BRE PROPERTIES INC /MD/ - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL DATA

Attached files

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8-K - FORM 8-K - BRE PROPERTIES INC /MD/	d249440d8k.htm
EX-99.1 - PRESS RELEASE - BRE PROPERTIES INC /MD/	d249440dex991.htm

Exhibit 99.2

BRE Properties, Inc.

Third Quarter 2011

Earnings Release and

Supplemental Financial Data


Table of Contents	Page

Financial and Operating Highlights		1

Consolidated Balance Sheets		2

Consolidated Statements of Income - Comparative Quarters		3

Consolidated Statements of Income - Past Five Quarters		4

Reconciliation of FFO, Capital Expenditures, and Continuing and Discontinued Operations		5

Market Summaries “Same-Store” Data

- Quarter vs. Quarter		6

- YTD 2011 vs. YTD 2010		7

- Same-Store Operating Expense Summary and Joint Venture Disclosure		8

- Sequential “Same-Store” Operating Data		9

- Summary of Revenue and Occupancy Changes		10

- Operating, Renewal and Leasing Metrics		11

Debt Summary		12

Development Communities and Land Held for Development		13

Exhibit A - Share Analysis		14

Exhibit B - Non-GAAP Financial Measure Reconciliations and Definitions		15-16

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Except for the historical information contained herein, this document contains forward-looking statements regarding BRE and property performance, and is based on BRE’s current expectations and judgment. Actual results could vary materially depending on risks and uncertainties inherent to general and local real estate conditions, future interest rate levels or capital market conditions. For more details, please refer to BRE’s SEC filings, including its most recent Annual Report on Form 10-K and quarterly report on Form 10-Q.

BRE Properties, Inc.

Financial and Operating Highlights

Third Quarter 2011

(Unaudited; in thousands, except per share, ratio and community data)


	Quarter ending September 30,
	2011		2010
Selected Financial Results

Total revenues⁽¹⁾	$	96,647	$	87,188
Total real estate expenses⁽¹⁾	$	31,535	$	28,337
G&A expense	$	5,678	$	5,015
EBITDA ⁽²⁾	$	60,902	$	57,131
Interest expense	$	18,374	$	21,639
Net income	$	17,071	$	19,605
Funds from operations ⁽²⁾	$	41,503	$	30,567
Net income per share ⁽³⁾	$	0.23	$	0.30
FFO per share⁽²⁾	$	0.55	$	0.47

	Nine Months ending September 30,
	2011		2010
Total revenues⁽¹⁾	$	280,712	$	252,798

Total real estate expenses⁽¹⁾	$	90,994	$	82,622
G&A expense	$	16,071	$	15,454
EBITDA ⁽²⁾	$	177,687	$	165,670
Interest expense	$	56,861	$	63,465
Net income	$	32,886	$	41,430
Funds from operations ⁽²⁾	$	111,133	$	88,875
Net income per share ⁽³⁾	$	0.47	$	0.68
FFO per share⁽²⁾	$	1.57	$	1.44


	Q3 2011			Q3 2010
Financial Metrics

Debt-to-EBITDA		6.9x			7.8x
Debt plus preferred stock-to-EBITDA		7.1x			8.6x
Debt-to-total market capitalization		34.1	%		39.9	%
Debt-to-gross assets		41.3	%		48.9	%
Secured debt-to-gross assets		19.8	%		20.9	%
Interest coverage ratio ⁽⁴⁾		2.7x			2.3x
Fixed charge coverage ratio⁽⁴⁾		2.5x			2.0x


Capitalization

BRE common share price, 6/30/11	$	49.88
BRE common share price, 9/30/11	$	42.34

Common shares and units - Outstanding

period end		75,872
quarter average		75,571
year-to-date average		70,556
Total funded debt	$	1,689,107
Preferred equity (liquidation value)	$	53,993
Common equity (at market)	$	3,212,420
Total market capitalization	$	4,955,520
Total assets, gross at 9/30/11	$	4,088,110


	Quarter ending September 30,
	2011			2010
Same-Store Operating Results

Revenue growth (%)		3.7	%		-0.8	%
Expense growth (%)		2.9	%		1.5	%
NOI growth (%)		4.0	%		-1.8	%
Operating margin		68.1	%		67.8	%
Occupancy (avg. physical)		95.7	%		96.2	%
Annual turnover ratio		71.1	%		69.3	%

	Nine Months ending September 30,
	Nine Months ending September 30,
	2011			2010
Revenue growth (%)		2.7	%		-2.8	%
Expense growth (%)		1.0	%		2.0	%
NOI growth (%)		3.5	%		-4.9	%
Operating margin		68.3	%		67.9	%
Occupancy (avg. physical)		95.6	%		95.7	%
Annual turnover ratio		63.5	%		64.0	%


		Quarter ending September 30,
		2011			2010
Non Same-Store Operating Results

Revenues		$	13,266		$	6,717
NOI		$	8,595		$	4,482
Occupancy (avg. physical)			94.9	%		87.8	%
Gross asset value		$	680,104		$	470,768
Units			2,696			2,043	(5)

		Nine Months ending September 30,
		Nine Months ending September 30,
		2011			2010
Revenues		$	35,023		$	13,304
NOI		$	22,880		$	8,744
Occupancy (avg. physical)			94.0	%		81.8	%
Community Information

As of September 30, 2011
Operating:	Communities		Units			NOI % (6)

Wholly or majority owned
Same-store	68		19,275			86	%
Non same-store	10		2,696			13	%

Total	78		21,971			99	%
Joint venture	12		3,856			1	%

Development Pipeline:
Under construction	2		502
Land owned for development	5		1,771
Land under contract	3		880

(1)	Revenues reported exclude results from discontinued operations, partnership income and other income. Expenses exclude discontinued operations.

(2)	Please refer to Exhibit C for definitions and reconciliations of all non-GAAP financial measures presented in this package.

(3)	Represents diluted per share amounts.

(4)	Includes GAAP interest and capitalized interest (gross interest incurred). Fixed charges include gross interest incurred, preferred dividends and recurring cash amortization on secured debt.

(5)	Represents Q3’11 non-same-store units present as of Q3’10.

(6)	Represents percentage of total NOI for the three months ended September 30, 2011.

Page 1

BRE Properties, Inc.

Consolidated Balance Sheets

Third Quarter 2011

(Unaudited, dollar amounts in thousands except per share data)


	September 30, 2011			December 31, 2010
ASSETS

Real estate portfolio:
Direct investments in real estate:

Investments in rental properties	$	3,660,343		$	3,464,466
Construction in progress		58,644			29,095
Less: accumulated depreciation		(717,474	)		(640,456	)

		3,001,513			2,853,105

Equity in real estate joint ventures:
Investments		66,753			61,132

Land under development		247,553			183,291


Total real estate portfolio		3,315,819			3,097,528

Cash		6,616			6,357
Other assets		48,201			52,362


TOTAL ASSETS		$3,370,636			$3,156,247


LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Unsecured senior notes	$	724,851		$	773,076
Unsecured line of credit		155,000			209,000
Mortgage loans payable		809,256			810,842
Accounts payable and accrued expenses		53,232			52,070


Total liabilities		1,742,339			1,844,988


Redeemable noncontrolling interests		33,771			34,866


Shareholders’ equity:

Preferred Stock, $0.01 par value; 20,000,000 shares authorized: 2,159,715 and 7,000,000 shares with $25 liquidation preference issued and outstanding at September 30, 2011 and December 31, 2010, respectively.		22			70

Common stock, $0.01 par value, 100,000,000 shares authorized. Shares issued and outstanding: 75,265,831 and 64,675,815 at September 30, 2011 and December 31, 2010, respectively.		753			647

Additional paid-in capital		1,593,751			1,275,676


Total shareholders’ equity		1,594,526			1,276,393


TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	$	3,370,636		$	3,156,247

Page 2

BRE Properties, Inc.

