hme8k1q2014earnings99ex.htm

Home Properties, Inc.

Earnings Release and Supplemental Information

First Quarter 2014

Table of Contents

	Page
Earnings Release	1-8
Property Results	9-12
Physical Occupancy Comparison by Region	13
Operating Results by Region	14
New Lease and Renewal Lease Rents vs. Expiring Lease Rents	15
Resident Statistics	16
Net Operating Income Detail and Seasonality Factor for NAV Calculation	17
Operating Expense Detail	18
Impact of Severe Winter Weather on Net Operating Income	19
Discontinued Operations	20
Summary of Recent Acquisitions	21
Summary of Recent Sales	21
Breakdown of Units	22
Debt Summary Schedule	23-27
Recurring Capital Expenditure and Adjusted NOI Summary	28-29
Development Pipeline	30
2014 Earnings Guidance	31-33

FOR IMMEDIATE RELEASE

Home Properties Reports First Quarter 2014 Results

ROCHESTER, N.Y., May 1, 2014 – Home Properties, Inc. (NYSE: HME) today released financial and operational results for the first quarter ended March 31, 2014. All results are reported on a diluted basis.

“While first quarter Funds from Operations per share were 4 cents below our expectations as a result of costs related to severe winter weather, rate increases on expiring leases have been very encouraging,” said Edward J. Pettinella, Home Properties President and CEO. “Rents on new leases, compared to expiring leases, increased steadily month-over-month into May, a positive sign of the typical upturn we expected during the Spring leasing season.”

Earnings per share ("EPS") for the quarter ended March 31, 2014 was $0.79, compared to $0.99 for the quarter ended March 31, 2013. The $0.20 decrease in EPS is primarily attributable to a $9.1 million decrease in the gain on disposition of property partially offset by a $1.5 million increase in income from continuing operations from both the properties owned throughout 2013 and 2014 (the “Core” properties) and those acquired, developed, or redeveloped subsequent to January 1, 2013 (the “Non-Core” properties).

For the quarter ended March 31, 2014, Funds From Operations ("FFO") were $67.6 million, or $1.00 per share, compared to $66.0 million, or $1.05 per share, for the quarter ended March 31, 2013, which equates to a 5.4% decrease on a per-share basis. First quarter 2014 FFO included $0.04 in costs related to record severe weather, over and above the budgeted normal winter, that resulted in increased costs in the majority of the Company’s market areas. Excluding this extreme variance in weather-related costs, FFO per share would have been $1.04. A reconciliation of GAAP net income to FFO is included in the financial data accompanying this news release.

Operating Results

For the first quarter of 2014, same-property comparisons (for 115 Core properties containing 39,915 apartment units owned since January 1, 2013) reflected an increase of 2.8% in base rental rates and an increase of 2.8% in total revenues compared to the same quarter a year ago. Net operating income (“NOI”) decreased by 0.8% from the first quarter of 2013. Property level operating expenses increased by 8.9% compared to the prior year quarter, primarily due to increases in electricity, natural gas heating costs, personnel expense, property insurance, real estate taxes and snow removal costs. Excluding the extraordinary weather-related effects, NOI would have increased by 2.0%, slightly above the Company’s expectations.

For the first quarter of 2014, compared to expiring leases, new lease rents for the Core properties declined by 0.2% while renewals increased 2.9%. In April, new lease rents were 2.3% higher than expiring leases and in May, preliminary results show that new lease rents

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Home Properties Reports First Quarter 2014 Results

For Immediate Release: May 1, 2014

Page 2 of 8

were up 3.7%. Renewals in both April and May were 3.1% higher than expiring leases. In May, the increase in new lease rents surpassed that of renewals for the first time since July of 2012.

Average physical occupancy for the Core properties was 95.0% during the first quarter of 2014, down from 95.5% during the first quarter of 2013. Average monthly rental rates of $1,311 represent a 2.8% increase compared to the year-ago period.

On a sequential basis, compared to the 2013 fourth quarter results for Core properties, rental income (excluding utility recovery) was up 0.4% in the first quarter of 2014, total revenues increased 1.7%, expenses were up 12.4% and NOI decreased 4.2%. Average physical occupancy increased 0.2% to 95.0%. The large sequential increase in expenses represents the seasonality of weather-related costs in the first quarter.

Physical occupancy for the 1,308 apartment units acquired/developed/redeveloped between January 1, 2013 and March 31, 2014 averaged 85.2% during the first quarter of 2014, at average monthly rents of $1,468.

Acquisitions/Dispositions

There were no acquisitions of apartment communities during the first quarter of 2014.

As previously reported, during the first quarter of 2014, the Company sold an 864-unit apartment community in the Washington, D.C. region for $110 million resulting in a gain on sale of $31.3 million. The sale is consistent with the Company’s strategy to lighten the geographic concentration in the Washington, D.C. region, which is now at 28% of total units.

Development

Construction continues on Eleven55 Ripley, which will consist of one 21-story high-rise and a 5-story mid-rise, for a total of 379 units. Construction on the 21-story building is nearly complete, with 309 units ready for occupancy. Lease-up has commenced, with 52 units occupied and another 39 units preleased as of March 31, 2014.

Construction continued as planned on Courts at Spring Mill Station, with initial occupancy expected later in 2014.

Capital Markets Activities

The Company repaid a $58.5 million variable rate mortgage on February 26, 2014 in connection with the property disposition discussed above.

On March 31, 2014, the Company repaid a $22.3 million fixed rate mortgage with an April 1, 2014 maturity date. The property is now part of the unencumbered asset pool. As of March 31, 2014, unencumbered assets represented 53.5% of total undepreciated assets, up from 51.9% at December 31, 2013.

During the first quarter of 2014, the Company did not issue any new shares through its At-The-Market equity offering program. There are approximately two million common shares that remain available under this program. In addition, the Company did not repurchase any shares and has authorization remaining to repurchase approximately 2.3 million shares.

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Home Properties Reports First Quarter 2014 Results

For Immediate Release: May 1, 2014

Page 3 of 8

As of March 31, 2014, the Company’s ratio of debt-to-total market capitalization was 36.8% (based on a March 31, 2014 stock price of $60.12), with $179 million outstanding on its $450 million revolving credit facility and $8.4 million of unrestricted cash on hand. Total debt of $2.4 billion was outstanding, at interest rates averaging 4.5% and with staggered maturities averaging four years. Approximately 91% of total indebtedness was at fixed rates. Interest coverage for the quarter was 3.6 times and the fixed charge ratio was 3.3 times.

Outlook

Based solely on the actual first quarter results as compared to expectations, the Company has decreased the midpoint of its prior guidance by $0.04 per share to $4.48 and the range of FFO per share to $4.42 to $4.54. The guidance range of both FFO and OFFO per share results for the second quarter of 2014 is $1.09 to $1.13. The Company expects to include additional commentary on projected results for the balance of the year when it announces second quarter 2014 financial results.

Dividend Declared

The Company announced a regular cash dividend on the Company’s common shares of $0.73 per share for the quarter ended March 31, 2014. The dividend is payable on May 23, 2014 to shareholders of record on May 12, 2014 and is equivalent to an annualized rate of $2.92 per share. The current annual dividend represents a 4.8% yield based on the April 28 closing price of $61.34. Home Properties’ common stock will begin trading ex-dividend on May 8, 2014.

Supplemental Information

The Company produces supplemental information that includes details regarding property operations, other income, acquisitions, sales, geographic market breakdown, debt and new development. A new schedule is included in the first quarter 2014 supplement that provides details on weather-related effects on the quarter’s results. The supplemental information is available via the Company's website through the "Investors" section or e-mail upon request.

First Quarter 2014 Earnings Conference Call

The Company will conduct a conference call and simultaneous webcast tomorrow at 11:00 AM ET to review and comment on the information reported in this release. The webcast, which includes audio and a slide presentation, will be available, live at 11:00 AM and archived by 1:00 PM, through the "Investors" section home page of the website homeproperties.com. For live audio-only participation, please dial 800-913-1647 (International 212-231-2900).

Second Quarter 2014 Conference/Event Schedule

Home Properties is scheduled to participate in REITWeek 2014:® NAREIT's Investor Forum® from June 3-5, 2014 in New York City. Management will present information and answer questions about its operations on Wednesday, June 4, from 11:00 AM-11:30 AM ET. The audio presentation and related materials will be available at homeproperties.com in the “Investors” section.

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Home Properties Reports First Quarter 2014 Results

For Immediate Release: May 1, 2014

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Second Quarter 2014 Earnings Release and Conference Call

The Company’s second quarter 2014 financial results are scheduled to be released after the stock market closes on Thursday, July 31, 2014. A conference call, which will be simultaneously webcast, is scheduled for Friday, August 1, 2014 at 11:00 AM ET and will be accessible following the instructions for the current quarter's conference call.

This release contains forward-looking statements. Although the Company believes expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that may cause actual results to differ include general economic and local real estate conditions, weather and other conditions that might affect operating expenses, the timely completion of repositioning and new development activities within anticipated budgets, the actual pace of future acquisitions and dispositions, and continued access to capital to fund growth.

Home Properties is a publicly traded apartment real estate investment trust that owns, operates, develops, acquires and rehabilitates apartment communities primarily in suburbs of major metropolitan areas in selected Northeast and Mid-Atlantic markets. An S & P 400 Company, Home Properties owns and operates 119 communities containing 41,568 apartment units. For more information, visit Home Properties’ website at www.homeproperties.com.

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Home Properties Reports First Quarter 2014 Results

For Immediate Release: May 1, 2014

Page 5 of 8

HOME PROPERTIES, INC.

