Form 8-K HOME PROPERTIES INC For: Apr 30

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May 1, 2015 9:40 AM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

April 30, 2015

HOME PROPERTIES, INC.

(Exact name of Registrant as specified in its Charter)

MARYLAND	1-13136	16-1455126
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification Number)

850 Clinton Square, Rochester, New York 14604

(Address of principal executive offices)

(585) 546-4900

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02.

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On April 30, 2015, the Registrant issued a press release announcing its results for the first quarter ended March 31, 2015. The related press release and supplemental information referred to in the press release are furnished as Exhibit 99 hereto.

The attached includes a presentation of Home Properties' Funds from Operations ("FFO") and Net Operating Income ("NOI"). FFO does and NOI may fall within the definition of "non-GAAP financial measures" set forth in Item 10(e) of Regulation S-K and as a result Home Properties is or may be required to include in this Current Report a statement disclosing the reasons why management believes that presentation of these measures provides useful information to investors. The Company believes that FFO is helpful to investors as a supplemental measure of the operating performance of a real estate company because, along with cash flows from operating activities, financing activities and investing activities, it provides investors an understanding of the ability of the Company to incur and service debt and to make capital expenditures. Home Properties believes that NOI is helpful to investors as a supplemental measure of the operating performance of a real estate company because it is a direct measure of the actual operating results of the Company's apartment properties. The Company also uses these two measures to compare its performance to that of its peer group.

ITEM 9.01.

FINANCIAL STATEMENTS AND EXHIBITS.

c. Exhibits

Exhibit 99 Press Release and supplemental information to press release of April 30, 2015, relating to first quarter ended March 31, 2015 results.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:	May 1, 2015	HOME PROPERTIES, INC.
		(Registrant)




		By:	/s/ David P. Gardner
			David P. Gardner
			Executive Vice President and
			Chief Financial Officer

EXHIBIT 99

Home Properties, Inc.

Earnings Release and Supplemental Information

First Quarter 2015

Table of Contents

	Page
Earnings Release	1-7
Property Results	8-11
Physical Occupancy Comparison by Region	12
Operating Results by Region	13
New Lease and Renewal Lease Rents compared to Expiring Lease Rents	14
Resident Statistics	15
Net Operating Income Detail	16
Seasonality Factor for NAV Calculation	16
Operating Expense Detail	17
Disposition of Real Estate	18
Summary of Recent Acquisitions	19
Summary of Recent Dispositions	19
Breakdown of Units	20
Debt	21-25
Capital Expenditures	26-27
Adjusted Net Operating Income Summary	27
Development Pipeline	28
2015 Earnings Guidance	29-31

Table of Contents

FOR IMMEDIATE RELEASE

Home Properties Reports First Quarter 2015 Results and

Announces Quarterly Dividend

ROCHESTER, N.Y., April 30, 2015 – Home Properties, Inc. (NYSE: HME) today reported financial results for the quarter ended March 31, 2015. All per share results are reported on a diluted basis.

·	Earnings per share (“EPS”) increased 23.4% to $0.98 from $0.79 in the first quarter of 2014. 2015 EPS includes the impact of higher gains on the disposition of property of $0.13 per share.

·	Funds from Operations ("FFO") per share increased 8.7% to $1.08 from $1.00 in the prior year period.

·	Operating Funds from Operations (“OFFO) per share increased 9.2% to $1.09 from $1.00 in the prior year period.

“We generated growth in rental income of 3.2% for the quarter, equal to assumptions provided in our guidance,” said Edward J. Pettinella, President and Chief Executive Officer. “Occupancy was steady at 95.0% for the quarter, unchanged from the first quarter of 2014 and up 10 basis points from year-end 2014.

"I am pleased with these achievements in light of the challenging weather conditions experienced in seven of our eight markets. In the first quarter of 2015, temperatures were significantly lower than the 30-year historical average and snowfall was higher, contributing to lower prospective resident traffic and higher operating expenses. Operating expenses related to weather were approximately three cents per share higher than our forecast. Nonetheless, our core portfolio generated a strong 5.2% increase in NOI. In light of recent positive operating trends, particularly in our Washington, D.C. market, and our outlook for the remainder of 2015, today we reaffirmed the midpoint of previously-provided FFO and OFFO guidance.”

Same-Property Operating Results (1)

	First Quarter 2015 Compared to	First Quarter 2015 Compared to
	First Quarter 2014	Fourth Quarter 2014
Rental Income	3.2% increase	0.5% increase
Total Revenues	2.6% increase	0.8% increase
Property Level
Operating Expenses	1.3% decrease	5.2% increase
Net Operating Income (“NOI”)	5.2% increase	1.8% decrease
Average Physical	95.0%,	95.0%,
Occupancy(2)	unchanged from prior year	10 basis point increase
Average Monthly Rental Rates	3.0% increase to $1,357	0.3% increase to $1,357

(1)	For 113 core properties containing 38,569 apartment units owned since January 1, 2014.

(2)	The number of occupied apartment units divided by total apartment units.

Table of Contents

Home Properties Reports First Quarter 2015 Results

April 30, 2015

Page 2 of 7

Acquisitions

During the quarter, the Company added 710 units in its Chicago region and 241 units in Northern New Jersey for a combined purchase price of $123 million.

Two adjacent apartment communities were acquired on January 7 in the northwest suburbs of Chicago – The Mansions of Mountshire and The Mansions Apartments – and they are being operated as one community named Park Grove Apartments. Park Grove is located in Mount Prospect near three major Chicago area expressways and within 5 miles of O’Hare International Airport.

·	Longbrook Apartments in Matawan, New Jersey was acquired on February 19 and renamed Sutton Pointe Apartments. The community is located within walking distance of the Aberdeen-Matawan Train Station and is a 45-minute drive from Manhattan.

Dispositions

The Company sold two apartment communities with 1,141 units during the quarter for approximately $126 million, resulting in a gain on sale of $40.3 million.

Apartment communities sold were:

·	The New Colonies – 672 units in Steger, Illinois (Chicago region) sold on January 26.

·	The Coves at Chesapeake – 469 units in Glen Burnie, Maryland (Baltimore region) sold on March 25.

Development

Construction continues at The Courts at Spring Mill Station, the Company’s last remaining development project. The first of two buildings in this Conshohocken, Pennsylvania community became ready for occupancy in the fourth quarter of 2014, and the second building is nearing completion. Approximately 41% of the units are currently leased.

Capital Markets

During the quarter, the Company repaid first and second mortgages on one community totaling approximately $33 million at a weighted average fixed rate of 5.22%. The property is now part of the unencumbered asset pool.

As of March 31, 2015:

·	The Company had approximately $22 million of cash on hand and an additional $155 million of available capacity on its corporate credit facility.

·	Unencumbered assets represented 57.6% of total undepreciated assets, up from 56.7% at December 31, 2014.

·	The Company’s ratio of debt-to-total market capitalization was 34.1%.

·	Total debt of $2.4 billion was outstanding at a weighted average interest rate of 4.1% and staggered maturities averaging 3.2 years.

·	Approximately 83% of total indebtedness was at fixed rates.

·	Interest coverage for the quarter was 4.0 times and the fixed charge ratio was 3.8 times.

Table of Contents

Home Properties Reports First Quarter 2015 Results

April 30, 2015

Page 3 of 7

Guidance

For 2015, the Company expects FFO between $4.59 and $4.71 per share, which will produce growth of 6.1% to 8.9% when compared to 2014 results. The guidance range of expected FFO per share for the second quarter of 2015 is $1.13 to $1.17.

The Company expects 2015 OFFO per share between $4.54 and $4.66. The guidance range of expected OFFO per share for the second quarter of 2015 is $1.13 to $1.17.

Assumptions for 2015 guidance are included in the Company’s supplemental information. The Company expects to include additional commentary on projected results for the balance of the year when it announces second quarter 2015 financial results.

Dividend Declared

The Company announced a regular cash dividend on the Company’s common shares of $0.76 per share for the quarter ended March 31, 2015. The dividend is payable on May 22, 2015 to shareholders of record on May 12, 2015 and is equivalent to an annualized rate of $3.04 per share. The current annual dividend represents a 4.1% yield based on the April 29 closing price of $73.89. Home Properties’ common stock will begin trading ex-dividend on May 8, 2015.

Supplemental Information

The Company produces supplemental information that includes details regarding property operations, other income, acquisitions, dispositions, geographic market breakdown, debt and new development. The supplemental information is available via the Company's website through the "Investors" section or e-mail upon request.

First Quarter Earnings Conference Call

The Company will conduct a conference call and simultaneous webcast tomorrow at 11:00 AM ET to discuss quarterly results. The webcast, which includes a slide presentation, will be available on the Presentations page of the Investors section of the Company’s website, www.homeproperties.com. For live audio-only participation, you may dial 800-913-1647 (International 212-231-2900).

