Form 10-K

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes ¨ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes x No

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

At June 30, 2012, the aggregate market value of the registrant’s shares of Common Stock, par value $.01 per share, held by non-affiliates of the registrant was approximately $3,841,000,000. At January 31, 2013, 76,940,017 shares of Common Stock were outstanding.

Portions of the Proxy Statement for the Annual Meeting of Shareholders of BRE Properties, Inc. to be filed within 120 days of December 31, 2012 are incorporated by reference in Part III of this report.

In addition to historical information, we have made forward-looking statements in this Annual Report on Form 10-K. These forward-looking statements pertain to, among other things, our capital resources, portfolio performance and results of operations. Forward-looking statements involve numerous risks and uncertainties. You should not rely on these statements as predictions of future events because we cannot assure you that the events or circumstances reflected in the statements can be achieved or will occur. Forward-looking statements are identified by words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or their negative form or other variations, or by discussions of strategy, plans or intentions. Forward-looking statements are based on assumptions, data or methods that may be incorrect or imprecise or incapable of being realized. The following factors, among others, could affect actual results and future events: defaults or non-renewal of leases, increased interest rates and operating costs, failure to obtain necessary outside financing, difficulties in identifying communities to acquire and in effecting acquisitions, failure to successfully integrate acquired communities and operations, inability to dispose of assets that no longer meet our investment criteria under acceptable terms and conditions, risks and uncertainties affecting property development and construction (including construction delays, cost overruns, inability to obtain necessary permits and public opposition to such activities), failure to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended, environmental uncertainties, risks related to natural disasters, financial market fluctuations, changes in real estate and zoning laws and increases in real property tax rates. Our success also depends on general economic trends, including interest rates, income tax laws, governmental regulation, legislation, population changes and other factors, including those risk factors discussed in the section entitled “Risk Factors” in this report as they may be updated from time to time by our subsequent filings with the Securities and Exchange Commission. Do not rely solely on forward-looking statements, which only reflect management’s analysis. We assume no obligation to update forward-looking statements.

References in this Annual Report on Form 10-K to “BRE,” “Company,” “we” or “us” refer to BRE Properties, Inc., a Maryland corporation.

We are a self-administered equity real estate investment trust, or REIT, focused on the development, acquisition and management of multifamily apartment communities primarily located in the major metropolitan markets of Southern and Northern California and Seattle, Washington. At December 31, 2012, our multifamily portfolio had real estate assets with a net book value of approximately $3.4 billion, which included: 74 wholly or majority owned stabilized multifamily communities, aggregating 21,160 homes primarily located in California and Washington; eight stabilized multifamily communities owned through joint ventures comprised of 2,864 apartment homes; and seven development communities in various stages of planning and construction. We have been a publicly traded company since our founding in 1970 and have paid 169 consecutive quarterly dividends to our shareholders since inception.

Our business touches one of the most personal aspects of our customers’ lives—the place they call home. We believe this creates an opportunity to set ourselves apart by seeing things from our residents’ point of view and putting them first in all we do. The power of this viewpoint is that what is good for our residents is good for our Company. As we build relationships with the people and communities we serve, we set ourselves apart in the marketplace and create long-term, income-producing investments for our shareholders. Our principal operating objective is to maximize the economic returns of our apartment communities so as to provide our shareholders with the greatest possible total return and value. To achieve this objective, we pursue the following primary strategies and goals:

We believe we can best achieve our objectives by developing, acquiring and internally managing high-quality apartment communities in high-demand, supply-constrained locations in the most attractive places to live in the Western United States, specifically coastal California and the Seattle metropolitan area. Our communities are generally near the business, transportation, employment and recreation centers essential to customers who value the convenience, service and flexibility of rental living. Recognizing that customers have many housing choices, we focus on developing and acquiring apartment homes with customer-defined amenities and providing professional management services delivered by well-trained associates. We have concentrated our investment and business focus in California and the Seattle, Washington region, because of certain market characteristics

that we find attractive, including the propensity to rent, job growth and the scarcity of undeveloped land. From time to time, we dispose of assets that do not meet our long-term investment criteria, recycling the capital derived from property sales into apartment communities in supply-constrained locations that offer higher long-term return opportunities.

During 2012, we sold three communities located in the San Diego market: Countryside Village, with 96 homes; Terra Nova Villas, with 233 homes; and Canyon Villa, with 183 homes. The approximate net proceeds from the three sales were $88,236,000 resulting in a net gain of $62,136,000. The three communities sold reduced our concentration in this market to 18% of total net operating income at year-end 2012 from 21% at year-end 2011. Additionally, during 2012, three joint venture assets were sold: Calavera Point, a 276 home community located in Westminister, Colorado; Pinnacle at the Creek, a 216 home community located in Centennial, Colorado; and Pinnacle at Galleria, a 236 home community, located in Roseville, California. We had a 15% equity ownership in the sold communities in Colorado and a 35% equity ownership in the community sold in California. The sale of the three joint venture communities resulted in net proceeds of approximately $26,919,000 and a net gain on sale of approximately $6,025,000.

During 2012, we completed construction of one development community, Lawrence Station, with 336 homes in Sunnyvale, California. The aggregate investment in the community totaled $104,400,000 as of December 31, 2012.

During 2012, we acquired a parcel of land for future development in Redwood City, California for a purchase price of $11,400,000. We also acquired a parcel of land for future development in Pleasanton, California for a purchase price of $11,100,000.

During 2012, we recorded a $15,000,000 non cash impairment charge on land held for development, as a result of our decision to sell the site and no longer proceed with development. As a result, we concluded that indicators of impairment existed and a reduction in the carrying value to estimated fair value was warranted for the site. This charge was the result of an analysis of the site’s estimated fair value (based on market assumptions and comparable sales data) compared to its current capitalized carrying value.

As of December 31, 2012, we had seven sites under development or construction. The aggregate investment in the sites is expected to total $932,100,000. We have an estimated cost of $239,200,000 to complete the existing construction in process which consists of four development communities totaling 1,188 homes. The communities are expected to be delivered during 2013 and 2014. We also intend to seek a joint venture partner for our Pleasanton, California development sites, two of three land sites that we own but which we had not yet commenced construction at year end 2012. If successful, the formation of a joint venture partnership for the Pleasanton sites will reduce our capital obligation for these developments.

On January 5, 2012, we entered into a $750,000,000 revolving credit facility (the “Credit Agreement”). The Credit Agreement has an initial term of 39 months, terminates on April 3, 2015 and replaces our previous $750,000,000 revolving credit facility. Based on our current debt ratings, revolving credit facility accrues interest at LIBOR plus 120 basis points. In addition, we pay a 0.20% annual facility fee on the total commitment of the facility.

On February 1, 2012, we prepaid the single property mortgage on Alessio for $65,866,000 prior to its scheduled maturity with no prepayment penalty.

During 2012, we exercised our right to redeem for cash all of the $35,000,000 outstanding convertible notes, at a redemption price equal to 100% of the principal amount of the notes outstanding, plus accrued and unpaid interest up to, but excluding, February 21,2012 (the “Redemption Date”).

During 2012, 160,882 Operating Company units were converted for 160,882 shares of BRE common stock. There are no remaining Operating Company units outstanding.

On August 13, 2012 we completed an offering of $300,000,000 10.5 year senior unsecured notes. The notes will mature on January 15, 2023 and bear interest at a fixed coupon rate of 3.375%. Net proceeds from the offering, after all discounts, commissions, and issuance costs totaled approximately $295,400,000 and were used for general corporate purposes.

During 2012, 815,045 shares were issued under the EDAs, with an average share price of $49.09 for total gross proceeds of approximately $40,000,000 and total commissions paid to the sales agents of approximately $800,000. As of December 31, 2012, the remaining capacity under the EDAs totals $123,600,000. We intend to use any net proceeds from the sale of shares under the EDAs for general corporate purposes, which may include reducing borrowings under the our revolving credit facility, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development activities and financing for acquisitions.

On December 21, 2012, a redeemable noncontrolling interest partner exercised its redemption rights to its membership interest in the Meridian Apartments LLC. The Meridian Apartments LLC solely owns the community Pinnacle City Center. The redemption resulted in a decrease in redeemable noncontrolling interests of $3,356,000 and a corresponding reduction in notes receivable of $2,424,000.

During 2011, we acquired three communities totaling 652 units: Lafayette Highlands, with 150 units, located in Lafayette, California; The Landing at Jack London Square, with 282 units, located in Oakland, California; and The Vistas of West Hills, with 220 units, located in Valencia, California. The aggregate investment in these three communities was $170,127,000. In addition to these communities, we acquired two parcels of land for future development in San Francisco, California’s Mission Bay district for a purchase price of $41,400,000; and we purchased a 4.4 acre site contiguous to our existing Park Viridian operating community and its existing second phase land site in Anaheim, California for a purchase price of $5,100,000.

During 2011, we sold two communities totaling 634 units: Galleria at Towngate, with 268 units located in Moreno Valley, California; and Windrush Village, a 366 unit property located in Colton, California. The approximate net proceeds from the sales of the two communities were $63,486,000, resulting in a net gain of approximately $14,489,000. Additionally, during 2011, two joint venture assets were sold; The Landing at Bear Creek, a 224 unit joint venture community, located in Lakewood, Colorado; and The Pinnacle at Hunters Glen, a 264 unit joint venture community located in Thornton, Colorado. We had a 15% equity ownership in the communities and as a result received net proceeds of $9,349,000 and recognized a net gain on the sale of $4,270,000.

On August 15, 2011, we repurchased 840,285 shares of our 6.75% Series D Cumulative Redeemable Preferred Stock at a price of $24.33 per share on the open market, a $0.67 discount to par resulting in a non cash gain from preferred shareholders of $563,000. In addition, the initial issuance costs associated with these shares totaling $718,000 were charged to retained earnings during the third quarter of 2011. The net effect of the activity was a $155,000 charge to retained earnings for the three months ending September 30, 2011. As of December 31, 2011, 2,159,715 shares of 6.75% Series D Cumulative Redeemable Preferred Stock remained outstanding.

On June 13, 2011, we redeemed all 4,000,000 shares of our 6.75% Series C Cumulative Redeemable Preferred Stock at a redemption price of $25.35 per share. The redemption price was equal to the original issuance price of $25.00 per share, plus accrued and unpaid dividends to the redemption date. The initial issuance cost totaling approximately $3,616,000 associated with this series of perpetual preferred stock was charged to retained earnings during the second quarter of 2011.

On May 11, 2011, we completed an equity offering of 9,200,000 shares of common stock, including shares issued to cover over-allotments, at $48.00 (prior to a $1.92 per share underwriters discount) per share. Total

gross proceeds from this offering were approximately $441,508,000. We used the net proceeds from the offering for general corporate purposes which included redeeming our 6.75% Series C Cumulative Redeemable Preferred Stock and a portion of our 6.75% Series D Cumulative Redeemable Preferred Stock, and to repay borrowings under our revolving credit facility.

During 2011, 1,291,537 shares were issued under the EDAs, with an average gross share price of $47.55 for total gross proceeds of approximately $61,414,000. As of December 31, 2011, the remaining capacity under the equity distribution agreements totaled $163,600,000. Proceeds were used for general corporate purposes, which included reducing borrowings under our revolving credit facility, the repayment of other indebtedness, the redemption or other repurchase of outstanding securities and funding for development activities.

During January 2011, we paid off the remaining aggregate principal amount of $48,545,000 of our 7.450% senior notes as they matured.

During 2010, we acquired four communities totaling 1,037 homes: Allure at Scripps Ranch, with 194 homes, located in San Diego, California; Museum Park, with 117 homes, located in San Jose, California; Fountains at River Oaks, with 226 homes, located in San Jose, California; and Aqua at Marina Del Rey, with 500 homes, located in Marina Del Rey, California. The aggregate investment in these four communities was $292,100,000. In connection with the acquisition of Fountains at River Oaks, we assumed an existing $32,500,000 secured mortgage loan, with a fixed interest rate of 5.74% that is scheduled to mature in 2019. In addition to the communities, we purchased one land parcel for future development of 280 homes, in Sunnyvale, California, for $19,000,000.

During 2010, we completed construction of two development communities: Belcarra, with 296 homes in Bellevue, Washington, and Villa Granada, with 270 homes in Santa Clara, California. The aggregate investment in the two communities totaled $178,025,000.

During 2010, we sold four communities totaling 1,530 homes: Montebello, with 248 homes located in Seattle, Washington; Boulder Creek, a 264 unit property located in Riverside, California; Pinnacle Riverwalk, a 714 unit property located in Riverside, California; and Parkside Village, a 304 unit property located in Riverside, California. The approximate net proceeds from sales of the four communities were $163,705,000, resulting in a net gain of approximately $40,111,000. Three of the four communities sold were located in the Inland Empire.

Effective February 24, 2010, we terminated the equity distribution agreement we entered into on May 14, 2009 under which we could issue and sell from time to time through or to our sales agent shares of our common stock having an aggregate offering price of up to $125,000,000. On February 24, 2010, we entered into Equity Distribution Agreements (EDAs) with each of Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, and Wells Fargo Securities, LLC (collectively, the “sales agents”) under which we may issue and sell from time to time through or to the sales agents shares of our common stock having an aggregate offering price of up to $250,000,000.

During 2010, 581,055 shares were issued under the EDAs for gross proceeds of approximately $25,000,000 with an average gross share price of $43.02. Proceeds were used for general corporate purposes, which included reducing borrowings under our revolving credit facility, the repayment of other indebtedness, the redemption or other repurchase of outstanding securities and funding for development activities.

On April 7, 2010, we completed an equity offering of 8,050,000 common shares, including shares issued to cover over-allotments, at $34.25 per share. Total gross proceeds from this offering were approximately $275,712,500. We used the net proceeds from the offering for general corporate purposes, which included reducing borrowings under our revolving credit facility.

On April 30, 2010 we refinanced a single property mortgage loan totaling $59,500,000 at a fixed rate of 5.20%. The mortgage has a 10 year interest only term. The original mortgage note had a principal amount outstanding of $31,100,000 and was scheduled to mature on October 1, 2010, at a fixed rate of 7.38%.

On September 22, 2010, we closed an offering of $300,000,000 of 10.5 year senior unsecured notes with a coupon rate of 5.20%. The notes will mature on March 15, 2021. Net proceeds from the offering, after all discounts, commissions and issuance costs, totaled approximately $297,477,000. We used the net proceeds of the 2021 Notes Offering to repay borrowings under our $750,000,000 revolving credit facility and used a portion of the proceeds to fund a portion of the purchase price and accrued and unpaid interest on any 4.125% convertible senior notes due 2026 validly tendered and accepted for payment pursuant to the Offer to Purchase dated September 15, 2010.

As a result of the resignation of our former Chief Operating Officer, we recognized a one-time expense during the second quarter of 2010 totaling approximately $1,300,000.

During June 2010, we repurchased $15,000,000 of our 4.125% convertible senior unsecured notes at par. We recognized a net loss on early debt extinguishment of $558,000 in connection with the repurchase. On October 13, 2010, we closed a fixed price cash tender offer for any and all of our 4.125% convertible senior unsecured notes due in 2026. As a result, $321,334,000 in aggregate principal of our 4.125% convertible senior unsecured notes due in 2026 were validly tendered, and we accepted, purchased and subsequently cancelled the notes for an aggregate purchase price of 104% of par, or approximately $334,187,360. We recognized a net loss of $22,949,000 in connection with the tender offer. After the tender offers an aggregate principal amount of $35,000,000 of the notes remained outstanding at December 31, 2010.

All of our communities are located in urban and suburban areas that include other multifamily communities. There are many other multifamily communities and real estate companies within these areas that compete with us for residents and development and acquisition opportunities. Such competition could have a material effect on our ability to lease apartment homes and on the rents charged at our communities or at any newly developed or acquired communities. We may be competing with others that have greater resources than us. In addition, other forms of residential communities, including single-family housing, provide housing alternatives to potential residents of upscale apartment communities.