SUMMARY OF OCCUPANCY AND PROPERTY OPERATING RESULTS

	Avg. Physical
First Quarter Results:	Occupancy(a)							1Q 2014	1Q 2014 vs. 1Q 2013 % Growth
							Average
							Monthly		Base
							Rent/		Rental			Total			Total
		1Q 2014			1Q 2013		Occ Unit		Rates			Revenue			Expense			NOI
Core Properties(b)		95.0	%		95.5	%	$	1,311		2.8	%		2.8	%		8.9	%		(0.8	%)
Non-Core Properties(c)		85.2	%	NA			$	1,468	NA			NA			NA			NA
TOTAL PORTFOLIO		94.7	%	NA			$	1,316	NA			NA			NA			NA

(a)	Average physical occupancy is defined as the number of occupied apartment units divided by total apartment units.

(b)	Core Properties consist of 115 properties with 39,915 apartment units owned throughout 2013 and 2014.

(c)

Non-Core Properties consist of 3 properties with 1,308 apartment units acquired, developed, or redeveloped subsequent to January 1, 2013, such that full year comparable operating results are not available. Non-Core Properties exclude properties still under development where construction is not 100% complete.

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Home Properties Reports First Quarter 2014 Results

For Immediate Release: May 1, 2014

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HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data – Unaudited)

	Three Months Ended
	March 31
	2014			2013
Rental income	$	152,354		$	147,293
Property other income		15,560			14,181
Other income		141			249
Total revenues		168,055			161,723
Operating and maintenance		66,459			60,057
General and administrative		9,258			9,083
Interest		25,327			29,995
Depreciation and amortization		44,378			41,412
Other expenses		8			17
Total expenses		145,430			140,564
Income from continuing operations		22,625			21,159
Discontinued operations
Income from discontinued operations		40			808
Gain on disposition of property		31,306			40,359
Discontinued operations		31,346			41,167
Net income		53,971			62,326
Net income attributable to noncontrolling interest		(8,180	)		(10,446	)
Net income attributable to common stockholders	$	45,791		$	51,880
Reconciliation from net income attributable to common stockholders to Funds From Operations:
Net income available to common stockholders	$	45,791		$	51,880
Real property depreciation and amortization		44,088			42,665
Noncontrolling interest		8,180			10,446
Gain on disposition of property		(31,306	)		(40,359	)
FFO - basic and diluted, as defined by NAREIT		66,753			64,632
Loss from early extinguishment of debt in connection with sale of real estate		802			1,416
FFO - basic and diluted (1)	$	67,555		$	66,048

(1)

Pursuant to the updated guidance for Funds From Operations provided by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"), FFO is defined as net income (computed in accordance with accounting principles generally accepted in the United States of America ("GAAP")) excluding gains or losses from disposition of property, impairment write-downs of depreciable real estate, noncontrolling interest and extraordinary items plus depreciation from real property. The Company adds back debt extinguishment costs and other one-time costs incurred as a result of repaying property specific debt triggered upon sale of a property. Because of the limitations of the FFO definition as published by NAREIT as set forth above, the Company has made certain interpretations in applying the definition. The Company believes all adjustments not specifically provided for are consistent with the definition. Other similarly titled measures may not be calculated in the same manner.

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Home Properties Reports First Quarter 2014 Results

For Immediate Release: May 1, 2014

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HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data – Unaudited)

	Three Months Ended
	March 31
	2014			2013
FFO – basic and diluted	$	67,555		$	66,048
FFO – basic and diluted	$	67,555		$	66,048
Acquisition costs of closed deals included in other expenses		8			17
Operating FFO (2)	$	67,563		$	66,065
FFO – basic and diluted	$	67,555		$	66,048
Recurring non-revenue generating capital expenses		(9,129	)		(9,034	)
AFFO (3)	$	58,426		$	57,014
Operating FFO	$	67,563		$	66,065
Recurring non-revenue generating capital expenses		(9,129	)		(9,034	)
Operating AFFO (2) (3)	$	58,434		$	57,031
Weighted average shares/units outstanding:
Shares – basic		57,106.9			51,618.7
Shares – diluted		57,620.7			52,325.4
Shares/units – basic (4)		67,336.5			62,045.9
Shares/units – diluted (4)		67,850.3			62,752.6
Per share/unit:
Net income – basic	$	0.80		$	1.01
Net income – diluted	$	0.79		$	0.99
FFO – basic	$	1.00		$	1.06
FFO – diluted	$	1.00		$	1.05
Operating FFO (2)	$	1.00		$	1.05
AFFO (3)	$	0.86		$	0.91
Operating AFFO (2) (3)	$	0.86		$	0.91
Common Dividend paid	$	0.73		$	0.70

(2)	Operating FFO is defined as FFO as adjusted for the addback of acquisition costs on closed deals.

(3)

Adjusted Funds From Operations ("AFFO") is defined as FFO less an annual reserve for anticipated recurring, non-revenue generating capitalized costs of $900 and $848 per apartment unit in 2014 and 2013, respectively. The resulting sum is divided by the weighted average shares/units on a diluted basis to arrive at AFFO per share/unit.

(4)	Basic includes common stock outstanding plus operating partnership units in Home Properties, L.P., which can be converted into shares of common stock. Diluted includes additional common stock equivalents.

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Home Properties Reports First Quarter 2014 Results

For Immediate Release: May 1, 2014

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HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(in thousands - Unaudited)

	March 31, 2014			December 31, 2013
Land	$	770,851		$	786,868
Construction in progress		192,111			187,976
Buildings, improvements and equipment		4,588,065			4,645,921
		5,551,027			5,620,765
Accumulated depreciation		(1,258,186	)		(1,243,243	)
Real estate, net		4,292,841			4,377,522

Cash and cash equivalents		8,403			9,853
Cash in escrows		26,006			23,738
Accounts receivable		15,118			14,937
Prepaid expenses		15,777			22,089
Deferred charges		11,021			11,945
Other assets		7,059			7,793
Total assets	$	4,376,225		$	4,467,877
Mortgage notes payable	$	1,725,359		$	1,814,217
Unsecured notes payable		450,000			450,000
Unsecured line of credit		179,000			193,000
Accounts payable		28,193			27,540
Accrued interest payable		10,362			8,392
Accrued expenses and other liabilities		31,097			33,936
Security deposits		18,310			18,479
Total liabilities		2,442,321			2,545,564

Common stockholders’ equity		1,641,678			1,629,253
Noncontrolling interest		292,226			293,060
Total equity		1,933,904			1,922,313
Total liabilities and equity	$	4,376,225		$	4,467,877

Total shares/units outstanding:
Common stock		57,106.9			56,961.6
Operating partnership units		10,218.4			10,287.2
		67,325.3			67,248.8

For further information:

David P. Gardner, Executive Vice President and Chief Financial Officer, (585) 246-4113

Charis W. Warshof, Vice President, Investor Relations, (585) 295-4237

###

Table of Contents

Property Results

First Quarter 2014															1Q '14 Versus 1Q '13
			1Q '14												% Growth												1Q '14
	# of		Company			Date	1Q '14		1Q '14			1Q '13			Rental			Total			Total			Total			Company
Region	Units		% Units (1)			Acquired (2)	Rent/Mo		Occup(3)			Occup(3)			Rates(4)			Revenue			Expense			NOI			% NOI (1)
Baltimore
Annapolis Roads		282				6/17/2010	$	1,300		94.0	%		93.0	%		0.1	%		2.6	%		31.9	%		(11.1	%)
Bonnie Ridge		960				7/1/1999		1,173		95.0	%		94.1	%		1.4	%		3.1	%		9.4	%		0.1	%
Canterbury		618				7/15/1999		1,070		95.4	%		94.6	%		3.9	%		6.5	%		6.9	%		6.3	%
Charleston Place		858				9/30/2010		1,256		95.3	%		95.2	%		3.3	%		4.2	%		13.4	%		0.4	%
Country Village		344				4/30/1998		1,036		95.9	%		94.7	%		(0.8	%)		0.3	%		9.2	%		(4.9	%)
Dunfield		312				11/1/2007		1,266		91.8	%		95.6	%		2.9	%		(1.7	%)		20.0	%		(10.6	%)
Fox Hall		720				3/28/2007		954		94.4	%		92.3	%		4.2	%		4.5	%		11.4	%		(1.0	%)
Gateway Village		132				7/15/1999		1,444		97.0	%		95.3	%		3.4	%		5.2	%		2.0	%		6.9	%
Heritage Woods		164				10/4/2006		1,189		97.0	%		94.4	%		0.1	%		3.6	%		16.9	%		(2.8	%)
Howard Crossing		1,350				6/28/2012		1,153		93.8	%		93.9	%		2.9	%		5.2	%		7.7	%		3.9	%
Middlebrooke		208				4/1/2010		1,044		96.1	%		95.1	%		4.8	%		4.9	%		7.4	%		3.5	%
Mill Towne Village		384				5/31/2001		964		95.7	%		97.1	%		1.8	%		1.7	%		19.7	%		(7.3	%)
Morningside Heights		1,050				4/30/1998		997		93.6	%		94.3	%		4.3	%		3.8	%		16.7	%		(2.3	%)
Owings Run		504				7/15/1999		1,326		93.2	%		94.8	%		2.4	%		1.4	%		16.3	%		(4.7	%)
Ridgeview at Wakefield Valley		204				1/13/2005		1,269		93.0	%		97.2	%		3.3	%		2.1	%		10.7	%		(2.5	%)
Saddle Brooke		468				10/29/2008		1,182		95.3	%		93.4	%		4.7	%		5.9	%		12.1	%		2.7	%
Selford		102				7/15/1999		1,502		97.1	%		95.1	%		3.3	%		5.2	%		9.5	%		3.5	%
The Apts. at Cambridge Court		544				8/23/2011		1,355		92.7	%		91.4	%		(0.7	%)		0.8	%		4.7	%		(1.2	%)
The Coves at Chesapeake		469				11/20/2006		1,357		91.8	%		94.5	%		2.6	%		(2.9	%)		12.3	%		(8.9	%)
The Greens at Columbia		168				7/29/2010		1,483		95.6	%		95.3	%		2.2	%		3.4	%		12.7	%		(0.1	%)
Top Field		156				10/4/2006		1,374		94.2	%		96.6	%		2.8	%		0.2	%		12.4	%		(4.5	%)
Village Square		370				7/15/1999		1,246		93.4	%		95.6	%		2.7	%		0.1	%		13.1	%		(5.9	%)
Westbrooke		110				4/1/2010		931		96.3	%		97.2	%		3.7	%		4.9	%		5.7	%		4.4	%
Total Baltimore		10,477		25.2	%		$	1,172		94.3	%		94.4	%		2.6	%		3.0	%		11.9	%		(1.4	%)		23.9	%