Second Quarter Conference/Event Schedule

Home Properties is scheduled to participate in REITWeek 2015®: NAREIT's Investor Forum® on June 9-11, 2015 in New York City. Management will participate in a roundtable discussion at the event on Tuesday, June 9 at 10:15 AM. A link to the live webcast will be available on the Presentations page of the Investors section of the Company’s website, with a replay available for 90 days. The Company’s presentation materials for the conference will be available at the same location.

Second Quarter Earnings Release and Conference Call

The Company’s second quarter 2015 financial results are scheduled to be released after the stock market closes on Thursday, July 30, 2015. A conference call, which will be simultaneously webcast, is scheduled for Friday, July 31, 2015 at 11:00 AM ET. The call will be accessible following the same instructions as the current quarter's conference call.

Table of Contents

Home Properties Reports First Quarter 2015 Results

April 30, 2015

Page 4 of 7

Forward-Looking Statements

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 are described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission and include general economic and local real estate conditions, weather and other conditions that might affect operating expenses, the timely completion of repositioning activities within anticipated budgets, the actual pace of future acquisitions and dispositions, and continued access to capital to fund growth. The Company assumes no obligation to update or supplement forward-looking statements because of subsequent events.

About Home Properties

Home Properties is a publicly traded multifamily real estate investment trust that owns, operates, acquires and repositions apartment communities in suburbs of major metropolitan areas, primarily along the East Coast of the United States. An S&P 400 Company, Home Properties owns and operates 121 communities containing 41,917 apartment units. For more information, please visit the Company’s website at www.homeproperties.com.

Table of Contents

Home Properties Reports First Quarter 2015 Results

April 30, 2015

Page 5 of 7

HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands – Unaudited)

	Three Months Ended
	March 31,
	2015			2014
Revenues:
Rental income	$	160,880		$	149,836
Property other income		15,447			15,321
Other income		317			141
Total revenues		176,644			165,298
Expenses:
Operating and maintenance		67,307			65,571
General and administrative		8,543			9,258
Interest		25,485			24,852
Depreciation and amortization		47,864			43,778
Other expenses		377			8
Impairment and other charges		181			-
Total expenses		149,757			143,467
Income from continuing operations, before gain on disposition of real estate		26,887			21,831
Gain on disposition of land		70			-
Gain on disposition of property		40,346			-
Income from continuing operations		67,303			21,831
Discontinued operations:
Income from discontinued operations		-			834
Gain on disposition of property		-			31,306
Discontinued operations		-			32,140
Net income		67,303			53,971
Net income attributable to noncontrolling interest		(9,945	)		(8,180	)
Net income attributable to common stockholders	$	57,358		$	45,791
Reconciliation from net income attributable to common stockholders to Funds From Operations:
Net income attributable to common stockholders	$	57,358		$	45,791
Real property depreciation and amortization		47,272			44,088
Noncontrolling interest		9,945			8,180
Gain on disposition of property		(40,346	)		(31,306	)
FFO - basic and diluted, as defined by NAREIT		74,229			66,753
Loss from early extinguishment of debt in connection with sale of real estate		-			802
FFO - basic and diluted (1)	$	74,229		$	67,555

(1)

Pursuant to guidance provided by 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. Similarly titled measures disclosed by other companies may not be calculated in the same manner.

Table of Contents

Home Properties Reports First Quarter 2015 Results

April 30, 2015

Page 6 of 7

HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share/unit – Unaudited)

	Three Months Ended
	March 31,
	2015			2014
FFO – basic and diluted	$	74,229		$	67,555
Acquisition costs of closed deals included in other expenses		377			8
Gain on land sale		(70	)		-
Impairment and other charges		3			-
Operating FFO (2)	$	74,539		$	67,563
FFO – basic and diluted	$	74,229		$	67,555
Recurring non-revenue generating capital expenses		(9,192	)		(9,129	)
AFFO (3)	$	65,037		$	58,426
Operating FFO	$	74,539		$	67,563
Recurring non-revenue generating capital expenses		(9,192	)		(9,129	)
Operating AFFO (2) (3)	$	65,347		$	58,434
Weighted average shares/units outstanding:
Shares – basic		57,872.6			57,106.9
Shares – diluted		58,505.7			57,620.7
Shares/units – basic (4)		67,940.3			67,336.5
Shares/units – diluted (4)		68,573.4			67,850.3
Per share/unit:
Net income – basic	$	0.99		$	0.80
Net income – diluted	$	0.98		$	0.79
FFO – basic	$	1.09		$	1.00
FFO – diluted	$	1.08		$	1.00
Operating FFO (2)	$	1.09		$	1.00
AFFO (3)	$	0.95		$	0.86
Operating AFFO (2) (3)	$	0.95		$	0.86
Common dividend paid	$	0.76		$	0.73

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

(3)	Adjusted Funds From Operations ("AFFO") is defined as FFO less an annual reserve for anticipated recurring, non-revenue generating capitalized costs of $900 per apartment unit. 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.

Table of Contents

Home Properties Reports First Quarter 2015 Results

April 30, 2015

Page 7 of 7

HOME PROPERTIES, INC.

SUMMARY CONSOLIDATED BALANCE SHEETS

(in thousands - Unaudited)

	March 31, 2015			December 31, 2014
Assets
Real estate:
Land	$	803,156		$	815,565
Land held for sale		36,746			13,114
Construction in progress		83,611			118,595
Buildings, improvements and equipment		4,859,169			4,817,453
		5,782,682			5,764,727
Less: accumulated depreciation		(1,381,762	)		(1,371,227	)
Real estate, net		4,400,920			4,393,500
Cash and cash equivalents		22,130			11,131
Cash in escrows		25,978			24,118
Accounts receivable, net		17,053			19,556
Prepaid expenses		17,003			23,484
Deferred charges, net		8,590			9,250
Other assets		2,299			7,496
Total assets	$	4,493,973		$	4,488,535
Liabilities and Equity
Mortgage notes payable	$	1,596,881		$	1,637,175
Unsecured notes payable		550,000			550,000
Unsecured line of credit		291,500			269,000
Accounts payable		27,376			25,835
Accrued interest payable		9,819			7,732
Accrued expenses and other liabilities		42,812			38,732
Security deposits		19,161			18,631
Total liabilities		2,537,549			2,547,105

Common stockholders’ equity		1,669,300			1,653,218
Noncontrolling interest		287,124			288,212
Total equity		1,956,424			1,941,430
Total liabilities and equity	$	4,493,973		$	4,488,535

Total shares/units outstanding:
Common stock		57,900.9			57,704.0
Operating partnership units		10,017.1			10,114.4
		67,918.0			67,818.4

For Further Information:

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

Shelly J. Doran, Vice President, Investor Relations, (585) 295-4227

###

Table of Contents

Property Results

First Quarter 2015
															1Q '15 Versus 1Q '14
			1Q '15												% Growth
	# of		Company			Date	1Q '15		1Q '15			1Q '14			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	$	1,365		93.4	%		94.0	%		5.0	%		1.8	%		(12.9	%)		12.0	%
Bonnie Ridge		960				7/1/1999		1,221		94.6	%		95.0	%		4.1	%		4.7	%		(1.8	%)		8.1	%
Canterbury		618				7/15/1999		1,101		95.5	%		95.4	%		2.9	%		2.3	%		3.9	%		1.5	%
Charleston Place		858				9/30/2010		1,291		94.8	%		95.3	%		2.7	%		1.6	%		(2.6	%)		3.5	%
Country Village		344				4/30/1998		1,053		94.6	%		95.9	%		1.6	%		2.2	%		5.4	%		0.1	%
Dunfield		312				11/1/2007		1,281		93.7	%		91.8	%		1.2	%		5.5	%		(4.6	%)		11.1	%
Fox Hall		720				3/28/2007		983		91.9	%		94.4	%		3.0	%		(5.5	%)		(15.6	%)		3.7	%
Gateway Village		132				7/15/1999		1,469		96.6	%		97.0	%		1.7	%		2.2	%		(2.8	%)		4.7	%
Heritage Woods		164				10/4/2006		1,194		95.7	%		97.0	%		0.5	%		(0.8	%)		10.5	%		(7.3	%)
Howard Crossing		1,350				6/28/2012		1,187		95.1	%		93.8	%		3.0	%		4.4	%		0.0	%		6.7	%
Middlebrooke		208				4/1/2010		1,087		95.7	%		96.1	%		4.1	%		3.7	%		(4.4	%)		8.3	%
Mill Towne Village		384				5/31/2001		1,006		94.4	%		95.7	%		4.4	%		1.7	%		1.0	%		2.1	%
Morningside Heights		1,050				4/30/1998		1,039		93.2	%		93.6	%		4.2	%		4.3	%		1.7	%		5.8	%
Owings Run		504				7/15/1999		1,371		92.3	%		93.2	%		3.4	%		2.5	%		(2.7	%)		5.2	%
Ridgeview at Wakefield Valley		204				1/13/2005		1,311		94.5	%		93.0	%		3.3	%		2.1	%		(3.4	%)		5.4	%
Saddle Brooke		468				10/29/2008		1,243		94.6	%		95.3	%		5.2	%		4.3	%		(3.2	%)		8.6	%
Selford		102				7/15/1999		1,561		93.8	%		97.1	%		3.9	%		1.7	%		(1.3	%)		3.0	%
The Apts. at Cambridge Court		544				8/23/2011		1,386		91.1	%		92.7	%		2.3	%		1.6	%		9.9	%		(3.0	%)
The Greens at Columbia		168				7/29/2010		1,506		97.0	%		95.6	%		1.6	%		2.5	%		(0.1	%)		3.6	%
Top Field		156				10/4/2006		1,424		96.0	%		94.2	%		3.7	%		4.2	%		4.9	%		3.9	%
Village Square		370				7/15/1999		1,285		95.7	%		93.4	%		3.1	%		6.6	%		(6.7	%)		14.1	%
Westbrooke		110				4/1/2010		979		96.1	%		96.3	%		5.1	%		2.3	%		(4.2	%)		7.3	%
Total Baltimore		10,008		23.9	%		$	1,201		94.2	%		94.4	%		3.2	%		2.7	%		(1.7	%)		5.2	%		22.5	%