We were incorporated in the state of Maryland in 1970. We are organized and operate in a manner intended to enable us to qualify as a real estate investment trust, or REIT, under Sections 856-860 of the Internal Revenue Code of 1986, as amended. As a REIT, we generally will not be subject to federal income tax to the extent we distribute 100% of our taxable income to our shareholders. REITs are subject to a number of complex organizational and operational requirements. If we fail to qualify as a REIT, our taxable income may be subject to income tax at regular corporate rates. See “Risk Factors—Tax Risks.”

Our long-range investment policy emphasizes the development, construction and acquisition of multifamily communities located in major metropolitan markets of Southern and Northern California and Seattle, Washington. As circumstances warrant, certain communities may be sold and the proceeds reinvested into multifamily communities that our management believes better align with our growth objectives. Among other items, this policy is intended to enable our management to monitor developments in local real estate markets and to take an active role in managing our communities and improving their performance. The policy is subject to ongoing review by our Board of Directors and may be modified in the future to take into account changes in business or economic conditions, as circumstances warrant.

As of December 31, 2012, we had 670 employees. No employee is covered by collective bargaining agreements.

To view our current and periodic reports free of charge, please go to our website at www.breproperties.com. We make these postings as soon as reasonably practicable after our filings with the SEC. Our website contains copies of our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and the charters of each of our Audit, Compensation, and Nominating and Governance Committees. This information is also available in print to any shareholder who requests it by contacting us at BRE Properties, Inc., 525 Market St., 4^th Floor, San Francisco, California, 94105, attention: Investor Relations. Information contained on our website is not and should not be deemed a part of this report or a part of any other report or filing with the SEC.

See Part I, Item 2 (“Communities”) and Part II, Item 7 (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”) of this report for a description of our individual investments and certain developments during the year with respect to these investments. See Part IV, Item 15(a) 2, Schedule III (financial statement schedule), for additional information about our portfolio, including locations, costs and encumbrances.

Additionally, see Part II, Item 8 and Part IV, Item 15 of this report for our consolidated financial statements.

Ms. Moore has served as President and Chief Executive Officer since January 2005. Prior to serving as the Company’s Chief Executive Officer, she served as our Chief Operating Officer from July of 2002 through December 2004. Ms. Moore held several executive positions with Security Capital Group & Affiliates, an international real estate operating and investment management company, from 1993 to July 2002, including Co-Chairman and Chief Operating Officer of Archstone-Smith Trust, a Colorado-based multifamily REIT. Ms. Moore holds a Master of Business Administration degree from the University of California, Berkeley and a Bachelor’s degree in Business Administration from San Jose State University.

Mr. Dominiak has served as Executive Vice President, Chief Investment Officer since August 2008. Prior to joining BRE, Mr. Dominiak was the Division President and Managing Partner for JPI’s western division from 2004 to August 2008, a Division Vice President for BRE’s Southern California region from 2003 to 2004, and a Group Vice President for Archstone-Smith Trust in Southern California from 1995 to 2003. Mr. Dominiak holds a Master of Business Administration Degree from the University of California, Irvine, and both a Master’s Degree in city and regional planning and a Bachelor’s degree in Architecture from the University of Texas, Arlington.

Mr. Fanwick has served as Executive Vice President, General Counsel since July 2008. Prior to serving as the Company’s Executive Vice President, General Counsel, he served as Senior Vice President, General Counsel from February 2007 through July 2008. Mr. Fanwick was a co-founding partner of Miller & Fanwick, LLP, a law firm specializing in business and financial strategies, where he served as partner from May 1998 to December 2006. Previously, he served as general counsel for First Nationwide Bank from 1990 to 1998; an attorney at the law firm of Wilson, Sonsini, Goodrich & Rosati from 1981 to 1985; and in-house counsel and a member of senior management for various financial services and real estate companies. Mr. Fanwick received his Juris Doctor degree from Stanford Law School.

Ms. Jones has served as Executive Vice President, Associate Relations and Development since October, 2010. Ms. Jones joined BRE in 2005 as Vice President, associate relations and development, and was promoted to Senior Vice President in 2007. She began her career in the apartment industry in 1984 as director, human resources for Trammell Crow Residential-West (TCR-W), which was acquired by BRE in 1997, and continued in that role as Vice President for BRE after the acquisition. From 2000 to 2005, she served as Vice President, human resources for The Irvine Company Apartment Communities. Ms. Jones is a professionally certified executive coach and holds a Bachelor’s degree in Business Administration from Hertford College in Hertford, England.

Mr. Reinert has served as Executive Vice President, Operations since January 24, 2011. Prior to joining BRE, he was employed by the Irvine Company in Newport Beach, California from 1994 to 2009. Most recently, he served as Senior Vice President, property management, for the Irvine Company Apartment Communities. His first position was Vice President, asset management, Irvine Apartment Communities, then a public REIT. In 1998, he was promoted to President, Irvine Apartment Management Company. After leaving the Irvine Company, Mr. Reinert founded Axiom Multifamily Realty Advisors, Inc., to invest in and manage communities in the Southwest. He began his career in property management at GFS Northstar (now Pinnacle) in Atlanta, where he rose to Chief Operating Officer, East, in four years. Mr. Reinert holds a Bachelor’s degree in Real Estate and Risk Management from Florida State University.

Mr. Schissel has served as Executive Vice President, Chief Financial Officer since October, 2009. Prior to joining BRE, he served as Executive Vice President, Chief Financial Officer and Board Member of Carr Properties (and predecessor affiliate), a Washington D.C. based commercial office REIT, from 2004 to 2009. Prior to joining Carr Properties, Mr. Schissel worked at Wachovia Securities (and predecessor institutions), from 1991 to 2004, serving as Senior Vice President, and later as Director in the firm’s Real Estate Corporate Finance Group. Mr. Schissel holds a Bachelor’s degree in Business Administration in Finance from Georgetown University.

There is no family relationship among any of our executive Officers or Directors.

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K.

Decreased revenues or increased operating expenses may cause decreased yields from an investment in real property.

Real property investments are subject to varying degrees of risk. The yields available from investments in real estate depend upon the amount of revenues generated and expenses incurred. If communities do not generate revenues sufficient to meet operating expenses, including debt service and capital expenditures, our results from operations and our ability to make distributions to our shareholders and pay amounts due on our debt will be adversely affected. The performance of the economy in each of the areas in which the communities are located affects occupancy, market rental rates and expenses. These factors consequently can have an impact on revenues from the communities and their underlying values. The financial results and labor decisions of major local employers may also have an impact on the revenues from and value of certain communities.

Other factors may further adversely affect revenues from and values of our communities. These factors include the general economic climate, local conditions in the areas in which communities are located such as an oversupply of apartment homes or a reduction in the demand for apartment homes, the attractiveness of the communities to residents, competition from other multifamily communities and our ability to provide adequate facilities maintenance, services and amenities. Our revenues would also be adversely affected if residents were unable to pay rent or we were unable to rent apartments on favorable terms. If we were unable to promptly relet or renew the leases for a significant number of apartment homes, or if the rental rates upon renewal or reletting were significantly lower than expected rates, then our funds from operations and our ability to make expected distributions to our shareholders and pay amounts due on our debt could be adversely affected. There is also a risk that, as leases on the communities expire, residents will vacate or enter into new leases on terms that are less favorable to us. Operating costs, including real estate taxes, insurance and maintenance costs, and mortgage payments, if any, do not, in general, decline when circumstances cause a reduction in income from a property. We could sustain a loss as a result of foreclosure on the property, if a property is mortgaged to secure payment of indebtedness and we were unable to meet our mortgage payments. In addition, applicable laws, including tax laws, interest rate levels and the availability of financing also affect revenues from communities and real estate values.

If we are unable to implement our growth strategy, or if we fail to identify, acquire or integrate new acquisitions, our results may suffer.

Our future growth will be dependent upon a number of factors, including our ability to identify acceptable communities for development and acquisition, complete acquisitions and developments on favorable terms, successfully integrate acquired and newly developed communities, and obtain financing to support expansion. We cannot assure you that we will be successful in implementing our growth strategy, that growth will continue at historical levels or at all, or that any expansion will improve operating results. The failure to identify, acquire and integrate new communities effectively could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt.

Development and construction projects may not be completed or completed successfully.

As a general matter, property development and construction projects typically have a higher, and sometimes substantially higher, level of risk than the acquisition of existing communities. We intend to actively pursue development and construction of multifamily apartment communities. We cannot assure you that we will

complete development of the communities currently under development or any other development project that we may undertake. Risks associated with our development and construction activities may include the following:

Development and construction activities are also subject to risks relating to the inability to obtain, or delays in obtaining, all necessary zoning, land-use, building, occupancy, and other required governmental permits and authorizations.

Investments in newly acquired communities may not perform in accordance with our expectations.

In the normal course of business, we typically evaluate potential acquisitions, enter into non-binding letters of intent, and may, at any time, enter into contracts to acquire and may acquire additional communities. However, we cannot assure you that we will have the financial resources to make suitable acquisitions or that communities satisfying our investment policies will be available for acquisition. Acquisitions of communities entail risks that investments will fail to perform in accordance with expectations. Estimates of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property might prove inaccurate. Other risks may include rehabilitation costs exceeding original estimates, possibly making a project uneconomical; financing not being available on favorable terms or at all; and rehabilitation and lease-up not being completed on schedule. In addition, there are general real estate investment risks associated with any new real estate investment, including environmental risks. Although we undertake an evaluation of the physical condition of each new property before it is acquired, certain defects or necessary repairs may not be detected until after the property is acquired. This could significantly increase our total acquisition costs, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt.

Illiquidity of real estate and reinvestment risk may reduce economic returns to investors.

Real estate investments are relatively illiquid and, therefore, tend to limit our ability to adjust our portfolio in response to changes in economic or other conditions. Additionally, the Internal Revenue Code places certain limits on the number of communities a REIT may sell without adverse tax consequences. To affect our current operating strategy, we have in the past raised, and will seek to continue to raise additional funds, both through outside financing and through the orderly disposition of assets that no longer meet our investment criteria. However, we cannot assure you that we will be able to dispose of these assets, particularly during periods of decline in the real estate market, and the inability to make these dispositions may prevent us from executing our operating strategy and could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. Depending upon interest rates, current development and acquisition opportunities and other factors, generally we will reinvest the proceeds from any property dispositions in additional multifamily communities, although such funds may be employed in other uses. We cannot assure you that the proceeds realized from the disposition of assets which no longer meet our investment criteria can be reinvested to produce economic returns comparable to those being realized from the communities disposed of, or that we will be able to acquire communities meeting our investment criteria. If we are unable to

reinvest proceeds from the disposition of communities or if communities acquired with any such proceeds produce a lower rate of return than the communities disposed of, our results of operations and our ability to make distributions to our shareholders and pay amounts due on our debt could be adversely affected. In addition, a delay in reinvestment of any such proceeds could also have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt.

We may seek to structure future dispositions as tax-deferred exchanges, where appropriate, utilizing the non-recognition provisions of Section 1031 of the Internal Revenue Code to defer income taxation on the disposition of the exchanged property. For an exchange of these communities to qualify for tax-deferred treatment under Section 1031 of the Internal Revenue Code, certain technical requirements must be met. Given the competition for communities meeting our investment criteria, it may be difficult for us to identify suitable communities within the applicable time frames in order to meet the requirements of Section 1031. Even if we can structure a suitable tax-deferred exchange, as noted above, we cannot assure you that we will reinvest the proceeds of any of these dispositions to produce economic returns comparable to those currently being realized from the communities which were disposed of.

Substantial competition among multifamily communities and real estate companies may adversely affect our rental revenues and development and acquisition opportunities.

All of the communities currently owned by us are located in defined urban and suburban locations. There are numerous other multifamily communities and real estate companies, many of which have greater financial and other resources than we have, within the market area of each of our communities which compete with us for residents and development and acquisition opportunities. The number of competitive multifamily communities and real estate companies in these areas could have a material effect on (1) our ability to rent the apartments and the rents charged, and (2) development and acquisition opportunities. The activities of these competitors could cause us to pay a higher price for a new property than we otherwise would have paid or may prevent us from purchasing a desired property at all, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt.

Our operations are concentrated in the Western United States, in particular the state of California; we are subject to general economic conditions in the regions in which we operate.

Our portfolio is primarily located in the San Francisco Bay Area, Los Angeles, Orange County, Inland Empire, San Diego, and Seattle markets. Our performance could be adversely affected by economic conditions in, and other factors relating to, these geographic areas, including supply and demand for apartments in these areas, zoning and other regulatory conditions and competition from other communities and alternative forms of housing. In particular our performance is disproportionately influenced by job growth and unemployment. To the extent the aforementioned general economic conditions, job growth and unemployment in any of these markets deteriorate or any of these areas experiences natural disasters, the value of the portfolio, our results of operations and our ability to make distributions to our shareholders and pay amounts due on our debt could be materially adversely affected.

Our insurance coverage is limited and may not cover all losses to our communities.

We carry comprehensive liability, fire, mold, extended coverage and rental loss insurance with respect to our communities with certain policy specifications, limits and deductibles. While as of December 31, 2012, we carried flood and fire insurance for our communities with an aggregate annual limit of $150,000,000, and earthquake insurance with an aggregate annual limit of $90,000,000, subject to substantial deductibles, we cannot assure you that this coverage will be available on acceptable terms or at an acceptable cost, or at all, in the future, or if obtained, that the limits of those policies will cover the full cost of repair or replacement of covered communities. In addition, there may be certain extraordinary losses (such as those resulting from civil unrest or terrorist acts) that are not generally insured (or fully insured against) or underinsured losses (such as those

resulting from claims in connection with the occurrence of mold, asbestos, and lead) because they are either uninsurable or not economically insurable. Should an uninsured or underinsured loss occur to a property, we could be required to use our own funds for restoration or lose all or part of our investment in, and anticipated revenues from, the property and would continue to be obligated on any mortgage indebtedness on the property. Any such loss could have a material effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. In addition, a failure of any of our insurers to comply with their obligations to us could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt.

Adverse changes in laws may affect our liability relating to our communities and our operations.

Increases in real estate taxes and income, service and transfer taxes cannot always be passed through to residents or users in the form of higher rents, and may adversely affect our cash available for distribution and our ability to make distributions to our shareholders and pay amounts due on our debt. Similarly, changes in laws increasing the potential liability for environmental conditions existing on communities or increasing the restrictions on discharges or other conditions, as well as changes in laws affecting development, construction and safety requirements, may result in significant unanticipated expenditures, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. In addition, future enactment of rent control or rent stabilization laws or other laws regulating multifamily housing may reduce rental revenues or increase operating costs.

Compliance with laws benefiting disabled persons may require us to make significant unanticipated expenditures or impact our investment strategy.

A number of federal, state and local laws (including the Americans with Disabilities Act) and regulations exist that may require modifications to existing buildings or restrict certain renovations by requiring improved access to such buildings by disabled persons and may require other structural features which add to the cost of buildings under construction. Legislation or regulations adopted in the future may impose further burdens or restrictions on us with respect to improved access by disabled persons. The costs of compliance with these laws and regulations may be substantial, and limits or restrictions on construction or completion of certain renovations may limit implementation of our investment strategy in certain instances or reduce overall returns on our investments, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. We review our communities periodically to determine the level of compliance and, if necessary, take appropriate action to bring such communities into compliance.

Survey exceptions to certain title insurance policies may result in incomplete coverage in the event of a claim.

We have not obtained updated surveys for all of the communities we have acquired or developed. Because updated surveys were not always obtained, the title insurance policies obtained by us may contain exceptions for matters that an updated survey might have disclosed. Such matters might include such things as boundary encroachments, unrecorded easements or similar matters, which would have been reflected on a survey. Moreover, because no updated surveys were prepared for some communities, we cannot assure you that the title insurance policies in fact cover the entirety of the real property, buildings, fixtures, and improvements which we believe they cover. Incomplete coverage in the event of a claim could have a material adverse effect on our ability to make distributions to our shareholders and pay amounts due on our debt.

We anticipate that future developments and acquisitions will be financed, in whole or in part, under various construction loans, lines of credit, and other forms of secured or unsecured financing or through the issuance of additional debt or equity by us. We expect periodically to review our financing options regarding the appropriate mix of debt and equity financing. Equity, rather than debt, financing of future developments or acquisitions could

have a dilutive effect on the interests of our existing shareholders. Similarly, there are certain risks involved with financing future developments and acquisitions with debt, including those described below. In addition, if new developments are financed through construction loans, there is a risk that, upon completion of construction, permanent financing for such communities may not be available or may be available only on disadvantageous terms or that the cash flow from new communities will be insufficient to cover debt service. If a newly developed or acquired property is unsuccessful, our losses may exceed our investment in the property. Any of the foregoing could have a negative impact on operations and our ability to make distributions to our shareholders and pay amounts due on our debt.