Boston
Gardencrest		696				6/28/2002	$	1,769		95.8	%		96.2	%		5.6	%		4.9	%		2.2	%		6.3	%
Highland House		172				5/31/2006		1,338		91.0	%		95.0	%		3.8	%		(3.1	%)		1.6	%		(7.0	%)
Liberty Commons		120				8/30/2006		1,329		95.1	%		95.5	%		1.9	%		(0.6	%)		17.0	%		(8.2	%)
Liberty Place		107				6/6/2006		1,575		96.4	%		94.8	%		3.2	%		0.5	%		(3.7	%)		3.7	%
Middlesex Crossing Apartments		252				12/18/2013		1,413		95.9	%		n/a			n/a			n/a			n/a			n/a
Redbank Village		500				7/8/1998		1,008		97.1	%		95.6	%		5.7	%		8.1	%		0.2	%		13.3	%
Stone Ends		280				2/12/2003		1,402		96.3	%		97.1	%		5.2	%		1.3	%		7.8	%		(2.6	%)
The Commons at Haynes Farm		302				7/15/2011		1,400		97.6	%		97.6	%		5.4	%		4.1	%		(2.6	%)		8.4	%
The Heights at Marlborough		348				9/7/2006		1,351		97.0	%		95.3	%		4.9	%		5.8	%		9.9	%		3.1	%
The Meadows at Marlborough		264				9/7/2006		1,307		95.3	%		96.8	%		5.3	%		5.0	%		9.0	%		2.0	%
The Townhomes of Beverly		204				2/15/2007		1,682		94.0	%		97.3	%		5.6	%		1.5	%		11.0	%		(4.0	%)
The Village at Marshfield		276				3/17/2004		1,297		94.9	%		96.7	%		5.3	%		0.9	%		5.4	%		(1.9	%)
Westwoods		35				4/30/2007		1,417		96.7	%		99.0	%		3.0	%		(0.7	%)		32.3	%		(23.8	%)
Total Boston		3,556		8.6	%		$	1,415		95.9	%		96.3	%		5.1	%		3.6	%		4.7	%		2.9	%		8.9	%

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Table of Contents

Property Results

First Quarter 2014															1Q '14 Versus 1Q '13
			1Q '14												% Growth												1Q '14
	# of		Company			Date	1Q '14		1Q '14			1Q '13			Rental			Total			Total			Total			Company
Region	Units		% Units (1)			Acquired (2)	Rent/Mo		Occup(3)			Occup(3)			Rates(4)			Revenue			Expense			NOI			% NOI (1)
Chicago
Blackhawk		371				10/20/2000	$	939		94.7	%		95.8	%		3.4	%		1.7	%		10.5	%		(6.2	%)
Courtyards Village		224				8/29/2001		959		96.8	%		98.0	%		5.0	%		4.5	%		18.6	%		(6.1	%)
Cypress Place		192				12/27/2000		1,105		95.7	%		98.0	%		6.1	%		5.2	%		16.8	%		(2.9	%)
Lakeview Townhomes		120				10/18/2010		1,269		96.9	%		96.2	%		2.5	%		5.2	%		29.9	%		(12.7	%)
The Colony		783				9/1/1999		952		96.0	%		96.8	%		4.3	%		4.3	%		11.9	%		(1.2	%)
The Gates of Deer Grove		204				12/15/2011		1,082		96.5	%		96.1	%		4.3	%		4.4	%		9.5	%		(0.4	%)
The New Colonies		672				6/23/1998		769		97.0	%		96.6	%		0.2	%		3.2	%		12.8	%		(5.0	%)
Total Chicago		2,566		6.2	%		$	939		96.2	%		96.7	%		3.4	%		3.9	%		13.7	%		(4.0	%)		3.9	%

Florida
The Hamptons		668				7/7/2004	$	1,094		96.8	%		94.1	%		6.0	%		9.7	%		9.5	%		9.9	%
Vinings at Hampton Village		168				7/7/2004		1,224		95.5	%		96.7	%		5.7	%		4.3	%		3.5	%		4.9	%
Total Florida		836		2.0	%		$	1,120		96.5	%		94.7	%		5.9	%		8.5	%		8.1	%		8.8	%		1.5	%

Long Island
Bayview / Colonial		160				11/1/2000	$	1,394		97.4	%		98.8	%		3.8	%		6.2	%		8.5	%		4.4	%
Cambridge Village		82				3/1/2002		1,982		97.0	%		98.2	%		3.1	%		3.8	%		7.4	%		1.4	%
Crescent Club		257				9/30/2010		1,471		96.7	%		96.1	%		6.7	%		9.5	%		5.2	%		12.5	%
Devonshire Hills		656				7/16/2001		1,704		96.3	%		96.1	%		2.8	%		4.4	%		3.2	%		5.2	%
Hawthorne Court		434				4/4/2002		1,561		96.2	%		97.4	%		4.3	%		6.3	%		5.5	%		7.0	%
Heritage Square		80				4/4/2002		1,934		97.5	%		99.5	%		3.5	%		3.0	%		26.0	%		(11.6	%)
Holiday Square		144				5/31/2002		1,345		97.8	%		99.7	%		3.2	%		0.1	%		16.0	%		(10.7	%)
Lake Grove		368				2/3/1997		1,575		94.1	%		96.8	%		3.0	%		1.0	%		11.5	%		(5.4	%)
Mid-Island Estates		232				7/1/1997		1,517		97.4	%		96.9	%		2.0	%		3.6	%		5.8	%		2.1	%
Sayville Commons		342				7/15/2005		1,732		96.8	%		97.6	%		3.9	%		2.1	%		(1.3	%)		5.1	%
Southern Meadows		452				6/29/2001		1,559		95.5	%		96.1	%		3.5	%		4.2	%		8.1	%		1.3	%
Westwood Village		242				3/1/2002		2,567		96.9	%		95.3	%		0.5	%		2.1	%		8.1	%		(1.9	%)
Woodmont Village		97				3/1/2002		1,442		97.5	%		96.1	%		3.7	%		9.7	%		25.6	%		1.0	%
Yorkshire Village		40				3/1/2002		1,976		95.8	%		97.6	%		(0.6	%)		(7.5	%)		(6.2	%)		(8.7	%)
Total Long Island		3,586		8.6	%		$	1,666		96.3	%		96.9	%		3.2	%		3.9	%		6.7	%		1.9	%		10.6	%

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Property Results

First Quarter 2014															1Q '14 Versus 1Q '13
			1Q '14												% Growth												1Q '14
	# of		Company			Date	1Q '14		1Q '14			1Q '13			Rental			Total			Total			Total			Company
Region	Units		% Units (1)			Acquired (2)	Rent/Mo		Occup(3)			Occup(3)			Rates(4)			Revenue			Expense			NOI			% NOI (1)
New Jersey
Barrington Gardens		148				3/1/2005	$	1,421		97.3	%		98.0	%		4.9	%		5.1	%		26.4	%		(6.0	%)
Chatham Hill		308				1/30/2004		2,032		91.3	%		93.3	%		3.4	%		3.6	%		13.4	%		(0.6	%)
East Hill Gardens		33				7/8/1998		1,664		98.1	%		100.0	%		3.9	%		0.7	%		22.7	%		(12.0	%)
Hackensack Gardens		198				3/1/2005		1,253		98.4	%		96.8	%		3.8	%		7.4	%		8.7	%		6.2	%
Jacob Ford Village		270				2/15/2007		1,453		95.9	%		97.3	%		4.6	%		4.6	%		12.4	%		0.8	%
Lakeview		106				7/8/1998		1,497		97.5	%		98.0	%		2.6	%		1.6	%		10.9	%		(4.9	%)
Northwood		134				1/30/2004		1,472		97.0	%		95.8	%		3.2	%		5.1	%		(6.2	%)		15.0	%
Oak Manor		77				7/8/1998		2,084		94.9	%		97.3	%		6.0	%		2.9	%		24.9	%		(7.9	%)
Pleasant View		1,142				7/8/1998		1,250		96.1	%		96.5	%		3.3	%		2.5	%		8.3	%		(1.7	%)
Pleasure Bay		270				7/8/1998		1,179		95.7	%		94.2	%		6.1	%		5.1	%		11.4	%		(0.1	%)
Royal Gardens		550				5/28/1997		1,349		97.4	%		95.1	%		2.9	%		6.5	%		9.0	%		4.6	%
Wayne Village		275				7/8/1998		1,515		95.6	%		97.1	%		3.0	%		1.2	%		9.1	%		(3.2	%)
Windsor Realty		67				7/8/1998		1,378		96.8	%		97.8	%		3.4	%		2.0	%		8.9	%		(4.3	%)
Total New Jersey		3,578		8.6	%		$	1,410		96.1	%		96.1	%		3.7	%		3.9	%		10.1	%		(0.3	%)		8.9	%