Boston
Gardencrest		696				6/28/2002	$	1,839		95.5	%		95.8	%		4.0	%		4.0	%		5.4	%		3.2	%
Highland House		172				5/31/2006		1,392		93.9	%		91.0	%		4.0	%		6.5	%		0.4	%		12.1	%
Liberty Commons		120				8/30/2006		1,399		94.6	%		95.1	%		5.2	%		3.0	%		(4.3	%)		7.0	%
Liberty Place		107				6/6/2006		1,612		95.5	%		96.4	%		2.4	%		2.0	%		(4.9	%)		6.9	%
Middlesex Crossing		252				12/18/2013		1,515		94.6	%		95.9	%		7.2	%		6.5	%		5.0	%		7.6	%
Redbank Village		500				7/8/1998		1,107		94.6	%		97.1	%		9.9	%		7.6	%		3.8	%		9.9	%
Stone Ends		280				2/12/2003		1,484		97.3	%		96.3	%		5.8	%		7.7	%		7.4	%		8.0	%
The Commons at Haynes Farm		302				7/15/2011		1,463		98.1	%		97.6	%		4.5	%		5.6	%		11.1	%		2.5	%
The Heights at Marlborough		348				9/7/2006		1,423		97.1	%		97.0	%		5.3	%		4.5	%		12.8	%		(1.5	%)
The Meadows at Marlborough		264				9/7/2006		1,359		97.0	%		95.3	%		4.0	%		2.6	%		7.3	%		(1.1	%)
The Townhomes of Beverly		204				2/15/2007		1,745		94.3	%		94.0	%		3.7	%		4.8	%		22.4	%		(6.8	%)
The Village at Marshfield		276				3/17/2004		1,359		97.8	%		94.9	%		4.8	%		8.9	%		8.6	%		9.1	%
Westwoods		35				4/30/2007		1,480		98.9	%		96.7	%		4.4	%		8.3	%		(9.0	%)		29.3	%
Total Boston		3,556		8.5	%		$	1,487		96.0	%		95.9	%		5.1	%		5.4	%		7.0	%		4.3	%		8.8	%

Page 8

Table of Contents

Property Results

First Quarter 2015
															1Q '15 Versus 1Q '14
			1Q '15												% Growth
	# of		Company			Date	1Q '15		1Q '15			1Q '14			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	$	978		94.8	%		94.7	%		4.2	%		4.1	%		(0.3	%)		8.9	%
Courtyards Village		224				8/29/2001		987		96.9	%		96.8	%		2.9	%		3.9	%		(3.4	%)		11.1	%
Cypress Place		192				12/27/2000		1,152		97.2	%		95.7	%		4.3	%		5.6	%		(15.9	%)		24.1	%
Lakeview Townhomes		120				10/18/2010		1,279		96.1	%		96.9	%		0.8	%		0.6	%		(11.3	%)		13.6	%
Park Grove		710				1/7/2015		1,101		94.5	%		n/a			n/a			n/a			n/a			n/a
The Colony		783				9/1/1999		1,007		97.4	%		96.0	%		5.8	%		9.8	%		(8.8	%)		25.4	%
The Gates of Deer Grove		204				12/15/2011		1,147		96.7	%		96.5	%		6.0	%		6.6	%		(2.7	%)		16.2	%
The Lakes of Schaumburg		428				11/12/2014		1,209		97.6	%		n/a			n/a			n/a			n/a			n/a
Total Chicago		3,032		7.2	%		$	1,046		96.7	%		95.9	%		4.6	%		6.4	%		(6.7	%)		18.9	%		5.6	%

Long Island
Bayview / Colonial		160				11/1/2000	$	1,436		97.8	%		97.4	%		3.1	%		(1.9	%)		(16.7	%)		10.4	%
Cambridge Village		82				3/1/2002		2,092		95.3	%		97.0	%		5.6	%		0.9	%		7.9	%		(4.0	%)
Crescent Club		257				9/30/2010		1,547		96.3	%		96.7	%		5.2	%		3.4	%		(0.8	%)		6.2	%
Devonshire Hills		656				7/16/2001		1,754		94.8	%		96.3	%		3.0	%		(1.3	%)		(9.1	%)		3.4	%
Hawthorne Court		434				4/4/2002		1,620		96.5	%		96.2	%		3.7	%		1.8	%		1.0	%		2.4	%
Heritage Square		80				4/4/2002		2,022		96.8	%		97.5	%		4.6	%		3.7	%		(8.5	%)		14.9	%
Holiday Square		144				5/31/2002		1,393		96.2	%		97.8	%		3.6	%		2.1	%		1.4	%		2.6	%
Lake Grove		368				2/3/1997		1,637		97.8	%		94.1	%		3.9	%		7.4	%		(0.8	%)		13.3	%
Mid-Island Estates		232				7/1/1997		1,574		96.3	%		97.4	%		3.8	%		0.0	%		6.5	%		(4.8	%)
Sayville Commons		342				7/15/2005		1,810		95.1	%		96.8	%		4.5	%		7.9	%		3.4	%		11.5	%
Southern Meadows		452				6/29/2001		1,602		96.3	%		95.5	%		2.8	%		4.0	%		0.4	%		6.9	%
Westwood Village		242				3/1/2002		2,647		96.2	%		96.9	%		3.1	%		3.6	%		3.1	%		4.0	%
Woodmont Village		97				3/1/2002		1,527		97.1	%		97.5	%		5.9	%		(2.2	%)		(1.3	%)		(2.9	%)
Yorkshire Village		40				3/1/2002		2,047		97.4	%		95.8	%		3.6	%		11.7	%		20.6	%		3.0	%
Total Long Island		3,586		8.5	%		$	1,728		96.2	%		96.3	%		3.7	%		2.7	%		(0.8	%)		5.3	%		10.5	%

Page 9

Table of Contents

Property Results

First Quarter 2015
															1Q '15 Versus 1Q '14
			1Q '15												% Growth
	# of		Company			Date	1Q '15		1Q '15			1Q '14			Rental			Total			Total			Total			Company
Region	Units		% Units (1)			Acquired (2)	Rent/Mo		Occup(3)			Occup(3)			Rates(4)			Revenue			Expense			NOI			% NOI (1)
Northern New Jersey
Barrington Gardens		148				3/1/2005	$	1,470		98.1	%		97.3	%		3.4	%		5.1	%		(13.8	%)		18.5	%
Chatham Hill		308				1/30/2004		2,028		93.2	%		91.3	%		(0.2	%)		3.2	%		(8.7	%)		8.9	%
East Hill Gardens		33				7/8/1998		1,700		96.8	%		98.1	%		2.2	%		3.1	%		4.0	%		2.4	%
Hackensack Gardens		198				3/1/2005		1,333		94.5	%		98.4	%		6.4	%		1.1	%		(6.9	%)		8.3	%
Jacob Ford Village		270				2/15/2007		1,495		95.8	%		95.9	%		2.9	%		2.7	%		(9.9	%)		9.8	%
Lakeview		106				7/8/1998		1,521		97.5	%		97.5	%		1.6	%		(2.1	%)		13.6	%		(14.9	%)
Northwood		134				1/30/2004		1,509		95.0	%		97.0	%		2.6	%		1.0	%		(3.2	%)		4.1	%
Oak Manor		77				7/8/1998		2,117		96.1	%		94.9	%		1.6	%		1.4	%		(7.3	%)		7.2	%
Pleasant View		1,142				7/8/1998		1,286		96.4	%		96.1	%		2.9	%		3.8	%		(1.8	%)		8.4	%
Pleasure Bay		270				7/8/1998		1,228		93.9	%		95.7	%		4.1	%		1.1	%		(5.4	%)		7.2	%
Royal Gardens		550				5/28/1997		1,383		97.0	%		97.4	%		2.5	%		2.5	%		1.1	%		3.5	%
Sutton Pointe		241				2/19/2015		1,289		86.1	%		n/a			n/a			n/a			n/a			n/a
Wayne Village		275				7/8/1998		1,557		96.7	%		95.6	%		2.8	%		3.7	%		5.5	%		2.6	%
Windsor Realty		67				7/8/1998		1,398		96.5	%		96.8	%		1.4	%		2.0	%		(7.9	%)		12.1	%
Total Northern New Jersey		3,819		9.1	%		$	1,446		96.0	%		96.1	%		2.6	%		2.8	%		(2.9	%)		6.9	%		9.1	%