We are subject to the normal risks associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest, the risk that indebtedness on our communities, or unsecured indebtedness, will not be able to be renewed, repaid or refinanced when due or that the terms of any renewal or refinancing will not be as favorable as the existing terms of such indebtedness. If we were unable to refinance our indebtedness on acceptable terms, or at all, we might be forced to dispose of one or more of our communities on disadvantageous terms, which might result in losses to us. Such losses could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. Furthermore, if a property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments, the mortgagee could foreclose upon the property, appoint a receiver and receive an assignment of rents and leases or pursue other remedies, all with a consequent loss of our revenues and asset value. Foreclosures could also create taxable income without accompanying cash proceeds, thereby hindering our ability to meet the REIT distribution requirements of the Internal Revenue Code.

We have incurred and expect in the future to incur indebtedness and interest rate hedges that bear interest at variable rates. Accordingly, increases in interest rates would increase our interest costs, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt or cause us to be in default under certain debt instruments. In addition, an increase in market interest rates may lead holders of our common shares to demand a higher yield on their shares from distributions by us, which could adversely affect the market price for our common stock.

We currently fund the acquisition and development of multifamily communities’ partially through borrowings (including our revolving credit facility) as well as from other sources such as sales of communities which no longer meet our investment criteria or the contribution of property to joint ventures which may in turn secure debt. Our organizational documents do not contain any limitation on the amount of indebtedness that we may incur. Accordingly, subject to limitations on indebtedness set forth in various loan agreements, we could become more highly leveraged, resulting in an increase in debt service, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt and in an increased risk of default on our obligations.

The restrictive terms of certain of our indebtedness may cause acceleration of debt payments.

At December 31, 2012, we had outstanding borrowings of approximately $1.7 billion. Our indebtedness contains financial covenants as to minimum net worth, interest coverage ratios, maximum secured debt, and total debt to capital, among others. In the event that an event of default occurs, our lenders may declare borrowings under the respective loan agreements to be due and payable immediately, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt.

Failure to hedge effectively against interest rates may adversely affect results of operations.

From time to time we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements, such as interest rate cap agreements and interest rate swap agreements. These agreements involve risks, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes and that a court could rule that such an agreement is not legally enforceable. Hedging may reduce overall returns on our investments. Failure to hedge effectively against interest rate changes could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt.

Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances in, on, around or under such property. Such laws often impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of, or failure to remediate properly, hazardous or toxic substances may adversely effect the owner’s or operator’s ability to sell or rent the affected property or to borrow using the property as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of hazardous or toxic substances at a disposal or treatment facility, whether or not the facility is owned or operated by the person. Certain environmental laws impose liability for release of asbestos-containing materials into the air, and third parties may also seek recovery from owners or operators of real communities for personal injury associated with asbestos-containing materials and other hazardous or toxic substances. Federal and state laws also regulate the operation and subsequent removal of certain underground storage tanks. In connection with the current or former ownership (direct or indirect), operation, management, development or control of real communities, we may be considered an owner or operator of such communities or as having arranged for the disposal or treatment of hazardous or toxic substances and, therefore, may be potentially liable for removal or remediation costs, as well as certain other costs, including governmental fines, and claims for injuries to persons and property.

Our current policy is to obtain a Phase I environmental study on each property we seek to acquire and to proceed accordingly. We cannot assure you, however, that the Phase I environmental studies or other environmental studies undertaken with respect to any of our current or future communities will reveal:

Certain environmental laws impose liability on a previous owner of property to the extent that hazardous or toxic substances were present during the prior ownership period. A transfer of the property does not relieve an owner of such liability. Thus, we may have liability with respect to communities previously sold by our predecessors or by us.

There have been a number of lawsuits against owners and managers of multifamily communities alleging personal injury and property damage caused by the presence of mold in residential real estate. Some of these lawsuits have resulted in substantial monetary judgments or settlements. Insurance carriers have reacted to these liability awards by excluding mold related claims from standard policies and pricing mold endorsements separately. We have obtained a separate pollution insurance policy that covers mold-related claims and have

adopted programs designed to minimize the existence of mold in any of our communities as well as guidelines for promptly addressing and resolving reports of mold. To the extent not covered by our pollution policy, the presence of significant mold could expose us to liability from residents and others if property damage, health concerns, or allegations thereof, arise.

We may in the future choose to pay dividends in our own stock, in which case you may be required to pay tax in excess of the cash you receive.

We may distribute taxable dividends that are partially payable in cash and partially payable in our stock. Under recent IRS guidance, up to 90% of any such taxable dividend with respect to calendar years 2010 through 2012, and in some cases declared as late as December 31, 2013, could be payable in our stock if certain conditions are met. Taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits for United States federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of the cash received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, such sales may put downward pressure on the trading price of our stock.

Risks Associated with Our Disclosure Controls and Procedures and Internal Control over Financial Reporting

Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting.

The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. While management continues to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we can not assure you that our disclosure controls and procedures or internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, particularly material weaknesses, in internal control over financial reporting which may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operation, financial condition or liquidity.

A portion of our operations is conducted through our subsidiaries, including the Operating Company. Our cash flow and the consequent ability to make distributions and other payments on our equity securities and to service our debt will be partially dependent upon the earnings of our subsidiaries and the distribution of those earnings to us, or upon loans or other payments of funds made by our subsidiaries to us. In addition, debt or other arrangements of our subsidiaries may impose restrictions that affect, among other things, our subsidiaries’ ability to pay dividends or make other distributions or loans to us.

Likewise, a portion of our consolidated assets is owned by our subsidiaries, effectively subordinating certain of our unsecured indebtedness to all existing and future liabilities, including indebtedness, trade payables, lease obligations and guarantees of our subsidiaries. The Operating Company has guaranteed amounts due under our revolving credit facility with a syndicate of banks. The Operating Company and other of our subsidiaries may also, from time to time, guarantee other of our indebtedness. Therefore, our rights and the rights of our creditors,

including the holders of other unsecured indebtedness, to participate in the assets of any subsidiary upon the latter’s liquidation or reorganization will be subject to the prior claims of such subsidiary’s creditors, except to the extent that we may ourselves be a creditor with recognized claims against the subsidiary, in which case our claims would still be effectively subordinate to any security interests in or mortgages or other liens on the assets of such subsidiary and would be subordinate to any indebtedness of such subsidiary senior to that held by us.

Provisions in our Charter and Bylaws that Could Limit a Change in Control or Deter a Takeover

In order to maintain our qualification as a REIT, not more than 50% in value of our outstanding capital stock may be owned, actually or constructively, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities). In order to protect us against risk of losing our status as a REIT due to a concentration of ownership among our shareholders, our charter provides that any shareholder must, upon demand, disclose to our board of directors in writing such information with respect to such shareholder’s direct and indirect ownership of the shares of our stock as we deem necessary to permit us to comply or to verify compliance with the REIT provisions of the Internal Revenue Code, or the requirements of any other taxing authority. Our charter further provides, among other things, that if our board of directors determines, in good faith, that direct or indirect ownership of BRE stock has or may become concentrated to an extent that would prevent us from qualifying as a REIT, our board of directors may prevent the transfer of BRE stock or call for redemption (by lot or other means affecting one or more shareholders selected in the sole discretion of our board of directors) a number of shares of BRE stock sufficient in the opinion of our board of directors to maintain or bring the direct or indirect ownership of BRE stock into conformity with the requirements for maintaining REIT status. These limitations may have the effect of precluding acquisition of control of us by a third party without consent of our board of directors.

In addition, certain other provisions and restrictions contained in our charter and bylaws may have the effect of discouraging a third-party from making an acquisition proposal for us and may thereby inhibit a change in control. In our charter, these include provisions granting our board of directors the authority to issue preferred stock from time to time and to establish the terms, preferences and rights of such preferred stock without the approval of our shareholders, restrictions on our shareholders’ ability to remove directors and fill vacancies on our board of directors, restrictions on unsolicited business combinations and restrictions on our shareholders’ ability to amend our charter. In our bylaws, these include provisions establishing procedures and requirements to be met in order for our shareholders to request or call a special meeting of shareholders (including that the request be made by holders of at least a majority of the votes entitled to be cast), provisions requiring advance notice of shareholder nominees for director and of other shareholder proposals, restrictions on our shareholders’ ability to take action without a meeting, provisions granting our board of directors the power to amend our bylaws, provisions allowing our board of directors to increase its size and fill vacancies created thereby, and restrictions on the transfer of shares of our capital stock with respect to the preservation of our REIT status. Such provisions and restrictions may deter tender offers for BRE stock, which offers may be attractive to our shareholders, or deter purchases of large blocks of BRE stock, thereby limiting the opportunity for shareholders to receive a premium for their shares of BRE stock over then-prevailing market prices.

We believe we have operated and intend to continue operating in a manner that will allow us to qualify as a REIT for federal income tax purposes under the Internal Revenue Code. However, we cannot assure you that we have in fact operated, or will be able to continue to operate, in a manner so as to qualify, or remain qualified, as a REIT. Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions, for which there are only limited judicial or administrative interpretations, and the determination of various factual matters and circumstances not entirely within our control. For example, in order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets and a requirement that at least 95% of our gross income in any year must be derived from qualifying sources, such as “rents from real property.” Also, we must make distributions to shareholders aggregating annually at

least 90% of our net taxable income, excluding net capital gains. In addition, legislation, new regulations, administrative interpretations or court decisions may materially adversely affect our investors, our ability to qualify as a REIT for federal income tax purposes or the desirability of an investment in a REIT relative to other investments.

Even if we qualify as a REIT for federal income tax purposes, we may be subject to some federal, state and local taxes on our income or property and, in certain cases, a 100% penalty tax, in the event we sell property as a dealer.

If we fail to qualify as a REIT, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at corporate rates, which would likely have a material adverse effect on us, our share price and our ability to make distributions to our shareholders and pay amounts due on our debt. In addition, unless entitled to relief under certain statutory provisions, we would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. This treatment would reduce funds available for investment or distribution to our shareholders because of the additional tax liability to us for the year or years involved. In addition, we would no longer be required to make distributions to our shareholders. To the extent that distributions to our shareholders would have been made in anticipation of qualifying as a REIT, we might be required to borrow funds or to liquidate certain investments to pay the applicable tax. Finally, we cannot assure you that new legislation, new regulations, administrative interpretations or court decisions will not change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification.

In addition to the information in this Item 2, certain information regarding our community portfolio is contained in Schedule III (financial statement schedule) under Part IV, Item 15(a) (2).

Our multifamily communities represent 99% of our real estate portfolio and 99% of our total revenue.

No single multifamily property accounted for more than 10% of total revenues in any of the five years ended December 31, 2012.

This table summarizes information about our 2012 operating multifamily communities (excluding properties sold in 2012) and includes communities acquired during 2012 and 2011 in various phases of lease up:

The following table discloses certain operating data about our consolidated multifamily homes:

The following table summarizes our “same-store” operating results. “Same-store” communities are defined as communities that have been completed, stabilized and owned by us for two comparable calendar year periods. We define “stabilized” as communities that have reached a physical occupancy of at least 93%. Physical occupancy is calculated by dividing the total occupied homes by the total homes in stabilized communities in the portfolio.

Our business focus is the ownership, development and operation of multifamily communities; we evaluate performance and allocate resources primarily based on the net operating income (“NOI”) of an individual multifamily community. We define NOI as the excess of all revenue generated by the community (primarily rental revenue) less direct real estate expenses. Accordingly, NOI does not take into account community-specific costs such as depreciation, capitalized expenditures and interest expense.

A reconciliation of net income available to common shareholders to NOI for the three years ended December 31 is as follows:

We consider community level and portfolio-wide NOI to be an appropriate supplemental measure to net income available to common shareholders because it helps both investors and management to understand the core property operations prior to the allocation of any corporate-level property management overhead or general and administrative costs. This is more reflective of the operating performance of the real estate, and allows for an easier comparison of the operating performance of single assets or groups of assets. In addition, because prospective buyers of real estate have different overhead structures, with varying marginal impact to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or groups of assets.

However, because NOI excludes depreciation and does not capture the change in the value of our communities resulting from operational use and market conditions, nor the level of capital expenditures required to adequately maintain the communities (all of which have real economic effect and could materially impact our results from operations), the utility of NOI as a measure of our performance is limited. Other equity REITs may not calculate NOI consistently with our definition and, accordingly, our NOI may not be comparable to such other REITs’ NOI. As a result, NOI should be considered only as a supplement to net income available to common shareholders as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. NOI also should not be used as a supplement to or substitute for cash flow from operating activities (computed in accordance with generally accepted accounting principles in the United States “GAAP”).

The following table provides data on our seven multifamily communities that were under various stages of development and construction at December 31, 2012. Completion of the development communities is subject to a number of risks and uncertainties, including construction delays and cost overruns. We cannot assure that these communities will be completed, or that they will be completed by the estimated dates, or for the estimated amounts, or will contain the number of proposed homes shown in the table below. In addition to the communities below, we have made predevelopment investments and deposits on one potential project totaling approximately $16,000,000. The deposits and predevelopment costs are reported in Other Assets on the Consolidated Balance Sheet.

We carry comprehensive liability, fire, pollution, extended coverage and rental loss insurance on our communities with certain policy specifications, limits and deductibles. In addition, at December 31, 2012, we

carried flood and fire coverage with an annual aggregate limit of $150,000,000 (after policy deductibles). Also, we carried earthquake insurance with an aggregate annual limit of $90,000,000 (after policy deductibles). Management believes the communities are adequately covered by such insurance.

Property taxes on portfolio communities are assessed on asset values based on the valuation method and tax rate used by the respective jurisdictions. The gross carrying value of our direct investments in operating rental communities was $3,722,838,000 as of December 31, 2012. On the same date our assets had an underlying federal income tax basis of approximately $3,680,925,000 reflecting, among other factors, the carryover of basis on tax-deferred exchanges.

We lease our corporate headquarters at 525 Market Street, 4th Floor, San Francisco, California, 94105-2712, from Knickerbocker Properties, Inc., a Delaware corporation. The lease covers 28,339 rentable square feet at annual per square foot rents, which were $24.00 as of December 31, 2012. The lease term ends on February 1, 2016. We also maintain leased regional offices in: Seattle, Washington; Irvine and San Diego, California; Phoenix, Arizona; and Denver, Colorado.

We are involved in various legal actions arising in the ordinary course of business. Losses associated with legal claims arising in the ordinary course of business are expected to be covered under our insurance policies. As a result, the risk of a material loss impacting our financial position has been assessed as remote. As of December 31, 2012, there were no pending legal proceeds to which we are a party or of which any of our communities is the subject, the adverse determination of which we anticipate would have a material adverse effect upon our consolidated financial condition and results of operations.

Our common stock is traded on the New York Stock Exchange under the symbol “BRE”. As of January 31, 2013, there were approximately 2,874 record holders of BRE’s common stock and the last reported sales price on the NYSE was $50.88. The number of holders does not include shares held of record by a broker or clearing agency, but does include each such broker or clearing agency as one record holder. As of January 31, 2013, there were approximately 17,730 beneficial holders of BRE’s common stock.

This table shows the high and low sales prices of our common stock reported on the NYSE Composite Tape and the dividends we paid for each common share:

Since 1970, when BRE was founded, we have made regular and uninterrupted quarterly dividends to shareholders. The payment of dividends by BRE is at the discretion of the Board of Directors and depends on numerous factors, including our cash flow, financial condition and capital requirements, REIT provisions of the Internal Revenue Code and other factors.

Operating Company units in BRE Property Investors LLC converted into shares of BRE common stock or redeemed for cash totaled 160,882 and 454,273 for the years ended December 31, 2012 and 2011, respectively. As of December 31, 2012, no Operating Company units remain outstanding.

