Edgar Filing: BRE PROPERTIES INC /MD/

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

BRE PROPERTIES, INC.
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(Name of Registrant as Specified In Its Charter)

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Notes:

[LOGO] BRE PROPERTIES, INC.

BRE PROPERTIES, INC.
44 Montgomery Street, 36/th Floor /
San Francisco, CA 94104

March 23, 2002

Dear Shareholder:

It is a pleasure to invite you to attend our Annual Meeting of Shareholders
to be held on Tuesday, May 21, 2002, at 10:00 a.m. Pacific Daylight time, at
the Omni San Francisco Hotel, 500 California Street, San Francisco, California.

This booklet includes the notice of meeting and proxy statement, which
contain information about the formal business to be acted on by shareholders.
The Annual Meeting will also feature a report on the operations of your
Company, followed by a question and discussion period. After the Meeting, you
will have the opportunity to speak informally with the Directors and officers.

At the Annual Meeting, you will be asked to vote on: (i) electing three
Class II Directors for a term of three years and (ii) such other matters as may
properly come before the Meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE THREE
DIRECTOR NOMINEES AND TO APPROVE THE OTHER ITEMS TO BE VOTED ON AT THE ANNUAL
MEETING.

It is important that your shares be voted whether or not you plan to be
present at the Annual Meeting. Please complete, sign, date and return the
enclosed form of proxy promptly, or you may utilize our telephone voting
procedures, as more fully described in this document and in the enclosed proxy
card. If you attend the Annual Meeting and wish to vote your shares personally,
you may revoke any previously executed proxy.

Please vote promptly, and we look forward to seeing you at the Annual
Meeting.

Sincerely,

BRE PROPERTIES, INC.

/s/ Frank C. McDowell
Frank C. McDowell
President & Chief Executive Officer

BRE PROPERTIES, INC.

Notice of Annual Meeting of Shareholders

---------------

Notice is hereby given that the Annual Meeting of Shareholders of BRE
Properties, Inc. will be held on Tuesday, May 21, 2002 at 10:00 a.m. Pacific
Daylight time, at the Omni San Francisco Hotel, 500 California Street, San
Francisco, California, for the following purposes:

1. To elect three Class II Directors for a term of three years.

2. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Shareholders of record at the close of business on March 15, 2002 are
entitled to vote at the meeting.

By Order of the Board of Directors

EDWARD F. LANGE, JR.
Secretary

Dated: March 23, 2002

BRE PROPERTIES, INC.
44 Montgomery Street, 36th Floor
San Francisco, CA 94104-4809
Telephone: (415) 445-6530
Facsimile: (415) 445-6505

-----------------

PROXY STATEMENT

-----------------

Annual Meeting of Shareholders

The enclosed proxy is solicited by the Board of Directors of BRE Properties,
Inc., a Maryland corporation (the "Company"), for use at the Annual Meeting of
Shareholders of the Company (the "Annual Meeting") to be held on May 21, 2002
at 10:00 a.m. Pacific Daylight time. The meeting will be held at the Omni San
Francisco Hotel, 500 California Street, San Francisco, California. At the
meeting, holders of record of the Company's common stock ("Common Stock") at
the close of business on March 15, 2002 (the "Record Date") are entitled to
vote. On that date, the Company's outstanding capital stock consisted of
45,850,627 of Common Stock, each share of which is entitled to one vote at the
meeting.

The cost of soliciting proxies in the enclosed form will be borne by the
Company. Directors, officers and employees of the Company may also, without
additional compensation, solicit proxies by mail, personal interview, telephone
and telecopy. This Proxy Statement and the enclosed proxy card are scheduled to
be mailed to shareholders commencing on or about April 12, 2002.

The Company will request banks, brokerage houses and other institutions,
nominees or fiduciaries to forward the soliciting material to the beneficial
owners of shares and to obtain authorization for the execution of proxies. The
Company will, upon request, reimburse banks, brokerage houses and other
institutions, nominees and fiduciaries for their reasonable expenses in
forwarding proxy materials to the beneficial owners. If a shareholder is a
participant in the Company's Direct Stock Purchase and Dividend Reinvestment
Plan, the proxy card represents a voting instruction as to the number of full
shares in the plan account, as well as any shares held directly by the
shareholder.

In lieu of mailing the proxy card in the postage-paid envelope provided,
shareholders of record can vote their shares by calling the toll-free telephone
number on the proxy card. The telephone voting procedures are designed to
authenticate shareholders by use of a control number on your proxy card. The
procedure allows shareholders to vote their shares and to confirm that their
instructions have been properly recorded. Specific instructions to be followed
by any shareholder of record interested in voting by telephone are set forth on
the enclosed proxy card.

All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting as specified in such proxies.
Votes at the Annual Meeting will be tabulated by one or more independent
inspectors of election appointed by the Company. If no vote is specified in an
executed proxy, the shares represented by such signed proxy will be voted for
the election of the three nominees for Class II Director and in the proxy
holder's discretion, upon such other business as may properly come before the
meeting. The three nominees for election as Class II Directors who receive the
highest number of votes voting in person or by proxy at the Annual Meeting,
provided a quorum is present and voting, shall be elected as Directors (Proxy
Item No. 1).

In tallying shareholder votes, abstentions (i.e., shares for which a proxy
is presented but abstains from voting on one or more matters) and "broker
non-votes" (i.e., shares held by brokers or nominees for which proxies are
presented but as to which (i) instructions have not been received from the
beneficial owners or persons entitled to vote and (ii) the broker or nominee
does not have discretionary voting power on a particular matter because it is a
non-routine matter) will be counted for purposes of determining whether a
quorum is present for the conduct of business at the Annual Meeting. However,
abstentions and non-votes will not constitute votes for or against any proposal
and will be disregarded in determining votes cast.

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date, or by attending the meeting and voting in person.

Ernst & Young LLP, a certified public accounting firm, has provided services
to the Company during the past fiscal year, which included the examination of
the Company's annual report to shareholders on Form 10-K, timely reviews of the
Company's quarterly reports, preparation of the Company's federal and state
income tax returns, review of SEC registration statements and filings, internal
audit services, and accounting and transaction consultations. A representative
of Ernst & Young LLP will be at the annual meeting of shareholders to respond
to appropriate questions concerning the financial statements of the Company and
if desired, can make a statement.

The Company's principal executive offices are located at 44 Montgomery
Street, 36th Floor, San Francisco, California 94104-4809. The Company's
telephone number is (415) 445-6530.

