BRE Properties Reports Fourth Quarter and Full Year 2012 Results

  BRE Properties Reports Fourth Quarter and Full Year 2012 Results

                       2013 Core FFO Guidance Provided
                   Common and Preferred Dividends Declared

Business Wire

SAN FRANCISCO -- February 4, 2013

BRE Properties, Inc. (NYSE:BRE), a leading owner, operator and developer of
high-quality apartment communities in targeted growth markets in California
and Seattle, today reported Core Funds From Operations (Core FFO) of $0.61 per
share for the quarter ended December 31, 2012, and $2.39 per share for the
year ended December 31, 2012. The per share results reflect an increase of
7.0% and 8.6% compared to the fourth quarter and full year periods in 2011,
respectively. Core FFO is used to facilitate comparisons of the Company’s
earnings results and excludes certain non-core items that by their nature are
not comparable when comparing periods or earnings performance between periods.
All per share results are reported on a fully diluted basis.

Funds From Operations (FFO) on a per share basis were $0.61 per share for the
fourth quarter ended December 31, 2012 and $2.19 per share for the year ended
December 31, 2012. A reconciliation of FFO and Core FFO can be found in
Exhibit C of the Company’s Supplemental Financial Information package.

Fourth Quarter, 2012 Highlights and 2013 Outlook

  *Fourth quarter same-store revenues and net operating income (NOI)
    increased 5.6% and 6.2%, respectively, compared to the fourth quarter
    2011. During the quarter, physical occupancy averaged 95.7%; annualized
    turnover was 55.5%; and average revenue per occupied home was $1,645.
  *For the full year 2012, same-store revenues and net operating income (NOI)
    increased 5.5% and 6.4% over 2011, respectively.
  *During the fourth quarter, BRE completed the sale of two San Diego
    apartment communities for a combined gross sales price of $77.0 million.
    For the full year 2012, the Company sold six communities, including three
    in which it owned joint venture interests, for aggregate net proceeds to
    the company of $115.1 million.
  *During the fourth quarter, the Company completed construction of Lawrence
    Station, a 336-home community located in Sunnyvale, California. The
    project was completed on time and on budget at a total cost of
    approximately $110.0 million. Also in the fourth quarter, the Company
    commenced construction of Radius, a 264-unit luxury apartment community
    located in Redwood City, California, with a projected total cost of $98
    million.
  *2013 Core FFO guidance announced in a range of $2.35 to $2.45 per share.
    Same-store revenue and NOI are expected to increase within the ranges of
    3.50% to 4.75% and 3.40% to 5.55%, respectively.

“We finished 2012 on a strong note, producing solid results for the year,”
commented Constance Moore, Chief Executive Officer of BRE Properties. “In
addition, during the fourth quarter we completed $77 million of strategic
dispositions; delivered our Lawrence Station development on time and on
budget; and commenced construction of our Radius community in Redwood City,
California. Our key initiatives as we enter 2013 remain unchanged: to build on
our successful implementation of LRO last year and drive operating performance
from our portfolio; and to successfully execute on our development program
that is financed with proceeds from our capital recycling efforts through
strategic dispositions.While our outlook reflects the impact of these
expected dispositions, we believe this strategy preserves our balance sheet
strength while improving our portfolio quality which will result in
positioning BRE to generate sustainable sector-leading growth and achieve a
premium valuation in the coming years.”

Fourth Quarter 2012

Funds from operations, the generally accepted measure of operating performance
for real estate investment trusts, totaled $46.9 million, or $0.61 per share,
for the fourth quarter 2012, compared with $43.3 million, or $0.57 per share,
for the fourth quarter 2011. Core FFO was also $0.61 per share for the
quarter. (A reconciliation of net income available to common shareholders to
FFO is provided at the end of this release.)

Net income available to common shareholders for the fourth quarter 2012
totaled $73.8 million, or $0.96 per share, compared with net income of $33.6
million, or $0.44 per share, for the same period 2011. The fourth quarter 2012
results included a gain on sale of real estate totaling $53.9 million or,
$0.70 per share. The fourth quarter 2011 results included gains on sales of
approximately $16.5 million, or $0.22 per share.