The following table sets forth information as of December 31, 2012 for all of our equity compensation plans, including our Amended and Restated 1992 Employee Stock Plan, our 1999 Stock Incentive Plan and our Fifth Amended and Restated Non-Employee Director Stock Option and Restricted Stock Plan:

The line graph below compares the cumulative total shareholder return on BRE Common Stock for the last five years with the cumulative total return on the S&P 500 Index and the NAREIT All Equity REIT Index over the same period. This comparison assumes that the value of the investment in the Common Stock and in each index was $100 on December 31, 2007 and that all dividends were reinvested (1).

Recent Sales of Unregistered Securities; Use of Proceeds from Unregistered Securities

During the year ended December 31, 2012, an aggregate of 160,882 Operating Company units were converted to 160,882 shares of BRE common stock. There are no Operating Company units outstanding as of December 31, 2012.

The selected financial data below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes. The results are affected by numerous acquisitions and dispositions as discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Therefore, the consolidated financial statements and notes thereto included elsewhere in this report are not directly comparable to prior years.

We believe that FFO is a meaningful supplemental measure of our operating performance because historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation. Because real estate values have historically risen or fallen with market conditions, management considers FFO an appropriate supplemental performance measure because it excludes historical cost depreciation, as well as gains or losses related to sales of previously depreciated property, from GAAP net income. By excluding depreciation and gains or losses on sales of real estate, management uses FFO to measure returns on its investments in real estate assets. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our communities that result from use or market conditions nor the level of capital expenditures to maintain the operating performance of our communities, all of which have real economic effect and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. Management also believes that FFO, combined with the required GAAP presentations, is useful to investors in providing more meaningful comparisons of the operating performance of a company’s real estate between periods or as compared to other companies. FFO does not represent net income or cash flows from operations as defined by GAAP and is not intended to indicate whether cash flows will be sufficient to fund cash needs. It should not be considered an alternative to net income as an indicator of a REIT’s operating performance or to cash flows as a measure of liquidity. Our FFO may not be comparable to the FFO of other REITs due to the fact that not all REITs use the NAREIT definition or apply/interpret the definition differently.

We are a self-administered equity real estate investment trust, or REIT, focused on the ownership, operation, development, and acquisition of apartment communities. Our operating and investment activities are primarily focused on the major metropolitan markets within the state of California, and in the Seattle, Washington region. We also own and operate apartment communities in the Phoenix, Arizona metropolitan market and we own and operate apartment communities in the Denver, Colorado metropolitan market. At December 31, 2012 our portfolio had real estate assets with a net book value of approximately $3.4 billion that included 74 wholly or majority owned completed apartment communities, aggregating 21,160 homes; eight multifamily communities owned in joint ventures, comprised of 2,864 apartment homes; and seven apartment communities in various stages of construction and development. We earn revenue and generate operating cash flow primarily by collecting monthly rent from our apartment residents.

Our 2012 results, when compared to 2011 and 2010 annual results reflect the impact of improving fundamentals for the multifamily industry. We experienced same-store revenue growth in 2012 of 5.5% as compared to 3.4% growth in 2011 and a decline of 2.0% in 2010. Operating fundamentals, driven by low levels of new supply and an increase in propensity to rent, began to improve in 2010 and continued to strengthen throughout 2011 and 2012. Although unemployment levels following the severe recession that started in late 2007 remain elevated at 9.8% in California and 7.6% in Washington, we did experience job growth in our core markets in 2012 with the San Francisco Bay Area and Seattle markets benefiting the most from increased employment levels.

We continue to make progress on building out our development pipeline with properties that are in some of the country’s premier locations. As of December 31, 2012, our active and wholly-owned development pipeline had a total estimated cost of $770,000,000 of which approximately $395,000,000 remains to be funded. Our active and wholly-owned pipeline consists of Aviara, Solstice, Wilshire La Brea, Radius and MB 360 projects.

We remain committed to creating long-term value through a targeted development program, focused on core in-fill submarkets, appropriately sized for the balance sheet. We continue to source potential development opportunities. We expect to manage the size of our development pipeline in the future, based on the total estimated cost of the entire pipeline, to a level that is 10-15% of our total enterprise value plus the unfunded portion of our development communities at that time. We define enterprise value as the sum of: (1) the company’s outstanding common shares multiplied by the company’s share price at the time of calculation; plus (2) all outstanding debt and the par value of preferred shares. At year-end 2012, using this calculation, we estimated that the development pipeline as a percentage of enterprise value and the unfunded portion of the pipeline was approximately 18%. This assumes that we fund the entire cost of our two Pleasanton sites, which we previously announced our intention to build these communities with a joint venture partner who would fund a significant portion of the remaining cost to build these communities.

In October 2012, the following intentions were announced in an effort to reduce the overall size of the development pipeline: (1) we will commence a process to find a joint venture partner for the development of two land parcels that we own in Pleasanton, CA; and (2) we will sell the two land parcels that compose our Park Viridian II site in Anaheim, CA which resulted in the $15 million impairment charge. The carrying value of the Anaheim site was reduced from $38.1 million to $23.1 million and is recorded in Assets held for sale as of December 31, 2012. As of year-end 2012, both actions are in process.

We expect that strategic asset sales will be the primary funding source for our remaining current construction funding commitments. During 2012, we disposed of three communities with 502 homes (in the San Diego region of California) for combined net proceeds of $88,236,000. The dispositions produced net gains on sales totaling $62,136,000. In addition, during 2012 we sold three communities owned through joint ventures that generated $26,919,000 in net proceeds and net gains totaling $6,025,000. We believe that a combination of a targeted development program focused on our core markets along with the disposition slower revenue growth communities will over the time result in a higher quality portfolio with a stronger revenue growth profile.

We also remain committed to maintaining a strong financial position and balance sheet flexibility. Our leverage measured as debt as a percentage of gross assets was 40% as of December 31, 2012.

We believe our communities are well-positioned to take advantage of the favorable demographic factors that are expected to produce continued revenue growth for apartment owners in the coming years. These factors include: (1) increases in overall population levels among the age cohort with the greatest tendency to rent (age 20 to 34 years old); (2) a greater propensity to rent among all age groups as a result of the psychology and financial impact on homeownership rates coming out of this past recession; and (3) low levels of new supply of apartment communities from development activities in the majority of our core markets.

To better understand our overall results, our 74 wholly or majority owned apartment communities can be characterized as follows:

In addition to year-over-year economic operating performance, our results of operations for the three years ended December 31, 2012 were affected by income derived from communities acquired and completions of apartment communities, offset by the cost of capital associated with financing these transactions. Our book capitalization grew to $3.5 billion at December 31, 2012 from $3.1 billion at December 31, 2010, reflecting capital raised through offerings of debt and equity.

Total revenues include revenues from discontinued operations. The increase in rental income in 2012 was primarily derived from a 5.5% increase in same-store property revenue. A summary of revenues for the years ended December 31, 2012, 2011 and 2010 follows:

Same-store revenues increased by $18,834,000 or 5.5% and by $23,271,000 or 7.3% for the years ended December 31, 2012 and 2011, respectively. The 2012 same-store increase was primarily due to a 5.5% increase in average revenue earned per occupied home in the same-store portfolio in 2012. In 2012, revenue per occupied home totaled $1,613 per home from $1,529 per occupied home in 2011. Revenue per home is comprised of rental and ancillary income earned on occupied homes during the period and net of concessions of $3 per month per occupied home during 2012 and 2011, respectively. Physical occupancy levels averaged 94%, 95%, and 95% during the years ended 2012, 2011, and 2010, respectively. The $8,245,000 increase in revenue from non-same-store communities represents the increase in the year-over-year size of the portfolio from recently completed development communities and communities acquired in 2011.

As described above, the increase in non same-store rental and ancillary revenues relates to acquired and developed communities. The following table summarizes our multifamily development, acquisition and disposition activities:

Physical occupancy is calculated by dividing the total occupied homes by the total homes in stabilized communities in the portfolio.

Other income for the years ended December 31, 2012, 2011 and 2010 is detailed below and is comprised of the following:

The summary of real estate expenses, excluding discontinued operations is as follows:

Real estate expenses for multifamily rental communities (which include repairs and maintenance, utilities, on-site staff payroll, property taxes, insurance, advertising and other direct operating expenses) increased $6,182,000, or 5.3% and $10,566,000 or 10%, for the years ended December 31, 2012 and 2011, respectively. Also, same-store expenses increased $3,920,000, or 3.6%, $1,520,000, or 1.5%, and $1,621,000 or 1.7% in 2012, 2011 and 2010, respectively.

Property taxes comprised 30%, 28%, and 29% of real estate expenses during the year ended December 31, 2012, 2011 and 2010, respectively. Across the portfolio, property taxes increased $2,084,000 or 6.1% in 2012 from 2011.

Real estate expenses shown in the table above exclude real estate expense from discontinued operations which totaled $2,285,000, $4,860,000 and $9,918,000 for 2012, 2011 and 2010, respectively.

The provision for depreciation totaled $100,518,000, $101,047,000 and $88,490,000 for the years ending 2012, 2011 and 2010, respectively. The provision for depreciation decreased $529,000, or 0.5%, for the year ended December 31, 2012 compared to 2011, and increased $12,557,000, or 14.2%, for the year ended December 31, 2011 compared to 2010. The increases in 2011 resulted from higher depreciable bases on acquisitions including depreciation of in-place lease values over the average lease term.

Common equity issuances and community sales during the three years ended December 31, 2012 have reduced debt as a percentage of gross assets to 40% on December 31, 2012, compared to 41% on December 31, 2011 and 47% on December 31, 2010. As a result, lower leverage levels have reduced the absolute levels of interest expense incurred over the past three years. Average construction in progress and land under development balances outstanding totaled $396,303,000, $275,214,000 and $221,800,000 for the years ended December 31, 2012, 2011 and 2010, respectively. Weighted average cost of debt was 5.4%, 5.3% and 5.2% for the years ended December 31, 2012, 2011 and 2010, respectively. The summary of interest expense is as follows:

General and administrative expenses for the three years ended December 31, were as follows:

General and administrative expenses increased 5.0% in 2012 and 5.8% in 2011 due to a number of factors including increased compensation related costs and legal fees in the respective years. The 18.3% increase in general and administrative expenses in 2010 was primarily due to increased levels of stock-based compensation expense during the year compared to 2009. We had a significant decrease in stock-based compensation in 2009 due to decreased expectations for vesting levels of certain performance based awards due to the recessionary environment. Total stock-based compensation in general and administrative expenses totaled $5,754,000, $4,697,000, $4,785,000, during the years ending 2012, 2011, and 2010, respectively.

Office rents totaling $1,476,000, $1,499,000 and $1,433,000 for the years ended December 31, 2012, 2011 and 2010, respectively, are included in general and administrative expense.

Other expenses for the years ended December 31, 2012, 2011 and 2010, are comprised of the following:

Redeemable noncontrolling interest in income represent the earnings attributable to the noncontrolling members of our consolidated subsidiaries and totaled $413,000, $1,168,000 and $1,446,000 for the years ended December 31, 2012, 2011 and 2010, respectively. Redeemable noncontrolling interests in income decreased in 2012 primarily due to the redemptions of all remaining Operating Company units for common stock. Conversions and redemptions of Operating Company units to common shares or cash totaled 160,882, 454,273, and 155,635 units for the years ended December 31, 2012, 2011 and 2010, respectively. As of December 31, 2012, there were no Operating Company units outstanding.

Accounting guidance requires the results of operations for communities sold during the period or designated as held for sale at the end of the period to be classified as discontinued operations. The property-specific components of net earnings that are classified as discontinued operations include all property-related revenues and operating expenses, depreciation expense recognized prior to the classification as held for sale, and property-specific interest expense to the extent there is secured debt on the property. In addition, the net gain or loss on the eventual disposal of communities held for sale is reported as discontinued operations.

During 2012, we sold three communities located in San Diego, California: Countryside Village, with 96 homes in El Cajon submarket; Terra Nova Villas, with 233 homes in Chula Vista; and Canyon Villa, with 183 homes in Chula Vista. The approximate net proceeds from the three sales were $88,236,000 resulting in a combined net gain of $62,136,000. The sale of these assets reduced our exposure in the San Diego multi-family market to 18% of total net operating income from 21% at year-end 2011.

During 2011, we sold two communities in the eastern half of the Inland Empire totaling 634 homes: Galleria at Towngate, with 268 homes located in Moreno Valley, California; and Windrush Village, a 366 unit property located in Colton, California. The net proceeds from sales of the two communities were $63,486,000, resulting in a combined net gain of $14,489,000. The sale of these assets reduced our concentration of net operating income from the Inland Empire.

During 2010, we sold four communities totaling 1,530 homes: Montebello, with 248 homes located in Seattle, Washington; Boulder Creek, a 264 unit property located in Riverside, California; Pinnacle Riverwalk, a 714 unit property located in Riverside, California; and Parkside Village, a 304 unit property located in Riverside, California. The four communities were sold for combined net proceeds of $163,705,000 resulting in a net gain on sales of $40,111,000.

The net gain on sale and the combined results of operations for these nine communities for each year presented are included in discontinued operations on the consolidated statements of income. These amounts totaled $66,049,000, $21,297,000 and $51,975,000 for the years ended December 31, 2012, 2011 and 2010, respectively. There were no operating communities held for sale as of December 31, 2012.

As of December 31, 2012, there was land with a net carrying value of $23,065,000 classified as held for sale on the consolidated balance sheet. There was no land or other non operating assets classified as held for sale for the years ended 2011 and 2010.

Income from unconsolidated entities totaled $2,644,000, $2,888,000 and $2,178,000 for the years ended December 31, 2012, 2011 and 2010, respectively. The totals for each year include our share of net income from the joint ventures we own.

During 2012, we sold three joint venture assets: Calavera Point, a 276 home community located in Westminister, Colorado; Pinnacle at the Creek, a 216 home community located in Centennial, Colorado; and Pinnacle at Galleria, a 236 home community, located in Roseville, California. We had a 15% equity ownership in the sold Colorado communities and a 35% equity ownership in the Roseville, California community. The sale of the three joint venture communities resulted in net proceeds of approximately $26,919,000 and we recognized net gain on sale of approximately $6,025,000.

On October 13, 2010, we closed a fixed price cash tender offer for any and all of our 4.125% convertible senior unsecured notes due 2026. As a result, $321,334,000 in aggregate principal amount of our 4.125% convertible senior unsecured notes due 2026 were validly tendered, and we accepted, purchased and subsequently cancelled the notes for an aggregate purchase price of 104% of par, or approximately $334,187,360. After the tender offer an aggregate principal amount of $35,000,000 of the notes remained outstanding as of December 31, 2010. Net loss on extinguishment of debt totaled $23,507,000 for the year ended December 31, 2010. There was no gain or loss on extinguishment of debt during the years ended December 31, 2012 and 2011.

Dividends totaled $3,645,000, $7,655,000 and $11,813,000 for the years ended December 31, 2012, 2011, and 2010, respectively and are attributable to the dividends on our 6.75% Series C and 6.75% Series D Cumulative Redeemable Preferred Stock. Our Series D Cumulative Redeemable Preferred Stock has a $25.00 per share liquidation preference and became callable at our election in December of 2009.

On August 15, 2011, we repurchased 840,285 shares of 6.75% Series D Cumulative Redeemable Preferred Stock at a price of $24.33 per share on the open market, a $0.67 discount to par resulting in a non cash gain of $563,000. In addition, the initial issuance costs associated with these shares totaling $718,000 were charged to retained earnings during the third quarter of 2011. The net effect of the activity was a $155,000 charge to retained earnings during the third quarter of 2011. As of December 31, 2012, 2,159,715 shares of 6.75% Series D Cumulative Redeemable Preferred Stock remain outstanding.

On June 13, 2011, we redeemed all 4,000,000 shares of 6.75% Series C Cumulative Redeemable Preferred Stock at a redemption price of $25.34688 per share. The redemption price was equal to the original issuance price of $25.00 per share, plus accrued and unpaid dividends to the redemption date. The initial issuance costs totaling approximately $3,616,000 associated with this series of perpetual preferred stock were charged to retained earnings during the second quarter of 2011.