Philadelphia
Courts at Spring Mill Station		115				Under Construction	$	1,870		44.9	%		n/a			n/a			n/a			n/a			n/a
Glen Manor		180				9/23/1997		854		94.4	%		93.7	%		5.4	%		9.2	%		(9.1	%)		36.6	%
Golf Club		399				3/15/2000		1,243		94.9	%		96.3	%		3.0	%		0.4	%		(1.6	%)		1.5	%
Hill Brook Place		274				7/28/1999		979		93.7	%		94.5	%		1.7	%		(1.4	%)		(4.2	%)		1.5	%
Home Properties of Bryn Mawr		316				3/15/2000		1,617		97.7	%		95.8	%		3.3	%		3.0	%		0.1	%		4.2	%
Home Properties of Devon		631				3/15/2000		1,352		94.9	%		95.1	%		3.9	%		2.3	%		(5.9	%)		7.2	%
New Orleans Park		442				7/28/1999		960		96.7	%		94.8	%		2.7	%		2.7	%		(5.9	%)		11.6	%
Racquet Club East		466				7/7/1998		1,175		94.1	%		91.2	%		1.7	%		4.4	%		(1.3	%)		8.5	%
Racquet Club South		103				5/27/1999		981		96.1	%		89.5	%		1.8	%		10.8	%		(11.4	%)		43.6	%
Ridley Brook		244				7/28/1999		1,038		97.0	%		95.1	%		4.5	%		4.0	%		(2.4	%)		10.7	%
Sherry Lake		298				7/23/1998		1,342		94.3	%		95.9	%		1.2	%		(0.8	%)		(2.9	%)		0.4	%
Stone Hill		205				11/27/2013		946		96.7	%		89.6	%		2.1	%		26.7	%		2.2	%		55.8	%
The Brooke at Peachtree Village		146				8/15/2005		1,314		96.0	%		96.9	%		4.0	%		3.4	%		(7.8	%)		11.1	%
The Landings		384				11/22/1996		1,141		95.3	%		96.5	%		3.2	%		0.4	%		(4.5	%)		4.9	%
The Preserve at Milltown		376				6/19/2014		1,133		95.7	%		n/a			n/a			n/a			n/a			n/a
Trexler Park		250				3/15/2000		1,187		94.9	%		97.0	%		3.5	%		0.0	%		(4.3	%)		3.4	%
Trexler Park West		216				8/15/2008		1,420		96.0	%		97.2	%		4.0	%		2.7	%		(4.9	%)		6.7	%
Waterview		203				7/14/2011		1,152		92.2	%		96.3	%		2.3	%		(2.8	%)		(7.2	%)		0.8	%
William Henry		363				3/15/2000		1,268		93.7	%		93.8	%		3.1	%		4.4	%		(5.4	%)		11.7	%
Willowbrook		248				7/30/2014		1,241		93.9	%		n/a			n/a			n/a			n/a			n/a
Total Philadelphia		5,859		14.0	%		$	1,197		95.2	%		94.8	%		3.0	%		2.8	%		(4.2	%)		7.9	%		12.7	%

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Table of Contents

Property Results

First Quarter 2015
															1Q '15 Versus 1Q '14
			1Q '15												% Growth
	# of		Company			Date	1Q '15		1Q '15			1Q '14			Rental			Total			Total			Total			Company
Region	Units		% Units (1)			Acquired (2)	Rent/Mo		Occup(3)			Occup(3)			Rates(4)			Revenue			Expense			NOI			% NOI (1)
Southeast Florida
The Hamptons		668				7/7/2004	$	1,177		96.6	%		96.8	%		7.6	%		5.5	%		(5.9	%)		15.9	%
Vinings at Hampton Village		168				7/7/2004		1,300		97.3	%		95.5	%		6.2	%		9.0	%		0.1	%		16.7	%
Total Southeast Florida		836		2.0	%		$	1,202		96.7	%		96.5	%		7.3	%		6.3	%		(4.6	%)		16.1	%		1.7	%

Washington, D.C.
1200 East West		247				5/11/2010	$	1,797		95.1	%		92.8	%		(3.3	%)		2.0	%		4.7	%		0.6	%
Arbor Park of Alexandria		851				Redevelopment		1,689		77.3	%		80.9	%		4.5	%		(1.5	%)		(3.1	%)		(0.5	%)
Braddock Lee		256				3/13/1998		1,447		95.7	%		97.0	%		(0.1	%)		(0.8	%)		(3.2	%)		0.7	%
Cinnamon Run		511				12/28/2005		1,361		92.7	%		92.0	%		2.8	%		2.0	%		12.3	%		(2.0	%)
Courts at Huntington Station		421				6/15/2011		1,944		91.8	%		93.4	%		(1.5	%)		(1.2	%)		0.1	%		(1.9	%)
East Meadow		150				8/1/2000		1,507		95.3	%		95.8	%		1.8	%		0.2	%		2.0	%		(0.9	%)
Eleven55 Ripley		379				Lease Up		1,838		76.3	%		9.5	%		n/a			n/a			n/a			n/a
Elmwood Terrace		504				6/30/2000		1,070		95.7	%		95.8	%		4.9	%		5.5	%		(1.5	%)		10.9	%
Hunters Glen		108				4/19/2011		1,089		93.5	%		93.9	%		4.7	%		0.1	%		(10.4	%)		6.4	%
Mount Vernon Square		1,387				12/27/2006		1,374		94.3	%		92.8	%		1.2	%		3.2	%		(0.1	%)		5.2	%
Newport Village		937				10/17/2011		1,571		93.9	%		91.7	%		(0.2	%)		(1.8	%)		(8.9	%)		2.9	%
Park Shirlington		294				3/13/1998		1,490		94.6	%		94.4	%		1.4	%		1.4	%		(3.7	%)		4.8	%
Peppertree Farm		879				12/28/2005		1,344		92.1	%		93.3	%		3.1	%		0.6	%		(2.2	%)		2.4	%
Seminary Hill		296				7/1/1999		1,478		95.7	%		97.4	%		1.6	%		(0.6	%)		1.8	%		(2.2	%)
Seminary Towers		545				7/1/1999		1,505		94.3	%		94.4	%		1.4	%		(2.0	%)		(2.2	%)		(1.9	%)
Somerset Park		108				10/11/2011		1,536		92.0	%		97.7	%		0.5	%		(5.9	%)		0.8	%		(9.8	%)
Tamarron		132				7/15/1999		1,691		92.0	%		96.2	%		2.5	%		(0.6	%)		6.1	%		(3.1	%)
The Apts. at Cobblestone Square		314				6/14/2012		1,349		95.4	%		96.0	%		1.4	%		1.3	%		3.5	%		(0.1	%)
The Apts. at Wellington Trace		240				3/2/2004		1,439		94.7	%		97.0	%		1.7	%		(1.1	%)		2.9	%		(2.9	%)
The Courts at Dulles		411				11/30/2011		1,557		96.3	%		95.8	%		1.6	%		2.0	%		0.8	%		2.7	%
The Courts at Fair Oaks		364				9/30/2010		1,529		93.8	%		93.8	%		(0.8	%)		(1.4	%)		2.0	%		(3.0	%)
The Manor - VA		198				2/19/1999		1,232		92.6	%		94.8	%		3.9	%		(3.0	%)		(3.6	%)		(2.6	%)
The Manor East		164				5/11/2012		1,179		92.1	%		91.8	%		2.4	%		0.8	%		5.9	%		(2.4	%)
The Sycamores		185				12/16/2002		1,492		98.4	%		95.5	%		1.6	%		4.2	%		5.3	%		3.5	%
Village at Potomac Falls		247				8/5/2010		1,478		94.4	%		94.4	%		1.3	%		1.2	%		(5.0	%)		5.1	%
West Springfield		244				11/18/2002		1,607		96.7	%		95.9	%		2.1	%		3.7	%		(7.5	%)		10.3	%
Westchester West		345				12/30/2008		1,453		90.5	%		92.3	%		2.9	%		0.9	%		4.2	%		(1.0	%)
Woodway at Trinity Centre		504				5/17/2012		1,459		95.0	%		95.0	%		2.4	%		1.0	%		(0.1	%)		1.6	%
Total Washington, D.C.		11,221		26.8	%		$	1,454		94.1	%		94.1	%		1.3	%		0.7	%		(0.8	%)		1.5	%		29.1	%

Total Properties		41,917		100.0	%		$	1,361		94.3	%		n/a			n/a			n/a			n/a			n/a			100.0	%
Total Core Properties		38,569					$	1,357		95.0	%		95.0	%		3.0	%		2.6	%		(1.3	%)		5.2	%

(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, represents the date 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 bad debts and occupancy changes.