ELECTION OF DIRECTORS
(Proxy Item No. 1)

The Company's Board of Directors (the "Board") consists of 10 members,
divided into three classes, designated Class I, Class II and Class III. The
Articles of Incorporation provide that there shall be from three to 15
Directors, as determined from time to time by the Board. Currently, there are
three Class I Directors, three Class II Directors and four Class III Directors.

At the Annual Meeting, three Class II Directors are to be elected for a term
of three years (expiring in the year 2005) or until the election and
qualification of their successors. The persons proposed for re-election as the
Class II Directors are John McMahan, L. Michael Foley and Gregory M. Simon. The
accompanying proxies solicited by the Board will (unless otherwise directed,
revoked or suspended) be voted for the re-election of Messrs. McMahan, Foley
and Simon, who are the present Class II Directors.

In the unanticipated event that any nominee should become unavailable for
election, or upon election should be unable to serve, the proxies will be voted
for the election of such other person or persons as shall be determined by the
persons named in the proxy in accordance with their judgment or, if none, the
size of the Board will be reduced.

The following table sets forth certain information as to the nominees, as
well as the other current members of the Board, including their age, principal
business experience during the past five years, the year they each first became
a Director, Board committee membership, and other directorships currently held
in companies with a class of securities registered pursuant to Section 12 of
the Securities Exchange Act of 1934 or subject to the requirements of Section
15(d) of that Act or any Company registered as an Investment Company under the
Investment Company Act of 1940.

Nominees--Class II Directors:

Principal Business Experience Director Board Committee
Name During Past Five Years Age Since (1) Membership
---- ------------------------------------------------ --- --------- -----------------

John McMahan Chairman of the Board of the Company. 64 1993 Executive*,
Managing Principal, The McMahan Group, Strategic Planning,
real estate strategic management consultants, Capital Markets,
since 1996. Executive Director, The Center Compensation and
for Real Estate Enterprise Management, since Nominating
2000. President, John McMahan Associates,
Inc., a management consulting firm, and
McMahan Real Estate Securities, Inc., a real
estate investment firm, 1994 to 1996.

L. Michael Foley Principal, L. Michael Foley and Associates, real 63 1994 Compensation and
estate and corporate consulting, since 1996. Nominating*,
Senior Vice President and Chief Financial Audit,
Officer, Coldwell Banker Corporation, 1995 Capital Markets,
to 1996. Director and executive committee Executive
member, Western Property Trust, 1999 to
2000.

Gregory M. Simon Self-employed as a private investor since 1991. 60 1991 Development and
Senior Vice President, H.F. Ahmanson & Acquisitions*,
Co. and Home Savings of America, from Compensation and
1983 to 1991. Officer and Director, Golden Nominating
Orange Broadcasting, a privately held
corporation.

Class III Directors--Term Expires in 2003:

Principal Business Experience Director Board Committee
Name During Past Five Years Age Since (1) Membership
---- ----------------------------- --- --------- ---------------

William E. Borsari Self-employed, private investor. Former 63 1992 Asset Management*,
Chairman or President, The Walters Executive, Development
Management Company, a real estate asset and Acquisitions
management company, for more than five
years.
LeRoy E. Carlson Chief Operating Officer and Executive Vice 56 2000 Capital Markets
President of the Company since 2000. Chief
Financial Officer of the Company from 1996
to 2000 and Chief Financial Officer of Real
Estate Investment Trust of California from
1980 to 1996.
Edward E. Mace President, Vail Resorts Lodging Company and 50 1998 Strategic Planning*
Rock Resorts International LLC (both
subsidiaries of Vail Resorts, Inc.). President
and Chief Executive Officer of Fairmont
Hotels & Resorts-U.S. /Mexico division,
2000 to 2001. President and Chief Executive
Officer of Fairmont Hotels, 1996 to 2000.
Frank C. McDowell President and Chief Executive Officer of the 53 1995 Executive,
Company since June 1995. Chief Executive Strategic Planning
Officer and Chairman of Cardinal Realty
Services, Inc., 1992 to 1995.

Class I Directors--Term Expires in 2004:

Robert A. Fiddaman Chairman of SSR Realty Advisors, a real estate 64 1998 Development and
investment and management firm, from 1996 to Acquisitions, Strategic
1998. President and Chief Executive Officer of Planning
Metric Realty from 1993 to 1996.
Roger P. Kuppinger President, The Kuppinger Company, a private 61 1995 Capital Markets*, Audit
financial advisor to public and private
companies, since February 1994. Director,
Realty Income Corporation.
Arthur G. von Thaden President and Chief Executive Officer of the 70 1981 Audit*,
Company from 1987 to June 1995. Chief Asset Management
Executive Officer, BankAmerica Realty
Services, Inc., a real estate investment advisory
firm, from 1970 to 1987.

--------
* Denotes committee chairman.
(1) For Messrs. Kuppinger, Simon and Borsari (who joined the Board in March
1996), includes service as a trustee of Real Estate Investment Trust of
California ("RCT"), which merged with the Company in March 1996. For Mr.
von Thaden, includes service as a trustee of the Company's predecessor,
BankAmerica Realty Investors.

Vote Required

The three nominees who receive the highest numbers of votes shall be elected
as Class II Directors. The Board of Directors unanimously recommends that the
shareholders vote FOR Messrs. McMahan, Foley and Simon.

Board and Committee Meetings; Compensation of Directors

During the year ended December 31, 2001, the Board held 13 regular meetings
and no special meetings. All of the Directors attended 75% or more of the
meetings of the Board and the committees on which they served during 2001.

The Board had previously created seven committees to more effectively direct
and review the Company's operations and strategic outlook. In addition, the
committees allow management timely interface and response to factors affecting
the ongoing operations of the Company. Further, management regularly consulted
with the committee chairmen to review possible actions and seek counsel. Where
appropriate, the Board delegated authority to committees (within specified
parameters) to finalize the execution of various Board functions. While the
committee structures has improved the level of Board oversight, it has also
greatly increased the effort and time required of Board members who serve on
the various committees.

The Board had established the following committees: Asset Management, Audit,
Capital Markets, Compensation and Nominating, Development and Acquisitions,
Executive and Strategic Planning. In 2002, the seven committees were
consolidated into four to further enhance the committees strategic functions.
The members and functions of the seven previous committees are indicated in the
preceding section of this Proxy Statement.

The Asset Management Committee reviewed property performance and annual
budgets and determined which assets should be divested. The Asset Management
Committee met formally three times during 2001 and held numerous informal
meetings, including meetings with management and several property tours.