Consolidated Statements of Income

Quarters Ended September 30, 2011 and 2010

(Unaudited, dollar and share amounts in thousands)


	Quarter ended 9/30/11		Quarter ended 9/30/10		Nine months ended 9/30/11		Nine months ended 9/30/10
REVENUES

Rental income	$	93,042	$	83,752	$	270,295	$	243,118
Ancillary income		3,605		3,436		10,417		9,680

Total revenues		96,647		87,188		280,712		252,798

EXPENSES

Real estate	$	31,535	$	28,337	$	90,994	$	82,622
Provision for depreciation		25,931		23,209		78,268		67,560
Interest		18,374		21,639		56,861		63,465
General and administrative		5,678		5,015		16,071		15,454
Other expenses ⁽¹⁾		149		2,391		402		5,087

Total expenses		81,667		80,591		242,596		234,188

Other income		677		741		1,878		2,254

Net (loss) from extinguishment of debt		—		—		—		(558	)

Net income before noncontrolling interests, partnership income and discontinued operations		15,657		7,338		39,994		20,306

Income from unconsolidated entities		791		520		2,162		1,593
Gain on sale of unconsolidated entity		2,248		—		2,248		—

Income from continuing operations		18,696		7,858		44,404		21,899

Discontinued operations:
Discontinued operations, net ⁽²⁾		—		1,862		—		4,616
Net gain on sales of discontinued operations		—		13,203		—		24,885


Income from discontinued operations		—		15,065		—		29,501

NET INCOME	$	18,696	$	22,923	$	44,404	$	51,400

Redeemable noncontrolling interest in income		332		365		1,003		1,111
Redemption related preferred stock issuance cost		155		—		3,771		—

Dividends attributable to preferred stock		1,138		2,953		6,744		8,859


NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	17,071	$	19,605	$	32,886	$	41,430


Net income per common share - basic	$	0.23	$	0.30	$	0.47	$	0.68


Net income per common share - diluted	$	0.23	$	0.30	$	0.47	$	0.68


Weighted average shares outstanding - basic⁽³⁾		74,965		64,050		69,950		60,510


Weighted average shares outstanding - diluted ⁽³⁾		75,390		64,430		70,400		60,940

(1)

For the quarter ended September 30, 2011; $149,000 of acquisition costs were reported in other expenses. For the quarter ended September 30, 2010 other expenses include $2,390,000 of acquisition costs. For the nine months ended September 30, 2011; $402,000 of acquisition costs were reported in other expenses. For the nine months ended September 30, 2010 other expenses include a one-time $1,300,000 charge associated with the resignation of our COO and $3,787,000 related to acquisition costs.

(2)	For 2010, includes four operating properties sold during the twelve months ending December 31, 2010.

		Quarter ended		Quarter ended			Quarter ended		Quarter ended
	Quarter ended 9/30/11		Quarter ended 9/30/10			Nine months ended 9/30/11		Nine months ended 9/30/10
Rental and ancillary income		—	$	3,410			—	$	11,573
Real estate expenses		—		(1,376	)		—		(4,472	)
Provision for depreciation		—		(172	)		—		(2,485	)

Income from discontinued operations, net		—	$	1,862			—	$	4,616

(3)	See analysis of weighted average shares and ending shares in Exhibit A.

Page 3

BRE Properties, Inc.

Consolidated Statements of Income

Past Five Quarters

(Unaudited, dollar amounts in thousands)


	Sept. 30, 2011		June 30, 2011		Mar. 31, 2011		Dec. 31, 2010			Sept. 30, 2010
REVENUES

Rental income	$	93,042	$	89,909	$	87,345	$	86,162		$	83,752
Ancillary income		3,605		3,553		3,259		3,012			3,436

Total revenues		96,647		93,462		90,604		89,174			87,188

EXPENSES

Real estate	$	31,535	$	30,069	$	29,390	$	28,704		$	28,337
Provision for depreciation		25,931		27,936		24,401		24,223			23,209
Interest		18,374		18,739		19,748		21,428			21,639
General and administrative		5,678		5,159		5,234		5,116			5,015
Other expenses		149		111		143		211			2,391

Total expenses		81,667		82,014		78,916		79,682			80,591

Other income		677		597		605		681			741
Net (loss) from extinguishment of debt		—		—		—		(22,949	)		—


Income/(loss) from continuing operations and discontinued operations		15,657		12,045		12,293		(12,776	)		7,338

Income from unconsolidated entities		791		731		640		586			520
Gain on sale of unconsolidated entity		2,248		—		—		—			—


Income/(loss) from continuing operations		18,696		12,776		12,933		(12,190	)		7,858
Discontinued operations:
Discontinued operations, net ⁽¹⁾		—		—		—		401			1,862
Net gain on sales of discontinued operations		—		—		—		15,226			13,203

Income from discontinued operations		—		—		—		15,627			15,065

NET INCOME	$	18,696	$	12,776	$	12,933	$	3,437			22,923

Redeemable noncontrolling interest in income		332		335		335		335			365
Redemption related preferred stock issuance cost		155		3,616		—		—			—
Dividends attributable to preferred stock		1,138		2,653		2,953		2,953			2,953

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	17,071	$	6,172	$	9,645	$	149			19,605


Net income per common share - basic	$	0.23	$	0.09	$	0.15	$	0.00		$	0.30


Net income per common share - diluted	$	0.23	$	0.09	$	0.15	$	0.00		$	0.30


Weighted average shares outstanding - basic⁽²⁾		74,965		70,025		64,890		64,305			64,050


Weighted average shares outstanding - diluted⁽²⁾		75,390		70,285		65,305		64,725			64,430

(1)	Details of earnings from discontinued operations, net:


	Sept. 30, 2011		June 30, 2011		Mar. 31, 2011		Dec. 31, 2010			Sept. 30, 2010
Rental and ancillary income	$	—	$	—	$	—	$	885		$	3,410
Real estate expenses		—		—		—		(369	)		(1,376	)
Provision for depreciation		—		—		—		(115	)		(172	)

Income from discontinued operations, net	$	—	$	—	$	—	$	401		$	1,862

(2)	See analysis of weighted average shares and ending shares in Exhibit A.

Page 4

BRE Properties, Inc.