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Table of Contents

Physical Occupancy Comparison by Region - Core Properties

Sequential Comparison
First Quarter 2015 vs. Fourth Quarter 2014
Region	% Units			1Q '15			4Q '14			Variance
Baltimore		25.9	%		94.2	%		94.2	%		0.0	%
Boston		9.2	%		96.0	%		96.0	%		0.0	%
Chicago		4.9	%		96.7	%		96.2	%		0.5	%
Long Island		9.3	%		96.2	%		96.2	%		0.0	%
Northern New Jersey		9.3	%		96.0	%		95.9	%		0.1	%
Philadelphia		13.3	%		95.2	%		94.7	%		0.5	%
Southeast Florida		2.2	%		96.7	%		95.1	%		1.6	%
Washington, D.C.		25.9	%		94.1	%		94.2	%		(0.1	%)
Total Core		100.0	%		95.0	%		94.9	%		0.1	%


Quarter over Quarter Comparison
First Quarter 2015 vs. First Quarter 2014
Region	% Units			1Q '15			1Q'14			Variance
Baltimore		25.9	%		94.2	%		94.4	%		(0.2	%)
Boston		9.2	%		96.0	%		95.9	%		0.1	%
Chicago		4.9	%		96.7	%		95.9	%		0.8	%
Long Island		9.3	%		96.2	%		96.3	%		(0.1	%)
Northern New Jersey		9.3	%		96.0	%		96.1	%		(0.1	%)
Philadelphia		13.3	%		95.2	%		94.8	%		0.4	%
Southeast Florida		2.2	%		96.7	%		96.5	%		0.2	%
Washington, D.C.		25.9	%		94.1	%		94.1	%		0.0	%
Total Core		100.0	%		95.0	%		95.0	%		0.0	%


March 2015 vs. First Quarter 2015
Region	% Units			Mar '15			1Q '15			Variance
Baltimore		25.9	%		94.6	%		94.2	%		0.4	%
Boston		9.2	%		96.1	%		96.0	%		0.1	%
Chicago		4.9	%		97.5	%		96.7	%		0.8	%
Long Island		9.3	%		96.2	%		96.2	%		0.0	%
Northern New Jersey		9.3	%		96.4	%		96.0	%		0.4	%
Philadelphia		13.3	%		95.6	%		95.2	%		0.4	%
Southeast Florida		2.2	%		96.8	%		96.7	%		0.1	%
Washington, D.C.		25.9	%		93.9	%		94.1	%		(0.2	%)
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 2015 vs. Fourth Quarter 2014
				Base Rental			Total
Region	% Units			Revenues(1)			Revenues			Expenses			NOI
Baltimore		25.9	%		0.7	%		0.0	%		3.4	%		(1.8	%)
Boston		9.2	%		1.0	%		0.6	%		17.9	%		(8.3	%)
Chicago		4.9	%		1.2	%		2.8	%		3.3	%		2.5	%
Long Island		9.3	%		0.3	%		1.3	%		7.3	%		(2.5	%)
Northern New Jersey		9.3	%		0.5	%		(0.4	%)		3.5	%		(2.9	%)
Philadelphia		13.3	%		0.6	%		2.8	%		5.3	%		1.2	%
Southeast Florida		2.2	%		4.0	%		3.9	%		2.6	%		4.9	%
Washington, D.C.		25.9	%		(0.2	%)		0.4	%		2.7	%		(0.9	%)
Total Core		100.0	%		0.5	%		0.8	%		5.2	%		(1.8	%)


Year over Year Results
First Quarter 2015 vs. First Quarter 2014
				Base Rental			Total
Region	% Units			Revenues(1)			Revenues			Expenses			NOI
Baltimore		25.9	%		3.5	%		2.7	%		(1.7	%)		5.2	%
Boston		9.2	%		5.7	%		5.4	%		7.0	%		4.3	%
Chicago		4.9	%		5.7	%		6.4	%		(6.7	%)		18.9	%
Long Island		9.3	%		3.3	%		2.7	%		(0.8	%)		5.3	%
Northern New Jersey		9.3	%		3.1	%		2.8	%		(2.9	%)		6.9	%
Philadelphia		13.3	%		3.5	%		2.8	%		(4.2	%)		7.9	%
Southeast Florida		2.2	%		6.7	%		6.3	%		(4.6	%)		16.1	%
Washington, D.C.		25.9	%		1.2	%		0.7	%		(0.8	%)		1.5	%
Total Core		100.0	%		3.2	%		2.6	%		(1.3	%)		5.2	%

(1)	Reflects net change in base rental revenues after bad debts and occupancy changes.

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Percentage Change in New Lease and Renewal Lease Rents Compared to
Expiring Lease Rents - Core Properties

	1Q '14						2Q '14						3Q '14						4Q '14						YTD '14
Region	New			Renewal			New			Renewal			New			Renewal			New			Renewal			New			Renewal
Baltimore		0.3	%		3.3	%		3.4	%		3.7	%		2.1	%		3.9	%		1.2	%		3.9	%		2.1	%		3.7	%

Boston		0.4	%		3.0	%		5.3	%		3.8	%		5.8	%		4.1	%		4.8	%		4.1	%		4.6	%		3.9	%

Chicago		2.3	%		3.4	%		4.3	%		2.9	%		2.7	%		3.9	%		2.1	%		4.4	%		3.1	%		3.6	%

Long Island		(0.4	%)		3.4	%		4.5	%		3.5	%		3.6	%		4.0	%		1.1	%		4.1	%		2.8	%		3.8	%

Northern New Jersey		2.8	%		2.1	%		4.4	%		2.0	%		4.9	%		2.4	%		2.2	%		2.4	%		4.0	%		2.2	%

Philadelphia		(2.0	%)		2.4	%		2.7	%		3.4	%		3.5	%		3.8	%		1.0	%		3.5	%		2.0	%		3.4	%

Southeast Florida		6.9	%		4.2	%		9.4	%		3.9	%		9.7	%		4.6	%		6.7	%		4.5	%		8.3	%		4.2	%

Washington, D.C.		(2.3	%)		2.7	%		(0.1	%)		3.0	%		(0.2	%)		3.1	%		(2.0	%)		3.3	%		(1.0	%)		3.0	%

Total Core		(0.2	%)		2.9	%		3.0	%		3.2	%		2.5	%		3.6	%		0.9	%		3.6	%		1.9	%		3.4	%


	1Q '15						April '15*
Region	New			Renewal			New			Renewal
Baltimore		(0.1	%)		4.3	%		1.4	%		3.7	%

Boston		3.6	%		4.2	%		7.4	%		4.4	%

Chicago		3.0	%		5.1	%		8.8	%		5.2	%

Long Island		1.9	%		4.5	%		1.2	%		4.4	%

Northern New Jersey		(0.3	%)		2.2	%		1.8	%		1.6	%

Philadelphia		(2.5	%)		3.1	%		0.3	%		3.4	%

Southeast Florida		8.4	%		4.6	%		9.8	%		4.3	%

Washington, D.C.		(2.1	%)		3.2	%		(0.9	%)		3.0	%

Total Core		0.1	%		3.7	%		1.7	%		3.5	%

*	Preliminary results for April 2015.