Philadelphia
Glen Manor		180				9/23/1997		810		93.7	%		95.7	%		0.9	%		(4.8	%)		6.8	%		(18.1	%)
Golf Club		399				3/15/2000		1,207		96.3	%		95.3	%		4.2	%		5.9	%		8.7	%		4.4	%
Hill Brook Place		274				7/28/1999		962		94.5	%		94.3	%		1.2	%		0.6	%		5.0	%		(3.4	%)
Home Properties of Bryn Mawr		316				3/15/2000		1,564		95.8	%		97.6	%		5.7	%		3.8	%		3.4	%		3.9	%
Home Properties of Devon		631				3/15/2000		1,301		95.1	%		96.5	%		2.2	%		1.9	%		11.5	%		(3.1	%)
New Orleans Park		442				7/28/1999		935		94.8	%		93.1	%		2.5	%		8.2	%		7.0	%		9.5	%
Racquet Club East		466				7/7/1998		1,156		91.2	%		95.4	%		2.2	%		(1.7	%)		4.8	%		(6.0	%)
Racquet Club South		103				5/27/1999		964		89.5	%		93.9	%		1.0	%		(4.0	%)		9.5	%		(18.8	%)
Ridley Brook		244				7/28/1999		993		95.1	%		95.0	%		0.9	%		1.0	%		6.6	%		(4.3	%)
Sherry Lake		298				7/23/1998		1,326		95.9	%		95.8	%		0.9	%		2.4	%		9.4	%		(1.2	%)
Stone Hill Apartments		205				11/27/2013		926		89.6	%		n/a			n/a			n/a			n/a			n/a
The Brooke at Peachtree Village		146				8/15/2005		1,264		96.9	%		98.3	%		3.3	%		2.0	%		18.4	%		(6.9	%)
The Landings		384				11/22/1996		1,106		96.5	%		96.7	%		(0.3	%)		2.7	%		19.1	%		(8.9	%)
Trexler Park		250				3/15/2000		1,146		97.0	%		95.8	%		0.9	%		6.8	%		19.3	%		(1.3	%)
Trexler Park West		216				8/15/2008		1,366		97.2	%		97.9	%		(1.1	%)		(3.5	%)		6.1	%		(7.9	%)
Waterview		203				7/14/2011		1,127		96.3	%		94.6	%		4.6	%		7.7	%		24.6	%		(3.0	%)
William Henry		363				3/15/2000		1,230		93.8	%		94.9	%		1.9	%		1.6	%		11.3	%		(4.5	%)
Total Philadelphia		5,120		12.4	%		$	1,172		95.0	%		95.6	%		2.1	%		2.4	%		10.2	%		(2.6	%)		11.1	%

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Property Results

First Quarter 2014															1Q '14 Versus 1Q '13
			1Q '14												% Growth												1Q '14
	# of		Company			Date	1Q '14		1Q '14			1Q '13			Rental			Total			Total			Total			Company
Region	Units		% Units (1)			Acquired (2)	Rent/Mo		Occup(3)			Occup(3)			Rates(4)			Revenue			Expense			NOI			% NOI (1)
Washington, D.C.
1200 East West		247				5/11/2010	$	1,859		92.8	%		96.7	%		(1.5	%)		(3.0	%)		(22.4	%)		10.9	%
Arbor Park of Alexandria		851				Redevelopment		1,615		80.9	%		75.2	%		5.6	%		8.9	%		6.2	%		10.6	%
Braddock Lee		255				3/13/1998		1,454		97.0	%		96.8	%		1.4	%		3.2	%		5.5	%		1.8	%
Cinnamon Run		511				12/28/2005		1,324		92.0	%		92.5	%		2.6	%		4.5	%		(12.3	%)		12.7	%
Courts at Huntington Station		421				6/15/2011		1,973		93.4	%		96.1	%		(0.5	%)		(1.9	%)		3.2	%		(4.3	%)
East Meadow		150				8/1/2000		1,480		95.8	%		96.5	%		1.6	%		5.3	%		4.7	%		5.7	%
Eleven55 Ripley		309				Under Construction		2,087		9.5	%		n/a			n/a			n/a			n/a			n/a
Elmwood Terrace		504				6/30/2000		1,020		95.8	%		95.6	%		3.0	%		1.4	%		0.5	%		2.2	%
Hunters Glen		108				4/19/2011		1,040		93.9	%		93.6	%		3.0	%		7.9	%		4.9	%		9.8	%
Mount Vernon Square		1,387				12/27/2006		1,357		92.8	%		94.8	%		2.5	%		0.9	%		16.0	%		(6.8	%)
Newport Village		937				10/17/2011		1,573		91.7	%		96.2	%		1.4	%		(2.8	%)		12.3	%		(10.7	%)
Park Shirlington		294				3/13/1998		1,469		94.4	%		95.1	%		3.0	%		3.1	%		6.4	%		1.1	%
Peppertree Farm		879				12/28/2005		1,304		93.3	%		92.3	%		3.1	%		5.0	%		9.9	%		2.0	%
Seminary Hill		296				7/1/1999		1,455		97.4	%		96.5	%		3.4	%		5.6	%		5.3	%		5.7	%
Seminary Towers		545				7/1/1999		1,485		94.4	%		96.8	%		1.2	%		1.6	%		7.1	%		(1.8	%)
Somerset Park		108				10/11/2011		1,528		97.7	%		97.6	%		1.5	%		4.1	%		5.8	%		3.1	%
Tamarron		132				7/15/1999		1,649		96.2	%		95.0	%		0.1	%		1.2	%		8.0	%		(1.1	%)
The Apts. at Cobblestone Square		314				6/14/2012		1,331		96.0	%		94.8	%		2.4	%		5.6	%		12.8	%		1.5	%
The Apts. at Wellington Trace		240				3/2/2004		1,415		97.0	%		96.2	%		0.1	%		(0.3	%)		11.8	%		(5.0	%)
The Courts at Dulles		411				11/30/2011		1,533		95.8	%		96.3	%		(0.8	%)		(0.6	%)		7.8	%		(4.7	%)
The Courts at Fair Oaks		364				9/30/2010		1,541		93.8	%		97.5	%		0.6	%		(3.1	%)		8.8	%		(8.0	%)
The Manor - MD		435				8/31/2001		1,381		94.4	%		96.2	%		3.3	%		(0.1	%)		12.1	%		(6.1	%)
The Manor - VA		198				2/19/1999		1,186		94.8	%		94.0	%		5.4	%		10.1	%		10.4	%		9.9	%
The Manor East		164				5/11/2012		1,151		91.8	%		91.3	%		4.4	%		7.3	%		(1.3	%)		13.5	%
The Sycamores		185				12/16/2002		1,467		95.5	%		96.0	%		(0.6	%)		(1.8	%)		11.5	%		(8.8	%)
Village at Potomac Falls		247				8/5/2010		1,459		94.4	%		97.4	%		2.3	%		(0.8	%)		10.9	%		(6.8	%)
West Springfield		244				11/18/2002		1,573		95.9	%		96.2	%		(0.2	%)		(1.6	%)		16.6	%		(9.8	%)
Westchester West		345				12/30/2008		1,412		92.3	%		92.1	%		3.3	%		4.9	%		4.1	%		5.3	%
Woodleaf		228				3/19/2004		1,299		97.3	%		97.1	%		1.3	%		3.7	%		12.4	%		0.3	%
Woodway at Trinity Centre		504				5/17/2012		1,425		95.0	%		95.5	%		1.5	%		2.2	%		2.6	%		2.1	%
Total Washington, D.C.		11,813		28.4	%		$	1,430		94.1	%		95.3	%		1.7	%		1.3	%		7.0	%		(1.8	%)		31.2	%

Total Properties		41,532		100.0	%		$	1,320		94.2	%		n/a			n/a			n/a			n/a			n/a			100.0	%
Total Core Properties		39,915					$	1,311		95.0	%		95.5	%		2.8	%		2.8	%		8.9	%		(0.8	%)

(1)	Represents the percentage of the Company's total Units/NOI attributed to each region, including Core and Non-Core Properties.

(2)	For development properties the date reflects when all units became available to rent.

(3)	Average physical occupancy is defined as the number of occupied apartment units divided by total apartment units.

(4)	Reflects net change in base rental rates before utility reimbursements and economic occupancy changes.

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Physical Occupancy Comparison by Region - Core Properties

Sequential Comparison
First Quarter 2014 vs. Fourth Quarter 2013
Region	% Units			1Q '14			4Q '13			Variance
Baltimore		26.2	%		94.3	%		94.0	%		0.3	%
Boston		8.3	%		95.9	%		95.7	%		0.2	%
Chicago		6.4	%		96.2	%		96.2	%		0.0	%
Florida		2.2	%		96.5	%		95.1	%		1.4	%
Long Island, New Jersey		17.9	%		96.2	%		96.3	%		(0.1	%)
Philadelphia		12.3	%		95.0	%		94.5	%		0.5	%
Washington, D.C.		26.7	%		94.1	%		94.0	%		0.1	%

Total Core		100.0	%		95.0	%		94.8	%		0.2	%

Year over Year Comparison
First Quarter 2014 vs. First Quarter 2013
Region	% Units			1Q '14			1Q'13			Variance
Baltimore		26.2	%		94.3	%		94.4	%		(0.1	%)
Boston		8.3	%		95.9	%		96.3	%		(0.4	%)
Chicago		6.4	%		96.2	%		96.7	%		(0.5	%)
Florida		2.2	%		96.5	%		94.7	%		1.8	%
Long Island, New Jersey		17.9	%		96.2	%		96.5	%		(0.3	%)
Philadelphia		12.3	%		95.0	%		95.6	%		(0.6	%)
Washington, D.C.		26.7	%		94.1	%		95.3	%		(1.2	%)

Total Core		100.0	%		95.0	%		95.5	%		(0.5	%)

March vs. Quarter Comparison
Region	% Units			Mar '14			1Q '14			Variance
Baltimore		26.2	%		94.5	%		94.3	%		0.2	%
Boston		8.3	%		96.1	%		95.9	%		0.2	%
Chicago		6.4	%		96.9	%		96.2	%		0.7	%
Florida		2.2	%		97.0	%		96.5	%		0.5	%
Long Island, New Jersey		17.9	%		96.2	%		96.2	%		0.0	%
Philadelphia		12.3	%		95.3	%		95.0	%		0.3	%
Washington, D.C.		26.7	%		94.4	%		94.1	%		0.3	%