During 2011, our Series C Cumulative Redeemable Preferred Stock was outstanding for part of the year and a portion of our Series D Cumulative Redeemable Preferred Stock was outstanding for the entire year. Dividends for the Series C Cumulative Redeemable Preferred Stock for 2011 reflect the dividends earned from January 1, 2011 to the June 13, 2011, redemption date. Dividends for the 6.75% Series D Cumulative Redeemable Preferred Stock for 2011 reflect the dividends earned from January 1, 2011 to December 31, 2011. Included in the total are dividends earned from January 1, 2011 to August 10, 2011 for the 840,285 repurchased shares of 6.75% Series D Cumulative Redeemable Preferred Stock.

As a result of the various factors mentioned above, net income available to common shareholders for the year ended December 31, 2012 was $133,499,000 or $1.74 per diluted share, as compared with $66,461,000, or $0.93 per diluted share for the year ended December 31, 2011, and $41,576,000, or $0.67 per diluted share, for the year ended December 31, 2010.

The following is our reconciliation of net income to funds from operations (FFO) and core funds from operations (Core FFO) for each of the five years ended December 31, 2012:

Depending upon the availability and cost of external capital, we anticipate making additional investments in multifamily apartment communities. These investments are expected to be funded through a variety of sources. These sources may include internally generated cash, temporary borrowings under our revolving credit facility, proceeds from asset sales, public and private offerings of debt and equity securities, and in some cases the assumption of secured borrowings. To the extent that these additional investments are initially financed with temporary borrowings under our revolving credit facility, we anticipate that permanent financing will be provided through a combination of public and private offerings of debt and equity securities, proceeds from asset sales and secured debt. We believe our liquidity and various sources of available capital are sufficient to fund operations, meet debt service and dividend requirements, and finance future investments. Annual cash flows from operating activities exceeded annual distributions to common shareholders, preferred shareholders and noncontrolling members by approximately $79,200,000, $54,000,000 and $34,000,000 for the years ended December 31, 2012, 2011 and 2010, respectively. Due to the timing associated with operating cash flows, there may be certain periods where cash flows generated by operating activities are less than distributions. We believe our revolving credit facility provides adequate liquidity to address temporary cash shortfalls.

On February 1, 2012, we prepaid the single property mortgage on Alessio for $65,866,000 prior to its scheduled maturity with no prepayment penalty.

On August 13, 2012, we completed an offering of $300,000,000, 10.5 year senior unsecured notes. The notes will mature on January 15, 2023 and bear interest at a fixed coupon rate of 3.375%. Net proceeds from the offering, after all discounts, commissions, and issuance costs totaled approximately $295,400,000 and were used for general corporate purposes.

On February 24, 2010, we entered into Equity Distribution Agreements (EDAs) with each of Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, and Wells Fargo Securities, LLC (collectively, the “sales agents”) under which we may issue and sell from time to time through or to its sales agents shares of its common stock having an aggregate offering price of up to $250,000,000.

During the first quarter of 2012, 815,045 shares were issued under the EDAs, with an average share price of $49.09 for total gross proceeds of approximately $40,000,000 and total commissions paid to the sales agents of approximately $800,000. No shares were issued under the EDAs during the nine months ended December 31, 2012. As of December 31, 2012 the remaining capacity under the EDAs totals $123,600,000. During 2011, 1,291,537 shares were issued under the EDAs, with an average share price of $47.55 for total gross proceeds of approximately $61,414,000. During 2010, 581,055 shares were issued under the EDAs for gross proceeds of approximately $25,000,000 with an average gross share price of $43.02. Proceeds from the sale of shares under the EDAs were used for general corporate purposes that include reducing borrowings under our revolving credit facility, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development activities and financing for acquisitions.

On May 11, 2011, we completed an equity offering of 9,200,000 common shares, including shares issued to cover over-allotments, at $48.00 per share. Total gross proceeds from this offering were approximately $441,500,000. We used the net proceeds from the offering for general corporate purposes and to repay borrowings under our revolving credit facility.

During January 2011, we repaid the remaining aggregate principal amount of $48,545,000 of our 7.450% senior notes as they matured.

Effective February 24, 2010, we terminated the equity distribution agreement we entered into on May 14, 2009 under which we could issue and sell from time to time through or to our sales agent shares of our common stock having an aggregate offering price of up to $125,000,000. During 2009, 3,801,185 shares were issued under the equity distribution agreement for gross proceeds of approximately $104,600,000 with an average gross share price of $27.52. Proceeds were used for general corporate purposes, which included reducing borrowings under our revolving credit facility, the repayment of other indebtedness, the redemption or other repurchase of outstanding securities and funding for development activities. During 2010, there were no shares issued under the equity distribution agreement entered into on May 14, 2009.

During 2012, 2011, and 2010 we invested $250,400,000, $161,280,000, and $101,239,000, respectively in development, rehab and capital expenditures. These expenditures are expected to be between $247,000,000 and $300,000,000 for the year ending December 31, 2013.

During February 2012, we exercised our right to redeem for cash all of the $35,000,000 outstanding convertible senior unsecured notes, at a redemption price equal to 100% of the principal amount of the notes outstanding, plus accrued and unpaid interest up to, but excluding, February 21, 2012.

On October 13, 2010, we closed a fixed price cash tender offer for any and all of our 4.125% convertible senior unsecured notes due in 2026. The convertible notes were putable to us in February 2012, August 2013, August 2016 and August 2021. The decision to tender for and retire the majority of outstanding bonds was based on our desire to take advantage of the favorable interest rate environment for long-term debt in 2010 while also avoiding the potential put of these notes in 2012, the same year that our revolving credit facility expires. As a result of this tender offer, $321,334,000 in aggregate principal amount of our 4.125% convertible senior unsecured notes due in 2026 were validly tendered, and we accepted, purchased and subsequently cancelled the notes for an aggregate purchase price of 104% of par, or approximately $334,187,360. After the tender offer an aggregate principal amount of $35,000,000 of the notes remain outstanding. We recognized a net loss on early debt extinguishment of $22,949,000 in connection with the tender offer.

On September 22, 2010, we closed an offering of $300,000,000 of 10.5 year senior unsecured notes. The notes will mature on March 15, 2021 with a coupon rate of 5.20%. Net proceeds from the offering, after all discounts, commissions and issuance costs, totaled approximately $297,477,000. Proceeds from these offerings have been used for general corporate purposes, including the repayment of debt, redemption of equity securities, funding for development activities and financing for acquisitions. Pending these uses, we initially used the proceeds from these offerings to reduce borrowings under our revolving credit facility.

On January 4, 2012, we entered into a $750,000,000 revolving credit facility (the “Credit Agreement”). The Credit Agreement has an initial term of 39 months, terminates on April 3, 2015 and replaces our previous $750,000,000 revolving credit facility. Based on our current debt ratings, the revolving credit facility accrues interest at LIBOR plus 120 basis points. In addition, we pay a 0.20% annual facility fee on the total commitment of the facility.

The total principal amount in unsecured senior notes outstanding at December 31, 2012, consisted of the following:

On December 31, 2012, we had mortgage loans and a secured credit facility with a total principal amount outstanding of $741,942,000, at an effective interest rate of 5.6%, and remaining terms ranging from 1 year to 8 years.

On February 1, 2012, we prepaid the single property mortgage on Alessio for $65,866,000 prior to its scheduled maturity, with no prepayment penalty.

On August 12, 2010, we purchased an operating community totaling 226 homes located in San Jose, California, for an aggregate purchase price of $50,300,000. In connection with the acquisition, we assumed an existing $32,500,000 secured mortgage loan with a fixed interest rate of 5.74% that is scheduled to mature on September 1, 2019.

On April 30, 2010, we refinanced a single property mortgage loan totaling $59,500,000 at a fixed rate of 5.20%. The mortgage has a 10 year interest only term and is scheduled to mature on April 30, 2020. The original mortgage note had a principal amount outstanding of $31,100,000 and was scheduled to mature on October 1, 2010 at a fixed rate of 7.38%.

As of December 31, 2012, we had total outstanding debt balances of $1,731,960,000 and total outstanding shareholders’ equity and redeemable noncontrolling interests of $1,691,233,000, representing a debt to total book capitalization ratio of approximately 51%.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases or privately negotiated transactions. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Our indebtedness contains financial covenants as to minimum net worth, interest coverage ratios, maximum secured debt and total debt to capital, among others. We were in compliance with all such financial covenants throughout the year ended December 31, 2012.

We anticipate that we will continue to require outside sources of financing to meet all our long-term liquidity needs beyond 2012, including scheduled debt repayments, construction funding and property acquisitions. At December 31, 2012, we had an estimated cost of $239,200,000 to complete existing construction in progress, with funding estimated to be incurred through the fourth quarter of 2014.

Scheduled contractual obligations required for the next five years and thereafter are as follows (in thousands):

We continue to consider other sources of possible funding, including joint ventures and additional secured debt. We own unencumbered real estate assets that could be sold, contributed to joint ventures or used as collateral for financing purposes (subject to certain lender restrictions) and have encumbered assets with significant equity that could be further encumbered should other sources of capital not be available.

We have joint venture co-investments in communities that are unconsolidated and accounted for under the equity method of accounting. Management does not believe these investments have a materially different impact upon our liquidity, cash flows, capital resources, credit or market risk than our property management and ownership activities. These joint ventures are discussed in Note 4 of our Consolidated Financial Statements.

As of December 31, 2012 we have 74 wholly or majority owned operating communities with a gross book value of approximately $3,722,838,000. Eighteen of the 74 operating communities with gross book values of approximately $936,542,000 are encumbered with secured financing totaling $741,942,000. The remaining 56 operating communities are unencumbered with an approximate gross book value of $2,786,296,000.

On January 4, 2012, we amended and restated our revolving credit facility (the “Credit Agreement”). Majority owned subsidiaries no longer guarantee our revolving credit facility.

Under applicable accounting guidance, the managing member of a limited liability company, or LLC, is presumed to control the LLC unless the non-managing member(s) have certain rights that preclude the managing member from exercising unilateral control. We have reviewed our control as the managing member of our joint venture assets held in LLCs and concluded that we do not have control over any of those LLCs we manage. Consequently, we have applied the equity method of accounting to our investments in joint ventures. We consolidate entities not deemed to be variable interest entities that we have the ability to control. The accompanying consolidated financial statements include our accounts, the Operating Company and other controlled subsidiaries. At December 31, 2012, we owned 100% of the Operating Company. All significant intercompany balances and transactions have been eliminated in consolidation.

We define critical accounting policies as those that require management’s most difficult, subjective or complex judgments. A summary of our critical accounting policies follows. Additional discussion of accounting policies that we consider significant, including further discussion of the critical accounting policies described below, can be found in the notes to our consolidated financial statements.

Rental communities are recorded at cost, less accumulated depreciation, less an adjustment, if any, for impairment. Costs associated with the purchase of operating communities are allocated between land, building, personal property and intangibles when applicable, based on their estimated fair value in accordance with Financial Accounting Standards Board (FASB) business combination guidance. Land value is assigned based on the purchase price if land is acquired separately, or estimated fair market value based upon market comparables if acquired in a merger or in an operating community acquisition.

Where possible, we stage construction to allow leasing and occupancy during the construction period, which we believe minimizes the duration of the lease-up period following completion of construction. Our accounting policy related to communities in the development and leasing phase is to expense all operating expenses associated with completed apartment homes, including costs associated with the lease up of the development. Projects under development are carried at cost, including direct and indirect costs incurred to ready the assets for their intended use and which are specifically identifiable, including interest and property taxes until homes are placed in service. Interest is capitalized on the construction in progress at a rate equal to our weighted average cost of debt. We have a development group which manages the design, development and construction of apartment communities. Project costs related to the development and construction of apartment communities (including interest and related loan fees, property taxes, and other direct costs including municipal fees, permits, architecture, engineering and other professional fees) are capitalized as a cost of the project. Indirect development costs, including salaries, share based payment and bonuses, benefits, office rent, and associated costs for those individuals directly responsible for development activities are also capitalized and allocated to the projects based on development and construction personnel time allocations. Capitalized indirect development costs totaled approximately $10,738,000, $12,178,000 and $8,433,000 for the twelve month periods ended December 31, 2012, 2011 and 2010, respectively. Indirect costs not related to development and construction activity are expensed as incurred. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and expenditures that increase the value of the property or extend its useful life are capitalized.

Direct investment development projects are considered placed in service as certificates of occupancy are issued and the homes become ready for occupancy. Depreciation begins as homes are placed in service. Land acquired for development is capitalized and reported as Land under development until the development plan for the land is formalized. Once the development plan is finalized and construction contracts are signed, the costs are transferred to the balance sheet line item Construction in progress.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which generally range from 35 to 40 years for buildings and three to ten years for other community assets. The determination as to whether expenditures should be capitalized or expensed, and the period over which depreciation is recognized, requires management’s judgment.

In accordance with FASB guidance on accounting for the impairment or disposal of long-lived assets, our investments in real estate are periodically evaluated for indicators of impairment. The evaluation of impairment and the determination of estimated fair value are based on several factors, and future events could occur which would cause management to conclude that indicators of impairment exist and a reduction in carrying value to estimate fair value is warranted. Impairment is first triggered when the carrying amount of an asset may not be recoverable. To determine impairment, the test consists of comparing the undiscounted net cash flows expected to be produced by the asset to the carrying value of the asset. If the total future net cash flows thus determined are less than the carrying amount of the real estate, impairment exists. If impairment exists and the carrying amount of the real estate exceeds its fair value, an impairment loss is recognized equal to the amount of the excess carrying amount. Based on periodic tests of recoverability of long-lived assets, for the years ended December 31, 2012, 2011 and 2010, we did not record any impairment losses for wholly-owned operating real estate assets.

We also assess land held for development for impairment if our intent changes with respect to the development of the land. During the quarter ended September 30, 2012, we recorded a $15,000,000 non cash asset impairment charge on land held for development located in Anaheim, CA, as a result of our decision to sell the site and no longer proceed with development. Our change in intent to pursue disposition of the land rather than holding for development triggered the determination that an impairment of the basis for the land existed. As a result of this decision, we concluded that indicators of impairment existed and a reduction in the carrying value to estimated fair value was warranted for the land. This charge was the result of an analysis of the land’s estimated fair value (based on market assumptions and comparable sales data) compared to its current capitalized carrying value. There was no land held for development for which an adjustment for impairment in value was made in 2011 or 2010.

In the normal course of business, we will receive offers for sale of our communities, either solicited or unsolicited. For those offers that are accepted, the prospective buyer will usually require a due diligence period before consummation of the transaction. It is not unusual for matters to arise that result in the withdrawal or rejection of the offer during this process. We classify real estate as “held for sale” when all criteria under the FASB guidance has been met.

The guidance also requires that the results of operations of any communities that have been sold, or otherwise qualify as held for sale, be presented as discontinued operations in the consolidated financial statements in all periods presented. The community specific real estate classified as held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. Depreciation ceases once an asset is classified as held for sale. As of December 31, 2012, there was $23,065,000 of reported real estate held for sale, net, relating to our Anaheim, California land site we are in the process of selling.

FASB guidance requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their grant date fair values.

Stock-based compensation cost is measured at the grant date fair value and is recognized, net of estimated forfeitures, as expense ratably over the requisite service period, which is generally the vesting period. The cost related to stock-based compensation included in the determination of consolidated net income includes all awards outstanding that vested during these periods.

Under the 1992 Stock Option Plan and the 1999 BRE Stock Incentive Plan, as amended, and the Fifth Amended and Restated Non-Employee Director Stock Option and Restricted Stock Plan, we award service based restricted stock, performance based restricted stock without market conditions, performance based restricted stock with market conditions, and stock options.

We measure the value of the service based restricted stock and performance based restricted stock without market conditions at fair value on the grant date, based on the number of units granted and the market value of our common stock on that date. Guidance requires compensation expense to be recognized with respect to the restricted stock if it is probable that the service or performance condition will be achieved. As a result, we amortize the fair value, net of estimated forfeitures, as stock-based compensation expense on a straight-line basis over the vesting period for service based restricted stock. For service based restricted stock awards, we evaluate our forfeiture rate at the end of each reporting period based on the probability of the service condition being met. For performance based restricted stock awards without market conditions, we amortize the fair value, net of estimated forfeitures, as stock based compensation expense using the accelerated method with each vesting tranche valued as a separate award. The fair value of performance based restricted stock awards with market conditions is determined using a Monte Carlo simulation to estimate the grant date value. We amortize the fair value of these awards with market conditions, net of estimated forfeitures, as stock-based compensation on a straight-line basis over the vesting period regardless of whether the market conditions are satisfied in accordance with share-based payment guidance.