Reconciliation of Funds from Operations (FFO), and Capital Expenditures

(In thousands, except per share, unit and per unit data)


	Sept. 30, 2011			June 30, 2011			Mar. 31, 2011			Dec. 31, 2010			Sept. 30, 2010
CALCULATION OF FFO

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	17,071		$	6,172		$	9,645		$	149		$	19,605
Add back/ exclude:
Depreciation from continuing operations		25,931			27,936			24,401			24,223			23,209
Depreciation from discontinued operations		—			—			—			115			172
Redeemable noncontrolling interest in income ⁽¹⁾		332			335			335			—			365
Depreciation from unconsolidated entities		519			514			506			501			524
Net (gain) on sales from unconsolidated entity		(2,248	)		—			—			—			—
Net (gain) on sales of discontinued operations		—			—			—			(15,226	)		(13,203	)
Less: Redeemable noncontrolling interests in income not convertible to common ⁽¹⁾		(105	)		(105	)		(105	)		—			(105	)

FUNDS FROM OPERATIONS ⁽²⁾	$	41,500		$	34,852		$	34,782		$	9,762		$	30,567


Weighted average shares and equivalents outstanding - diluted		76,000			70,900			65,920			64,725			65,070


Funds from operations (per share) - diluted	$	0.55		$	0.49		$	0.53		$	0.15		$	0.47

(1)	OP units were dilutive for the quarters ending September 30, 2011, June 30, 2011, March 31, 2011, and September 30, 2010. OP units were anti-dilutive for the quarter ending December 31, 2010, but dilutive for the twelve months ending December 31, 2010.

(2)	Funds From Operations (FFO) is calculated in accordance with the White Paper adopted by the National Association of Real Estate Investment Trusts in October 1999 (as amended in April 2002). See Exhibit C for further definition.


	Sept. 30, 2011		June 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sept. 30, 2010
NON OPERATING EXPENSE ITEMS INCLUDED IN FFO

Net loss on extinguishment of debt		—		—		—	$	22,949		—

Net loss extinguishment of debt - per share	$	0.00	$	0.00	$	0.00	$	0.36	$	0.00
Acquisition costs	$	149	$	111	$	143	$	211	$	2,391

Acquisition costs - per share	$	0.00	$	0.00	$	0.00	$	0.00	$	0.04
Redemption related preferred stock issuance cost	$	155	$	3,616		—		—		—

Redemption related preferred stock issuance cost - per share	$	0.00	$	0.05	$	0.00	$	0.00	$	0.00

	Sep. 30, 2011		June 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sept. 30, 2010
CAPITAL EXPENDITURES
Recurring capital expenditures	$	5,183	$	4,990	$	4,956	$	7,129	$	5,679

Average apartment units in period		21,946		21,622		21,423		21,615		21,906
Capital expenditures per apartment unit in period	$	236	$	231	$	231	$	330	$	259
Capital expenditures per apartment unit-trailing four quarters	$	1,034	$	1,051	$	1,120	$	1,065	$	973
Revenue enhancing rehabilitation costs	$	3,756	$	3,472	$	1,659	$	1,801	$	1,840

Page 5

BRE Properties, Inc.

“Same-Store” Markets Summary

For the Quarters ended September 30, 2011 and 2010

(Dollar amounts in thousands)


			Revenues							Expenses
	No. of Units		Q3 2011		Q3 2010		% Change			Q3 2011		Q3 2010		% Change
California
San Diego		3,958	$	17,821	$	17,264		3.2	%	$	5,181	$	4,973		4.2	%
Inland Empire		1,807		6,593		6,511		1.3	%		2,245		2,314		-3.0	%
Orange County		3,349		14,729		14,383		2.4	%		4,835		4,774		1.3	%
Los Angeles		2,547		12,178		11,930		2.1	%		4,197		3,874		8.3	%
San Francisco		3,152		16,535		15,660		5.6	%		4,476		4,396		1.8	%

Subtotal; California		14,813	$	67,856	$	65,748		3.2	%	$	20,934	$	20,331		3.0	%

Washington
Seattle		3,160		11,490		10,803		6.4	%		4,222		3,961		6.6	%

Non-Core Markets⁽¹⁾		1,302		3,783		3,648		3.7	%		1,356		1,471		-7.8	%


Total Same-Store⁽²⁾		19,275	$	83,129	$	80,199		3.7	%	$	26,512	$	25,763		2.9	%


					Net Operating Income
	No. of Communities		No. of Units		Q3 2011		Q3 2010		% Change			% of Total
California
San Diego		13		3,958	$	12,640	$	12,291		2.8	%		22.3	%
Inland Empire		7		1,807		4,348		4,197		3.6	%		7.7	%
Orange County		11		3,349		9,894		9,609		3.0	%		17.5	%
Los Angeles		12		2,547		7,981		8,056		-0.9	%		14.1	%
San Francisco		10		3,152		12,059		11,264		7.1	%		21.3	%

Subtotal; California		53		14,813	$	46,922	$	45,417		3.3	%		82.9	%

Washington
Seattle		12		3,160		7,268		6,842		6.2	%		12.8	%

Non-Core Markets⁽¹⁾		3		1,302		2,427		2,177		11.5	%		4.3	%


Total Same-Store ⁽²⁾		68		19,275	$	56,617	$	54,436		4.0	%		100.0	%


							Net Operating Income						Avg. Physical Occupancy			Gross Carrying Value
	No. of Communities			No. of Units			Q3 2011			Q3 2010			Q3 2011			Q3 2011
“Non Same-Store” Summary
Acquired properties⁽³⁾		7			1,690		$	5,408		$	2,268			95.7	%	$	469,226
Lease up properties⁽⁴⁾		2			566			1,962			1,004			96.0	%		179,757
Rehabilitation properties ⁽⁵⁾		1			440			1,225			1,210			90.2	%		31,121
Joint venture income⁽⁶⁾		12			3,856			791			520
Commercial and Other⁽⁷⁾		n/a			n/a			(100	)		(67	)
Other income		n/a			n/a			677			741
Discontinued operations⁽⁸⁾		4			1,530						2,034

Total Non Same-Store		26			8,082		$	9,963		$	7,710			94.9	%	$	680,104


Less Properties Sold 2010		(4	)		(1,530	)
Total All Units / NOI		90			25,827		$	66,580		$	62,146

(1)	Consists of one property in Sacramento, CA (400 Units) and two properties in Phoenix, AZ (902 units).

(2)	Consists of stabilized properties owned by BRE since January 1, 2010.

(3)	Consists of NOI from seven properties acquired after January 1, 2010.

(4)	Consists of NOI from two properties fully delivered and under lease up.

(5)	Consists of NOI from one property under significant rehabilitation.

(6)	Consists of our percentage of net income derived from joint venture investments in rental properties. See page 8 for a reconciliation of the components of BRE’s share of joint venture net income.

(7)	Consists of NOI from commercial properties that will later be developed as multi-family and other real estate expenses. For the three months ended September 30, 2011 and 2010 other real estate expenses exceeded the NOI from commercial.

(8)	Includes results from four properties sold in 2010.

Page 6

BRE Properties, Inc.