BRE’s fourth quarter year-over-year earnings and FFO results reflect the
impact of the following during 2012: (1) increases in same-store
property-level operating results over 2011 levels; (2) incremental NOI from
acquired and newly completed properties in the last 24 months; and (3) a
reduction in interest expense due to lower leverage levels and higher levels
of capitalized interest; which were offset by (1) a higher level of
outstanding shares from equity issued in 2011 and the first quarter of 2012
and (2) a reduction in NOI from properties sold in 2011 and 2012.

12-Month Period Ended December 31, 2012

For the annual period, FFO totaled $168.9 million, or $2.19 per share,
compared with $154.4 million, or $2.14 per share, for 2011. FFO for the annual
period in 2012 includes a $15.0 million, or $0.195 per share, impairment
charge for land held for sale recorded in the third quarter of 2012. FFO for
the annual period in 2011 included: (1) acquisition-related expenses totaling
$402,000, or $0.006 per share; and (2) a $3.8 million, or $0.05 per share,
preferred stock redemption charge. Core FFO for 2012 was $2.39 per share
compared to $2.20 per share in 2011.

Net income available to common shareholders for 2012 totaled $133.5 million,
or $1.74 per diluted share, compared with $66.5 million, or $0.93 per diluted
share, for the same period in 2011. Annual 2012 results included gains on
sales of real estate of approximately $68.2 million, or $0.89 per share and
the impairment charge cited above. Annual 2011 results included gains on sales
of real estate of approximately $18.8 million, or $0.26 per share and the
acquisition-related expenses and preferred stock redemption charge cited
above.

Same-Store Results

BRE defines same-store communities as stabilized apartment communities owned
by the Company for two comparable calendar year periods. Of the 21,160
apartment homes owned directly by BRE, same-store homes totaled 19,462 for the
fourth quarter.

On a year-over-year basis, fourth quarter same-store revenues increased 5.6%
compared to fourth quarter 2011. The revenue increase was driven by a 5.5%
increase in revenue earned per occupied unit during the period, coupled with a
10-basis-point increase in year-over-year financial occupancy levels.
Operating expenses increased 4.4%, resulting in a 6.2% increase in NOI.

On a sequential basis, same-store revenue increased 1.0%, NOI increased 2.1%
and expenses decreased 1.2% over third quarter 2012 levels. The sequential
quarter increase in revenues was driven by a 0.9% increase in revenue earned
per occupied unit during the fourth quarter, coupled with a 10-basis-point
increase in financial occupancy.

Company Initiatives

  *Dispositions. In December 2012, the Company completed the sale of two
    apartment communities in San Diego for a combined gross sales price of
    $77.0 million. The combined gross sales price of the communities
    represents a 6.2% weighted average seller’s capitalization rate based on
    the communities’ annualized NOI. The implied capitalization rate, after
    giving effect to the reassessed value upon sale under Proposition 13, is
    estimated at 5.6%. The sale of these two communities resulted in a total
    gain of approximately $53.9 million in the fourth quarter. Both
    communities were owned on an unencumbered basis.

    For the full year 2012, BRE sold three wholly-owned communities, for total
    net proceeds of $88.2 million and sold three communities in which it
    maintained joint venture interests for total net proceeds of $26.9
    million. The sale of these communities and interests resulted in an
    aggregate gain of approximately $68.2 million. Gains related to the sales
    of these communities are included in the Company’s net income. FFO and
    Core FFO included no gains from the sale of these properties and
    interests.

  *Development. In December 2012, the Company completed development of
    Lawrence Station, a 336-unit luxury apartment community located in
    Sunnyvale, California. Lawrence Station is centrally located to many of
    Silicon Valley’s largest employers including Apple, Yahoo, Intel, Google,
    and Cisco Systems; and enjoys easy access to light rail, Amtrak and San
    Jose International Airport. The community was built for a total cost of
    $110 million and was completed on time and on budget. As of December 31,
    2012, the community had 158 occupied homes and a total of 183 leased
    homes.

    In October, the Company commenced construction of Radius, a 264-unit
    luxury apartment community located in Redwood City, California. Radius is
    projected to be completed in the fourth quarter of 2014, at a total cost
    of $98 million, or $371,000 per unit. At December 31, 2012, the Company
    had funded $24 million of the development costs.

As previously communicated, the Company expects to reduce its outstanding
development commitments through the completion of its active development
projects, the disposition of its land site in Anaheim, California and the
contribution of its two Pleasanton, California land parcels into a joint
venture. The Anaheim land site is currently being marketed for sale and an
update will be provided when a sale has been completed. The Company is
completing construction documentation for the Pleasanton sites. It expects to
commence the search for a joint venture partner in the first quarter of 2013.