The Company has an Audit Committee composed of independent Directors for
which information regarding the functions performed by the Committee, its
membership, and the number of meetings held during 2001, is set forth in the
"Report of the Audit Committee," included in this annual proxy statement. The
Audit Committee is governed by a written charter approved by the Board.

The Capital Markets Committee reviewed and established a capital markets
strategy and supervised management's implementation of such strategy. Further,
the Capital Markets Committee was delegated certain powers from time to time in
the execution of the financial affairs of the Company. The Capital Markets
Committee met formally two times during 2001 and had extensive informal
meetings as well as discussions of capital market issues with the full Board.

The Compensation and Nominating Committee reviews the compensation of
officers and the management succession plan, administers the Company's stock
compensation plans and nominates Directors. The Compensation and Nominating
Committee met numerous times on an informal basis, and met formally five times
during 2001.

The Development and Acquisitions Committee reviewed, analyzed and
recommended to the Board whether proposed development opportunities and
acquisitions should be undertaken. This process included, in some cases, site
visits to properties and meetings with management and staff to review potential
development opportunities and acquisitions. The Development and Acquisitions
Committee met numerous times on an informal basis, and met formally 10 times
during 2001.

The Executive Committee has all powers of the Board in the management and
affairs of the Company, subject to limitations prescribed by the Board and by
Maryland law, and generally meets once per quarter. The Executive Committee met
formally ten times during 2001.

The Strategic Planning Committee supplemented and assisted the full Board in
the review and definition of a strategic plan for the Company, including such
considerations as growth, geographic concentration and asset type. Further, the
Strategic Planning Committee conducted an ongoing evaluation and assessment of
the Company's prospects and future in the industry. The Strategic Planning
Committee met formally two times during 2001. In addition, committee members
discussed strategic planning issues during full Board meetings, including a
meeting specifically devoted to strategic planning.

The Company adopted a new committee structure in 2002 to further enhance its
strategic function. The seven committees described above that BRE has had in
place have been consolidated into four. The four committees under the new
structure are: the Audit Committee; the Real Estate Committee; the
Compensation/Nominating Committee and the Executive Committee. The Real Estate
Committee consolidates the functions of the Acquisition and Development and
Asset Management Committees under the previous committee structure. Also, the
Executive Committee adds the responsibilities of the Capital Markets Committee
and the Strategic Planning Committee, which have been eliminated.

The Company has adopted a policy of paying retainer and meeting fees for
non-employee Directors solely in stock options that have an exercise price
equal to the fair market value of the Common Stock on the date of grant. The
Director Plan provides that each non-employee Director will receive annual
stock options for 25,000 shares of Common Stock (up to 50,000 shares for the
Chairman of the Board) in lieu of cash compensation. Options for an additional
5,000 shares may be granted to each non-employee Director if for the preceding
fiscal year the increase in the Company's funds from operations ("FFO") per
share over the prior year places the Company at or above the 80th percentile in
this category for the 10 largest publicly traded multifamily real estate
investment trusts. In the event that FFO is below the 50th percentile, the
non-employee Directors receive no additional options. If FFO places the Company
between the 50th to 80th percentiles, the non-employee Directors receive a pro
rata number of options. Further, options for up to 8,000 shares will be granted
per non-employee Director for committee membership and/or chairmanship. Options
granted under the Plan have a term of 10 years and the automatic annual grants
become exercisable as to one-twelfth of the options per month, so that the
options are fully vested by the first anniversary of the date of grant. The
additional option grant for up to 5,000 shares related to the FFO per share
increase (if such requirement has been met) vests immediately. All non-employee
Directors are also reimbursed for their reasonable out-of-pocket expenses in
attending meetings. Based on the Company's 2001 performance in accordance with
the calculation described above, 3,167 options were granted to each
non-employee Director in February 2002.

The Board has adopted a share ownership guideline of having each new
Director own within three years of joining the Board a number of shares of
Common Stock equal to $150,000 divided by the price of a share of the Common
Stock. To facilitate share ownership and retention, the Director Plan provides
for reload options, as discussed in footnote 2 on page 11. During 2001, reload
options granted to non-employee Directors totaled 280,444. As of December 31,
2001, all Directors were in compliance with the share ownership guideline.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers, and persons who own more than 10 percent
(10%) of a registered class of its equity securities, to file with the
Securities and Exchange Commission and the New York Stock Exchange initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company.

To the Company's knowledge, based solely on review of the copies of such
reports furnished to it and written representations that no other reports were
required during the year ended December 31, 2001, all Section 16(a) filing
requirements applicable to its officers, Directors and greater than 10 percent
shareholders were complied with.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of February 28, 2002, information
regarding the shares of Common Stock beneficially owned by each person who is
known by the Company to own beneficially more than 5% of the Common Stock, by
each Director, by each named executive officer (as hereinafter defined) and by
all Directors and executive officers as a group. The amounts shown are based on
information provided by the individuals named.

Shares Percentage
Beneficially Beneficially
Name and Address Owned (1) Owned (1) (2)
---------------- ------------ -------------

La Salle Investment Management
200 East Randolph Drive
Chicago, IL 60601......................................... 3,573,102(3)(4) 7.6%
State Farm Insurance Companies
One State Farm Plaza
Bloomington, IL 61710..................................... 2,502,445(3)(5) 5.3%
John McMahan................................................ 183,510(6)
William E. Borsari.......................................... 189,157(7)
Robert A. Fiddaman.......................................... 118,798(8)
L. Michael Foley............................................ 198,901(9)
Roger P. Kuppinger.......................................... 168,294(10)
Edward Mace................................................. 126,987(11)
Frank C. McDowell........................................... 233,542(12)
Gregory M. Simon............................................ 228,127(13)
Arthur G. von Thaden........................................ 168,418(14)
LeRoy E. Carlson............................................ 109,612(15)
Edward F. Lange, Jr......................................... 35,000(16)
Deirdre A. Kuring........................................... 13,333(17)
All Directors and executive officers as a group (13 persons) 1,846,991 3.9%