Total Core		100.0	%		95.2	%		95.0	%		0.2	%

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Table of Contents

Operating Results by Region - Core Properties

Sequential Results
First Quarter 2014 vs. Fourth Quarter 2013
				Base Rental			Total
Region	% Units			Revenues(1)			Revenues			Expenses			NOI
Baltimore		26.2	%		0.3	%		1.6	%		10.0	%		(2.5	%)
Boston		8.3	%		0.8	%		0.9	%		14.7	%		(6.3	%)
Chicago		6.4	%		0.9	%		2.5	%		15.2	%		(7.1	%)
Florida		2.2	%		3.5	%		4.1	%		2.0	%		5.9	%
Long Island, New Jersey		17.9	%		0.2	%		1.6	%		22.1	%		(9.5	%)
Philadelphia		12.3	%		0.6	%		3.7	%		13.0	%		(2.1	%)
Washington, D.C.		26.7	%		(0.1	%)		1.1	%		6.7	%		(1.9	%)

Total Core		100.0	%		0.4	%		1.7	%		12.4	%		(4.2	%)

Year over Year Results
First Quarter 2014 vs. First Quarter 2013
				Base Rental			Total
Region	% Units			Revenues(1)			Revenues			Expenses			NOI
Baltimore		26.2	%		2.2	%		3.0	%		11.9	%		(1.4	%)
Boston		8.3	%		4.3	%		3.6	%		4.7	%		2.9	%
Chicago		6.4	%		3.0	%		3.9	%		13.7	%		(4.0	%)
Florida		2.2	%		7.6	%		8.5	%		8.1	%		8.8	%
Long Island, New Jersey		17.9	%		3.2	%		3.9	%		8.2	%		0.9	%
Philadelphia		12.3	%		1.5	%		2.4	%		10.2	%		(2.6	%)
Washington, D.C.		26.7	%		0.5	%		1.3	%		7.0	%		(1.8	%)

Total Core		100.0	%		2.1	%		2.8	%		8.9	%		(0.8	%)

(1)	Reflects net change in base rental revenues before utility reimbursements and economic occupancy changes.

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Table of Contents

Percentage Change in New Lease and Renewal Lease Rents Compared to
Expiring Lease Rents - Core Properties
	1Q '13						2Q '13						3Q '13						4Q '13						YTD '13
Region	New			Renewal			New			Renewal			New			Renewal			New			Renewal			New			Renewal
Baltimore		1.6	%		3.7	%		2.1	%		4.0	%		1.1	%		4.2	%		(1.1	%)		3.8	%		1.0	%		3.9	%

Boston		1.9	%		3.4	%		7.3	%		4.2	%		7.0	%		4.7	%		1.4	%		3.4	%		5.0	%		4.1	%

Chicago		0.5	%		3.0	%		2.3	%		4.0	%		2.4	%		3.9	%		0.4	%		4.5	%		1.8	%		3.9	%

Florida		4.6	%		4.3	%		7.9	%		3.6	%		5.7	%		4.0	%		5.1	%		4.0	%		6.0	%		3.9	%

Long Island, New Jersey		3.8	%		3.1	%		3.5	%		3.3	%		4.1	%		3.4	%		1.8	%		3.6	%		3.4	%		3.4	%

Philadelphia		(0.4	%)		2.9	%		2.4	%		3.7	%		0.0	%		4.3	%		(2.2	%)		2.9	%		0.1	%		3.6	%

Washington, D.C.		(0.3	%)		4.1	%		0.7	%		3.9	%		0.2	%		3.9	%		(3.0	%)		3.3	%		(0.6	%)		3.8	%

Total Core		1.3	%		3.6	%		2.7	%		3.8	%		2.0	%		4.0	%		(0.7	%)		3.5	%		1.5	%		3.7	%

	1Q '14						April '14						May '14*
Region	New			Renewal			New			Renewal			New			Renewal
Baltimore		0.3	%		3.3	%		3.4	%		3.4	%		4.8	%		3.8	%

Boston		0.4	%		3.0	%		4.5	%		3.5	%		5.0	%		3.4	%

Chicago		2.3	%		3.4	%		3.7	%		2.9	%		3.4	%		3.3	%

Florida		6.9	%		4.2	%		8.6	%		3.9	%		9.5	%		3.7	%

Long Island, New Jersey		1.3	%		2.8	%		3.7	%		2.7	%		4.7	%		2.6	%

Philadelphia		(2.0	%)		2.4	%		(0.6	%)		3.2	%		3.6	%		3.2	%

Washington, D.C.		(2.3	%)		2.7	%		(0.7	%)		3.1	%		0.9	%		3.0	%

Total Core		(0.2	%)		2.9	%		2.3	%		3.1	%		3.7	%		3.1	%

*	Preliminary results for May 2014.

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Resident Statistics

Top Six Reasons for Moveouts
	1Q '14			4Q '13			3Q '13			2Q '13			1Q '13			Year '13			Year '12			Year '11
Transfer within HME		15.4	%		16.1	%		12.1	%		11.9	%		14.1	%		13.4	%		13.1	%		11.6	%

Eviction, skip		14.6	%		13.4	%		10.9	%		13.3	%		14.9	%		12.9	%		14.2	%		16.4	%

Location, apartment size		14.0	%		12.2	%		13.9	%		13.4	%		12.3	%		13.1	%		12.6	%		13.1	%

Employment related		13.9	%		13.1	%		12.9	%		13.6	%		14.7	%		13.5	%		13.2	%		13.4	%

Home purchase		10.6	%		13.3	%		12.7	%		12.5	%		11.2	%		12.5	%		11.3	%		10.4	%

Rent level		9.4	%		10.4	%		11.5	%		10.3	%		9.9	%		10.6	%		10.8	%		10.5	%

Traffic - Core Properties							Turnover - Core Properties
				Signed
	Traffic			Leases
	1Q '14			1Q '14
	vs.			vs.
Region	1Q '13			1Q '13			1Q '14			1Q '13
Baltimore		(10.9	%)		4.9	%		8.1	%		7.7	%
Boston		(10.3	%)		(0.3	%)		8.3	%		8.6	%
Chicago		(4.2	%)		(6.3	%)		8.1	%		9.5	%
Florida		(14.3	%)		1.9	%		11.4	%		10.2	%
Long Island		(12.2	%)		0.0	%		7.2	%		7.3	%
New Jersey		(9.4	%)		(4.2	%)		8.0	%		7.7	%
Philadelphia		(3.7	%)		14.1	%		8.0	%		8.5	%
Washington, D.C.		(9.8	%)		0.6	%		7.6	%		7.7	%

Total Core		(9.3	%)		2.5	%		7.9	%		8.0	%


Bad Debt as % of Rent and Utility Recovery
	1Q '14			1Q '13
Total Core		0.89	%		0.87	%

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Net Operating Income Detail
($ in thousands, except per unit data)

Core Properties
							Qtr			%
	1Q '14			1Q '13			Variance			Variance
Rent	$	147,428		$	144,343		$	3,085			2.1	%
Utility recovery		8,316			7,149			1,167			16.3	%
Rent including recoveries		155,744			151,492			4,252			2.8	%
Other income		6,934			6,763			171			2.5	%
Total income		162,678			158,255			4,423			2.8	%
Operating & maintenance		(64,058	)		(58,834	)		(5,224	)		(8.9	%)
Core Properties NOI	$	98,620		$	99,421		$	(801	)		(0.8	%)

Physical Occupancy		95.0	%		95.5	%		(0.5	%)

Weighted Avg Rent per Unit	$	1,311		$	1,275		$	35			2.8	%

Acquired Properties (1)				Redevelopment Property (2)				Development Properties (3)
	1Q '14				1Q '14				1Q '14
Rent	$	1,540		Rent	$	3,252		Rent	$	134
Utility recovery		1		Utility recovery		145		Utility recovery		-
Rent including recoveries		1,541		Rent including recoveries		3,397		Rent including recoveries		134
Other income		35		Other income		109		Other income		20
Total income		1,576		Total income		3,506		Total income		154
Operating & maintenance		(698	)	Operating & maintenance		(1,299	)	Operating & maintenance		(404	)
Acquired Properties NOI	$	878		Redevelopment Property NOI	$	2,207		Development Properties NOI	$	(250	)

Physical Occupancy		93.1	%	Physical Occupancy		80.9	%	Physical Occupancy	(see development pipeline schedule)

Weighted Avg Rent per Unit	$	1,195		Weighted Avg Rent per Unit	$	1,615		Weighted Avg Rent per Unit	$	2,087

(1)	Acquired Properties consist of acquired properties subsequent to January 1, 2013, such that full year operating results are not available.

(2)	The Redevelopment Property is Arbor Park of Alexandria, where 851 units in 52 buildings commenced renovation in 2011 on a building by building basis.

(3)	Development Properties consist of one property, Eleven55 Ripley.

Seasonality Factor for NAV Calculation

To annualize net operating income in order to calculate a net asset value, the seasonality factor to apply to the current quarter's effective NOI run rate is 23.8%. This will adjust for the typical seasonal variability in NOI for each quarter.