“Same-Store” Markets Summary

For the Nine Months ended September 30, 2011 and 2010

(Dollar amounts in thousands)


			Revenues							Expenses
	No. of Units		YTD 2011		YTD 2010		% Change			YTD 2011		YTD 2010		% Change
California
San Diego		3,958	$	52,623	$	51,747		1.7	%	$	15,401	$	15,044		2.4	%
Inland Empire		1,807		19,704		19,445		1.3	%		6,509		6,777		-4.0	%
Orange County		3,349		43,718		42,941		1.8	%		14,162		13,782		2.8	%
Los Angeles		2,547		35,969		35,533		1.2	%		11,955		11,858		0.8	%
San Francisco		3,152		48,167		45,943		4.8	%		13,488		13,234		1.9	%

Subtotal; California		14,813	$	200,181	$	195,609		2.3	%	$	61,515	$	60,695		1.4	%

Washington
Seattle		3,160		33,606		32,306		4.0	%		12,126		11,926		1.7	%

Non-Core Markets⁽¹⁾		1,302		11,262		10,759		4.7	%		4,089		4,353		-6.1	%


Total Same-Store⁽²⁾		19,275	$	245,049	$	238,674		2.7	%	$	77,730	$	76,974		1.0	%


					Net Operating Income
	No. of Communities		No. of Units		YTD 2011		YTD 2010		% Change			% of Total
California
San Diego		13		3,958	$	37,222	$	36,703		1.4	%		22.2	%
Inland Empire		7		1,807		13,195		12,668		4.2	%		7.9	%
Orange County		11		3,349		29,556		29,159		1.4	%		17.7	%
Los Angeles		12		2,547		24,014		23,675		1.4	%		14.4	%
San Francisco		10		3,152		34,679		32,709		6.0	%		20.7	%

Subtotal; California		53		14,813	$	138,666	$	134,914		2.8	%		82.9	%

Washington
Seattle		12		3,160		21,480		20,380		5.4	%		12.8	%

Non-Core Markets⁽¹⁾		3		1,302		7,173		6,406		12.0	%		4.3	%


Total Same-Store ⁽²⁾		68		19,275	$	167,319	$	161,700		3.5	%		100.0	%


							Net Operating Income						Avg. Physical Occupancy			Gross Carrying Value
	No. of Communities			No. of Units			YTD 2011			YTD 2010			YTD 2011			YTD 2011
“Non Same-Store” Summary
Acquired properties⁽³⁾		7			1,690		$	13,583		$	3,315			94.1	%	$	469,226
Lease up properties ⁽⁴⁾		2			566			5,588			1,801			93.9	%		179,757
Rehabilitation properties ⁽⁵⁾		1			440			3,709			3,628			94.2	%		31,121
Joint venture income⁽⁶⁾		12			3,856			2,162			1,593
Commercial and Other⁽⁷⁾		n/a			n/a			(481	)		(268	)
Other income		n/a			n/a			1,878			2,254
Discontinued operations⁽⁸⁾		4			1,530			—			7,101

Total Non Same-Store		26			8,082		$	26,439		$	19,424			94.0	%	$	680,104


Less Properties Sold 2010		(4	)		(1,530	)

Total All Units / NOI		90			25,827		$	193,758		$	181,124

(1)	Consists of one property in Sacramento, CA (400 Units) and two properties in Phoenix, AZ (902 units).

(2)	Consists of stabilized properties owned by BRE since January 1, 2010.

(3)	Consists of NOI from seven properties acquired after January 1, 2010.

(4)	Consists of NOI from two properties fully delivered and under lease up.

(5)	Consists of NOI from one property under significant rehabilitation.

(6)	Consists of our percentage of net income derived from joint venture investments in rental properties. See page 8 for a reconciliation of the components of BRE’s share of joint venture net income.

(7)	Consists of NOI from commercial properties that will later be developed as multi-family and other real estate expenses. For the nine months ended September 30, 2011 and 2010 other real estate expenses exceeded the NOI from commercial.

(8)	Includes results from four properties sold in 2010.

Page 7

BRE Properties, Inc.

Same Store Operating Expense Summary and Joint Venture Disclosure

(Dollar amounts in thousands)

SAME-STORE OPERATING EXPENSES (19,275 units)


Quarter Ended September 30, 2011	Q3 2011		Q3 2010		$ Change			% Change			% of Q3 2011 Operating Expenses
Property taxes	$	7,448	$	7,258	$	190			2.6	%		28.1	%
Insurance		1,043		1,012		31			3.1	%		3.9	%
Utilities		2,154		2,424		(270	)		-11.1	%		8.1	%
Property management fees ⁽¹⁾		2,701		2,566		135			5.3	%		10.2	%
Other operating expenses ⁽²⁾		13,166		12,503		663			5.3	%		49.7	%

Total operating expenses	$	26,512	$	25,763	$	749			2.9	%		100.0	%


Nine Months Ended September 30, 2011	YTD 2011		YTD 2010		$ Change			% Change			% of YTD 2011 Operating Expenses
Property taxes	$	21,783	$	22,434	$	(651	)		-2.9	%		28.0	%
Insurance		3,031		2,932		99			3.4	%		3.9	%
Utilities		6,044		6,218		(174	)		-2.8	%		7.8	%
Property management fees ⁽¹⁾		7,964		7,638		326			4.3	%		10.2	%
Other operating expenses ⁽²⁾		38,908		37,752		1,156			3.1	%		50.1	%

Total operating expenses	$	77,730	$	76,974	$	756			1.0	%		100.0	%

(1)	Management fees based on a percentage of total revenues. Amount approximates the corporate cost to support on-site personnel. Corporate G&A is reduced by the allocation.

(2)	Includes advertising, payroll, property level administrative costs, repairs & maintenance and unit turnover costs.

JOINT VENTURE DISCLOSURE- Quarter and Nine Months Ended September 30, 2011


Joint Ventures	Communities		Regional Breakdown		Units ⁽³⁾		BRE equity investment ⁽⁴⁾
Relationship 1 - 15% BRE equity ownership		10		Phx. (3) Den. (7)		3,368	$	46,255
Relationship 2 - 35% BRE equity ownership		2		Phx. (1) Sac. (1)		488		20,498

Total		12				3,856	$	66,753


BRE share	Q3 2011		Q3 2010		YTD 2011		YTD 2010
Revenues	$	2,076	$	1,938	$	6,100	$	5,674
Expenses		766		778		2,237		2,242

Net Operating Income		1,310		1,160		3,863		3,432
Depreciation		519		523		1,540		1,489
Interest		—		117		161		350

Net Income	$	791	$	520	$	2,162	$	1,593
Third party management fees earned	$	494	$	432	$	1,397	$	1,275

(3)

During the quarter ending September 30, 2011, a joint venture community with 224 units was sold. The community was located in Denver, CO, the Company had a 15% equity ownership. BRE’s share of the total proceeds totaled $4.3 million. A $2.2 million gain on sale was recorded during the third quarter.

(4)

During the quarter ending September 30, 2011, the Company paid off its portion of debt inside its 35% equity investment as it matured. As a result of the debt maturity, the Company’s basis in the investment increased by approximately $8.6 million. As of September 30, 2011, all of the Company’s equity investments were unlevered.