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(1) The amounts and percentages of Common Stock beneficially owned are reported
on the basis of regulations of the Securities and Exchange Commission
governing the determination of beneficial ownership of securities. Except
as otherwise indicated, each individual has sole voting and sole investment
power with regard to the shares owned.
(2) Except where otherwise indicated, does not exceed 1%.
(3) Based on information furnished by the holder or contained in filings made
with the Securities and Exchange Commission.
(4) Includes 3,053,102 shares held by LaSalle Investment Management, L.P., and
520,000 shares held by LaSalle Investment Management, Inc. Each entity in
the LaSalle Investment Management group disclaims beneficial ownership as
to all shares for which such entity has no right to receive the proceeds of
the sale of such shares.
(5) Includes 2,493,900 shares held by State Farm Mutual Automobile Insurance
Company, and 8,545 shares held by State Farm Variable Product Trust. Each
entity in the State Farm Insurance Companies group disclaims beneficial
ownership to all shares for which such entity has no right to receive the
proceeds of the sale of such shares.
(6) Mr. McMahan--includes 47,720 shares he owns directly, and 135,790 shares
that may be purchased upon the exercise of stock options that are currently
exercisable or that will become exercisable on or before April 28, 2002.
(7) Mr. Borsari--includes 37,606 shares he owns directly, 956 shares held by
his wife and 150,595 shares that may be purchased upon the exercise of
stock options that are currently exercisable or that will become
exercisable on or before April 28, 2002.
(8) Mr. Fiddaman--includes 10,032 shares he owns outright and 108,766 shares
that may be purchased upon the exercise of stock options that are currently
exercisable or that will become exercisable on or before April 28, 2001.

(9) Mr. Foley--includes 30,529 shares owned by a family trust of which Mr.
Foley and his wife are trustees and share voting and investment power, and
168,372 shares that may be purchased upon the exercise of stock options
that are currently exercisable or that will become exercisable on or before
April 28, 2002.
(10) Mr. Kuppinger--includes 30,822 shares he owns outright and 137,472 shares
that may be purchased upon the exercise of stock options that are
currently exercisable or that will become exercisable on or before
April 28, 2002.
(11) Mr. Mace--includes 2,679 he owns outright, 3,478 shares owned by a
deferred compensation plan other than BRE's defined compensation plan and
120,830 shares that may be purchased upon the exercise of stock options
that are currently exercisable or that will become exercisable on or
before April 28, 2002.
(12) Mr. McDowell--includes 129,173 shares he owns directly, 1,450 shares held
by his wife in which he disclaims any interest, 46,354 shares that may be
purchased upon the exercise of stock options that are currently
exercisable or that will become exercisable on or before April 28, 2002,
6,565 restricted shares and 50,000 shares acquired upon exercise of stock
options that are collateral for recourse loans from the Company. See Stock
Loans.
(13) Mr. Simon--includes 79,859 shares he owns directly, 2,112 shares owned by
his wife as separate property, 4,274 shares held in trust for his children
of which Mr. Simon is the trustee, 35,000 shares held in trust for his
mother of which Mr. Simon is the trustee and 106,882 shares that may be
purchased upon the exercise of stock options that are currently
exercisable or that will become exercisable on or before April 28, 2002.
(14) Mr. von Thaden--includes 58,713 shares he owns directly, 189 shares held
by his wife in her Individual Retirement Account, as to which Mr. von
Thaden has no voting or investment power, and 109,516 shares that may be
purchased upon the exercise of stock options that are currently
exercisable or that will become exercisable on or before April 28, 2002.
(15) Mr. Carlson--includes 27,774 shares he owns directly, 44,744 shares that
may be purchased upon the exercise of stock options that are currently
exercisable or that will become exercisable on or before April 28, 2002,
1,094 restricted shares and 36,000 shares acquired upon exercise of stock
options that are collateral for recourse loans from the Company. See Stock
Loans.
(16) Mr. Lange--includes 20,000 shares acquired upon exercise of stock options
that are collateral for recourse loans from the Company and 15,000 shares
that may be purchased upon the exercise of stock options that are
currently exercisable or that will become exercisable on or before April
28, 2002. See Stock Loans.
(17) Ms. Kuring--includes 5,000 shares acquired upon exercise of stock options
that are collateral for recourse loans from the Company and 8,333 shares
that may be purchased upon the exercise of stock options that are
currently exercisable or that will become exercisable on or before April
28, 2002. See Stock Loans.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

Summary Compensation Table

The following table summarizes the compensation paid to the Company's Chief
Executive Officer and the five other highest paid executive officers (the
"named executive officers") for the years ended December 31, 2001, 2000 and
1999.

Long-Term
Compensation
Annual Compensation Awards
-------------------- --------------------
Restricted Options/ All Other
Shares SARS Compensation
Name and Principal Position Year Salary ($) Bonus ($) ($) (1) (2) (#) (3) ($) (4) (5) (6)
--------------------------- ---- ---------- --------- ----------- -------- ---------------

Frank C. McDowell................. 2001 $375,000 $ 95,000 $67,512 160,000 $179,262
President and Chief Executive 2000 372,493 150,000 53,183 210,000 549,938
Officer 1999 348,917 175,000 -- 160,000 4,800
LeRoy E. Carlson.................. 2001 $275,000 $ 70,000 $11,252 57,500 $195,121
Executive Vice President and Chief 2000 272,596 107,000 8,864 110,000 8,575
Operating Officer 1999 248,047 120,000 -- 31,000 8,080
Edward F. Lange, Jr............... 2001 $250,000 $ 67,500 $ -- 30,000 $ 37,650
Executive Vice President and Chief 2000(7) 89,423 40,000 -- 60,000 --
Financial Officer
Bradley P. Griggs................. 2001(8) $250,000 $ 62,500 $ -- -- $ 20,810
Executive Vice President,
Chief Investment Officer
John H. Nunn...................... 2001(9) $163,269 $ -- $11,252 55,000 $192,144
Executive Vice President, 2000 238,558 129,500 8,864 67,500 10,857
Asset Management 1999 221,154 100,000 -- 30,000 8,080
Dierdre A. Kuring................. 2001(10) $164,673 $ 55,800 $ -- 20,000 $ 4,940
Senior Vice President,
Asset Management

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(1) Reflects vesting of restricted shares based on the market price for the
stock on the vesting date.
(2) The value of the unvested restricted stock awards at December 31, 2001 are
$170,686 and $28,448 for McDowell and Carlson, respectively. Such value is
based on the market price for the stock at May 11, 1999, the grant date.
The number of restricted stock awards held by McDowell and Carson is 6,565
and 1,094, respectively. The unvested restricted stock award for Nunn was
cancelled in 2001. Restrictions lapse over a period not to exceed seven
years and vesting is based on the calendar year over year increase in the
Company's Funds From Operations. There were no restricted share grants to
these officers in 2001 or 2000, however, previous grants vested during 2001
and 2000.
(3) Does not include reload stock option grants as follows:

Reload Grants
----------------------
2001 2000 1999
------- ------- ------

Mr. McDowell 162,721 119,291 38,333
Mr. Carlson. 49,318 61,479 --
Mr. Nunn.... 17,194 33,312 --

(4) Consists of matching contributions to the Company's defined contribution
retirement plan (401(k) Plan) made by the Company on behalf of the named
executive officers. Also includes the partial forgiveness of a stock loan
to Mr. McDowell in the amount of $171,387 and $542,063 in 2001 and 2000,
respectively. Messrs. Carlson and Nunn each had a stock loan which was
partially forgiven in 2001, each amounting to $136,491. Additionally
includes for Messrs. Carlson and Nunn the benefit resulting from a $50,000
interest free loan amounting to $755, $3,700 and $3,280 for 2001, 2000 and
1999, respectively. The amounts were

calculated using an interest rate equal to the Company's borrowing cost.
Also, pursuant to their employment agreement, the interest-free $50,000
loans extended to Messrs. Carlson and Nunn were forgiven in 2001. For Mr.
Lange, includes the benefit of pro-rata forgiveness in 2001 of a $150,000
moving assistance loan. Pro-rata forgiveness in 2001 consisted of $30,000
principal and $7,650 interest. For Mr. Griggs, includes the benefit of
pro-rata forgiveness in 2001 of a $50,000 moving assistance loans. Pro-rata
forgiveness in 2001 consisted of $10,000 principal and $3,310 interest.
(5) Does not include potential loan forgiveness. See Stock Loans. While the
stock loan amount to be forgiven is not yet determinable, the following
amounts were expensed on the Company's financial statements.

2001 2000 1999
-------- -------- -------

Mr. McDowell $121,071 $142,151 $88,889
Mr. Carlson. 79,486 63,635 34,629
Mr. Lange... -- 13,695 --
Mr. Nunn.... 20,254 58,717 33,572
Ms. Kuring.. -- -- --

(6) Does not include amounts to be earned by the named executives under a long
term bonus program. While the amounts to be earned under the long term
bonus program are not yet determinable, the following amounts were expensed
on the Company's financial statements.

2001 2000 1999
------- ---- ----

Mr. McDowell $12,312 $-- $--
Mr. Carlson. 11,115 -- --
Mr. Lange... 12,295 -- --
Mr. Nunn.... 8,057 -- --
Ms. Kuring.. 2,457 -- --

(7) Mr. Lange joined the Company in June 2000.
(8) Mr. Griggs joined the Company in December 2000.
(9) Mr. Nunn is no longer an employee of the Company.
(10) Ms. Kuring was appointed to her current position in October 2001.

Option Grants in 2001

The following table sets forth: (i) grants of stock options made by the
Company during 2001 to each of the named executive officers based on the
Company's and their individual performance for 2000, grants pursuant to 2001
reload transactions; (ii) the ratio that the number of options granted to each
individual bears to the total number of options granted to all employees; (iii)
the exercise price and expiration date of these options; and (iv) the estimated
potential realizable values assuming certain stock price appreciation over the
10 year option term.

Individual Grants
----------------------------------------------- Potential Realized Value at
Number of % of Total Assumed Annual Rates of
Securities Options/SARS Exercise Stock Price Appreciation for
Underlying Granted to or Option Term (4)
Options/SARS Employees in Base Price Expiration ----------------------------
Name Granted (1) Fiscal Year ($/Sh) Date (3) 5% 10%
---- ------------ ------------ ---------- ---------- ---------- -----------

Frank C. McDowell... 160,000 16.9% $28.70 02/15/11 $2,887,887 $ 7,318,465
14,702(2) 1.6% $29.87 08/26/06 136,853 306,879
4,419(2) 0.5% $29.87 02/13/07 45,150 102,512
28,184(2) 3.0% $29.87 03/08/08 347,353 811,240
22,936(2) 2.4% $29.87 06/05/05 161,572 350,991
33,541(2) 3.6% $29.87 01/28/10 551,601 1,358,236
6,773(2) 0.7% $32.60 08/26/06 61,003 134,800
4,186(2) 0.4% $32.60 02/13/07 41,742 93,381
22,045(2) 2.3% $32.60 03/02/08 269,162 619,185
25,935(2) 2.7% $32.60 05/11/09 386,129 917,475
------- ---- ---------- -----------
322,721 34.2% $4,888,451 $12,013,165
LeRoy E. Carlson.... 57,500 6.1% $28.70 02/15/11 $1,037,833 $ 2,630,073
1,782(2) 0.2% $29.66 03/15/06 14,636 32,349
3,301(2) 0.3% $29.66 02/13/07 32,787 74,224
4,504(2) 0.5% $29.66 03/02/08 54,109 125,995
15,174(2) 1.6% $29.66 01/28/10 244,055 599,091
4,183(2) 0.4% $30.85 05/11/09 59,394 141,319
3,696(2) 0.4% $31.35 03/15/06 26,978 58,529
7,082(2) 0.8% $31.35 02/13/07 64,258 142,775
9,596(2) 1.0% $31.35 03/02/08 107,459 245,484
------- ---- ---------- -----------
106,808 11.3% $1,641,509 $ 4,049,840
Edward F. Lange, Jr. 30,000 3.2% $28.70 02/15/11 $ 541,478 $ 1,372,212
Diedre A. Kuring.... 5,000 0.5% $29.14 10/26/11 $ 91,746 $ 232,569
15,000 1.6% $28.88 01/25/04 68,271 143,364
------- ---- ---------- -----------
20,000 2.1% $ 160,017 $ 375,933