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Operating Expense Detail - Core Properties
($ in thousands)

					Qtr			%
	1Q '14		1Q '13		Variance			Variance
Electricity	$	2,248	$	2,020	$	228			11.3	%
Gas		6,870		6,069		801			13.2	%
Water & sewer		4,543		4,490		53			1.2	%
Repairs & maintenance		6,433		6,245		188			3.0	%
Personnel expense		14,215		13,984		231			1.7	%
Advertising		1,197		1,176		21			1.8	%
Legal & professional		268		370		(102	)		(27.6	%)
Office & telephone		1,662		1,619		43			2.7	%
Property insurance		3,232		1,171		2,061			176.0	%
Real estate taxes		16,280		15,601		679			4.4	%
Snow		1,957		830		1,127			135.8	%
Trash		935		892		43			4.8	%
Property management G&A		4,218		4,367		(149	)		(3.4	%)
Total Core	$	64,058	$	58,834	$	5,224			8.9	%

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Impact of Severe Winter Weather on Net Operating Income - Core Properties
($ in thousands, except per share data)

Weather-Related Line Items - First Quarter 2014 Actual Compared to Guidance
(Guidance assumed "normal winter" for snowfall and temperature)
								$			Per
								Variance			Share
Electricity	- heating of certain common areas, units and vacant units							$	(150	)	$	(0.002	)
Gas	- natural gas heating costs								(953	)		(0.014	)
Repairs & maintenance	- transportation costs for HME trucks used for plowing								(104	)		(0.002	)
Personnel expense	- overtime incurred for snow removal and freezing pipes								(429	)		(0.006	)
Property insurance	- claims for freezing pipes								(789	)		(0.012	)
Snow	- snow melt product and third-party providers								(1,048	)		(0.015	)
Increased expenses								$	(3,473	)	$	(0.051	)

Utility recovery	- natural gas heating costs passed through to residents								642			0.009

Net decrease to Core NOI								$	(2,831	)	$	(0.042	)


Year over Year Results as Adjusted for Weather-Related Items Described Above
First Quarter 2014 vs. First Quarter 2013
					Total
Region		% Units			Revenues			Expenses			NOI
Baltimore			26.2	%		2.5	%		4.1	%		1.6	%
Boston			8.3	%		3.6	%		0.8	%		5.4	%
Chicago			6.4	%		3.3	%		4.9	%		2.0	%
Florida			2.2	%		8.5	%		7.1	%		9.7	%
Long Island, New Jersey			17.9	%		3.5	%		2.5	%		4.2	%
Philadelphia			12.3	%		1.9	%		3.9	%		0.7	%
Washington, D.C.			26.7	%		0.9	%		2.1	%		0.2	%
Total Core			100.0	%		2.4	%		3.0	%		2.0	%

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Discontinued Operations (1)
($ in thousands)
The results of discontinued operations are summarized for the three months ended March 31, 2014 and 2013 as follows:

	1Q '14		1Q '13
Revenues:
Rental income	$	2,015	$	6,852
Property other income		286		718
Total revenues		2,301		7,570
Expenses:
Operating and maintenance		892		2,626
Interest (2)		1,109		2,369
Depreciation and amortization		260		1,767
Total expenses		2,261		6,762
Income from discontinued operations		40		808
Gain on disposition of property		31,306		40,359
Discontinued operations	$	31,346	$	41,167

(1)	Properties included in discontinued operations are listed in Summary Of Recent Sales.

(2)	Includes debt extinguishment costs and other one-time costs incurred as a result of repaying property specific debt triggered upon sale of $802 for the three months ended March 31, 2014 and $1,416 for the three months ended March 31, 2013.

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Summary of Recent Acquisitions
($ in millions, except unit and per unit data)

											Wtd Avg
			Purchase	# of		Cap (1)			Purchase		Price per
Community	Region	State	Date	Units		Rate			Price		Unit
2014 Acquisitions

			Total 2014		-				$	-
2013 Acquisitions
Stone Hill	Philadelphia	PA	11/27/2013		205		6.8	%	$	15.5	$	75,610
Middlesex Crossing	Boston	MA	12/18/2013		252		6.4	%		40.3		159,722
			Total 2013		457		6.5	%	$	55.8	$	121,991

			Total 2014 and 2013 Acquisitions		457		6.5	%	$	55.8	$	121,991

(1)	Capitalization (Cap) rate based on projected NOI at the time of acquisition after an allowance for a 2.7% management fee but before capital expenditures.

Summary Of Recent Sales
($ in millions, except unit and per unit data)
											Wtd Avg
			Sale	# of		Cap (2)			Sales		Price per		Unlevered
Community	Region	State	Date	Units		Rate			Price		Unit		IRR
2014 Sales
Cider Mill	Washington, D.C.	MD	2/26/2014		864		6.9	%	$	110.0	$	127,315		8.4	%
			Total 2014		864		6.9	%	$	110.0	$	127,315		8.4	%

2013 Sales
South Bay Manor	Long Island	NY	3/14/2013		61		6.4	%	$	11.1	$	181,967		10.7	%
Falkland Chase	Washington, D.C.	MD	3/29/2013		450		5.5	%		98.0		217,778		10.8	%
Castle Club	Philadelphia	PA	4/10/2013		158		7.2	%		15.0		94,937		7.4	%
Virginia Village	Washington, D.C.	VA	10/15/2013		344		5.9	%		68.0		197,674		13.4	%
			Total 2013		1,013		5.8	%	$	192.1	$	189,635		11.5	%

			Total 2014 and 2013 Sales		1,877		6.2	%	$	302.1	$	160,948		10.4	%

(2)	Capitalization (Cap) rate based on historical NOI after an allowance for a 2.7% management fee but before capital expenditures.

Page 21

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Breakdown of Units

				Net								Net
				Acquired/								Acquired/
		As of		Developed			As of		12/31/2013			Developed			As of		3/31/2014
Region	State	12/31/2012		in 2013			12/31/2013		% of Units			in 2014			3/31/2014		% of Units
Baltimore	MD		10,477		-			10,477		24.8	%		-			10,477		25.2	%
Boston	MA/ME		3,303		253			3,556		8.4	%		-			3,556		8.6	%
Chicago	IL		2,566		-			2,566		6.1	%		-			2,566		6.2	%
Florida	FL		836		-			836		2.0	%		-			836		2.0	%
Long Island, New Jersey	NY/NJ		7,225		(61	)		7,164		17.0	%		-			7,164		17.2	%
Philadelphia	PA		5,067		47			5,114		12.2	%		6			5,120		12.4	%
Washington, D.C.	MD/VA		13,161		(704	)		12,457		29.5	%		(644	)		11,813		28.4	%
Total			42,635		(465	)		42,170		100.0	%		(638	)		41,532		100.0	%

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Debt Summary Schedule
($ in thousands)

		Interest			03/31/14
Property	Lender	Rate %			Balance		Maturity Date
Fixed Rate Secured

Hawthorne Court	Centerline (CIII) - Fannie Mae		5.27	%		31,910	07/01/14
The Greens at Columbia	M&T Realty-Fannie Mae		3.93	%		8,891	08/01/14
Westchester West - 1st	Berkeley Point Capital - Freddie Mac		6.15	%		25,851	03/01/15
Westchester West - 2nd	Berkeley Point Capital - Freddie Mac		6.64	%		7,195	03/01/15
Stratford Greens	Capital One Bank		5.75	%		28,971	07/01/15
Sayville Commons	M&T Realty - Freddie Mac		5.00	%		36,878	08/01/15
Charleston Place	Wells Fargo - Freddie Mac		3.77	%		31,754	09/01/15
Charleston Place	Wells Fargo - Freddie Mac		3.77	%		21,779	09/01/15
Charleston Place	Wells Fargo - Freddie Mac		3.77	%		18,831	09/01/15
Cypress Place Apartments	Prudential - Fannie Mae		6.56	%		9,736	11/01/15
Golf Club Apartments	Prudential - Fannie Mae		6.38	%		31,353	11/01/15
Northwood Apartments	M&T Realty - Freddie Mac		5.50	%		10,005	12/01/15
Cinnamon Run - 1st	M&T Realty - Freddie Mac		5.25	%		47,071	01/01/16
Cinnamon Run - 2nd	M&T Realty - Freddie Mac		5.55	%		4,893	01/01/16
Peppertree Farm - 1st	M&T Realty - Freddie Mac		5.25	%		72,452	01/01/16
Peppertree Farm - 2nd	M&T Realty - Freddie Mac		5.55	%		1,779	01/01/16
The Hamptons/Vinings at Hamptons	Prudential - Fannie Mae		5.57	%		47,568	02/01/16
Devonshire - 1st	Wachovia - Fannie Mae		5.60	%		34,851	04/01/16
Devonshire - 2nd	Wachovia - Fannie Mae		6.24	%		7,974	04/01/16
Mid-Island	Prudential - Fannie Mae		5.48	%		18,435	04/01/16
Owings Run 1 & 2	Prudential - Fannie Mae		5.59	%		39,941	04/01/16
The Manor East	KeyBank - Freddie Mac		3.25	%		6,811	04/01/16
Country Village	Centerline (CIII) - Fannie Mae		5.52	%		17,491	06/01/16
Fox Hall Apartments	Columbia Nat'l - Freddie Mac		5.61	%		47,000	06/01/17
Mill Towne Village	Prudential - Fannie Mae		5.99	%		24,239	09/01/17
Royal Gardens Apts.	M&T Realty - Freddie Mac		5.83	%		47,000	11/01/17
Village Square 1, 2 & 3	Prudential - Fannie Mae		5.81	%		39,285	12/01/17
Chatham Hill	M&T Realty - Freddie Mac		5.59	%		42,281	01/01/18
William Henry Apartments	PNC - Fannie Mae		4.85	%		27,261	01/01/18
Seminary Towers Apartments	Prudential - Fannie Mae		5.49	%		53,515	07/01/18
The Manor (MD)	Prudential - Fannie Mae		4.23	%		44,024	11/01/18
Bonnie Ridge - 1st	Prudential Life		6.60	%		7,337	12/15/18
Bonnie Ridge - 2nd	Prudential Life		6.16	%		16,443	12/15/18
Bonnie Ridge - 3rd	Prudential Life		6.07	%		23,527	12/15/18
Annapolis Roads	Amerisphere - Fannie Mae		5.12	%		22,884	01/01/19