Page 8

BRE Properties, Inc.

Sequential “Same-Store” Multifamily Markets Summary

Last five quarters

REVENUES


	Q3’ 11			Q2’ 11			Q1’ 11			Q4’ 10			Q3’ 10
California
San Diego		1.8	%		1.3	%		0.7	%		-0.5	%		0.3	%
Inland Empire		0.6	%		-0.1	%		0.2	%		0.5	%		0.3	%
Orange County		0.5	%		2.2	%		0.3	%		-0.6	%		0.8	%
Los Angeles		1.6	%		1.5	%		0.1	%		-1.1	%		1.2	%
San Francisco		2.9	%		3.2	%		0.9	%		-1.5	%		2.3	%

Subtotal; California		1.6	%		1.8	%		0.5	%		-0.8	%		1.1	%

Washington
Seattle		2.3	%		3.3	%		2.2	%		-1.5	%		-0.5	%
Non-Core Markets⁽¹⁾		0.3	%		1.7	%		1.7	%		0.0	%		2.0	%

Total Same Store ⁽³⁾		1.7	%		2.0	%		0.8	%		-0.8	%		0.9	%


EXPENSES ⁽²⁾
	Q3’ 11			Q2’ 11			Q1’ 11			Q4’ 10			Q3’ 10
California
San Diego		0.7	%		1.4	%		6.0	%		-3.7	%		1.0	%
Inland Empire		1.1	%		8.6	%		-0.7	%		-11.0	%		2.7	%
Orange County		4.0	%		-0.6	%		0.9	%		-2.8	%		5.1	%
Los Angeles		11.0	%		-5.0	%		-3.2	%		6.1	%		-4.4	%
San Francisco		0.1	%		-1.6	%		6.6	%		-3.1	%		-2.3	%

Subtotal; California		3.3	%		-0.3	%		2.3	%		-2.3	%		0.3	%

Washington
Seattle		2.6	%		8.7	%		-0.6	%		-3.8	%		-5.2	%
Non-Core Markets⁽¹⁾		-1.2	%		0.9	%		0.1	%		-7.6	%		5.2	%

Total Same Store ⁽³⁾		3.0	%		1.1	%		1.8	%		-2.9	%		-0.3	%


NET OPERATING INCOME
	Q3’ 11			Q2’ 11			Q1’ 11			Q4’ 10			Q3’ 10
California
San Diego		2.2	%		1.2	%		-1.4	%		-0.8	%		0.1	%
Inland Empire		0.3	%		-4.0	%		0.7	%		6.8	%		-0.9	%
Orange County		-1.1	%		3.6	%		0.0	%		0.5	%		-1.2	%
Los Angeles		-2.7	%		4.7	%		1.8	%		-4.5	%		4.2	%
San Francisco		4.0	%		5.2	%		-1.2	%		-0.9	%		4.2	%

Subtotal; California		0.9	%		2.8	%		-0.3	%		0.1	%		1.4	%

Washington
Seattle		2.1	%		0.4	%		3.8	%		-0.2	%		2.5	%
Non-Core Markets⁽¹⁾		1.2	%		2.2	%		2.6	%		5.1	%		-0.1	%

Total Same Store ⁽³⁾		1.1	%		2.4	%		0.3	%		0.1	%		1.5	%

(1)	Consists of one property in Sacramento, CA (400 Units) and two properties in Phoenix, AZ (902 units).

(2)	Expenses fluctuate from quarter to quarter due to timing of repairs and maintenance, utilities and other items.

(3)	Data reflects sequential results for the company’s current same-store pool totaling 19,275 units for all periods shown.

Page 9

BRE Properties, Inc.

Summary of Revenue and Occupancy Changes - “Same-Store” properties

For the period ending September 30, 2011


Q3’11 vs. Q2’11 Change			Average Revenue per Unit ⁽¹⁾							Financial Occupancy⁽²⁾									Rental Revenue
	units		Q3’ 11		Q2’ 11		% Change			Q3’ 11			Q2’ 11			% Change			Q3’ 11		Q2’ 11		% Change
San Diego		3,958	$	1,563	$	1,543		1.4	%		96.0	%		95.6	%		0.4	%	$	17,821	$	17,510		1.8	%
Inland Empire		1,807		1,276		1,274		0.2	%		95.3	%		94.9	%		0.4	%		6,593		6,553		0.6	%
Orange County		3,349		1,530		1,514		1.1	%		95.8	%		96.3	%		-0.5	%		14,729		14,651		0.5	%
Los Angeles		2,547		1,664		1,659		0.3	%		95.8	%		94.5	%		1.3	%		12,178		11,981		1.6	%
San Francisco		3,152		1,833		1,777		3.1	%		95.4	%		95.6	%		-0.2	%		16,535		16,065		2.9	%
Seattle		3,160		1,272		1,235		3.0	%		95.3	%		96.0	%		-0.7	%		11,490		11,237		2.3	%
Non Core Markets		1,302		1,029		1,016		1.3	%		94.1	%		95.0	%		-0.9	%		3,783		3,771		0.3	%


Same Store		19,275	$	1,504	$	1,481		1.6	%		95.6	%		95.5	%		0.1	%	$	83,129	$	81,768		1.7	%


Q3’11 vs. Q3’10 Change			Average Revenue per Unit ⁽¹⁾							Financial Occupancy⁽²⁾									Rental Revenue
	units		Q3’ 11		Q3’ 10		% Change			Q3’ 11			Q3’ 10			% Change			Q3’ 11		Q3’ 10		% Change
San Diego		3,958	$	1,563	$	1,524		2.6	%		96.0	%		95.4	%		0.6	%	$	17,821	$	17,264		3.2	%
Inland Empire		1,807		1,276		1,249		2.2	%		95.3	%		96.2	%		-0.9	%		6,593		6,511		1.3	%
Orange County		3,349		1,530		1,494		2.4	%		95.8	%		95.8	%		0.0	%		14,729		14,383		2.4	%
Los Angeles		2,547		1,664		1,623		2.5	%		95.8	%		96.2	%		-0.4	%		12,178		11,930		2.1	%
San Francisco		3,152		1,833		1,702		7.7	%		95.4	%		97.3	%		-1.9	%		16,535		15,660		5.6	%
Seattle		3,160		1,272		1,188		7.0	%		95.3	%		95.9	%		-0.6	%		11,490		10,803		6.4	%
Non Core Markets		1,302		1,029		961		7.1	%		94.1	%		97.2	%		-3.1	%		3,783		3,648		3.7	%


Same Store		19,275	$	1,504	$	1,442		4.3	%		95.6	%		96.2	%		-0.6	%	$	83,129	$	80,199		3.7	%