--------
(1) All options shown in the table were granted under the 1999 BRE Stock
Incentive Plan. The exercise price is 100% of the fair market value of the
Common Stock on the date of grant. All options held by Messrs. McDowell,
Carlson, Lange and Kuring may become immediately exercisable upon
termination of employment following a change in control. See Employment
Contracts and Termination of Employment and Change in Control Arrangements.
Messrs. McDowell, Carlson, Lange, and Ms. Kuring immediately exercised,
upon grant, options for 10,000, 7,500, 5,000, and 5,000 shares,
respectively. See Stock Loans.
(2) The right to receive reload options was given in connection with some
options. The intent of reload options is to encourage the named executive
officers to buy and hold shares by enabling them to use already owned
shares to pay the strike price when they exercise options and hold the
shares. They then receive a reload option to replace shares used for the
exercise, such that the total number of shares and options owned before and
after the exercise are the same. The effective date of the grant of the
reload options is the date the underlying option is exercised by delivering
shares of Common Stock to the Company. The reload options

have the same expiration date as the underlying options and will have an
exercise price equal to the fair market value of the Common Shares as of the
effective date of the grant of the reload options. Included in the amounts
shown are reload options granted for Messrs. McDowell and Carlson of 162,721
and 49,318 shares, respectively.
(3) The options have a term of 10 years, subject to acceleration upon a change
in control or termination.
(4) Potential realizable value is calculated based on an assumption that the
price of the Company's Common Stock appreciates at the annual rates shown
(5% and 10%), compounded annually, from the date of grant of the option
until the end of the option term. The value is net of the exercise price
but is not adjusted for the taxes that would be due upon exercise. The 5%
and 10% assumed rates of appreciation are mandated by the rules of the
Securities and Exchange Commission and do not represent the Company's
estimate or projection of future stock prices. There can be no assurance
that any of the values reflected in the table will be achieved. Actual
gains, if any, upon future exercise of any of these options will depend on
the actual performance of the Common Stock and the continued employment of
the executive officer holding the option through its vesting period.

Option Grants on January 24, 2002

On January 24, 2002, the Compensation Committee approved the following
option grants to the named executive officers under the 1999 BRE Stock
Incentive Plan:

Name Options Granted
---- ---------------

Frank C. McDowell... 110,000(1)
LeRoy E. Carlson.... 47,500(2)
Edward F. Lange, Jr. 45,000(3)
Diedre A. Kuring.... 25,000

--------
(1) Includes 10,000 shares to be exercised immediately related to a stock loan
(see Stock Loans).
(2) Includes 7,500 shares to be exercised immediately related to a stock loan
(see Stock Loans).
(3) Includes 5,000 shares to be exercised immediately related to a stock loan
(see Stock Loans).

The above options were granted at the market price of the Common Stock on
the date of grant.

Aggregated Option Exercises in 2001 and Year-End Option Values

The following table sets forth: (i) the number of shares received and the
aggregate dollar value realized in connection with each exercise of outstanding
stock options during 2001 by each of the named executive officers; (ii) the
total number of all outstanding unexercised options held by the named executive
officers at the end of 2001; and (iii) the aggregate dollar value of all such
unexercised options based on the excess of the market price of the Common Stock
over the exercise price of the option.

Number of Securities Value of Unexercised
Number of Underlying Unexercised In-the-Money
Shares Options/SARS at 12/31/01 Options at 12/31/01 (3)
Acquired on Value ------------------------- -------------------------
Exercise (1) Realized (2) Exercisable Unexercisable Exercisable Unexercisable
------------ ------------ ----------- ------------- ----------- -------------

Frank C. McDowell... 35,883 $190,341 110,504 626,508 $314,290 $2,494,039
LeRoy E. Carlson.... 15,554 $ 58,940 -- 249,423 -- $ 976,675
Edward F. Lange, Jr. 5,000 -- 10,000 65,000 $ 14,884 $ 116,036
John H. Nunn (4).... 14,803 $ 56,574 -- -- -- --
Diedre A. Kuring.... 5,000 -- 3,333 21,667 -- $ 31,275

--------
(1) The amounts shown for Messrs. McDowell, Carlson, Lange, Nunn, and Ms.
Kuring include 10,000, 7,500, 5,000, 7,500, and 5,000 shares, respectively,
for the immediate exercise of stock options granted; these shares represent
collateral for stock loans. There was no value realized for these shares.
See Stock Loans.
(2) Value realized is calculated by subtracting the total exercise price from
the market value of the underlying Common Stock on the date of exercise.
For the options exercised for stock loans on the date of grant, the
exercise price was equal to the market price at the time of exercise.
(3) The market value of the Company's Common Stock at December 31, 2001 was
$30.69 per share.
(4) Mr. Nunn is no longer an employee of the Company.

Retirement Plan (401(k) Plan)

The Company's Retirement Plan is intended to be a qualified retirement plan
under Section 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code"). Under the retirement plan, participating employees (including the
named executive officers) may contribute up to 15% of their compensation, but
not exceeding the amount allowed under applicable tax laws ($10,500 in calendar
2001), and the Company contributes 75% of the first 4% of the employee's
contribution for a maximum of $7,875. All employees of the Company with six
months of service are eligible to participate in the Retirement Plan. The
Company's contributions on behalf of employees who have been employed with the
Company (including prior service for certain entities acquired by the Company)
for at least five years are fully vested.

Stock Loans

Since 1995, the Board has approved five-year loans aggregating $5,426,207 to
the named executive officers for the purpose of immediately exercising a
portion of stock options granted on the date of the loan (the "Stock Loans").
The first of these loans was granted to Mr. McDowell on June 5, 1995, the date
of commencement of his employment with the Company. Similar loans were granted
to Messrs. Carlson, Lange, Nunn and Ms. Kuring. See Employment Contracts and
Termination of Employment and Change in Control Arrangements--Mr.
McDowell--Stock Loan. A provision in Mr. McDowell's employment agreement
entitles him to an annual stock loan for 10,000 shares of Common Stock. See
Employment Contracts and Termination of Employment and Change in Control
Arrangements--Mr. McDowell--Future Awards. The Board has adopted the practice
of making similar annual performance grants to the other named executive
officers.

The following table summarizes certain information concerning the Stock
Loans granted:

To Exercise
Loan Option for Interest
Date Amount No. of Shares Rate (1)
---- -------- ------------- --------

January 24, 2002
McDowell...... $291,600 10,000 6.7%
Carlson....... $218,700 7,500 6.7%
Lange......... $145,800 5,000 6.7%
October 25, 2001
Kuring........ $145,700 5,000 6.4%
February 16, 2001
McDowell...... $287,000 10,000 6.5%
Carlson....... $215,250 7,500 6.5%
Lange......... $143,500 5,000 6.5%
June 23, 2000
Lange......... $296,875 10,000 5.7%
January 28, 2000
McDowell...... $225,625 10,000 6.9%
Carlson....... $225,625 10,000 6.9%
May 11, 1999
McDowell...... $260,000 10,000 6.0%
Carlson....... $156,000 6,000 6.0%
March 2, 1998
McDowell...... $268,750 10,000 5.4%
Carlson....... $134,375 5,000 5.4%
February 13, 1997
McDowell (2).. $123,125 5,000 5.4%
Carlson (2)... $123,125 5,000 5.4%

--------
(1) Payable quarterly except for Mr. McDowell's loans, for which interest
accrues subject to forgiveness for loans made before January 28, 2000. The
interest rate is equal to the dividend yield on the Common Stock purchased
on the loan date.
(2) As of March 15, 2002, these loans have matured and the portion which was
not forgiven has been repaid.