The Company remains committed to creating long-term value through a targeted
development program, focused on core in-fill submarkets, appropriately sized
for the balance sheet. BRE continues to review potential development
opportunities and expects to target a stabilized development program going
forward within a range of 10% to 15% of its real estate portfolio base.

As of December 31, 2012, the Company’s active and wholly-owned development
pipeline has a total estimated cost of $770 million, of which approximately
$395 million remains to be funded through the first quarter of 2015. The
active and wholly-owned pipeline consists of the Company’s Aviara, Solstice,
Wilshire La Brea, Redwood City and Mission Bay projects.

The Company intends to fund the existing capital commitments related to its
current development projects primarily with proceeds from strategic asset
sales of certain older, slower growth communities in its existing portfolio,
as well as from funds available under its $750 million unsecured revolving
credit facility which had no outstanding balance as of the date of this
release.

The Company also expects to continue to identify properties within its
portfolio that no longer meet its investment criteria. Management believes the
disposition of these slower-growth assets over time will contribute to a
portfolio with greater concentrations in targeted markets and infill
submarkets that can produce a sustainable, sector-leading growth rate. The
Company expects to be prudent in the execution of its disposition plans,
balancing strategic portfolio goals with capital needs, tax implications, and
balance sheet metrics.

2013 Earnings Guidance

Earnings per share (EPS) for the full year 2013 are estimated to be within a
range of $1.00 to $1.10.

Management estimates Core FFO per share for 2013 to range from $2.35 to $2.45.
At the midpoint, Core FFO is $0.01 ahead of 2012 Core FFO, reflecting: (1) an
expected increase in NOI from same-store operations; and (2) increased NOI
from communities in lease-up in 2012; (3) offset by the loss of NOI from
communities sold in 2012 and expected community sales in 2013.

For the first quarter of 2013, the Company estimates FFO per share to range
from $0.54 to $0.58. The difference between the Company’s fourth quarter 2012
FFO of $0.61 per share and the midpoint of the first quarter 2013 guidance
range of $0.56 is primarily due to: (1) loss of NOI from San Diego communities
sold in the fourth quarter; (2) a sequential increase in both general and
administrative expenses and operating expenses in Q1 2013; and (3) the
potential loss of NOI from community disposition activity.

The Company’s 2013 financial outlook is based on a number of assumptions and
estimates, which are outlined in Attachment B to this release. The primary
assumptions and estimates include:

Same-Store Operations

  *An increase in same-store revenue in a range of 3.50% to 4.75%;
  *An increase in same-store expenses in a range of 3.00% to 3.75%; and
  *An increase in same-store NOI in a range of 3.40% to 5.55%.

Projected Investment Activity

  *Development advances are estimated to range from $190 to $225 million;
    capitalized interest is estimated to range from $22.0 to $23.5 million.
  *Proceeds from property dispositions are expected to be the primary source
    of capital. The Company currently anticipates that proceeds from community
    / land sales proceeds will total $150 to $250 million in 2013. At this
    time, the Company does not expect to call for redemption its outstanding
    Series D preferred shares during 2013.
  *Core FFO guidance does not include any non-routine income or expense items
    (including gains or losses associated with the sale of land).

Common and Preferred Dividends Declared

On February 4, 2013, BRE’s Board of Directors approved common and preferred
stock dividends for the quarter ending March 31, 2013. All common and
preferred dividends will be payable on Friday, March 29, 2013 to shareholders
of record on Friday, March 15, 2013.

The board also approved a 2.6% increase for the 2013 common dividend to $0.395
per share quarterly. The quarterly dividend payment is equivalent to $1.58 per
share on an annualized basis, and represents a yield of approximately 3.17% on
Friday’s closing price of $49.77 per share. BRE has paid uninterrupted
quarterly dividends to shareholders since the Company’s founding in 1970.

The Company’s 6.75% Series D quarterly preferred dividend is $0.421875 per
share.