YTD 2011 vs. YTD 2010 Change			Average Revenue per Unit ⁽¹⁾							Financial Occupancy⁽²⁾									Rental Revenue
	units		YTD 9/30/11		YTD 9/30/10		% Change			YTD 9/30/11			YTD 9/30/10			% Change			YTD 9/30/11		YTD 9/30/10		% Change
San Diego		3,958	$	1,545	$	1,519		1.7	%		95.6	%		95.6	%		0.0	%	$	52,623	$	51,747		1.7	%
Inland Empire		1,807		1,272		1,245		2.1	%		95.3	%		96.1	%		-0.8	%		19,704		19,445		1.3	%
Orange County		3,349		1,517		1,491		1.7	%		95.6	%		95.5	%		0.1	%		43,718		42,941		1.8	%
Los Angeles		2,547		1,654		1,611		2.6	%		94.9	%		96.2	%		-1.3	%		35,969		35,533		1.2	%
San Francisco		3,152		1,782		1,678		6.2	%		95.3	%		96.5	%		-1.2	%		48,167		45,943		4.8	%
Seattle		3,160		1,237		1,190		3.9	%		95.5	%		95.4	%		0.1	%		33,606		32,306		4.0	%
Non Core Markets		1,302		1,012		956		5.8	%		95.0	%		96.0	%		-1.0	%		11,262		10,759		4.7	%

Same Store		19,275	$	1,481	$	1,435		3.2	%		95.4	%		95.9	%		-0.5	%	$	245,049	$	238,674		2.7	%

⁽¹⁾

Average revenue per unit includes rental and ancillary income earned on occupied units during the period. Ancillary income per occupied unit totals approximately $55 per unit per month for the nine months ended September 31, 2011. Amounts reflect the effect of concessions amortized over the average lease term.

⁽²⁾

Financial occupancy is defined as gross potential rent less vacancy loss as a percentage of gross potential rent. Gross potential rent is determined by valuing occupied units at contract rates and vacant units at market rents. Vacancy loss is determined by valuing vacant units at current market rents.

Page 10

BRE Properties, Inc.

“Same -Store” Operating Metrics

As of September 30, 2011 and 2010


	No. of Units		Market Rent per Unit ⁽²⁾							Occupancy⁽³⁾						Turnover Ratio ⁽⁴⁾
	No. of Units		Q3’11		Q3’10		% Change			Q3’11			Q3’10			2011			2010
California
San Diego		3,958	$	1,559	$	1,496		4.2	%		96.0	%		95.3	%		72	%		73	%
Inland Empire		1,807		1,293		1,245		3.9	%		95.1	%		96.2	%		64	%		65	%
Orange County		3,349		1,547		1,520		1.8	%		95.6	%		95.7	%		66	%		66	%
Los Angeles		2,547		1,703		1,668		2.0	%		95.6	%		96.2	%		62	%		62	%
San Francisco		3,152		1,932		1,753		10.2	%		96.1	%		97.3	%		57	%		56	%

Subtotal; California		14,813	$	1,628	$	1,555		4.7	%		95.8	%		96.1	%		65	%		65	%

Washington

Seattle		3,160		1,314		1,198		9.7	%		95.8	%		96.1	%		57	%		58	%

Non-Core Markets⁽¹⁾		1,302		1,034		964		7.2	%		94.5	%		97.1	%		69	%		67	%


Total/Average Same Store ⁽⁵⁾		19,275	$	1,536	$	1,457		5.5	%		95.7	%		96.2	%		63	%		64	%

(1)	Consists of one property in Sacramento, CA (400 Units) and two properties in Phoenix, AZ (902 units).

(2)	Represents, by region, weighted average market level rents across the quarter.

(3)	Represents average physical occupancy for the quarter.

(4)	Represents the annualized number of units turned over for the nine month period, divided by the number of units in the region.

(5)	Consists of stabilized properties owned by BRE for two comparable periods year over year periods.

“Same -Store” New Lease and Renewal Transactions


	New Leases											Renewals							Total New Leases/Renewals
	Q3 ‘11		New Leases Effective ⁽⁶⁾		Previous Resident Effective ⁽⁷⁾		% Change			Q3 ‘11		Renewal Effective ⁽⁶⁾		Expiring Effective ⁽⁸⁾		% Change			Q3 ‘11		Current Effective ⁽⁶⁾		Prior Effective		% Change
California
San Diego		810	$	1,512	$	1,471		2.8	%		565	$	1,541	$	1,479		4.1	%		1,375	$	1,524	$	1,475		3.3	%
Inland Empire		337		1,269		1,244		2.0	%		286		1,269		1,241		2.3	%		623		1,269		1,243		2.1	%
Orange County		582		1,522		1,461		4.2	%		573		1,505		1,452		3.6	%		1,155		1,513		1,456		3.9	%
Los Angeles		496		1,659		1,631		1.7	%		374		1,699		1,649		3.1	%		870		1,676		1,639		2.3	%
San Francisco		444		1,950		1,781		9.5	%		463		1,841		1,717		7.2	%		907		1,895		1,749		8.3	%

Subtotal; California		2,669	$	1,584	$	1,522		4.1	%		2,261	$	1,585	$	1,519		4.4	%		4,930	$	1,584	$	1,520		4.2	%

Washington
Seattle		446		1,270		1,163		9.2	%		441		1,232		1,147		7.5	%		887		1,251		1,155		8.3	%
Non-Core Markets		237		1,007		949		6.1	%		200		1,026		964		6.4	%		437		1,015		956		6.2	%

Total Same Store⁽⁹⁾		3,352	$	1,501	$	1,433		4.7	%		2,902	$	1,493	$	1,424		4.8	%		6,254	$	1,497	$	1,429		4.8	%

⁽⁶⁾	Represents leased rent per unit less the monthly value of concessions awarded on leases and renewals signed during the quarter.

⁽⁷⁾	Represents leased rent per unit less the monthly value of concessions awarded on the prior resident for the same unit that was leased during the quarter.

⁽⁸⁾	Represents leased rent per unit less the monthly value of concessions awarded on the prior lease that expired during the quarter.

⁽⁹⁾	The Q3’11 total same-store pool consists of 19,275 units.

Page 11

BRE Properties, Inc.

Debt Summary as of September 30, 2011

(Dollar amounts in thousands)


DEBT MATURITY SCHEDULE
	Secured Debt				Unsecured Debt								Weighted
	Amortization		Balloon		Floating			Fixed			Total		Avg. Rate ⁽¹⁾			% of Debt
Year
2011	$	541	$	—	$	—		$	—		$	541		5.49	%		0.0	%
2012		1,236		65,507		155,000	(2)		35,000	(3)		256,743		3.23	%		15.2	%
2013		872		29,639		—			40,018			70,529		6.48	%		4.2	%
2014		3,839		—		—			50,000			53,839		4.82	%		3.2	%
2015		7,962		—		—			—			7,962		5.65	%		0.5	%
2016		9,041		—		—			—			9,041		5.65	%		0.5	%
2017		9,307		—		—			300,000			309,307		5.61	%		18.3	%
2018		9,853		—		—			—			9,853		5.65	%		0.6	%
2019		6,492		317,975		—			—			324,467		5.60	%		19.2	%
2020		3,346		343,646		—			—			346,992		5.62	%		20.5	%
2021		—		—		—			300,000			300,000		5.31	%		17.8	%