These loans are collateralized by the purchased shares with full recourse to
the named executive officers. The loans made before 2000 are forgivable in
whole or in part upon the achievement of performance criteria. The loans made
in 2000, 2001 and 2002 do not have any forgiveness provisions. In addition, all
loans are also forgivable in whole or in part under certain circumstances
similar to the forgiveness applicable to Mr. McDowell's June 5, 1995 loan as
described in Employment Contracts and Termination of Employment and Change in
Control Arrangements--Mr. McDowell--Stock Loan, Certain Severance Benefits and
Messrs. Carlson and Lange--Certain Severance Benefits. Upon termination, the
Stock Loans that have forgiveness provisions are forgiven pro rata for the
measurement periods, but the same performance goal criteria are used. Although
certain of the performance goals have been attained, loan forgiveness will not
occur until the five-year term ends.

Employment Contracts and Termination of Employment and Change in Control
Arrangements

Mr. McDowell

Effective January 1, 2001 (the "Commencement Date"), the Company entered
into a new employment agreement with Mr. McDowell. The agreement was for an
initial term of one year, with automatic renewal on a year-to-year basis
thereafter unless terminated in accordance with its terms. Certain material
terms of the agreement are as follows:

Base Salary and Annual Incentive Bonus. Mr. McDowell receives a current
base salary of $375,000 per year and is eligible to receive an annual
incentive bonus targeted at 50% of base salary and up to 100% of base salary
based on achievement of predefined operating or performance criteria
established by the Board, with emphasis on growth in FFO per share (the
"Annual Criteria").

Certain Severance Benefits. If at any time during the term of the
employment agreement the employment of Mr. McDowell is terminated, he shall
be entitled to receive the benefits described below.

(a) Termination Other Than In Connection with a Change in Control.

(i) Termination Due to Death or Disability. Upon termination due to death
or disability, Mr. McDowell or his estate will receive a lump sum payment equal
to the estimated annual bonus he would have received for the fiscal year in
question, if any (based on actual performance relative to the Annual Criteria
for the fiscal year and Mr. McDowell's contribution to the date of death or
disability), calculated on a pro rata basis to the date of termination. In
addition, Mr. McDowell's stock loans made prior to 2000 would be forgiven based
on certain performance formulas, taking into consideration the number of full
months worked and the Company's performance through the last quarter ended 45
days or more prior to the termination date, with any balance payable 15 days
after termination.

(ii) Voluntary Termination or Termination for Cause. Upon voluntary
termination or termination for "cause" by the Company, no further compensation
would be payable to Mr. McDowell and the outstanding balance of the stock
loans, together with accrued but unpaid interest, would be payable in full
within 15 days of termination.

(iii) Termination by the Company Without Cause. If Mr. McDowell is
terminated without cause, Mr. McDowell would receive a lump sum payment equal
to his then base salary, plus an amount equal to the average of his annual
bonus, if any, over the most recent two years, and the Loan Amount for loans
made before 2000 would be reduced based on a pro rata application of certain
performance formulas, taking into consideration the number of full months
worked and the Company's performance through the last quarter ended 45 days or
more

prior to the termination date, with any balance payable immediately. In
addition, Mr. McDowell shall receive within 90 days after such termination, the
estimated annual bonus he would have received for the fiscal year in question,
if any (based on actual performance relative to the Annual Criteria for the
fiscal year and Mr. McDowell's contribution to date), calculated on a pro rata
basis to the date of termination.

(b) Termination Following a Change in Control.

(i) Termination by the Company Without Cause or by Mr. McDowell for Good
Reason. If Mr. McDowell is terminated without cause within 12 months following
a Change in Control (defined to include, without limitation, the acquisition by
a person or group of the beneficial ownership of 50% or more of the Company's
outstanding securities and certain changes in the Board of Directors resulting
from proxy contests or other actions by a person or group with beneficial
ownership of 5% or more of the Company's outstanding securities), or if Mr.
McDowell terminates his employment for Good Reason (defined as material changes
in the executive's duties, responsibilities or authority or the Company's
relocation of the executive outside of San Francisco) within 12 months after a
Change in Control, he would receive the following benefits: (a) a lump sum
payment equal to (x) two times his then base salary plus an amount equal to two
times the average of his annual bonus over the most recent two years, if any
(based on his current base salary of $375,000 and assuming average incentive
compensation in the maximum amount of $375,000, this payment would be
$1,500,000) plus (y) the estimated annual bonus he would have received for the
fiscal year in question, if any (based on actual performance relative to the
Annual Criteria for the fiscal year and Mr. McDowell's contribution to date),
calculated on a pro rata basis to the date of termination; (b) all restrictions
on the shares of Common Stock awarded to Mr. McDowell would vest and become
exercisable for a period of three months; (c) all unvested stock options held
by Mr. McDowell would vest and be exercisable for a period of three months; and
(d) Mr. McDowell's stock loans would be forgiven based on certain performance
formulas, taking into consideration the number of full months worked and the
Company's performance through the last quarter ended 45 days or more prior to
the termination date, with any balance payable immediately.

(ii) Termination Due to Death or Disability. Upon termination due to death
or disability following a Change in Control, Mr. McDowell or his estate would
receive the same benefits described in paragraph (a)(i) above.

(iii) Voluntary Termination Without Good Reason or Termination for
Cause. Upon voluntary termination of employment by Mr. McDowell without Good
Reason upon not less than 90 days notice with such notice not earlier than the
three month anniversary date of the Change in Control, within 12 months
following a Change in Control (defined to include, without limitation, the
acquisition by a person or group of the beneficial ownership of 50% or more of
the Company's outstanding securities and certain changes in the Board of
Directors resulting from proxy contests or other actions by a person or group
with beneficial ownership of 5% or more of the Company's outstanding
securities), he would receive a lump sum payment equal to his then base salary
plus an amount equal to the average of his annual bonus over the most recent
two years, if any ($750,000 assuming a $375,000 base salary and maximum
incentive bonus). Mr. McDowell's stock loans would be forgiven based on certain
performance formulas, taking into consideration the number of full months
worked and the Company's performance through the last quarter ended 45 days or
more prior to the termination date, with any balance payable immediately. In
addition, Mr. McDowell shall receive within 90 days after such termination, the
estimated annual bonus he would have received for the fiscal year in question,
if any (based on actual performance relative to the Annual Criteria for the
fiscal year and Mr. McDowell's contribution to date), calculated on a pro rata
basis to the date of termination. Upon termination for "cause" by the Company
within 12 months following a Change in Control, no further compensation would
be payable to Mr. McDowell and the outstanding balance of Mr. McDowell's stock
loans, together with accrued but unpaid interest, would be payable in full
within 15 days of termination.