Q4 2012 Analyst Conference Call

The Company will hold an analyst conference call on Tuesday, February 5, 2013
at 11:00 a.m. Eastern (8:00 a.m. Pacific) to review these results. The dial-in
number to participate in the United States and Canada is 877.723.9511; the
international number is 719.325.4815 Enter Conf. ID# 5089643. A telephone
replay of the call will be available for 14 days at 877.870.5176 or
858.384.5517 international, using the same ID# 5089643. A link to the live
webcast of the call will be posted on www.breproperties.com in the Investors
section. A webcast replay will be available for 90 days following the call.

About BRE Properties

BRE Properties, based in San Francisco, California, focuses on the
development, acquisition and management of apartment communities located
primarily in the major metropolitan markets of Southern and Northern
California and Seattle. BRE directly owns 74 multifamily communities (totaling
21,160 units) and has joint venture interests in an additional 8 apartment
communities (totaling 2,864 units). BRE Properties is a real estate investment
trust (REIT) listed in the S&P MidCap 400 Index. For more information on BRE
Properties, please visit our website at www.breproperties.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of
1995: Except for the historical information contained herein, this news
release contains forward-looking statements regarding the Company’s capital
resources, portfolio performance and results of operations, and is based on
the Company’s current expectations and judgment. You should not rely on these
statements as predictions of future events because there is no assurance that
the events or circumstances reflected in the statements can be achieved or
will occur. Forward-looking statements are identified by words such as
“believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,”
“intends,” “plans,” “pro forma,” “estimates,” or “anticipates” or their
negative form or other variations, or by discussions of strategy, plans or
intentions. The following factors, among others, could affect actual results
and future events: defaults or nonrenewal of leases, increased interest rates
and operating costs, failure to obtain necessary outside financing,
difficulties in identifying properties to acquire and in effecting
acquisitions, failure to successfully integrate acquired properties and
operations, inability to dispose of assets that no longer meet our investment
criteria under applicable terms and conditions, risks and uncertainties
affecting property development and construction (including construction
delays, cost overruns, inability to obtain necessary permits and public
opposition to such activities), failure to qualify as a real estate investment
trust under the Internal Revenue Code of 1986, as amended, and increases in
real property tax rates. The Company’s success also depends on general
economic trends, including interest rates, tax laws, governmental regulation,
legislation, population changes and other factors, including those risk
factors discussed in the section entitled “Risk Factors” in the Company’s most
recent Annual Report on Form 10-K as they may be updated from time to time by
the Company’s subsequent filings with the Securities and Exchange Commission,
or SEC. Do not rely solely on forward-looking statements, which only reflect
management’s analysis. The Company assumes no obligation to update this
information. For more details, refer to the Company’s SEC filings, including
its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

                                                               
BRE Properties, Inc.
Consolidated Balance Sheets
Fourth Quarter 2012
(Unaudited, in thousands, except per share, unit               
and per unit data)
                                                                 
                                                 December 31,    December 31,
ASSETS                                           2012         2011      
                                                                 
Real estate portfolio:
Direct investments in real estate:
                                                                 
Investments in rental communities                $ 3,722,838     $ 3,607,045
Construction in progress                           302,263         246,347
Less: accumulated depreciation                    (811,187  )    (729,151  )
                                                  3,213,914     3,124,241 
Equity in real estate joint ventures:
Investments                                        40,753          63,313
                                                                 
Real estate held for sale, net                     23,065          -
                                                                 
Land under development                            104,675       101,023   
                                                                 
Total real estate portfolio                        3,382,407       3,288,577
                                                                 
                                                                 
Cash                                               62,241          9,600
Other assets                                      54,334        54,444    
                                                                 
TOTAL ASSETS                                     $ 3,498,982    $ 3,352,621 
                                                                 
                                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY                           
                                                                 
Liabilities:
                                                                 
Unsecured senior notes                           $ 990,018       $ 724,957
Unsecured line of credit                           -               129,000
Mortgage loans payable                             741,942         808,714
Accounts payable and accrued expenses             75,789        63,273    
                                                                 
Total liabilities                                 1,807,749     1,725,944 
                                                                 
Redeemable and other noncontrolling interests     4,751         16,228    
                                                                 
Shareholders' equity:
Preferred Stock, $0.01 par value; 20,000,000
shares authorized: 2,159,715 shares with $25
liquidation preference issued and outstanding at   22              22
December 31, 2012 and December 31, 2011,
respectively.
                                                                             
Common stock, $0.01 par value, 100,000,000
shares authorized. Shares issued and
outstanding: 76,925,351 and 75,556,167 at          769             756
December 31, 2012 and December 31, 2011,
respectively.
                                                                             