Total	$	52,489	$	756,767	$	155,000		$	725,018		$	1,689,274		5.21	%		100	%


WEIGHTED AVERAGE COST OF DEBT
	Balance			Weighted Avg. Term		Weighted Avg. Rate⁽¹⁾			Percentage Total Debt
Fixed Rate
Unsecured	$	690,018			6.75		5.51	%		40.8	%
Convertible (unsecured)		34,833	(3)		0.39		6.01	%		2.1	%
Secured		809,256			7.26		5.60	%		47.9	%

	$	1,534,107			6.88		5.57	%		90.8	%
Floating Rate
Unsecured		155,000			1.00		1.63	%		9.2	%

Total debt	$	1,689,107			6.34		5.21	%		100.0	%


CAPITALIZED INTEREST
	Q3 2011		Q3 2010
Capitalized Interest	$	3,915	$	2,864

	YTD 2011		YTD 2010
Capitalized Interest	$	10,202	$	9,228


SENIOR UNSECURED DEBT RATING As of November 1, 2011

Moody’s	Baa2	(stable	)
Standard & Poor’s	BBB	(stable	)


SUMMARY OF COMPLIANCE- Senior Unsecured Notes

	Requirement			Actual
Total Debt to Gross Assets		<60	%		41	%
Debt Service Test		>1.5			2.67
Total Secured Debt to Total Assets		<40	%		20	%
Total Unecumbered Assets to Unsecured Debt		>1.5			3.34


SUMMARY OF COMPLIANCE - Line of Credit

	Requirement			Actual
Leverage Ratio		<60	%		39	%
Maximum Secured Indebtness		<40	%		18	%
Minimum Unsecured Leverage		>1.6			3.35
Minimum Fixed Charge Coverage		>1.5			2.49


SUMMARY OF PREFERRED SHARES

	Q3 2011
Total preferred shares outstanding		2,160
Liquidation value	$	53,993
Dividend yield at par		6.75	%

(1)	Represents the weighted average effective interest rates (includes amortized issuance costs) of BRE’s debt maturities in the year in which they become due.

(2)	Outstanding balance under the $750 million senior unsecured line of credit priced at LIBOR plus 47.5 bp, maturing in September 2012.

(3)	Represents $35 million cash principal with 4.125% coupon adjusted to reflect convertible debt accounting guidance effective January 2009.

Page 12

BRE Properties, Inc.

Development Summary

September 30, 2011

(Dollar amounts in millions)


CONSTRUCTION IN PROGRESS	Number of Units		Cost Incurred		Estimated Cost		Balance to Fund		Product Type		First CO ⁽¹⁾		Final CO ⁽¹⁾
Lawrence Station
Sunnyvale, CA		336	$	50.4	$	110.0	$	59.6		Wrap		Q2 ‘12		Q1 ‘13
Aviara⁽²⁾
Mercer Island, WA		166	$	8.2	$	44.5	$	36.3		Podium		Q1’13		Q2’13

Total CIP		502	$	58.6	$	154.5	$	95.9

LAND UNDER DEVELOPMENT ⁽³⁾

Number
of Units

Cost
Incurred

Estimated
Cost⁽⁵⁾

Balance
to Fund

Product
Type

Estimated
Start Date

Wilshire La Brea⁽⁴⁾

Los Angeles, CA

478

120.5

TBR

Podium

2H ‘11

Town and Country

Sunnyvale, CA

279

30.5

TBR

Podium

2H ‘11

Pleasanton I

Pleasanton, CA

254

17.6

TBR

Garden

TBD

Park Viridian II⁽⁶⁾

Anaheim, CA

400

34.3

TBR

Garden

TBD

Mission Bay ⁽⁷⁾

San Francisco, CA

360

44.7

TBR

Podium

2H ‘12

Total Land Owned

1,771

247.6

824.0

576.4

LAND UNDER CONTRACT ⁽⁸⁾

Number
of Units

Cost
Incurred⁽⁹⁾

Estimated
Cost

Balance
to Fund

Product
Type

Walnut Creek BART

358

9.3

TBR

Podium

Walnut Creek, CA

Redwood City

271

1.8

TBR

Podium

Redwood City, CA

Pleasanton II

251

1.1

TBR

Garden

Pleasanton, CA

Total

880

12.2

319.6

293.5

(1)	Represents estimated quarter in which first and final certificates of occupancy will be received. Projects generally received phased certificates of occupancy during the final six to nine months of construction.

(2)	During the fourth quarter of 2010, the Company entered into a ground lease for the Mercer Island site. The ground lease has an initial term of 60 years, two 15-year extensions followed by a 10-year extension. The annualized GAAP expense is $664,000.

(3)	Represents projects in various stages of predevelopment, development and initial construction, for which construction or supply contracts have not yet been finalized. When construction commences, projects are transferred to construction in progress.

(4)	Subsequent to quarter ended September 30, 2011, the Company commenced construction on its Wilshire La Brea project. All related costs incurred were transferred from land under development to construction in progress.

(5)	Reflects the aggregate cost estimates including land. Specific property cost estimates To Be Reported (TBR) once entitlement approvals are received and the Company is prepared to begin construction.

(6)	During the first quarter of 2011, the Company purchased for $5.1 million, a 4.4 acre site contiguous to its existing Park Viridian operating community and an existing phase 2 land site in Anaheim. The combined undeveloped phases now total 400 units (185 units were added).

(7)	This acquisition is for two parcels of land in the Mission Bay district that are entitled for residential use and can be developed in phases.

(8)

Land under contract represents land parcels for which: 1) the Company has a signed agreement and the right to acquire the land (but not the obligation), 2) made a non refundable deposit and 3) commenced the entitlement process. Costs incurred on these projects are recorded in Other assets on the Consolidated Balance Sheets.

(9)	Represents deposits, contractual costs, and entitlement expenses incurred to date.

(10)

Development pipeline totals above do not include a potential future redevelopment site in Emeryville, California. The site consists of two existing occupied office buildings. The net book value of this investment is $10.2 million and it is recorded in Investment in rental properties. Predevelopment costs associated with this site total $3.1 million and are recorded in Other assets.

Page 13


BRE Properties, Inc.			Exhibit A

Share Analysis as of September 30, 2011

(Dollar and share amounts in thousands)

SUMMARY OF COMMON SHARES


	Qtr. Ended 9/30/2011			Qtr. Ended 6/30/2011			Qtr. Ended 3/31/2011			Qtr. Ended 12/31/2010			Qtr. Ended 9/30/2010
Weighted Average
Weighted average shares outstanding ⁽¹⁾		74,965			70,025			64,890			64,305			64,050
Weighted average OP units⁽²⁾		610			615			615			—			640
Dilutive effect of stock based awards		425			260			415			420			380


Diluted shares - FFO ⁽²⁾		76,000			70,900			65,920			64,725			65,070
Less: Anti-dilutive OP Units ⁽³⁾		(610	)		(615	)		(615	)		—			(640	)
Less: Anti-dilutive stock based awards ⁽³⁾		—			—			—			(420	)		—

Diluted shares - EPS⁽⁴⁾		75,390			70,285			65,305			64,305			64,430

	YTD			YTD
Weighted Average	9/30/2011			9/30/2010
Weighted average shares outstanding ⁽¹⁾		69,950			60,510
Weighted average OP units		610			700
Dilutive effect of stock based awards		450			430