We estimated the fair value of our options using a Black-Scholes valuation model using various assumptions to determine their grant date fair value. We amortize the fair value, net of estimated forfeitures, as stock-based compensation expense on a straight-line basis over the vesting period.

Arrangements that are not controlled through voting or similar rights are reviewed under the applicable accounting guidance for variable interest entities or “VIEs.” A Company is required to consolidate the assets, liabilities and operations of a VIE if it is determined to be the primary beneficiary of the VIE.

In June 2009, the Financial Accounting Standards Board changed the consolidation analysis for VIEs to require a qualitative analysis to determine the primary beneficiary of the VIE. The determination of the primary beneficiary of a VIE is based on whether the entity has the power to direct matters which most significantly impact the activities of the VIE and has the obligation to absorb losses, or the right to receive benefits, of the VIE which could potentially be significant to the VIE. The guidance requires an ongoing reconsideration of the primary beneficiary and also amends the events triggering a reassessment. The new guidance was effective for us beginning January 1, 2010. Additional disclosures for VIEs are required, including a description about a reporting entity’s involvement with VIEs, how a reporting entity’s involvement with a VIE affects the reporting entity’s financial statements, and significant judgments and assumptions made by the reporting entity to determine whether it must consolidate the VIE.

financial support provided by any parties, including equity holders or b) as a group the holders of the equity investment at risk lack any one of the following three characteristics: (i) the power, through voting rights or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity. We reviewed the consolidation guidance and concluded that joint venture LLCs are not VIEs. We further reviewed the management fees paid to us by our joint ventures and determined that they do not create variable interests in the entities. As of December 31, 2012, we have no land purchase options outstanding requiring evaluation as VIEs and potential consolidation. We have concluded that there is no impact on the financial statements as a result of the adoption of the guidance.

We consolidate entities not deemed to be VIEs that we have the ability to control. The accompanying consolidated financial statements include our accounts, the Operating Company and other controlled subsidiaries. At December 31, 2012, we owned 100% of the Operating Company. All significant intercompany balances and transactions have been eliminated in consolidation.

Approximately 99% of our total revenues for 2012 were derived from apartment communities. Due to the short-term nature of most apartment unit leases (typically one year or less), we may seek to adjust rents to mitigate the impact of inflation upon renewal of existing leases or commencement of new leases, although we cannot assure that we will be able to adjust rents in response to inflation. In addition, market rates may also fluctuate due to short-term leases and other permitted and non-permitted lease terminations.

Dividends Paid to Common and Preferred Shareholders and Distributions to Noncontrolling Members

A cash dividend has been paid to common shareholders each quarter since our inception in 1970. The payment of distributions by BRE is at the discretion of the Board of Directors and depends on numerous factors, including our cash flow, financial condition and capital requirements, REIT provisions of the Internal Revenue Code and other factors.

The quarterly common dividend payment of $0.385 is equivalent to $1.54 per common share on an annualized basis. Cash dividends per common share were $1.50 in 2011 and $1.50 in 2010. Dividends paid for the years ended December 31 are summarized below:

Distributions accrued and paid to noncontrolling interests were $413,000, $1,168,000 and $1,446,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

Market risks relating to our operations result primarily from changes in short-term LIBOR interest rates. We do not have any direct foreign exchange or other significant market risk.

Our exposure to market risk for changes in interest rates relates primarily to our revolving credit facility. We primarily enter into fixed and variable rate debt obligations to support general corporate purposes, including acquisitions and development, capital expenditures and working capital needs. We continuously evaluate our level of variable rate debt with respect to total debt and other factors, including our assessment of the current and future economic environment.

We seek to limit the risk of interest rate exposure by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. We do not engage in hedging activities for speculative purposes.

We have a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, we have not sustained a material loss from those instruments nor do we anticipate any material adverse effect on our net income or financial position in the future from the use of derivatives currently in place.

The fair values of our financial instruments (including such items in the financial statement captions as cash, other assets, accounts payable and accrued expenses, and lines of credit) approximate their carrying or contract values based on their nature, terms and interest rates that approximate current market rates. The fair value of mortgage loans payable and unsecured senior notes is estimated using discounted cash flow analyses with an interest rate similar to that of current market borrowing arrangements. The estimated fair value of our mortgage loans and unsecured senior notes is approximately $1,427,413,000 at December 31, 2012, as compared with a carrying value of $1,731,960,000 at that date.

We had zero and $129,000,000 in variable rate debt outstanding at December 31, 2012 and 2011, respectively. A hypothetical 10% adverse change in interest rates would have had an annualized unfavorable impact of approximately zero and $240,000 on our earnings and cash flows based on these period-end debt levels and our average variable interest rates for the twelve months ended December 31, 2012 and 2011, respectively. We cannot predict the effect of adverse changes in interest rates on our variable rate debt and, therefore, our exposure to market risk, nor can we assure that fixed rate, long-term debt will be available to us at advantageous pricing. Consequently, future results may differ materially from the estimated adverse changes discussed above.

See Part IV, Item 15. Our Consolidated Financial Statements and Schedules are incorporated herein by reference.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial

Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, we have investments in certain unconsolidated entities. As we do not control these entities, our disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those we maintain with respect to our consolidated subsidiaries.

As of December 31, 2012, the end of the quarter and fiscal year covered by this report, management conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us on the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. We continue to review and document our disclosure controls and procedures, including our internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2012, using the framework set forth in the report entitled “Internal Control—Integrated Framework” published by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework management concluded that our internal control over financial reporting was effective as of December 31, 2012.

Ernst & Young LLP, the registered accounting firm that audited the financial statements included in this annual report, has issued an attestation report on our internal control over financial reporting.

There was no change in our internal control over financial reporting that occurred during the fourth quarter of the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.

We have audited BRE Properties, Inc.’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). BRE Properties, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, BRE Properties, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of BRE Properties, Inc. as of December 31, 2012 and 2011, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2012 of BRE Properties, Inc. and our report dated February 15, 2013 expressed an unqualified opinion thereon.

Pursuant to Section 303A.12(a) of the New York Stock Exchange’s Corporate Governance Standards, the Chief Executive Officer has certified to the NYSE that she is not aware of any violation by the Company of NYSE corporate governance listing standards. This certification was submitted to the NYSE and was not qualified in any respect. Additionally, certifications by our Chief Executive Officer and Chief Financial Officer required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed and furnished, respectively, with the Securities and Exchange Commission as exhibits to this report.

The information required by this Item is incorporated herein by reference from our Proxy Statement, relating to our 2013 Annual Meeting of Shareholders, under the headings “Executive Compensation and Other Information” and “Election of Directors—Governance, Board and Committee Meetings; Compensation of Directors,” to be filed with the Securities and Exchange Commission within 120 days of December 31, 2012.

The information required by this Item is incorporated herein by reference from our Proxy Statement, relating to our 2013 Annual Meeting of Shareholders, under the heading “Security Ownership of Certain Beneficial Owners and Management,” to be filed with the Securities and Exchange Commission within 120 days of December 31, 2012.

The information required by this Item is incorporated herein by reference from our Proxy Statement, relating to our 2013 Annual Meeting of Shareholders, under the headings “Certain Relationships and Related Transactions,” to be filed with the Securities and Exchange Commission within 120 days of December 31, 2012.

The information required by this Item is incorporated by reference from our Proxy Statement, relating to our 2013 Annual Meeting of Shareholders, under the headings “Report of the Audit Committee” and “Fees of Ernst & Young LLP,” to be filed with the Securities and Exchange Commission within 120 days of December 31, 2012.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


BRE PROPERTIES, INC.

By:		/s/ CONSTANCE B. MOORE
		Constance B. Moore President and Chief Executive Officer

Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

We have audited the accompanying consolidated balance sheets of BRE Properties, Inc. as of December 31, 2012 and 2011, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2012. Our audits also included the financial statement schedule listed in the Index at item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of BRE Properties, Inc. at December 31, 2012 and 2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), BRE Properties, Inc.’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 15, 2013 expressed an unqualified opinion thereon.

BRE Properties, Inc., a Maryland corporation (“BRE” or the “Company”), was formed in 1970. BRE is a self-administered real estate investment trust (“REIT”) focused on the development, acquisition and management of multifamily apartment communities primarily located in the major metropolitan markets within the State of California, and in the Seattle, Washington region. At December 31, 2012, BRE owned directly or through wholly or majority owned subsidiaries, 74 multifamily communities (aggregating 21,160 homes), classified as direct investments in real estate-investments in rental communities on the accompanying consolidated balance sheets. Of these communities, 59 were located in California, 13 in Washington, and two in Arizona. In addition, at December 31, 2012, there were seven communities under various stages of construction and development, including four directly owned communities with 1,188 homes classified as direct investments in real estate-construction in progress and three land parcels which are classified as land under development. BRE also holds a 35% interest in one real estate Limited Liability Company (LLC) that owns one multifamily community with a total of 252 homes and a 15% interest in seven LLC’s that own seven multifamily communities with a total of 2,612 homes at December 31, 2012.

In November 1997, BRE acquired 16 completed communities and eight development communities from certain entities of Trammell Crow Residential-West (the “Transaction”) pursuant to a definitive agreement (the “Contribution Agreement”). BRE paid a total of approximately $160,000,000 in cash and issued $100,000,000 in common stock based on a stock price of $26.93 per share, as provided for in the Contribution Agreement. In addition, certain entities received Operating Company Units (“OC Units”) valued at $76,000,000 in BRE Property Investors LLC (the “Operating Company”), a Delaware limited liability company and a majority owned subsidiary of BRE. The Operating Company assumed approximately $120,000,000 in debt in connection with this purchase. Substantially all of the communities acquired in the Transaction are owned by the Operating Company, which was formed by BRE for the purpose of acquiring the communities in the Transaction.

During the year ended December 31, 2012, the final 160,882 OC units in BRE Property investors LLC were redeemed for BRE common stock and as of December 31, 2012, there were no Operating Company units outstanding and BRE is the sole managing member and sole owner of the Operating Company. The OC units held by non-managing members were included in redeemable noncontrolling interests in the Company’s consolidated financial statements through February 2012, when all remaining units were converted to common stock. Starting in November 1999, non-managing members of the Operating Company could exchange their units for cash in an amount equal to the market value of BRE common stock at the time of the exchange or, at the option of the Company, BRE common stock on a 1:1 basis.

Arrangements that are not controlled through voting or similar rights are reviewed under the accounting guidance for variable interest entities; or “VIEs.” A company is required to consolidate the assets, liabilities and operations of a VIE if it is determined to be the primary beneficiary of the VIE.

The consolidation analysis for VIEs requires a qualitative analysis to determine the primary beneficiary of the VIE. The determination of the primary beneficiary of a VIE is based on whether the entity has the power to direct matters which most significantly impact the activities of the VIE and has the obligation to absorb losses, or the right to receive benefits, of the VIE which could potentially be significant to the VIE. Accounting guidance requires an ongoing reconsideration of the primary beneficiary.

Under the guidance, an entity is a VIE and subject to consolidation, if by design a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any parties, including equity holders or b) as a group the holders of the equity investment at risk lack any one of the following three characteristics: (i) the power, through voting rights or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity. The Company has reviewed the consolidation guidance and concluded that the joint ventures LLCs are not VIEs. The Company has also reviewed the management fees paid to it by its joint ventures and determined that they do not create variable interests in the entities. As of December 31, 2012, the Company had no land purchase options outstanding from third party entities.

Under applicable accounting guidance, the managing member of a limited liability company, or LLC, is presumed to control the joint venture LLC and must prove non-managing member(s) have certain rights that preclude the managing member from exercising unilateral control. The Company has reviewed its control as the managing partner of the Company’s joint venture assets and concluded that it does not have unilateral control over any of the LLCs managed by the Company. The Company has applied the equity method of accounting to its investments in joint ventures.

BRE consolidates entities not deemed to be VIEs that it has the ability to control. The accompanying consolidated financial statements include the accounts of the Company, the Operating Company and other controlled subsidiaries. At December 31, 2012, BRE owned 100% of the Operating Company. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of consolidated financial statements, in accordance with accounting principles generally accepted in the United States of America, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate communities, its investments in and advances to joint ventures, its accrued liabilities, its performance-based equity compensation awards, and its qualification as a REIT. The Company bases its estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could vary under different assumptions or conditions.

Rental communities are recorded at cost, less accumulated depreciation, less an adjustment, if any, for impairment. All communities are held for leasing activities. A land value is assigned based on the purchase price if land is acquired separately, or based on estimated market rates if acquired in a merger or in an operating community acquisition. In connection with the acquisition of an operating community, the Company performs a valuation, allocating to each asset and liability acquired in such transaction its relative fair value at the date of acquisition. The purchase price allocations to tangible assets, such as land, buildings and improvements, and furniture, fixtures and equipment, are reflected in investments in rental communities and depreciated over their estimated useful lives. Any purchase price allocation to intangible assets, such as in-place leases, is included in investments in rental communities and amortized over the average remaining lease term of the acquired leases. The fair value of acquired in-place leases is determined based on the estimated cost to replace such leases, including foregone rents during an assumed re-lease period, as well as the impact on projected cash flow of acquired leases with leased rents above or below current market rents.

Where possible, the Company stages its construction to allow leasing and occupancy during the construction period, which BRE believes minimizes the duration of the lease-up period following completion of construction. The Company’s accounting policy related to communities in the development and leasing phase is to expense all

operating expenses associated with completed apartment homes, including costs associated with the lease up of the development. Projects under development are carried at cost, including direct and indirect costs incurred to ready the assets for their intended use and which are specifically identifiable, including interest and property taxes until homes are placed in service. Interest is capitalized on the construction in progress at a rate equal to the Company’s weighted average cost of debt. The Company has a development group which manages the design, development and construction of apartment communities. Project costs related to the development and construction of apartment communities (including interest and related loan fees, property taxes, and other direct costs including municipal fees, permits, architecture, engineering and other professional fees) are capitalized as a cost of the project. Indirect development costs, including salaries and benefits, office rent, and associated costs for those individuals directly responsible for development activities are also capitalized and allocated to the projects to which they relate. Capitalized payroll totaled approximately $10,738,000, $12,178,000, and $8,433,000 for the twelve month periods ended December 31, 2012, 2011 and 2010, respectively. Indirect costs not related to development and construction activity are expensed as incurred. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and expenditures that increase the value of the property or extend its useful life are capitalized.

Direct investment development projects are considered placed in service as certificates of occupancy are issued and the homes become ready for occupancy. Depreciation begins once homes are placed in service. Land acquired for development is capitalized and reported as Land under development until the development plan for the land is finalized. Once the development plan is finalized and construction contracts are signed, the costs are transferred to the balance sheet line item Construction in progress.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which generally range from 35 to 40 years for buildings and three to ten years for other property.

In accordance with FASB guidance on accounting for the impairment or disposal of long-lived assets, the Company’s investments in real estate are periodically evaluated for indicators of impairment. The evaluation of impairment and the determination of estimated fair value are based on several factors, and future events could occur which would cause management to conclude that indicators of impairment exist and a reduction in carrying value to estimate fair value is warranted. Impairment is first triggered when the carrying amount of an asset may not be recoverable. To determine impairment, the test consists of comparing the undiscounted net cash flows expected to be produced by the asset to the carrying value of the asset. If the total future net cash flows thus determined are less than the carrying amount of the real estate, impairment exists. If impairment exists and the carrying amount of the real estate exceeds its fair value, an impairment loss is recognized equal to the amount of the excess carrying amount. Based on periodic tests of recoverability of long-lived assets, for the years ended December 31, 2012, 2011 and 2010, the Company did not record any impairment losses for wholly-owned operating real estate assets.