Additional paid-in capital                        1,685,691     1,609,671 
                                                                 
Total shareholders' equity                        1,686,482     1,610,449 
                                                                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $ 3,498,982    $ 3,352,621 


BRE Properties, Inc.
Consolidated Statements of Income
Quarters and Twelve Months Ended December 31, 2012 and 2011
(Unaudited, in thousands, except per share, unit and per unit data)
                                                             
                    Quarter        Quarter          Twelve         Twelve
                    ended          ended            months ended   months ended
REVENUES            12/31/12     12/31/11      12/31/12     12/31/11 
                                                                   
Rental income       $ 96,295       $ 90,367         $ 374,982      $ 349,667
Ancillary income     4,000        3,527          15,156       13,392   
                                                                   
Total revenues        100,295        93,894           390,138        363,059
                                     
EXPENSES                                                      
                                                                   
Real estate         $ 31,162       $ 29,712         $ 122,996      $ 116,814
Provision for         26,519         25,301           100,518        101,047
depreciation
Interest              17,979         18,103           68,467         74,964
General and           5,696          5,697            22,848         21,768
administrative
Other expenses       -            -              15,000       402      
^(1)
Total expenses        81,356         78,813           329,829        314,995
                                                                   
Other income          565            657              2,530          2,536
                                                                

Net income before
noncontrolling
interests,
partnership           19,504         15,738           62,839         50,600
income and
discontinued
operations
                                                                   
Income from
unconsolidated        519            726              2,644          2,888
entities
Net gain on sale
of unconsolidated    -            2,022          6,025       4,270    
entities
Income from
continuing            20,023         18,486           71,508         57,758
operations
                                                                   
Discontinued
operations:
     Discontinued
     operations,      936            1,675            3,913          6,808
     net ^(2)
     Net gain on
     sales of        53,856       14,489         62,136       14,489   
     discontinued
     operations
Income from
discontinued          54,792         16,164           66,049         21,297
operations
                                                                
NET INCOME          $ 74,815       $ 34,650         $ 137,557      $ 79,055
                                                                   
Redeemable and
other
noncontrolling        99             165              413            1,168
interest in
income
                                                                   
Redemption
related preferred     -              -                -              3,771
stock issuance
cost
                                                                   
Dividends
attributable to      911          911            3,645        7,655    
preferred stock
                                                                   
NET INCOME
AVAILABLE TO        $ 73,805      $ 33,574        $ 133,499     $ 66,461   
COMMON
SHAREHOLDERS
                                                                   
Net income per
common share -      $ 0.96        $ 0.45          $ 1.74        $ 0.93     
basic
                                                                   
Net income per
common share -      $ 0.96        $ 0.44          $ 1.74        $ 0.93     
diluted
                                                                   
                                                                   
Weighted average
shares               76,872       75,415         76,567       71,220   
outstanding -
basic
                                                                   
Weighted average
shares               77,180       75,830         76,920       71,670   
outstanding -
diluted
                                                                   
     For the twelve months ended December 31, 2012, Other expenses included a
     $15,000,000 impairment charge related to a land parcel in Land under
^(1) development that was transferred to Real estate held for sale, net. For
     the twelve months ended December 31, 2011, Other expenses included
     $402,000 related to acquisition costs.
^(2) Includes three communities sold during 2012 and two
     communities sold during 2011.
                                                                   
                    Quarter        Quarter          Twelve         Twelve
                    ended          ended            months ended   months ended
                     12/31/12     12/31/11      12/31/12     12/31/11 
     Rental and
     ancillary      $ 1,551        $ 3,014          $ 7,299        $ 14,561
     income
     Real estate      (513     )     (968     )       (2,286   )     (4,860   )
     expenses
     Provision
     for             (102     )    (371     )      (1,100   )    (2,893   )
     depreciation
     Discontinued
     operations,    $ 936         $ 1,675         $ 3,913       $ 6,808    
     net

                                                           
Exhibit B: 2013 Financial Outlook (page 1
of 2)
 (dollars in thousands, except per share
  amounts)
  2013: EPS & FFO per share                              
  guidance
                                                                
                              Low End           High End
  Earnings per share          $ 1.00            $ 1.10
  Depreciation per share      $ 1.35            $ 1.35
  Funds from operations       $ 2.35            $ 2.45
  per share
                                                                