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Resident Statistics

Top Six Reasons for Moveouts
	1Q '15			4Q '14			3Q '14			2Q '14			1Q '14			Year '14			Year '13			Year '12
Transfer within HME		15.3	%		13.5	%		11.9	%		11.2	%		15.4	%		12.8	%		13.4	%		13.1	%
Employment related		15.0	%		14.6	%		13.1	%		14.8	%		13.9	%		14.1	%		13.5	%		13.2	%
Location, apartment size		13.8	%		12.7	%		15.1	%		14.5	%		14.0	%		14.2	%		13.1	%		12.6	%
Eviction, skip		12.7	%		14.2	%		11.7	%		12.1	%		14.6	%		13.0	%		12.9	%		14.2	%
Home purchase		12.0	%		13.2	%		12.2	%		10.8	%		10.6	%		11.8	%		12.5	%		11.3	%
Domestic Situation		9.1	%		8.6	%		11.3	%		11.1	%		8.2	%		10.8	%		10.1	%		10.2	%

Traffic - Core Properties							Turnover - Core Properties
				Signed
	Traffic			Leases
	1Q '15			1Q '15
	vs.			vs.
Region	1Q '14			1Q '14			1Q '15			1Q '14
Baltimore		(1.4	%)		4.8	%		7.6	%		8.0	%
Boston		(19.0	%)		3.9	%		7.7	%		8.3	%
Chicago		(9.8	%)		1.8	%		8.2	%		7.6	%
Long Island		11.5	%		6.4	%		7.9	%		7.2	%
Northern New Jersey		0.3	%		1.5	%		8.1	%		8.0	%
Philadelphia		(4.2	%)		(4.4	%)		7.8	%		7.8	%
Southeast Florida		11.5	%		9.2	%		12.1	%		11.4	%
Washington, D.C.		3.5	%		10.3	%		7.9	%		7.7	%

Total Core		(1.6	%)		4.4	%		7.9	%		7.9	%


Bad Debt as % of Rent and Utility Recovery
	1Q '15			1Q '14
Total Core		0.75	%		0.84	%

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

Core Properties
							Qtr			%
	1Q '15			1Q '14			Variance			Variance
Rent	$	147,776		$	143,262		$	4,514			3.2	%
Utility recovery		7,539			7,978			(439	)		(5.5	%)
Rent including recoveries		155,315			151,240			4,075			2.7	%
Other income		6,782			6,732			50			0.7	%
Total income		162,097			157,972			4,125			2.6	%
Operating & maintenance		(61,741	)		(62,537	)		796			1.3	%
Core Properties NOI	$	100,356		$	95,435		$	4,921			5.2	%

Physical Occupancy		95.0	%		95.0	%		0.0	%

Weighted Avg Rent per Unit	$	1,357		$	1,318		$	39			3.0	%

Acquired Properties (1)				Redevelopment Property (2)
	1Q '15				1Q '15
Rent	$	7,494		Rent	$	3,244
Utility recovery		155		Utility recovery		109
Rent including recoveries		7,649		Rent including recoveries		3,353
Other income		354		Other income		103
Total income		8,003		Total income		3,456
Operating & maintenance		(3,296	)	Operating & maintenance		(1,263	)
Acquired Properties NOI	$	4,707		Redevelopment Property NOI	$	2,193

Physical Occupancy		91.6	%	Physical Occupancy		77.3	%

Weighted Avg Rent per Unit	$	1,285		Weighted Avg Rent per Unit	$	1,689

Development Properties (3)				Disposed Properties (4)
	1Q '15				1Q '15
Rent	$	290		Rent	$	2,076
Utility recovery		15		Utility recovery		91
Rent including recoveries		305		Rent including recoveries		2,167
Other income		36		Other income		263
Total income		341		Total income		2,430
Operating & maintenance		(262	)	Operating & maintenance		(745	)
Development Properties NOI	$	79		Disposed Properties NOI	$	1,685

Physical Occupancy	(see development pipeline schedule)
Weighted Avg Rent per Unit	$	1,870

(1)	Acquired Properties consists of properties acquired subsequent to January 1, 2014 and a development property currently in Lease-up (full year operating results not available).

(2)	Arbor Park of Alexandria - 851 units in 52 buildings commenced renovation in 2011 on a building-by-building basis.

(3)	Development Properties consists of one property, Courts at Spring Mill Station.

(4)	Disposed Properties consists of two properties, The New Colonies and The Coves at Chesapeake.

Seasonality Factor for NAV Calculation

To annualize net operating income for net asset value calculation, the seasonality factor to apply to the current quarter's effective NOI run rate is 24.3%. This will adjust for the typical seasonal variability in NOI.

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Operating Expense Detail - Core Properties
($ in thousands)

					Qtr			%
	1Q '15		1Q '14		Variance			Variance
Electricity	$	2,309	$	2,199	$	110			5.0	%
Gas		6,139		6,766		(627	)		(9.3	%)
Water & sewer		4,558		4,441		117			2.6	%
Repairs & maintenance		6,056		6,187		(131	)		(2.1	%)
Personnel expense		13,603		13,759		(156	)		(1.1	%)
Advertising		1,159		1,152		7			0.6	%
Legal & professional		341		247		94			38.1	%
Office & telephone		1,684		1,615		69			4.3	%
Property insurance		2,652		3,151		(499	)		(15.8	%)
Real estate taxes		16,243		15,903		340			2.1	%
Snow		1,872		1,944		(72	)		(3.7	%)
Trash		945		912		33			3.6	%
Property management G&A		4,180		4,261		(81	)		(1.9	%)
Total Core	$	61,741	$	62,537	$	(796	)		(1.3	%)

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Disposition of Real Estate

($ in thousands)

Results of operations for the two communities sold during the first quarter of 2015 are included in continuing operations in the consolidated statements of operations in accordance with ASU 2014-08 adopted effective January 1, 2015. Communities sold were:

- The New Colonies in the Chicago region was sold on January 26

- The Coves at Chesapeake in the Baltimore region was sold on March 25

Operating results provided below:

	1Q '15			1Q '14
Revenues:
Rental income		$	2,076	$	3,170
Property other income			354		337
Total revenues			2,430		3,507
Expenses:
Operating and maintenance			745		1,327
Interest
Depreciation and amortization			421		960
Total expenses			1,166		2,287
Net income		$	1,264	$	1,220


Results of operations for the three communities sold during 2014 are included in the line item “Income from discontinued operations.” Communities sold were:

- Cider Mill in the Washington, D.C. region was sold on February 26, 2014
- Woodleaf in the Washington, D.C. region was sold on December 19, 2014
- The Manor - MD in the Washington, D.C. region was sold on December 29, 2014

Operating results provided below:

				1Q '14
Revenues:
Rental income				$	4,533
Property other income					525
Total revenues					5,058
Expenses:
Operating and maintenance					1,779
Interest (1)					1,584
Depreciation and amortization					861
Total expenses					4,224
Net income				$	834

(1)	Includes debt extinguishment costs of $802 incurred as a result of repaying property-specific debt upon sale.

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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
2015 Acquisitions
Park Grove	Chicago	IL	1/7/2015		710		5.8	%	$	92.0	$	129,577
Sutton Pointe	Northern New Jersey	NJ	2/19/2015		241		6.1	%		31.0		128,631
			Total 2015		951		5.9	%	$	123.0	$	129,338
2014 Acquisitions
The Preserve at Milltown	Philadelphia	PA	6/19/2014		376		6.3	%	$	45.0	$	119,681
Willowbrook	Philadelphia	PA	7/30/2014		248		6.8	%		30.5		122,984
Lakes of Schaumburg	Chicago	IL	11/12/2014		428		6.0	%		66.0		154,206
			Total 2014		1,052		6.3	%	$	141.5	$	134,506

	Total 2015 and 2014 Acquisitions				2,003		6.1	%	$	264.5	$	132,052

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

Summary of Recent Dispositions
($ 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

2015 Sales
The New Colonies	Chicago	IL	1/26/2015		672		7.3	%	$	49.3	$	73,390		10.5	%
The Coves at Chesapeake	Baltimore	MD	3/25/2015		469		6.6	%		76.3		162,580		6.3	%
			Total 2015		1,141		6.9	%	$	125.6	$	110,051		8.0	%
2014 Sales
Cider Mill	Washington, D.C.	MD	2/26/2014		864		6.9	%	$	110.0	$	127,315		8.3	%
Woodleaf	Washington, D.C.	MD	12/19/2014		228		7.1	%		33.5		146,930		12.1	%
The Manor (MD)	Washington, D.C.	MD	12/29/2014		435		6.3	%		73.3		168,391		11.5	%
			Total 2014		1,527		6.7	%	$	216.8	$	141,945		10.0	%

	Total 2015 and 2014 Sales				2,668		6.8	%	$	342.3	$	128,305		9.2	%

(2)	Capitalization (Cap) rate based on historical NOI after allowance for a 2.7% management fee, but before capital expenditures. The cap rate as calculated from the buyer's perspective could be lower if risk of real estate re-assessment is taken into account.