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Table of Contents

		Interest			03/31/14
Property	Lender	Rate %			Balance		Maturity Date
Fixed Rate Secured

Ridgeview at Wakefield Valley	M&T Realty - Freddie Mac		5.75	%		17,368	01/01/19
The Sycamores	M&T Realty - Freddie Mac		5.71	%		20,243	01/01/19
Top Field Apartments	M&T Realty - Fannie Mae		4.84	%		15,817	01/01/19
Westwood Village	M&T Realty - Freddie Mac		5.68	%		44,346	01/01/19
The Brooke at Peachtree	Wells Fargo - Fannie Mae		5.47	%		11,717	07/01/19
Glen Manor	Prudential - Fannie Mae		5.83	%		7,568	08/01/19
Ridley Brook	Prudential - Fannie Mae		5.83	%		12,563	08/01/19
The Courts at Fair Oaks	Walker&Dunlop - Freddie CME		4.50	%		46,882	08/01/19
Southern Meadows	Red Mortgage - Fannie Mae		5.36	%		38,844	10/01/19
Elmwood Terrace	M&T Realty - Fannie Mae		5.56	%		25,538	11/01/19
Lakeview	Greystone - Fannie Mae		5.31	%		8,659	12/01/19
The Landings	Prudential - Fannie Mae		5.60	%		24,948	01/01/20
East Meadow Apartments	M&T Realty - Freddie Mac		5.40	%		14,041	05/01/20
Selford Townhomes	M&T Realty - Freddie Mac		5.40	%		8,488	05/01/20
Stone Ends Apts.	M&T Realty - Freddie Mac		5.40	%		23,909	05/01/20
Tamarron Apartments	M&T Realty - Freddie Mac		5.40	%		14,048	05/01/20
The Manor (VA)	M&T Realty - Freddie Mac		5.40	%		13,185	05/01/20
Woodmont Village	M&T Realty - Freddie Mac		5.40	%		9,513	05/01/20
Trexler Park	Greystone - Fannie Mae		4.34	%		36,550	08/01/20
Arbor Park of Alexandria	Prudential - Fannie Mae		4.35	%		92,185	11/01/20
New Orleans Park	M&T Realty - Fannie Mae		4.58	%		22,439	11/01/20
Racquet Club East	PNC - Fannie Mae		4.74	%		35,951	12/01/20
Heritage Woods Apts	Greystone - Fannie Mae		5.39	%		13,865	01/01/21
The Meadows at Marlborough	Prudential - Fannie Mae		5.50	%		20,263	01/01/21
Home Properties of Devon	M&T Realty - Fannie Mae		4.85	%		58,053	08/01/21
Pleasant View Gardens	Prudential - Fannie Mae		4.51	%		91,297	11/01/21
Dunfield Townhomes	Midland Mortgage - HUD		5.25	%		10,394	09/01/28
Highland House	Arbor Comml - Fannie Mae		6.32	%		5,289	01/01/29

Wtd Avg - Fixed Secured			5.21	%	$	1,701,183

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		Interest			03/31/14
Property	Lender	Rate %			Balance		Maturity Date
Variable Rate Secured
Sherry Lake	M&T Realty - Freddie Mac		2.90	%		24,176	04/01/17

Wtd Avg - Total Secured Debt			5.18	%	$	1,725,359

Fixed Rate Unsecured
Private Placement Senior Notes - Series A	Various Investors		4.46	%	$	90,000	12/19/18
Private Placement Senior Notes - Series B	Various Investors		5.00	%		60,000	12/19/21
Senior Notes	Prudential Life Insurance		4.16	%		50,000	06/27/19
Bank Term Loan-Interest Rate Swapped to Maturity	M&T Bank et. al.		1.69	%		250,000	08/18/18

Variable Rate Unsecured
Revolving Line of Credit	M&T Bank et. al.		1.19	%		179,000	08/18/17

Wtd Avg - Total Unsecured Debt			2.45	%	$	629,000

Total Combined Debt			4.45	%	$	2,354,359

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% Of Portfolio - Fixed	91.4	%
% Of Portfolio - Variable	8.6	%
			Interest			Years To
			Rate %			Maturity
Wtd Avg - Total Fixed Rate Debt				4.74	%	4.39
Wtd Avg - Total Variable Rate Debt				1.39	%	3.34
Wtd Avg - Combined Debt				4.45	%	4.30

Total Debt Maturity Schedule Exclusive of Revolving Line of Credit
Year of Maturity	Fixed Rate					Variable Rate					Total
	Wtd Avg					Wtd Avg							% Of
	Rate			Debt		Rate			Debt		Debt		Total
2014		4.98	%		40,801		-			-		40,801		1.88	%
2015		5.17	%		222,355		-			-		222,355		10.22	%
2016		5.40	%		299,267		-			-		299,267		13.76	%
2017		5.78	%		157,524		2.90	%		24,176		181,700		8.35	%
2018		3.54	%		554,388		-			-		554,388		25.48	%
2019		5.14	%		322,431		-			-		322,431		14.82	%
2020		4.82	%		295,257		-			-		295,257		13.57	%
2021		4.84	%		243,477		-			-		243,477		11.19	%
2022		-			-		-			-		-		0.00	%
2023		-			-		-			-		-		0.00	%
2024 - 2029		5.61	%		15,683		-			-		15,683		0.72	%
TOTAL		4.74	%	$	2,151,183		2.90	%	$	24,176	$	2,175,359		100.00	%

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Debt Summary Schedule

Unencumbered Properties

Property

# Units

Region

State

Property

# Units

Region

State

Canterbury Apartments

618

Baltimore

Yorkshire Village

Long Island

Gateway Village

132

Baltimore

Barrington Gardens

148

New Jersey

Howard Crossing

1,350

Baltimore

East Hill Gardens

New Jersey

Middlebrooke Apartments

208

Baltimore

Hackensack Gardens

198

New Jersey

Morningside Heights

1,050

Baltimore

Jacob Ford Village

270

New Jersey

Saddle Brooke Apartments

468

Baltimore

Oak Manor

New Jersey

The Apts at Cambridge Court

544

Baltimore

Pleasure Bay

270

New Jersey

The Coves at Chesapeake

469

Baltimore

Wayne Village

275

New Jersey

Westbrooke Apartments

110

Baltimore

Windsor Realty

New Jersey

Gardencrest

696

Boston

Hill Brook Apartments

274

Philadelphia

Liberty Place

107

Boston

Home Properties of Bryn Mawr

316

Philadelphia

Middlesex Crossing

252

Boston

Racquet Club South

103

Philadelphia

The Commons at Haynes Farm

302

Boston

Stone Hill Apartments

205

Philadelphia

The Heights at Marlborough

348

Boston

Waterview

203

Philadelphia

The Townhomes of Beverly

204

Boston

1200 East West Highway

247

Washington, D.C.

The Village at Marshfield

276

Boston

Eleven55 Ripley *

309

Washington, D.C.

Westwoods

Boston

Hunter's Glen

108

Washington, D.C.

Liberty Commons

120

Boston

Seminary Hill

296

Washington, D.C.

Redbank Village

500

Boston

Courts at Huntington Station

421

Washington, D.C.

Blackhawk Apartments

371

Chicago

Woodleaf Apartments

228

Washington, D.C.

Courtyards Village

224

Chicago

Braddock Lee

255

Washington, D.C.

Lakeview Townhomes

120

Chicago

Mt. Vernon Square

1,387

Washington, D.C.

The Colony

783

Chicago

Newport Village

937

Washington, D.C.

The Gates of Deer Grove

204

Chicago

Park Shirlington

294

Washington, D.C.

The New Colonies

672

Chicago

Somerset Park

108

Washington, D.C.

Bayview & Colonial

160

Long Island

The Apts at Cobblestone Square

314

Washington, D.C.

Cambridge Village

Long Island

The Apts at Wellington Trace *

240

Washington, D.C.

Crescent Club

257

Long Island

The Courts at Dulles

411

Washington, D.C.

Heritage Square

Long Island

Village at Potomac Falls

247

Washington, D.C.

Holiday Square

144

Long Island

West Springfield Village

244

Washington, D.C.

Lake Grove Apartments

368

Long Island

Woodway at Trinity Centre

504

Washington, D.C.

Total Number of Units:

20,283

Total Number of Properties:

*	Property added to unencumbered pool during Q1 '14.

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Recurring Capital Expenditure Summary

Effective January 1, 2014, the Company updated its estimate of the amount of recurring, non-revenue enhancing capital expenditures incurred on an annual basis for a standard garden style apartment. The Company now estimates that the annual amount is $900 per apartment unit compared to $848 in the prior year. This new amount better reflects current actual costs and the effects of inflation since the last update.

The Company's policy is to capitalize costs related to the acquisition, development, rehabilitation, construction and improvement of properties. Capital improvements are costs that increase the value and extend the useful life of an asset. Ordinary repair and maintenance costs that do not extend the useful life of the asset are expensed as incurred. Costs incurred on a lease turnover due to normal wear and tear by the resident are expensed on the turn. Recurring capital improvements typically include appliances, carpeting and flooring, HVAC equipment, kitchen and bath cabinets, new roofs, site improvements and various exterior building improvements. Non-recurring, revenue generating upgrades include, community centers, new windows, and kitchen and bath apartment upgrades. Revenue generating capital improvements are expected to directly result in increased rental earnings or expense savings. The Company capitalizes interest and certain internal personnel costs related to the communities under rehabilitation and construction.

The table below is a list of the items that management considers recurring, non-revenue enhancing capital and maintenance expenditures for a standard garden style apartment. Included are the per unit replacement cost and the useful life that Management estimates the Company incurs on an annual basis.