  2013: Same-store                                      
  outlook
                                                                
                              Low End           High End
  Same-store revenue (2013 vs   3.50    %         4.75    %
  2012)
  Same-store expense (2013 vs   3.75    %         3.00    %
  2012)
  Same-store net operating      3.40    %         5.55    %
  income (2013 vs 2012)
                                                                
  Regional breakdown of same                                    % of Total
  store revenues              Low End           High End       Same
                                                                Store Revenues
  Seattle                       5.00    %         6.25    %     14       %
  San Francisco Bay Area        5.50    %         6.75    %     25       %
  Southern California           2.50    %         3.75    %     57       %
  Non Core markets             1.00    %     2.00    %   4        %
  Total                        3.50    %     4.75    %   100      %
                                                                
                                                                
                                                                
  2013: Other elements of                                  
  guidance
                                                                
  2013 Same-store and non
  same-store pools
                              Communities       Homes
  Ending 2012 communities
  Same-store                    68                19,462
                                                                
  Non same-store
  Acquisition communities       3                 652
  Lease-up communities          2                 606
  Renovation communities       1               440     
  Total wholly or majority     74              21,160  
  owned communities
                                                                
  2012 pool adjustments
  2012 acquisition
  communities moved to 2013     3                 652
  same store
  2012 lease-up community       1                 270
  moved to 2013 same-store
  2012 renovation community     1                 440
  moved to 2013 same store
                                                                
  2013 Communities
  Same-store                    73                20,824
                                                                
  Non same-store
  Lease-up communities         1               336     
  Total wholly or majority     74              21,160  
  owned communities
                                                                
  Operating and capital       Level / Range
  elements
  Occupancy (same-store)      95.0% - 95.3%
  LIBOR (average)             35 - 50 bps
  Weighted average cost of    5.35% - 5.40%
  debt outstanding
                                                                
  Operating property            -                 -
  acquisitions
  Development advances        $ 190,000   -     $ 225,000
  Capitalized interest        $ 22,000    -     $ 23,500
  Debt maturities             $ 70,000    -     $ 70,000
  Revenue enhancing rehab     $ 35,000    -     $ 50,000
  & other
  Recurring capital           $ 22,000    -     $ 25,000
  expenditures
                                                                
  Common stock                $ -         -     $ 50,000
  Community sales / land      $ 150,000   -     $ 250,000
  sales
  Debt issuance               $ -         -     $ -
                                                                
  Detail of increase in       Low End           High End
  shares outstanding
  Diluted shares outstanding    77,255            77,255
  12/31/12
  Weighted average impact of   545             745     
  shares issued in 2013
  2013 Outlook weighted         77,800            78,000
  average shares outstanding

                                                                           
Exhibit B: 2013 Financial Outlook (page 2
of 2)
                                     
    2013: Detail of financial outlook line items against comparable 2012 actual
     results (dollar amounts in thousands except per share amounts)
                                                                                
                                                             
                           2012               2013                  2013
                        Actual           Low End               High End
                                                                                
     Rental and
     ancillary
     revenues
     Same-store          $ 387,313          $ 400,869     3.50%   $ 405,710     4.75%
     ^(1)
                       
     Non same-store    
     ^ (1)
     Lease-up             1,062              8,750                 9,000
     communities
     Acquisition          -                  -                     -
     communities
     Commercial &         1,763            1,770               1,800   
     other
     Total rental
     and ancillary         390,138            411,389               416,510
     revenues
                                                                                
     Real estate
     expenses
     Same-store            120,862            125,394     3.75%     124,488     3.00%
     ^(1)
                                                                                
     Non same-store
     ^ (1)
     Lease-up              456                3,400                 3,200
     communities
     Acquisition           -                  -                     -
     communities
     Commercial &         1,678            1,850               1,750   
     other
     Total real
     estate                122,996            130,644               129,438
     expenses
                                                                                
     Property level
     net operating
     income
     Same-store            266,451            275,475     3.40%     281,223     5.55%
     ^(1)
                                                                                
     Non same-store
     ^ (1)
     Lease-up              606                5,350                 5,800
     communities
     Acquisition           -                  -                     -
     communities
     Commercial &         85               (80     )            50      
     other
     Total property
     level net             267,142            280,745               287,073
     operating
     income
                                                                                