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Breakdown of Units

							Net								Net
							Acquired/Sold/								Acquired/Sold/
		As of		12/31/2013			Developed			As of		12/31/2014			Developed			As of		3/31/2015
Region	State	12/31/2013		% of units			in 2014			12/31/2014		% of Units			in 2015			3/31/2015		% of Units
Baltimore	MD		10,477		24.8	%		-			10,477		24.9	%		(469	)		10,008		23.9	%
Boston	MA/ME		3,556		8.4	%		-			3,556		8.4	%		-			3,556		8.5	%
Chicago	IL		2,566		6.1	%		428			2,994		7.1	%		38			3,032		7.2	%
Long Island	NY		3,586		8.5	%		-			3,586		8.5	%		-			3,586		8.5	%
Northern New Jersey	NJ		3,578		8.5	%		-			3,578		8.5	%		241			3,819		9.1	%
Philadelphia	PA		5,114		12.2	%		745			5,859		14.0	%		-			5,859		14.0	%
Southeast Florida	FL		836		2.0	%		-			836		2.0	%		-			836		2.0	%
Washington, D.C.	MD/VA		12,457		29.5	%		(1,236	)		11,221		26.6	%		-			11,221		26.8	%
Total			42,170		100.0	%		(63	)		42,107		100.0	%		(190	)		41,917		100.0	%

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Debt
($ in thousands)

		Interest			03/31/15
Property	Lender	Rate %			Balance		Maturity Date
Fixed Rate Secured

Stratford Greens	Capital One Bank		5.75	%		28,258	07/01/15
Sayville Commons	M&T Realty - Freddie Mac		5.00	%		35,891	08/01/15
Charleston Place	Wells Fargo - Freddie Mac		3.77	%		31,389	09/01/15
Charleston Place	Wells Fargo - Freddie Mac		3.77	%		21,464	09/01/15
Charleston Place	Wells Fargo - Freddie Mac		3.77	%		18,448	09/01/15
Cypress Place Apartments	Prudential - Fannie Mae		6.56	%		9,572	11/01/15
Golf Club Apartments	Prudential - Fannie Mae		6.38	%		30,812	11/01/15
Northwood Apartments	M&T Realty - Freddie Mac		5.50	%		9,824	12/01/15
Cinnamon Run - 1st	M&T Realty - Freddie Mac		5.25	%		46,053	01/01/16
Cinnamon Run - 2nd	M&T Realty - Freddie Mac		5.55	%		4,792	01/01/16
Peppertree Farm - 1st	M&T Realty - Freddie Mac		5.25	%		70,884	01/01/16
Peppertree Farm - 2nd	M&T Realty - Freddie Mac		5.55	%		1,742	01/01/16
The Hamptons/Vinings at Hamptons	Prudential - Fannie Mae		5.57	%		46,425	02/01/16
Devonshire - 1st	Wachovia - Fannie Mae		5.60	%		34,029	04/01/16
Devonshire - 2nd	Wachovia - Fannie Mae		6.24	%		7,845	04/01/16
Mid-Island	Prudential - Fannie Mae		5.48	%		18,083	04/01/16
Owings Run 1 & 2	Prudential - Fannie Mae		5.59	%		39,190	04/01/16
The Manor East	KeyBank - Freddie Mac		3.25	%		6,542	04/01/16
Country Village	Centerline (CIII) - Fannie Mae		5.52	%		17,079	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	%		41,528	01/01/18
William Henry Apartments	PNC - Fannie Mae		4.85	%		26,777	01/01/18
Seminary Towers Apartments	Prudential - Fannie Mae		5.49	%		53,515	07/01/18
Bonnie Ridge - 1st	Prudential Life		6.60	%		5,977	12/15/18
Bonnie Ridge - 2nd	Prudential Life		6.16	%		15,979	12/15/18
Bonnie Ridge - 3rd	Prudential Life		6.07	%		23,058	12/15/18

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Debt
($ in thousands)

		Interest			03/31/15
Property	Lender	Rate %			Balance		Maturity Date
Fixed Rate Secured

Annapolis Roads	Amerisphere - Fannie Mae		5.12	%		22,497	01/01/19
Ridgeview at Wakefield Valley	M&T Realty - Freddie Mac		5.75	%		17,043	01/01/19
The Sycamores	M&T Realty - Freddie Mac		5.71	%		19,862	01/01/19
Top Field Apartments	M&T Realty - Fannie Mae		4.84	%		15,536	01/01/19
Westwood Village	M&T Realty - Freddie Mac		5.68	%		43,508	01/01/19
The Brooke at Peachtree	Wells Fargo - Fannie Mae		5.47	%		11,497	07/01/19
Glen Manor	Prudential - Fannie Mae		5.83	%		7,443	08/01/19
Ridley Brook	Prudential - Fannie Mae		5.83	%		12,356	08/01/19
The Courts at Fair Oaks	Walker&Dunlop - Freddie CME		4.50	%		45,810	08/01/19
Southern Meadows	Red Mortgage - Fannie Mae		5.36	%		38,157	10/01/19
Elmwood Terrace	M&T Realty - Fannie Mae		5.56	%		25,103	11/01/19
Lakeview	Greystone - Fannie Mae		5.31	%		8,506	12/01/19
The Landings	Prudential - Fannie Mae		5.60	%		24,505	01/01/20
East Meadow Apartments	M&T Realty - Freddie Mac		5.40	%		13,789	05/01/20
Selford Townhomes	M&T Realty - Freddie Mac		5.40	%		8,336	05/01/20
Stone Ends Apts.	M&T Realty - Freddie Mac		5.40	%		23,481	05/01/20
Tamarron Apartments	M&T Realty - Freddie Mac		5.40	%		13,797	05/01/20
The Manor (VA)	M&T Realty - Freddie Mac		5.40	%		12,949	05/01/20
Woodmont Village	M&T Realty - Freddie Mac		5.40	%		9,343	05/01/20
The Lakes of Schaumburg	Midland Loan Services - Freddie CME		3.50	%		33,410	09/01/20
Trexler Park	Greystone - Fannie Mae		4.34	%		35,826	09/01/20
Arbor Park of Alexandria	Prudential - Fannie Mae		4.35	%		90,381	11/01/20
New Orleans Park	M&T Realty - Fannie Mae		4.58	%		22,016	11/01/20
Racquet Club East	PNC - Fannie Mae		4.74	%		35,297	12/01/20
Heritage Woods Apts	Greystone - Fannie Mae		5.39	%		13,641	01/01/21
The Meadows at Marlborough	Prudential - Fannie Mae		5.50	%		19,942	01/01/21
Home Properties of Devon	M&T Realty - Fannie Mae		4.85	%		57,061	08/01/21
Pleasant View Gardens	Prudential - Fannie Mae		4.51	%		89,558	11/01/21

Wtd Avg Rate/Total Debt - Fixed Rate Secured			5.18	%	$	1,573,332

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Debt
($ in thousands)

				Interest			03/31/15
Property			Lender	Rate %			Balance		Maturity Date
Variable Rate Secured
Sherry Lake			M&T Realty - Freddie Mac		2.92	%		23,549	04/01/17

Wtd Avg Rate/Total Debt - Variable Rate Secured					2.92	%	$	23,549

Wtd Avg Rate/Total Debt - Total Secured Debt					5.15	%	$	1,596,881

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
Bank Term Loan 180-Day			M&T Bank		1.19	%		100,000	05/18/15
Revolving Line of Credit			M&T Bank et. al.		1.19	%		291,500	08/18/17
Adjusts Daily 30 LIBOR + 1.0

Wtd Avg Rate/Total Debt - Total Unsecured Debt					2.13	%	$	841,500

Total Combined Debt					4.11	%	$	2,438,381

% Of Portfolio - Fixed	83.0	%
% Of Portfolio - Variable	17.0	%
				Interest					Years To
				Rate %					Maturity
Wtd Avg - Total Fixed Rate Debt					4.69	%			3.48
Wtd Avg - Total Variable Rate Debt					1.29	%			1.82
Wtd Avg - Combined Debt					4.11	%			3.19

Page 23

Table of Contents

Debt
($ in thousands)

Total Debt Maturity Schedule Exclusive of Revolving Line of Credit & 180-Day Term Loan
Year of Maturity	Fixed Rate					Variable Rate					Total
	Wtd Avg					Wtd Avg							% Of
	Rate			Debt		Rate			Debt		Debt		Total
2015		4.98	%	$	185,659		-			-	$	185,659		9.07	%
2016		5.40	%		292,663		-			-		292,663		14.30	%
2017		5.78	%		157,524		2.92	%		23,549		181,073		8.85	%
2018		3.46	%		506,834		-			-		506,834		24.76	%
2019		5.14	%		317,318		-			-		317,318		15.50	%
2020		4.68	%		323,131		-			-		323,131		15.79	%
2021		4.85	%		240,203		-			-		240,203		11.73	%
TOTAL		4.69	%	$	2,023,332		2.92	%	$	23,549	$	2,046,881		100.00	%

Page 24

Table of Contents

Debt

Unencumbered Properties

Property

# Units

Region

State

Property

# Units

Region

State

Canterbury

618

Baltimore

Barrington Gardens

148

Northern New Jersey

Dunfield

312

Baltimore

East Hill Gardens

Northern New Jersey

Gateway Village

132

Baltimore

Hackensack Gardens

198

Northern New Jersey

Howard Crossing

1,350

Baltimore

Jacob Ford Village

270

Northern New Jersey

Middlebrooke

208

Baltimore

Oak Manor

Northern New Jersey

Morningside Heights

1,050

Baltimore

Pleasure Bay

270

Northern New Jersey

Saddle Brooke

468

Baltimore

Sutton Pointe *

241

Northern New Jersey

The Apts at Cambridge Court

544

Baltimore

Wayne Village

275

Northern New Jersey

The Greens at Columbia

168

Baltimore

Windsor Realty

Northern New Jersey

Westbrooke

110

Baltimore

Courts at Spring Mill Station

115

Philadelphia

Gardencrest

696

Boston

Hill Brook Place

274

Philadelphia

Highland House

172

Boston

Home Properties of Bryn Mawr

316

Philadelphia

Liberty Place

107

Boston

Racquet Club South

103

Philadelphia

Middlesex Crossing

252

Boston

Stone Hill

205

Philadelphia

The Commons at Haynes Farm

302

Boston

The Preserve at Milltown

376

Philadelphia

The Heights at Marlborough

348

Boston

Waterview

203

Philadelphia

The Townhomes of Beverly

204

Boston

Willowbrook

248

Philadelphia

The Village at Marshfield

276

Boston

1200 East West

247

Washington, D.C.