The Company also assess land held for development for impairment if the intent changes with respect to the development of the land. During the quarter ended September 30, 2012, the Company recorded a $15,000,000 non cash asset impairment charge on land held for development located in Anaheim, CA, as a result of changes in the future plans to develop the project. The change in intent to pursue disposition of the land rather than holding for development triggered the determination that an impairment of the basis for the land existed. As a result of this decision, the Company concluded that indicators of impairment existed and a reduction in the carrying value to estimated fair value was warranted for the land. This charge was the result of an analysis of the land’s estimated fair value (based on market assumptions and comparable sales data) compared to its current capitalized carrying value. There was no land held for development for which an adjustment for impairment in value was made in 2011 or 2010.

FASB guidance also requires that the results of operations of any communities that have been sold, or otherwise qualify as held for sale, be presented as discontinued operations in the Company’s consolidated financial statements in all periods presented. The community specific real estate classified as held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. Depreciation ceases once an asset is classified as held for sale.

In the normal course of business, BRE will receive offers for sale of its communities, either solicited or unsolicited. For those offers that are accepted, the prospective buyer will usually require a due diligence period before consummation of the transaction. It is not unusual for matters to arise that result in the withdrawal or rejection of the offer during this process. The Company classifies real estate as “held for sale” when all of the following criteria have been met: management has committed to a plan to sell the asset, the asset is available for immediate sale in its present condition, an active program to locate a buyer has been initiated, the sale of the asset is probable within one year, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Specific components of net income that are presented as discontinued operations include the held for sale communities’ operating results, depreciation and interest expense to the extent there is a secured loan on the property. In addition, the net gain or loss on the eventual disposal of communities held for sale will be presented as income from discontinued operations when recognized. Real estate assets held for sale are measured at the lower of the carrying amount or the fair value less the cost to sell. Subsequent to classification of a community as held for sale, no further depreciation is recorded on the assets. Communities are presented as held for sale on the accompanying consolidated balance sheets only in the period that they qualify for such treatment. The Company accounts for sales of real estate assets and the related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete and the Company is not obligated to perform significant activities after the sale.

As of December 31, 2012, $23,065,000 of land located in Anaheim, CA was held for sale. There were no operating communities held for sale on December 31, 2012.

The Company’s investments in non-controlled real estate joint ventures and joint ventures which are VIEs in which the Company is not the primary beneficiary are accounted for under the equity method of accounting on the accompanying consolidated financial statements. Investments in real estate joint ventures that are managed by the Company are included in Equity interests in and advances to real estate joint ventures.

Redeemable noncontrolling interests include redeemable OC units and are recorded at their current redemption value. Increases or decreases in the redemption value of the redeemable OC units are recorded against additional paid-in capital. The redeemable noncontrolling interest amount related to the OC units is reclassified to Common stock and Additional paid-in capital at conversion. As of December 31, 2012, there were no redeemable OC units outstanding.

On Decemember 21, 2012, a redeemable noncontrolling interest partner exercised its redemption rights to its membership interest in the Meridian Apartments LLC investment. The Meridian Apartments LLC investment solely owns the community Pinnacle City Center. The redemption resulted in a decrease in redeemable noncontrolling interests of $3,356,000. As of December 31, 2012, there is $4,751,000 of other redeemable noncontrolling interest stated at redemption value.

Rental income is recorded when due from residents and recognized monthly as it is earned and realizable, under lease terms which are generally for periods of one year or less. There were no contingent rental payments or percentage rents in the three years ended December 31, 2012, 2011 and 2010. Rent concessions are amortized over the lives of the related leases.

Other income totaled for the years ended December 31, 2012, 2011 and 2010 is comprised of the following:

Other expenses for the three years ended December 31, 2012 are comprised of the following:

Cash and cash equivalents include all cash and liquid investments with an original maturity of three months or less from the date acquired. The Company maintains its cash at financial institutions. The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant, as the Company places its cash deposits and temporary cash investments with financial institutions believed by management to be creditworthy and of high quality.

The Company utilizes derivative financial instruments to manage interest rate risk and generally designates these financial instruments as cash flow hedges in accordance with derivative and hedging guidance.

Included in Other assets are costs incurred in obtaining debt financing that are deferred and amortized over the terms of the respective debt agreements as interest expense. Related amortization expense is included in Interest expense in the accompanying consolidated statements of income. Net deferred financing costs included in Other assets in the accompanying consolidated balance sheets are $14,654,000 and $8,431,000 as of December 31, 2012, and 2011, respectively. Amortization of deferred costs totaled $2,960,000, $2,223,000 and $2,907,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

BRE has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a result, BRE will not be subject to federal taxation at the corporate level to the extent it distributes, annually, at least 90% of its REIT taxable income, as defined by the Code, to its shareholders and satisfies certain other requirements. To the extent that the Company does not distribute all of its net capital gain, or distribute at least 90%, but less than 100%, of its “REIT taxable income,” as adjusted, the Company will be required to pay tax on the undistributed amount at regular corporate tax rates.

In addition, the states in which BRE owns and operates real estate communities have provisions equivalent to the federal REIT provisions. Management believes that all conditions to qualify as a REIT have been met for all periods presented. Accordingly, no provision has been made for federal or state income taxes at the REIT level in the accompanying consolidated financial statements.

Under FASB guidance, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date.

Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, defined by the FASB and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. The types of assets and liabilities classified as Level 1 fair value generally are G-7 government and agency securities, equities listed in active markets, investments in publicly traded mutual funds with quoted market prices and listed derivatives.

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Fair valued assets that are generally included in this category are stock warrants for which there are market-based implied volatilities, unregistered common stock and thinly traded common stock.

Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Generally, assets carried at fair value and included in this category include stock warrants for which market-based implied volatilities are not available.

The Company’s redeemable noncontrolling interests that have a conversion feature are required to be marked to redemption value at each reporting period. The maximum redemption amount of the redeemable noncontrolling interests is contingent on the fair value of the Company’s common stock at the redemption date, and therefore the amount reported on the consolidated balance sheet is calculated based on the fair value of the Company’s common stock as of the balance sheet date. Since the valuation is based on observable inputs such as quoted prices for similar instruments in active markets, redeemable noncontrolling interests are classified as Level 2. During the first quarter of 2012, all outstanding Operating Company units recorded in redeemable noncontrolling interests were converted to shares of common stock, and a decrease in redeemable noncontrolling interests of $3,789,000 was recorded to adjust the noncontrolling interest to its final redemption value with an offsetting change in additional paid in capital. As of December 31, 2012, no Operating Company units remain outstanding. As of December 31, 2012, there is $4,751,000 of other noncontrolling interest stated at its fixed redemption value.

The estimated fair values of investment securities classified as deferred compensation plan investments are based on quoted market prices utilizing public information for the same transactions and are therefore classified as Level 1. The Company’s deferred compensation plan investments are recorded in Other assets and totaled $4,111,000 and $3,668,000 at December 31, 2012 and at December 31, 2011.

There were no transfers of assets measured at fair value between Level 1 and Level 2 of the fair value hierarchy for the twelve months ended December 31, 2012.

The guidance also requires that the results of operations of any communities that have been sold, or otherwise qualify as held for sale, be presented as discontinued operations in the Company’s consolidated financial statements in all periods presented. The community specific real estate classified as held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. Depreciation ceases once an asset is classified as held for sale.

During 2012, a $15,000,000 non cash impairment charge was recorded in Other expenses in conjunction with the decision to sell land in Anaheim, California that the Company previously intended to develop. The Company’s real estate asset impairment charge (level 3) was the result of an analysis of the land’s fair value (based on market assumptions and comparable sales data) compared to its current capitalized carrying value. As of December 31, 2012, the capitalized carrying value of the land approximates fair value, net of the $15,000,000 impairment charge. The land is classified as Real estate held for sale, net in the consolidated balance sheets at December 31, 2012.

The fair values of BRE’s financial instruments, including such items in the consolidated financial statement captions as other assets, cash, mortgages payable, and lines of credit, approximate their carrying or contract values based on their nature, terms and interest rates that approximate current market rates. The fair value of mortgage loans payable and unsecured senior notes is estimated using discounted cash flow analyses with an interest rate similar to that of current market borrowing arrangements. The fair value of the Company’s mortgage loans payable and unsecured senior notes was approximately $1,427,413,000 (compared to a net carrying value of $1,731,960,000) and $1,612,849,000 (compared to a net carrying value of $1,533,671,000) at December 31, 2012 and 2011, respectively.

FASB guidance requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their grant date fair values.

Effective January 1, 2006, the Company adopted the modified prospective method for share-based payments. This method requires the recognition of compensation cost for all share-based payments that are unvested as of January 1, 2006. The cost related to stock-based compensation included in the determination of consolidated net income for the twelve months ended December 31, 2012, 2011 and 2010 includes all awards outstanding that are vesting during the period. From January 1, 2003 through December 31, 2005, the Company applied fair value recognition provisions. The Company adopted the prospective method as provided for in FASB guidance and applied them prospectively to all awards granted, modified or settled after January 1, 2003.

Under the 1992 Stock Option Plan and the 1999 BRE Stock Incentive Plan, as amended, and the Fifth Amended and Restated Non-Employee Director Stock Option and Restricted Stock Plan, the Company awards service based restricted stock, performance based restricted stock without market conditions, performance based restricted stock with market conditions, and stock options.

The Company measures the value of the service based restricted stock and performance based restricted stock without market conditions at fair value on the grant date, based on the number of units granted and the market value of its common stock on that date. Guidance requires compensation expense to be recognized with respect to the restricted stock if it is probable that the service or performance condition will be achieved. As a result, the Company amortizes the fair value, net of estimated forfeitures, as stock-based compensation expense on a straight-line basis over the vesting period for service based restricted stock. For service based restricted stock awards, the Company evaluates its forfeiture rate at the end of each reporting period based on the probability of the service condition being met. For performance based restricted stock awards without market conditions, the Company amortizes the fair value, net of estimated forfeitures, as stock-based compensation expense using the accelerated method with each vesting tranche valued as a separate award. The fair value of performance based restricted stock awards with market conditions is determined using a Monte Carlo simulation to estimate the grant date fair value. The Company amortizes the fair value of these awards with market conditions, net of estimated forfeitures, as stock-based compensation on a straight-line basis over the vesting period regardless of whether the market conditions are satisfied in accordance with share-based payment guidance.

The Company estimated the fair value of its options using a Black-Scholes valuation model using various assumptions to determine their grant date fair value. The Company amortizes the fair value, net of estimated forfeitures, as stock-based compensation expense on a straight-line basis over the vesting period.

Certain reclassifications and adjustments have been made to the prior years’ consolidated financial statements to conform to the presentation of the current year’s consolidated financial statements due to discontinued operations.

FASB guidance requires certain descriptive information to be provided about an enterprise’s reportable segments. BRE has determined that each of its operating communities, which comprised 99% of BRE’s consolidated assets at December 31, 2012 and December 31, 2011 and approximately 99% of its total consolidated revenues for the three years in the period ended December 31, 2012, represents an operating segment. The Company aggregates its operating segments into five reportable segments based upon geographical region for same-store communities, with non same-store communities aggregated into one reportable segment.

“Same-store” communities are defined as communities that have been completed, stabilized and owned by the Company for two comparable calendar year periods. The Company defines “stabilized” as communities that have reached a physical occupancy of at least 93%. Physical occupancy is calculated by dividing the total occupied homes by the total homes in stabilized communities in the portfolio

All multifamily communities owned by the Company are located in the Western United States, primarily in California, and Seattle, Washington. All revenues are from external customers and there are no revenues from transactions with other segments. There are no residents that contributed 10% or more of BRE’s total revenues in the years ended December 31, 2012, 2011 or 2010.

Effective July 1, 2009, the FASB Accounting Standards Codification (FASB ASC or the Codification) is the single source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP. The adoption of the FASB ASC

does not impact the Company’s financial statements, however the Company’s references to accounting literature within its notes to the consolidated financial statements have been revised to conform to the Codification beginning with the quarter ended September 30, 2009.

In June 2009, the FASB changed the consolidation analysis for VIEs to require a qualitative analysis to determine the primary beneficiary of the VIE. The determination of the primary beneficiary of a VIE is based on whether the entity has the power to direct matters which most significantly impact the activities of the VIE and has the obligation to absorb losses, or the right to receive benefits, of the VIE which could potentially be significant to the VIE. The guidance requires an ongoing reconsideration of the primary beneficiary and also amends the events triggering a reassessment. Additional disclosures for VIEs are required, including a description about a reporting entity’s involvement with VIEs, how a reporting entity’s involvement with a VIE affects the reporting entity’s financial statements, and significant judgments and assumptions made by the reporting entity to determine whether it must consolidate the VIE. The guidance was effective for the Company beginning January 1, 2010. Adoption of this guidance had no impact on the Company’s financial statements.

Effective January 1, 2009, FASB guidance on property acquisitions requires the acquiring entity in a business combination to recognize the fair value of assets acquired and liabilities assumed in the transaction and recognize contingent consideration arrangements and pre-acquisition loss and gain contingencies at their acquisition-date fair value. The acquirer is required to expense, as incurred, acquisition related transaction costs. BRE expenses costs associated with the pursuit of potential acquisitions to General and Administrative expenses. Once an acquisition is probable the costs are categorized and expensed in Other expenses.

In January 2010, the FASB issued an amendment to improving disclosures about fair value. This amendment provides for more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. The new guidance is effective for the Company for interim and annual reporting beginning after December 15, 2009, with one new disclosure effective after December 15, 2010. The adoption of this guidance did not impact the Company’s financial position or results of operations.

During 2012, BRE acquired a parcel of land for future development in Redwood City, California for a purchase price of $11,400,000. BRE also acquired a parcel of land for future development in Pleasanton, California for a purchase price of $11,100,000.

During 2012, BRE sold three communities in San Diego, California: Countryside Village, with 96 homes, located in El Cajon submarket; Terra Nova Villas, with 233 homes, located in Chula Vista; and Canyon Villa, with 183 homes, located in Chula Vista. The approximate net proceeds from the three sales were $88,236,000 resulting in a net gain of $62,136,000.

During 2012, BRE completed construction of one development community, Lawrence Station, with 336 homes in Sunnyvale, California. The aggregate investment in the community totaled $104,400,000 as of December 31, 2012.