     2013
     acquisition           -                  -                     -
     communities
     (net)
                                                                                
     Non real
     estate
     expenses
     Provision for         100,518            105,000               105,000
     depreciation
     General &             22,848             24,250                23,250
     administrative
     Interest              68,467             69,000                68,000
     expense
     Other expenses        15,000             -                     -
     Loss on
     retirement of        -                -                   -       
     debt
     Total non real
     estate                206,833            198,250               196,250
     expenses
                                                                                
     Partnership
     and other
     income
     Partnership           2,644              2,000                 2,300
     income
     Net gain on
     sale of               6,025              -                     -
     unconsolidated
     entity
     Other income
     non property         2,530            1,600               1,650   
     related
     Total
     partnership           11,199             3,600                 3,950
     and other
     income
                                                                                
     Discontinued
     operations -
     communities
     sold
     Net operating         5,013     ^(2)     (6,000  ) ^(3)        (6,000  ) ^(3)
     income
     Depreciation          (1,100  )          -                     -
     Gain on sales
     of discontinued      62,136           -                   -       
     operations
     Total
     discontinued          66,049             (6,000  )             (6,000  )
     operations
                                                                                
     Redeemable
     noncontrolling        413                300                   300
     interest in
     income
     Preferred
     stock                 3,645              3,645                 3,645
     dividends
     Redemption related
     preferred stock      -                -                   -       
     issuance costs
     Net income
     available to common $ 133,499         $ 76,150             $ 84,828  
     shareholders
                                                                                
     Reconciliation
     to funds from
     operations
     Depreciation from
     continuing and        101,618            105,000               105,000
     discontinued ops
     Depreciation
     from                  1,903              1,400                 1,500
     unconsolidated
     entities
     Convertible
     redeemable
     noncontrolling                           -                     -
     interests in
     income
     Gain on sales
     of discontinued       (62,136 )          -                     -
     operations
     Net gain on
     sale of              (6,025  )         -                   -       
     unconsolidated
     entity
     Funds from          $ 168,859         $ 182,550            $ 191,328 
     operations
                                                                                
     Diluted shares
     outstanding -         76,940             77,800                78,000
     FFO
                                                                
     FFO per common      $ 2.19            $ 2.35               $ 2.45    
     share
                                                                
     Core FFO per        $ 2.39            $ 2.35               $ 2.45    
     common share
                                   
                                                                                
     
^(1) 2012 Actual Same-store and Non Same-store communities are presented to reflect
     results for the comparable 2013 community pool composition.
     
     Net operating income from three San Diego assets sold in 2012. Countryside
^(2) Village sold on May 17, 2012 for $12.6 million and Terra Nova and Canyon Villa
     sold on December 20, 2012 for $77.0 million.
     
     Assumes midpoint ($200 million) of estimated 2013 range of sales proceeds
^(3) closing on July 1, at a 6.0% cap rate. Annual NOI from properties anticipated to
     be sold are included in Same-store totals above, deduction in this line
     represents NOI lost post the July 1 assumed sale date.
     

                                                 
BRE Properties,
Inc.
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 community, from GAAP net income. By excluding
depreciation and gains or losses on sales of real estate, management uses FFO
to measure returns on its investments in real estate assets. However, because
FFO excludes depreciation and amortization and captures neither the changes in
the value of our communities that result from use or market conditions nor the
level of capital expenditures to maintain the operating performance of our
communities, all of which have real economic effect and could materially
impact our results from operations, the utility of FFO as a measure of our
performance is limited.

Management also believes that FFO, combined with the required GAAP
presentations, is useful to investors in providing more meaningful comparisons
of the operating performance of a company’s real estate between periods or as
compared to other companies. FFO does not represent net income or cash flows
from operations as defined by GAAP and is not intended to indicate whether
cash flows will be sufficient to fund cash needs. It should not be considered
an alternative to net income as an indicator of 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.
                                                                  
Core Funds from Operation ("Core FFO")
Core funds from operations ("Core FFO") begins with FFO as defined by the
NAREIT White Paper and is adjusted for: the impact of any expenses relating to
non-operating asset impairment and valuation allowances; property acquisition
costs and pursuit cost write-offs (other expenses); gains and losses from
early debt extinguishment, including prepayment penalties and preferred share
redemptions; executive level severance costs; gains and losses on the sales of
non-operating assets, and other non-comparable items.
                                                                  