							Maintenance
					Capitalized		Expense		Total
	Capitalized				Expenditure		Cost per		Cost per
	Cost per		Useful		per Unit		Unit		Unit
Category	Unit		Life(1)		per Year(2)		per Year(3)		per Year
Appliances	$	1,673		10	$	167	$	13	$	180
Blinds, shades		148		3		49		6		55
Carpets, cleaning		924		4		231		155		386
Computers, equipment, misc.(4)		124		6		21		22		43
Contract repairs		-		-		-		182		182
Exterior painting (5)		87		3		29		-		29
Flooring		175		7		25		27		52
Furnace, air (HVAC)		880		19		46		84		130
Hot water heater		302		7		43		-		43
Interior painting		-		-		-		194		194
Kitchen, bath cabinets upgrades		1,272		15		85		-		85
Landscaping site		-		-		-		122		122
New roof		906		24		38		-		38
Parking lot site		900		15		60		-		60
Pool, exercise facility		130		15		9		56		65
Windows major		1,712		20		86		-		86
Miscellaneous (6)		190		17		11		-		11
Total	$	9,423			$	900	$	861	$	1,761

(1)	Estimated weighted average actual physical useful life of the expenditure capitalized.

(2)	This amount is not necessarily incurred each and every year. Some years will be higher, or lower depending on the timing of certain longer life expenditures.

(3)

These expenses are included in the Operating and Maintenance line item of the Consolidated Statement of Operations. Maintenance labor costs are not included in the $861 per unit estimate. All personnel costs for site supervision, leasing agents, and maintenance staff are combined and disclosed in the Company's Core Properties expense detail schedule.

(4)	Includes computers, office equipment, furniture, and maintenance vehicles.

(5)	The level of exterior painting may be lower than other similarly titled presentations as the Company's portfolio has a significant amount of brick exteriors. In addition, the other exposed surfaces are most often covered in aluminum or vinyl.

(6)	Includes items such as balconies, siding, and concrete sidewalks.

The breakdown of costs above reflects the Company's unique strategies to improve every property every year regardless of age, and to purchase older properties and rehabilitate and reposition them to enhance internal rates of return. These strategies result in higher costs of capital expenditures and maintenance costs which permit the Company to realize higher revenue growth, higher net operating income growth and a higher rate of property appreciation.

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Capital Expenditure Summary

The Company estimates that on an annual basis $900 per unit is spent on recurring capital expenditures in 2014. During the three months ended March 31, 2014 approximately $225 per unit was spent on recurring capital expenditures. The table below summarizes the actual total capital improvements incurred by major categories and an estimate of the breakdown of total capital improvements by major categories between recurring, and non-recurring revenue generating capital improvements for the three months ended March 31, 2014 as follows:

For the three months ended March 31, 2014
($ in thousands, except per unit data)

					Non-				Total
	Recurring				Recurring				Capital
	Capex		Per Unit(a)		Capex		Per Unit(a)		Improvements		Per Unit(a)
New buildings	$	-	$	-	$	159	$	4	$	159	$	4
Major building improvements		1,272		31		1,977		49		3,249		80
Roof replacements		384		10		1		-		385		10
Site improvements		466		12		-		-		466		12
Apartment upgrades		1,842		46		6,051		150		7,893		196
Appliances		1,426		35		-		-		1,426		35
Carpeting/flooring		2,584		64		96		2		2,680		66
HVAC/mechanicals		898		22		2,630		65		3,528		87
Miscellaneous		212		5		562		14		774		19
Total	$	9,084	$	225	$	11,476	$	284	$	20,560	$	509

(a)	Calculated using the weighted average number of units owned, including 39,915 core units, and 2013 acquisition units of 457 for the three months ended March 31, 2014.

The schedule below summarizes the breakdown of total capital improvements between core and non-core as follows:

For the three months ended March 31, 2014
($ in thousands, except per unit data)

					Non-				Total
	Recurring				Recurring				Capital
	Capex		Per Unit(a)		Capex		Per Unit(a)		Improvements		Per Unit(a)
Core Communities	$	8,981	$	225	$	10,956	$	274	$	19,937	$	499
2013 Acquisition Communities		103		225		520		1,138		623		1,363
Subtotal		9,084		225		11,476		284		20,560		509
2014 Disposed Communities		45		82		-		-		45		82
Corporate office expenditures (b)		-		-		-		-		363		-
Total	$	9,129	$	223	$	11,476	$	284	$	20,968	$	504

(a)	Calculated using the weighted average number of units owned, including 39,915 core units, 2013 acquisition units of 457, and 2014 disposed units of 547 for the three months ended March 31, 2014.

(b)	No distinction is made between recurring and non-recurring expenditures for corporate office. Corporate office expenditures includes principally computer hardware, software, office furniture, fixtures and leasehold improvements. Corporate office expenditures are excluded from per unit figures.

Adjusted Net Operating Income - Core Properties

($ in thousands)

	Quarter			Quarter
	3/31/2014			3/31/2013		Change
Net Operating Income	$	98,620		$	99,421		(0.8	%)
Less: Non-recurring Capex @ 6%		(657	)		-		-
Adjusted Net Operating Income	$	97,963		$	99,421		(1.5	%)

Some of our Core Property NOI reflects incremental investments in the communities above and beyond normal capital replacements. After charging ourselves a 6% cost of debt capital on these additional expenditures, what we refer to as the adjusted NOI for the quarter is recalculated and presented above.

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Development Pipeline as of March 31, 2014

($ in thousands)

Units

Cost

Costs

Physical

Property

when

Cost

Estimate

Incurred

Initial

Date

Complete

Leased

Occup

Type

Complete

Estimate

Per Unit

Start

Occup

Complete

Under construction:

Eleven55 Ripley (5)

Mid-Rise and

379

111,000

293

106,464

4Q 11

4Q 13

3Q 14

91.0

28.5

20.3

Silver Spring, MD

High-Rise

Courts at Spring Mill Station (6)

Donut/Podium

385

89,000

231

48,419

2Q 12

3Q 14

2H 14

0.0

n/a

Conshohocken, PA

Pre-construction:

Westpark Tysons (part of Arbor Row

Mid-Rise and

694

232,000

334

34,627

tbd

n/a

final development plan)

High-Rise

Tysons Corner, VA

Concorde Circle

Garden

300

tbd

14,893

tbd

n/a

Linthicum, MD

Total

204,403

(1)	Costs classified as Construction in Progress at March 31, 2014 are comprised of:

Eleven55 Ripley	$	94,172
Courts at Spring Mill Station		48,419
Westpark Tysons		34,627
Concorde Circle		14,893
	$	192,111

(2)	Represents the percentage of units that have been completed and are available to rent as of April 30, 2014.

(3)	Represents the percentage of units that have been leased as of April 30, 2014.

(4)	Represents the percentage of units occupied as of April 30, 2014.

(5)	The time when construction is expected to be complete has moved out one quarter due to delays from severe winter weather in the first quarter of 2014.

(6)	The time when we are expecting initial occupancy has moved out one quarter due to delays from severe winter weather in the first quarter of 2014.

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2014 Earnings Guidance
	Actual
	First			Second			Third		Fourth
	Quarter			Quarter			Quarter		Quarter		Year

2014 compared to 2013

FFO per share - 2014 guidance	$	0.996		$	1.09 - $1.13		Subsequent quarters will be				$	4.42 to $4.54

Midpoint of guidance	$	0.996		$	1.11		provided in future releases				$	4.48

FFO per share - 2013 actual	$	1.053		$	1.113		$	1.086	$	1.111	$	4.368

Projected improvement		-5.4	%		0.0	%						2.6	%

The range for the year has been changed to reflect the actual results for the first quarter as compared to expectations. All other assumptions for the balance of the year remain unchanged.

2014 compared to 2013 based on "Operating FFO" - OFFO

OFFO per share - 2014 guidance	$	0.996		$	1.09 - $1.13		Subsequent quarters will be				$	4.43 to $4.55

Midpoint of guidance	$	0.996		$	1.11		provided in future releases				$	4.49

OFFO per share - 2013 actual	$	1.053		$	1.113		$	1.087	$	1.115	$	4.373

Actual/projected improvement		-5.4	%		0.0	%						2.7	%

The difference between FFO and OFFO is expensed acquisition costs.

The range for the year has been changed to reflect the actual results for the first quarter as compared to expectations. All other assumptions for the balance of the year remain unchanged.

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2014 Earnings Guidance
	Actual
	First			Second			Third	Fourth
	Quarter			Quarter			Quarter	Quarter	Year

Core Property Assumptions:

Total revenue growth		2.8	%		3.0	%	Subsequent quarters will be		2.7% to 3.7%

Expense growth		8.9	%		3.3	%	provided in future releases		4.4% to 5.4%

NOI growth		-0.8	%		2.8	%			1.9% to 2.9%

The range for the year has been changed to reflect the actual results for the first quarter as compared to expectations. All other assumptions for the balance of the year remain unchanged.

Core Occupancy Assumptions:

2014 physical occupancy	95.0	%	95.7	%	95.8	%	95.4	%	95.5	%

2013 physical occupancy	95.5	%	95.8	%	94.9	%	94.8	%	95.2	%

Change in occupancy	-0.5	%	-0.1	%	0.9	%	0.6	%	0.3	%

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2014 Earnings Guidance

General & Administrative - guidance assumptions remain unchanged from the original guidance provided on February 6, 2014, a decrease of 2.4% at the midpoint of a range between $27.4 million and $28.2 million.

Interest Expense - guidance assumptions remain unchanged from the original guidance provided on February 6, 2014 and is projected to range from

$101.9 million to $102.7 million for the year, without significant differences between the quarters.

Acquisition range for the year remains unchanged at $150 million to $250 million.

Disposition range for the year remains unchanged at $160 million to $260 million

Anticipated expense from acquisition costs for 2014 remains unchanged at $0.9 million versus actual of $0.3 million in 2013.

Capital expenditures:
	Recurring	$35 million
	Upgrading and repositioning	$100 million	remains unchanged from original guidance given February 6, 2014

Page 33