During 2011, BRE acquired three communities totaling 652 homes: Lafayette Highlands, with 150 homes, located in Lafayette, California; The Landing at Jack London Square, with 282 homes, located in Oakland, California; and The Vistas of West Hills, with 220 homes, located in Valencia, California. The aggregate inv


Maryland		94-1722214
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

525 Market Street, 4th Floor San Francisco, California		94105-2712
(Address of Principal Executive Offices)		(Zip Code)


Large accelerated filer x		Accelerated filer ¨		Non-accelerated filer ¨		Smaller reporting company ¨


	December 31,
	2012			2011			2010			2009			2008
Total number of homes		21,160			21,336			21,318			21,245			21,196
Physical occupancy⁴		94	%		95	%		95	%		95	%		94	%
Average revenue per home³	$	1,622		$	1,548		$	1,417		$	1,475		$	1,528
Total number of communities		74			76			75			73			72


	December 31,
	2012			2011			2010			2009			2008
Number of same-store homes		19,462			18,641			18,914			19,572			19,053
Same-store homes % of total homes		92	%		87	%		89	%		92	%		90	%
Same-store revenue change		5.5	%		3.4	%		(2.0	%)		(3.9	%)		3.4	%
Same-store expense change		3.6	%		1.5	%		1.7	%		1.9	%		4.0	%
Same-store NOI change		6.4	%		4.3	%		(3.7	%)		(6.4	%)		3.2	%


	Years ended December 31
(amounts in thousands)	2012			2011			2010
Net income available to common shareholders	$	133,499		$	66,461		$	41,576
Interest expense, including discontinued operations		68,467			74,964			84,894
Provision for depreciation, including discontinued operations		101,618			103,940			94,384
Redeemable noncontrolling interests in income		413			1,168			1,446
Net gain on sales of discontinued operations		(62,136	)		(14,489	)		(40,111	)
Net gain on sales of unconsolidated entities		(6,025	)		(4,270	)		—
General and administrative expense		22,848			21,768			20,570
Dividends attributable to preferred stock		3,645			7,655			11,813
Other expenses		15,000			402			5,298
Redemption related to preferred stock issuance cost		—			3,771			—
Net loss on extinguishment of debt		—			—			23,507

Net operating income	$	277,329		$	261,370		$	243,377


Name	Age at February 15, 2013		Position(s)
Constance B. Moore		57	President, Chief Executive Officer and Director
Stephen C. Dominiak		49	Executive Vice President, Chief Investment Officer
Kerry Fanwick		57	Executive Vice President, General Counsel
Deborah J. Jones		62	Executive Vice President, Associate Relations and Development
Scott A. Reinert		54	Executive Vice President, Operations
John A. Schissel		46	Executive Vice President, Chief Financial Officer


Multifamily Communities	2012			2011			2010			2009			2008
Percentage of total portfolio at cost, as of December 31		99	%		99	%		99	%		99	%		99	%
Percentage of total revenues, for the year ended December 31		99	%		99	%		99	%		99	%		99	%


Market	Number of Communities		Homes		Percentage of Revenue¹			Percentage of NOI¹			Occupancy²			Average Rent³
San Francisco Bay Area		16		4,533		26	%		26	%		90	%	$	1,926
Los Angeles		14		3,267		17	%		17	%		96	%		1,808
Seattle		13		3,456		14	%		13	%		96	%		1,368
Orange County		12		3,789		17	%		17	%		95	%		1,571
San Diego		11		3,640		17	%		18	%		95	%		1,622
Inland Empire		5		1,173		5	%		5	%		95	%		1,470
Phoenix		2		902		3	%		3	%		95	%		977
Sacramento		1		400		1	%		1	%		95	%		1,208

Total/Weighted Average		74		21,160		100	%		100	%		94	%	$	1,622


(Dollar amounts in millions) Property Name	Location		Number of Homes		Costs Incurred to Date— December 31, 2012¹		Estimated Total Cost		Estimated Cost to Complete		Estimated Completion Date²
Construction in Progress
Aviara³		Mercer Island, WA		166	$	31.6	$	44.5	$	12.9		2Q/2013
Solstice		Sunnyvale, CA		280		70.8		121.9		51.1		1Q/2014
Wilshire La Brea		Los Angeles, CA		478		176.0		277.3		101.3		4Q/2014
Radius⁴		Redwood City, CA		264		23.9		97.8		73.9		4Q/2014

Total Construction in Progress				1,188	$	302.3	$	541.5	$	239.2


Property Name	Location		Proposed Number of Homes		Costs Incurred to Date— December 31, 2012		Estimated Total Cost⁵
Land Owned⁶
MB 360⁷		San Francisco, CA		360	$	70.0		TBR
Pleasanton I⁸		Pleasanton, CA		254		20.7		TBR
Pleasanton II⁸		Pleasanton, CA		255		14.0		TBR

Total Land Owned				869	$	104.7	$	390.6


	Years ended December 31,
	2012						2011
	Stock Price				Dividends Paid		Stock Price				Dividends Paid
	High		Low		Dividends Paid		High		Low		Dividends Paid
First Quarter	$	52.43	$	48.30	$	0.3850	$	47.69	$	42.01	$	0.3750
Second Quarter	$	53.57	$	47.66	$	0.3850	$	51.15	$	46.31	$	0.3750
Third Quarter	$	53.31	$	46.68	$	0.3850	$	54.31	$	41.39	$	0.3750
Fourth Quarter	$	51.45	$	46.07	$	0.3850	$	50.86	$	39.65	$	0.3750


	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights		Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($)		Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans Excluding Securities Reflected in Column (a)
Plan Category		(a)		(b)		(c)
Equity compensation plans approved by security holders		507,131	$	41.33		1,334,618
Equity compensation plans not approved by security holders		—		—		—
Total		507,131	$	41.33		1,334,618


	Period Ending
*Index*	12/31/07		12/31/08		12/31/09		12/31/10		12/31/11		12/31/12
BRE Properties, Inc.		100.00		73.04		93.07		127.09		152.21		158.12
NAREIT All Equity REIT Index		100.00		62.27		79.70		101.98		110.42		132.18
S&P 500		100.00		63.00		79.68		91.68		93.61		108.59


	(a) Total Number of Shares (or Units) Purchased¹			(b) Average Price Paid per Share (or Unit)²		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Traded Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1, 2012 though March 31, 2012		(44,265	)	$	52.55		—		—
April 1, 2012 though June 30, 2012		(13,560	)	$	48.41		—		—
July 1, 2012 though September 30, 2012		—			—		—		—
October 1, 2012 though October 31, 2012		—			—		—		—
November 1, 2012 though November 30, 2012		—			—		—		—
December 1, 2012 though December 31, 2012		—			—		—		—
Total		(57,825	)	$	51.58		—		—


	2012 Total		% of Total Revenues			2011 Total		% of Total Revenues			2010 Total		% of Total Revenues
Rental income	$	374,982,000		92	%	$	349,667,000		90	%	$	314,722,000		87	%
Ancillary income		15,156,000		4	%		13,392,000		4	%		12,033,000		3	%

Total revenue from continuing operations		390,138,000					363,059,000					326,755,000
Revenues from discontinued operations		7,299,000		2	%		14,561,000		4	%		27,676,000		8	%

Total rental and ancillary income		397,437,000					377,620,000					354,431,000

Income from unconsolidated entities		2,644,000		1	%		2,888,000		1	%		2,178,000		1	%
Other income		2,530,000		1	%		2,536,000		1	%		2,934,000		1	%

Total revenue	$	402,611,000		100	%	$	383,044,000		100	%	$	359,543,000		100	%


	2012 Change		2011 Change
Same-store communities	$	18,834,000	$	23,271,000
Non same-store communities		8,245,000		13,033,000

Total change in rental and ancillary revenues from continuing operations	$	27,079,000	$	36,304,000


	Year Ended December 31,
	2012		2011		2010
Total cost of development communities completed	$	104,400,000		—	$	119,698,000
# of homes completed		336		—		566
Total cost of communities acquired		—	$	170,127,000	$	292,100,000
# of homes acquired		—		652		1,037
Approximate gross sales proceeds of dispositions	$	89,600,000	$	65,175,000	$	167,327,000
# of homes sold		512		634		1,530


	Year ended December 31,
(amounts in thousands)	2013 Range		2012		2011		2010
New development (including land)	$	190,000-$225,000	$	196,021	$	124,249	$	71,630
Rehab expenditures	$	35,000-$50,000		34,420		15,869		5,944
Capital expenditures	$	22,000-$25,000		19,959		21,162		23,665

Total capital expenditures	$	247,000-$300,000	$	250,400	$	161,280	$	101,239


Security	Cash Principal Outstanding			Bonds Retired		Cash Paid		Principal Amount Remaining			% of Par			Extinguishment loss			Write off of Unamortized Discounts / Fees			Net (Loss)
4.125% Senior Notes	$	371,334	⁽¹⁾	$	15,000	$	15,000	$	356,334			100.00	%		—		($	558	)	($	558	)

Open Market Repurchase	$	371,334		$	15,000	$	15,000	$	356,334			100.00	%		—		($	558	)	($	558	)
4.125% Senior Notes	$	356,334	⁽²⁾	$	321,334	$	334,187	$	35,000			104.00	%	($	12,853	)	($	10,096	)	($	22,949	)

Debt Tender Total	$	356,334		$	321,334	$	334,187	$	35,000			104.00	%	($	12,853	)	($	10,096	)	($	22,949	)

Total Tender/Repurchase	$	371,334		$	336,334	$	349,187	$	35,000	⁽³⁾		103.82	%	($	12,853	)	($	10,654	)	($	23,507	)


Maturity	Unsecured Senior Note Balance		Interest Rate (Coupon)
February 2013	$	40,018,000		7.13	%
March 2014		50,000,000		4.70	%
March 2017		300,000,000		5.50	%
March 2021		300,000,000		5.20	%
January 2023		300,000,000		3.38	%

Total/Weighted Average Interest Rate	$	990,018,000		4.79	%


Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(amounts in thousands)
Long-Term Debt Obligations	$	1,731,960	$	70,499	$	61,801	$	318,348	$	1,281,312
Lease Obligations		16,694		1,788		3,615		1,614		9,677

Total	$	1,748,654	$	72,287	$	65,416	$	319,962	$	1,290,989


Paula F. Downey		Ms. Downey has been our Director since March 2008. Currently, Ms. Downey is President and CEO of the California State Automobile Association Inter-Insurance Bureau. She served as President of AAA Northern California, Nevada and Utah (CSAA) from 2005 to 2010. She was Chief Operations Officer from 2003 through 2005 and Senior Vice President and Chief Financial Officer from 2000 to 2003, and was named CEO in July of 2010. Ms. Downey serves as an officer of California State Automobile Association, California State Automobile Association Inter-Insurance Bureau, and as a director of their subsidiaries including Pacific Lighthouse Reinsurance Ltd., Western United Insurance Company, CSAA Life and Financial Services, Inc., ACA Insurance Company, ACA Member Services Company, and Ceres Reinsurance, Inc. Ms. Downey is 57 years old.

Irving F. Lyons, III		Mr. Lyons has been our Director since 2006. Mr. Lyons currently serves on the Board of Directors of Equinix, Inc. and Prologis. He served as Vice Chairman of ProLogis, a global provider of distribution facilities and services, from 2001 through May 2006. He was Chief Investment Officer from March 1997 to December 2004, and held several other executive positions since joining ProLogis in 1993. Prior to joining ProLogis, he was a Managing Partner of King & Lyons, a San Francisco Bay Area industrial real estate development and management company, since its inception in 1979. Mr. Lyons is 63 years old.

Christopher J. McGurk		Mr. McGurk has been our Director since 2006. Currently, Mr. McGurk is Chairman and Chief Executive Officer of Cinedigm Digital Cinema Corporation, a NASDAQ-listed provider of digital services, advertising, software and content distribution to theaters. From 2006 to 2010, Mr. McGurk served as CEO of Overture Films, a motion picture studio. Prior to his post at Overture Films, Mr. McGurk served as Vice Chairman and COO of Metro-Goldwyn-Mayer, Inc. (MGM), a motion picture, television, home video, and theatrical production and distribution company, from 1999 to 2005. From 1996 to 1999, Mr. McGurk served in executive capacities with Universal Pictures, a division of Universal Studios Inc., most recently as President and COO. Mr. McGurk is 56 years old.

Matthew T. Medeiros		Mr. Medeiros has been our Director since 2005. Mr. Medeiros has served as President, Chief Executive Officer and Director of SonicWALL, a global Internet security company, since March 2003. From 1998 to December 2002, he served as Chief Executive Officer of Philips Components, a division of Royal Philips Electronics, a consumer electronics company. Mr. Medeiros served as Chairman of the Board, LG.Philips LCD, a liquid crystal display joint venture, from 2001 to 2002. Mr. Medeiros is 56 years old.



Constance B. Moore		Ms. Moore has been our Director since 2002. Ms. Moore has served as President and Chief Executive Officer of the Company since January 1, 2005, and was President and Chief Operating Officer in 2004. Ms. Moore was Executive Vice President and Chief Operating Officer of BRE from July 2002 through December 2003. She held several executive positions with Security Capital Group & Affiliates, an international real estate operating and investment management company, from 1993 to 2002, including Co-Chairman and Chief Operating Officer of Archstone-Smith Trust. Ms. Moore is 57 years old.

Jeanne R. Myerson		Ms. Myerson has been our Director since 2002. Ms. Myerson has served as President and Chief Executive Officer of The Swig Company, a private real estate investment firm, since 1997. She served as President and Chief Executive Officer of The Bailard, Biehl & Kaiser REIT from 1993 to 1997. Ms. Myerson is 59 years old.

Jeffrey T. Pero		Mr. Pero has been our director since 2009. Mr. Pero currently serves on the Board of Directors of Redwood Trust, Inc. He is a former partner of Latham & Watkins (LW), an international law firm, and has been engaged in the practice of law since 1971. As partner, his focus was public and private debt and equity financings; mergers and acquisitions; corporate governance; and compliance with U.S. securities laws. He has lectured extensively on these topics in the United States and England. Mr. Pero also served as primary outside counsel to several publicly traded companies, including BRE. He served as the managing partner of the LW London office from 1990 to 1994. Mr. Pero is 66 years old.

Thomas E. Robinson		Mr. Robinson has been our Director since 2007. Currently, Mr. Robinson is senior advisor to the real estate investment banking group at Stifel, Nicolaus & Company, Inc., St. Louis, MO and its prior affiliate Legg Mason, where he was previously a managing director. Prior to that position he served as the president and chief financial officer of Storage USA, Inc., from 1994-1997. Mr. Robinson currently serves on the Tanger Factory Outlet Centers, Inc. board of directors, is a former trustee/director of Centerpoint Communities Trust and Legg Mason Real Estate Investors, Inc., and a past member of the board of governors of the National Association of Real Estate Investment Trusts (NAREIT). Mr. Robinson is 65 years old.

Dennis E. Singleton		Mr. Singleton has been our director since 2009. Mr. Singleton currently serves on the Board of Directors of Digital Realty Trust, Inc; as vice chairman of the board of trustees of Lehigh University; and is a board member and past president of the Glaucoma Research Foundation. Mr. Singleton was a founding partner of Spieker Communities, Inc., a Northern California-based commercial real estate investment trust (REIT), which was acquired by Equity Office Communities, Inc. in 2003. Mr. Singleton served as Chief Financial Officer and Director of Spieker Communities, Inc. from 1993 to 1995, Chief Investment Officer and Director from 1995 to 1997, and Vice Chairman and Director from 1998 to 2001. Mr. Singleton is 67 years old.



Thomas P. Sullivan		Mr. Sullivan has been our director since 2009. He controls Westwood Interests, a privately-held, San Francisco-based firm active in real estate investments and developments in the Bay Area, including several office development projects in the Silicon Valley. Prior to forming Westwood, he was a founding partner of Wilson Meany Sullivan, a San Francisco development firm focused on urban infill locations on the West Coast. Mr. Sullivan has played a major role in the development of large-scale, technologically innovative projects in San Francisco, most notably Foundry Square, the Ferry Building and 250 Embarcadero (headquarters of Gap, Inc.), as well as several urban infill residential development projects. Prior to WMS, Mr. Sullivan served as President of Wilson/Equity Office, a joint venture between Equity Office Properties Trust and William Wilson and Associates; and as Senior Vice President at William Wilson & Associates. Mr. Sullivan was selected by the Nominating & Governance Committee due to his experience with real estate and development and his advisory roles in Bay Area organizations. Mr. Sullivan is 55 years old.


Report of Independent Registered Public Accounting Firm			54

Consolidated Balance Sheets at December 31, 2012 and 2011			55

Consolidated Statements of Income for the years ended December 31, 2012, 2011, and 2010			56

Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011, and 2010			57

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2012, 2011, and 2010			59

Notes to Consolidated Financial Statements			60


Schedule III—Real Estate and Accumulated Depreciation			88

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and, therefore, have been omitted.


Name	Title	Date

/s/ CONSTANCE B. MOORE Constance B. Moore	President, Chief Executive Officer and Director (Principal Executive Officer)	February 15, 2013

/s/ JOHN A. SCHISSEL John A. Schissel	Executive Vice President, Chief Financial Officer (Principal Financial Officer)	February 15, 2013

/s/ PETER C. OLSON Peter C. Olson	Chief Accounting Officer (Principal Accounting Officer)	February 15, 2013

/s/ PAULA F. DOWNEY Paula Downey	Director	February 15, 2013

/s/ IRVING F. LYONS, III Irving F. Lyons, III	Director	February 15, 2013

/s/ CHRISTOPHER J. MCGURK Christopher J. McGurk	Director	February 15, 2013

/s/ MATTHEW T. MEDEIROS Matthew T. Medeiros	Director	February 15, 2013

/s/ JEANNE R. MYERSON Jeanne R. Myerson	Director	February 15, 2013

/s/ JEFFREY T. PERO Jeffrey T. Pero	Director	February 15, 2013

/s/ THOMAS E. ROBINSON Thomas E. Robinson	Director	February 15, 2013

/s/ DENNIS E. SINGLETON Dennis E. Singleton	Director	February 15, 2013

/s/ THOMAS P. SULLIVAN Thomas P. Sullivan	Director	February 15, 2013