                    Quarter Ended  Quarter Ended    Twelve Months Twelve
                    12/31/2012     12/31/2011       Ended         Months Ended
                                                    12/31/2012    12/31/2011
                                                               
                                                                  
Net income
available to common $73,805        $33,574          $133,499      $66,461
shareholders
Depreciation from
continuing          26,519         25,301           100,518       101,047
operations
Depreciation from
discontinued        102            371              1,100         2,893
operations
Redeemable and
other               99             165              413           1,168
noncontrolling
interest in income
Depreciation from
unconsolidated      392            512              1,903         2,052
entities
Net gain on sales
of discontinued     (53,856)       (14,489)         (62,136)      (14,489)
operations
Net gain on sale of
unconsolidated      -              (2,022)          (6,025)       (4,270)
entities
Less: Redeemable
noncontrolling
interest in income  (99)           (105)            (413)         (420)
not convertible
into common shares
Funds from          $46,962        $43,307          $168,859      $154,442
operations
                                                                  
Non core items in
the periods         -              -                15,000        4,173
presented
Core Funds from     $46,962        $43,307          $183,859      $158,615
operations
                                                                  
Diluted shares      77,180         75,830           76,920        71,670
outstanding - EPS
                                                                  
Net income per
common share -      $0.96          $0.44            $1.74         $0.93
diluted
                                                                  
Diluted shares      77,180         76,100           76,940        72,180
outstanding - FFO
FFO per common      $0.61          $0.57            $2.19         $2.14
share - diluted
                                                                  
Diluted shares
outstanding - Core  77,180         76,100           76,940        72,180
FFO
Core FFO per common $0.61          $0.57            $2.39         $2.20
share - diluted

                                                           
BRE Properties,                               
Inc.
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 community 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 communities that result from
use or market conditions nor the level of capital expenditures to maintain the
operating performance of our communities, all of which have real economic
effect and could materially impact our results from operations, the utility of
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  Quarter Ended     Twelve Months  Twelve Months
                12/31/2012     12/31/2011        Ended          Ended
                                                 12/31/2012     12/31/2011
                                                             
                                                                
Net income
available to    $  73,805      $  33,574         $  133,499     $  66,461
common
shareholders
Interest,
including          17,979         18,103            68,467         74,964
discontinued
operations
Depreciation,
including         26,621       25,672          101,618      103,940  
discontinued
operations
EBITDA             118,405        77,349            303,584        245,365
Redeemable and
other
noncontrolling     99             165               413            1,168
interest in
income
Net gain on        (53,856  )     (14,489  )        (62,136  )     (14,489  )
sales
Dividends on       911            911               3,645          7,655
preferred stock
Other expenses     -              -                 15,000         402
Net gain on
sale of            -              (2,022   )        (6,025   )     (4,270   )
unconsolidated
entities
Redemption
related to        -            -               -            3,771    
preferred stock
issuance cost
Adjusted EBITDA $  65,559     $  61,914        $  254,481      239,602  
                                                                
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 community 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  Quarter Ended     Twelve Months  Twelve Months
                12/31/2012     12/31/2011        Ended          Ended
                                                 12/31/2012     12/31/2011
                                                             
                                                                
Net income
available to    $  73,805      $  33,574         $  133,499     $  66,461
common
shareholders
Interest,
including          17,979         18,103            68,467         74,964
discontinued
operations
Depreciation,
including          26,621         25,672            101,618        103,940
discontinued
operations
Redeemable and
other
noncontrolling     99             165               413            1,168
interest in
income
Net gain on        (53,856  )     (14,489  )        (62,136  )     (14,489  )
sales
Net gain on
sale of            -              (2,022   )        (6,025   )     (4,270   )
unconsolidated
entities
Dividends on       911            911               3,645          7,655
preferred stock
General and
administrative     5,696          5,697             22,848         21,768
expense
Other expenses     -              -                 15,000         402
Redemption
related to        -            -               -            3,771    
preferred stock
issuance cost
NOI             $  71,255     $  67,611        $  277,329    $  261,370  
Less Non          7,629        7,674           30,096       29,051   
Same-Store NOI
Same-Store NOI  $  63,626     $  59,937        $  247,233    $  232,319  

Contact:

BRE Properties, Inc.
Investor Contact:
Stephanie T. Andre, 415-445-3745
 
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