Diluted shares - FFO		71,010			61,640
Less: Anti-dilutive OP Units ⁽³⁾		(610	)		(700	)

Diluted shares - EPS⁽⁴⁾		70,400			60,940

	As of 9/30/2011			As of 6/30/2011			As of 3/31/2011			As of 12/31/2010			As of 9/30/2010
Ending
Shares outstanding at end of period		75,266			74,697			65,341			64,675			64,088
OP units at end of period		606			615			615			615			639
Dilutive effect of stock based awards		158			220			215			170			160

Total		76,030			75,532			66,171			65,460			64,887

SUMMARY OF PREFERRED SHARES
	Qtr. Ended 9/30/2011			Qtr. Ended 6/30/2011			Qtr. Ended 3/31/2011			Qtr. Ended 12/31/2010			Qtr. Ended 9/30/2010
6.75% Series C, $25 per share liquidation preference		—			—			4,000			4,000			4,000
6.75% Series D, $25 per share liquidation preference		2,160			3,000			3,000			3,000			3,000

		2,160			3,000			7,000			7,000			7,000

(1)	Represents denominator for shares in the calculation of basic earnings per share.

(2)	OP Units are anti-dilutive for FFO and EPS for the quarter ended December 31, 2010, and therefore are not included in shares calculation.

(3)	Under FASB guidance, common share equivalents deemed to be anti-dilutive are excluded from the diluted earnings per share calculations.

(4)	Represents denominator for shares in the calculation of diluted EPS.

Page 14


BRE Properties, Inc.		Exhibit B

Non-GAAP Financial Measure Reconciliations and Definitions

(Dollar amounts in thousands)

This document includes certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. BRE’s definition and calculation of non-GAAP financial measures may differ from those of other REITs, and may, therefore, not be comparable. The non-GAAP financial measures should not be considered an alternative to net income or any other GAAP measurement of performance and should not be considered an alternative to cash flows from operating, investing or financing activities as a measure of liquidity.

Funds from Operations (FFO)

FFO is used by industry analysts and investors as a supplemental performance measure of an equity REIT. FFO is defined by the National Association of Real Estate Investment Trusts as net income or loss (computed in accordance with accounting principles generally accepted in the United States) excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated real estate assets, plus depreciation and amortization of real estate assets and adjustments for unconsolidated partnerships and joint ventures. We calculate FFO in accordance with the NAREIT definition.

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 properties that result from use or market conditions nor the level of capital expenditures to maintain the operating performance of our properties, 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 the 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.


	Quarter Ended 9/30/2011			Quarter Ended 9/30/2010			Nine Months Ended 9/30/2011			Nine Months Ended 9/30/2010
Net income available to common shareholders	$	17,071		$	19,605		$	32,886		$	41,430
Depreciation from continuing operations		25,931			23,209			78,268			67,560
Depreciation from discontinued operations		—			172			—			2,485
Redeemable noncontrolling interest in income		335			365			1,003			1,111
Depreciation from unconsolidated entities		519			524			1,539			1,489
Net gain on investments		—			(13,203	)		—			(24,885	)
Gain on sale of unconsolidated entity		(2,248	)		—			(2,248	)		—
Less: Redeemable noncontrolling interest in income not convertible into common shares		(105	)		(105	)		(315	)		(315	)

Funds from operations	$	41,503		$	30,567		$	111,133		$	88,875


Diluted shares outstanding - EPS ⁽¹⁾		75,390			64,430			70,400			60,940
Net income per common share - diluted	$	0.23		$	0.30		$	0.47		$	0.68


Diluted shares outstanding - FFO ⁽¹⁾		76,000			65,070			71,010			61,640
FFO per common share - diluted	$	0.55		$	0.47		$	1.57		$	1.44

⁽¹⁾	See analysis of weighted average shares and ending shares at Exhibit A.

Page 15


BRE Properties, Inc.		Exhibit B, continued

Non-GAAP Financial Measure Reconciliations and Definitions

(Dollar amounts in thousands)

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined by BRE as EBITDA, excluding minority interests, gains or losses from sales of investments, preferred stock dividends and other expenses. We consider EBITDA and Adjusted EBITDA to be appropriate supplemental measures of our performance because they eliminate depreciation, interest, and, with respect to Adjusted EBITDA, gains (losses) from property dispositions and other charges, which permits investors to view income from operations without the impact of noncash depreciation or the cost of debt, or with respect to Adjusted EBITDA, other non-operating items described above.

Because EBITDA and Adjusted EBITDA exclude depreciation and amortization and capture neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of EBITDA and Adjusted EBITDA as measures of our performance is limited. Below is a reconciliation of net income available to common shareholders to EBITDA and Adjusted EBITDA:


	Quarter Ended 9/30/2011			Quarter Ended 9/30/2010			Nine Months Ended 9/30/2011			Nine Months Ended 9/30/2010
Net income available to common shareholders	$	17,071		$	19,605		$	32,886		$	41,430
Interest, including discontinued operations		18,374			21,639			56,861			63,465
Depreciation, including discontinued operations		25,931			23,381			78,268			70,045

EBITDA		61,376			64,625			168,015			174,940
Redeemable noncontrolling interest in income		332			365			1,003			1,111
Net gain on sales		—			(13,203	)		—			(24,885	)
Dividends on preferred stock		1,138			2,953			6,744			8,859
Other expenses		149			2,391			402			5,087
Net loss from extinguishment of debt		—			—			—			558
Gain on sale of unconsolidated entity		(2,248	)		—			(2,248	)		—
Redemption related to preferred stock issuance cost		155			—			3,771			—

Adjusted EBITDA	$	60,902		$	57,131		$	177,687		$	165,670

Net Operating Income (NOI)

We consider community level and portfolio-wide NOI to be an appropriate supplemental measure to net income because it helps both investors and management to understand the core property operations prior to the allocation of 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 from 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.

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. Accordingly, NOI should be considered only as a supplement to net income 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 GAAP).


	Quarter Ended 9/30/2011			Quarter Ended 9/30/2010			Nine Months Ended 9/30/2011			Nine Months Ended 9/30/2010
Net income available to common shareholders	$	17,071		$	19,605		$	32,886		$	41,430
Interest, including discontinued operations		18,374			21,639			56,861			63,465
Depreciation, including discontinued operations		25,931			23,381			78,268			70,045
Redeemable noncontrolling interest in income		332			365			1,003			1,111
Net gain on sales		—			(13,203	)		—			(24,885	)
Gain on sale of unconsolidated entity		(2,248	)		—			(2,248	)		—
Dividends on preferred stock		1,138			2,953			6,744			8,859
General and administrative expense		5,678			5,015			16,071			15,454
Other expenses		149			2,391			402			5,087
Net loss from extinguishment of debt		—			—			—			558
Redemption related to preferred stock issuance cost		155			—			3,771			—

NOI	$	66,580		$	62,146		$	193,758		$	181,124

Less Non Same-Store NOI		9,963			7,710			26,439			19,424

Same-Store NOI	$	56,617		$	54,436		$	167,319		$	161,700

Page 16

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BRE PROPERTIES INC /MD/ Reports

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