Westwoods

Boston

Eleven55 Ripley

379

Washington, D.C.

Liberty Commons

120

Boston

Hunter's Glen

108

Washington, D.C.

Redbank Village

500

Boston

Seminary Hill

296

Washington, D.C.

Blackhawk

371

Chicago

Courts at Huntington Station

421

Washington, D.C.

Courtyards Village

224

Chicago

Braddock Lee

256

Washington, D.C.

Lakeview Townhomes

120

Chicago

Mt. Vernon Square

1,387

Washington, D.C.

Park Grove *

710

Chicago

Newport Village

937

Washington, D.C.

The Colony

783

Chicago

Park Shirlington

294

Washington, D.C.

The Gates of Deer Grove

204

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.

Hawthorne Court

434

Long Island

Village at Potomac Falls

247

Washington, D.C.

Heritage Square

Long Island

West Springfield

244

Washington, D.C.

Holiday Square

144

Long Island

Westchester West *

345

Washington, D.C.

Lake Grove

368

Long Island

Woodway at Trinity Centre

504

Washington, D.C.

Yorkshire Village

Long Island

Total Number of Units:

22,106

Total Number of Properties:

*	Property added to unencumbered pool during Q1 '15.

Page 25

Table of Contents

Capital Expenditures

Recurring Capital Expenditure Summary

For 2015 the Company estimates that the amount of recurring, non-revenue enhancing capital expenditures incurred on an annual basis for a standard garden style apartment will remain unchanged at $900 per apartment unit.

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.

Page 26

Table of Contents

Capital Expenditures

Capital Expenditure Summary

The Company estimates that on an annual basis $900 per unit is spent on recurring capital expenditures in 2015. During the three months ended March 31, 2015 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, 2015 as follows:

For the three months ended March 31, 2015
($ 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	$	-	$	-	$	221	$	5	$	221	$	5
Major building improvements		1,329		33		983		24		2,312		57
Roof replacements		345		9		-		-		345		9
Site improvements		679		17		-		-		679		17
Apartment upgrades		1,877		46		5,289		130		7,166		176
Appliances		1,324		33		-		-		1,324		33
Carpeting/flooring		2,423		60		-		-		2,423		60
HVAC/mechanicals		899		22		2,031		50		2,930		72
Miscellaneous		212		5		637		16		849		21
Total	$	9,088	$	225	$	9,161	$	225	$	18,249	$	450

(a)	Calculated using the weighted average number of units owned, including 38,569 core units, 2014 acquisition units of 1,052, and 2015 acquisition units of 773 for the three months ended March 31, 2015.

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

For the three months ended March 31, 2015

($ 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	$	8,677	$	225	$	8,646	$	224	$	17,323	$	449
2015 Acquisition Communities		174		225		70		91		244		316
2014 Acquisition Communities		237		225		445		423		682		648
Subtotal		9,088		225		9,161		225		18,249		450
2015 Disposed Communities		104		165		-		-		104		165
2014 Disposed Communities		-		-		-		-		-		-
Corporate office expenditures (b)		-		-		-		-		470		-
Total	$	9,192	$	224	$	9,161	$	225	$	18,823	$	449

(a)	Calculated using the weighted average number of units owned, including 38,569 core units, 2014 acquisition units of 1,052, 2015 acquisition units of 773, and 2015 disposed units of 632 for the three months ended March 31, 2015.

(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
	3/31/2015			3/31/2014		Change
Net Operating Income	$	100,356		$	95,435		5.2	%
Less: Non-recurring Capex @ 4%		(346	)		-		-
Adjusted Net Operating Income	$	100,010		$	95,435		4.8	%

Some of our Core Property NOI reflects incremental investments in the communities above and beyond normal capital replacements. After charging ourselves a 4% cost of debt capital on these additional expenditures, what we refer to as the adjusted NOI for the quarter is recalculated and presented above.

Page 27

Table of Contents

Development Pipeline as of March 31, 2015
($ in thousands)
						Cost													%
		Units				Estimate		Costs					%			%			Physical
	Property	when		Cost		Per		Incurred			Initial	Date	Complete			Leased			Occup
	Type	Complete		Estimate		Unit		(1)		Start	Occup	Complete	(2)			(3)			(4)
Completed:
Eleven55 Ripley	Mid-Rise and		379	$	113,500	$	299	$	113,842	4Q 11	4Q 13	4Q 14		100.0	%		94.7	%		85.0	%
Silver Spring, MD	High-Rise

Under construction:
Courts at Spring Mill Station	Donut/Podium		385		89,000		231		80,378	2Q 12	4Q 14	2Q 15		29.9	%		40.8	%		21.0	%
Conshohocken, PA

Total								$	194,220


(1) Costs classified as Construction in Progress at March 31, 2015 are comprised of:

Eleven55 Ripley (a)				$	16,629
Courts at Spring Mill Station (a)					66,982
				$	83,611

(a)

The difference between Costs Incurred and Construction in Progress represents units placed into service.

(2)	Represents the percentage of units that have been completed and are available to rent as of April 29, 2015.

(3)	Represents the percentage of units that have been leased as of April 29, 2015.

(4)	Represents the percentage of units occupied as of April 29, 2015.

Page 28

Table of Contents

2015 Earnings Guidance
	Actual
	First			Second			Third	Fourth
	Quarter			Quarter			Quarter	Quarter	Year

2015 compared to 2014

FFO per share - 2015 guidance	$	1.083		$	1.13 - $1.17				$	4.59 - $4.71
							Information for subsequent
Midpoint of guidance	$	1.083		$	1.15		quarters will be provided in future		$	4.65
							earnings press releases
FFO per share - 2014 actual	$	0.996		$	1.045				$	4.326

Projected improvement		8.7	%		10.0	%				7.5	%




2015 compared to 2014 based on "Operating FFO" - OFFO

OFFO per share - 2015 guidance	$	1.087		$	1.13 - $1.17				$	4.54 - $4.66
							Information for subsequent
Midpoint of guidance	$	1.087		$	1.15		quarters will be provided in future		$	4.60
							earnings press releases
OFFO per share - 2014 actual	$	0.996		$	1.105				$	4.394

Actual/projected improvement		9.1	%		4.1	%				4.7	%

OFFO excludes expensed acquisition costs from both years and development land impairment charges in 2014 and development land sale gain in 2015.

Page 29

Table of Contents

2015 Earnings Guidance
	Actual
	First			Second			Third	Fourth
	Quarter			Quarter			Quarter	Quarter	Year

Core Property Assumptions:

Base Rental Income		3.2	%		3.4	%				3.0% - 4.0	%

Total revenue growth		2.6	%		3.2	%				2.5% - 3.5	%
							Information for subsequent
Expense growth		-1.3	%		2.9	%	quarters will be provided in future			1.0% - 2.0	%
							earnings press releases
NOI growth		5.2	%		3.4	%				3.0% - 5.0	%




Core Occupancy Assumptions:

2015 physical occupancy		95.0	%		95.6	%				95.4	%
							Information for subsequent
2014 physical occupancy		95.0	%		95.4	%	quarters will be provided in future			95.2	%
							earnings press releases
Change in occupancy		0.0	%		0.2	%				0.2	%

Page 30

Table of Contents

2015 Earnings Guidance

Actual

First

Second

Third

Fourth

Quarter

Year

General & Administrative

8.5M

7.0M

5.9M

5.8M

27.2M

Interest Expense

25.5M

26.0M

27.1M

26.8M

105.4M

Development NOI 2015 projected run rate

(includes Eleven55 Ripley and Courts at Spring Mill)

1.0M

1.2M

1.7M

1.9M

5.8M

Acquisition range of $250 million to $350 million.

123M

60M

57M

300M

Disposition range of $100 million to $200 million

126M

24M

150M

Development land sale gain included in FFO, excluded from OFFO

4.5M

Expense from acquisition costs for 2015 are projected at $1.3 million versus actual of $0.7 million in 2014.

Development spend remains unchanged from the original guidance provided on February 5, 2015 - $20 million.

Capital expenditures:

Recurring $38 million

Upgrading and repositioning $80 million

remains unchanged from original guidance given February 5, 2015

Page 31

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