Any of the foregoing amounts payable to Mr. McDowell following a Change in
Control is subject to reduction to the extent such payments would constitute
"parachute payments" as defined in Section 280G of the Code.

In addition, Mr. McDowell has signed other compensation-related agreements,
the significant terms of which follow:

Stock Loan. Upon the commencement of his employment with the Company in
1995, Mr. McDowell received a loan of $612,500 to exercise options to
purchase 40,000 shares of Common Stock (at an exercise price of $15.32 per
share) issued on that date (the "McDowell Stock Loan"). The McDowell Stock
Loan had an interest of 8.25% per annum, compounded annually, with all
principal and accrued interest payable in full on June 5, 2000 (the "Payment
Date"); provided, however, that repayment of any principal and accrued
interest under the McDowell Stock Loan (the "Loan Amount") will be forgiven
in accordance with the following formulas (the "Performance Formulas"): (i)
20% of the Loan Amount will be forgiven if the gross book value of the
Company's equity investments in real estate, investments in limited
partnerships and mortgages is $937 million or more on the Payment Date, and
a pro rata portion of 20% of the Loan Amount will be forgiven if such value
is between $791 million and $937 million; (ii) 20% of the Loan Amount will
be forgiven on the Payment Date if, on the second anniversary date of the
McDowell Stock Loan, there has been an increase in FFO per share of the
Common Stock for the two-year period ending April 30, 1997 which is at or
above the 80th percentile of the 10 largest publicly traded multifamily real
estate investment trusts (the "Indexed REITs") for a comparable period, and
a pro rata portion of 20% of the Loan Amount will be forgiven if any such
increase is within the 50th and 80th percentiles; (iii) 30% of the Loan
Amount will be forgiven if, on the Payment Date, there has been an increase
in FFO per share of Common Stock for the three year period ending April 30,
2000 which is at or above the 80th percentile of the Indexed REITs, and a
pro rata portion of 30% of the Loan Amount will be forgiven if any such
increase is within the 50th and 80th percentiles; and (iv) 30% of the Loan
Amount will be forgiven if, as of the Payment Date, the average of the FFO
multiples of Common Stock as of December 31 of each of the five preceding
years (computed in each case by dividing the market price of Common Stock on
the last trading day of the calendar year by the preceding twelve months'
FFO) is at or above the 80th percentile of the average multiple of the
Indexed REITs for the same five-year period, and a pro rata portion of 30%
of the Loan Amount will be forgiven if such multiple is within the 50th and
80th percentiles. In addition, repayment of a pro rata portion of the Loan
Amount will be forgiven by the Company upon termination of Mr. McDowell's
employment under the circumstances described in Certain Severance Benefits.
Each of Mr. McDowell's subsequent loans granted in 1996 through 1998 have
substantially the same terms as the McDowell Stock Loan.The stock loan made
to Mr. McDowell in 1999 replaced formula (i) above with a formula allowing a
forgiveness of up to 20% of the Loan Amount based on the Company's
"same-store" (i.e. those apartment communities owned and stabilized for two
full years ending on December 31 of each applicable year) growth in net
operating income ("NOI", i.e. the excess of property income over property
expense, excluding interest and depreciation). If the five-year average of
the Company's same-store growth in NOI is at or above the 80th percentile of
the average of the same-store growth in NOI of the Indexed REITs for the
same five year period, 20% of the Loan Amount will be forgiven; and a pro
rata portion of 20% of the Loan Amount will be forgiven if such multiple is
within the 50th and 80th percentiles. The stock loans made to Mr. McDowell
in 2000 and 2001 do not have any provision for forgiveness. See also Stock
Loans.

Future Awards. Mr. McDowell will receive annual long-term incentive
awards which, assuming achievement of applicable performance goals, will
provide Mr. McDowell with (i) a five-year loan to purchase 10,000 shares of
Common Stock pursuant to an immediately exercisable stock option, on terms
similar to the McDowell Stock Loan (see Stock Loan above) and (ii)
performance options to purchase 50,000 shares of Common Stock at market
value on the date of award.

Bonus Arrangements. Under Bonus Arrangements entered into in January
2000, and 2001, Mr. McDowell is eligible to receive bonuses payable after
terms of five years of up to $314,975 and $393,215, respectively. The bonus
amount that is actually awarded will be calculated using a formula whereby:
(i) up to 20% of the bonus amount will be awarded based on the Company's
same property growth in NOI; (ii) up to 50% of the bonus amount will be
awarded based on the increase in FFO per share of Common Stock; and (iii) up
to 30% of the bonus amount will be awarded based on a FFO Multiple, defined
as the closing price per share of the Company's Common Stock as of the last
trading date of the calendar year divided by its

FFO per share for the preceding twelve-month period. Each of these criteria
is measured against the 10 largest publicly traded multifamily REITs.

Mr. Carlson

Effective March 15, 1996, the date of the merger with RCT, the Company
entered into an employment agreement with LeRoy E. Carlson. The agreement was
for an initial term of two years, with automatic renewal on a year-to-year
basis thereafter unless terminated in accordance with its terms. Certain
material terms of these agreements are as follows:

Base Salary. Mr. Carlson currently receives a base salary of $275,000.
The base salary will be subject to review each year with an expectation that
the base salary will increase in an amount at least equal to any increase in
the Consumer Price Index for the San Francisco Bay Area over the preceding
12 months.

Annual Incentive Bonus. Executive shall be eligible to receive an annual
incentive bonus targeted at 30% of base salary. The amount of the annual
bonus will be based on the achievement of predefined operating or
performance goals and other criteria established by the Chief Executive
Officer or the Compensation Committee of the Board.

Interest-Free Loans. Upon his employment, Mr. Carlson received a $50,000
interest-free recourse loan (an "Interest-Free Loan") to be forgiven either
on the fifth anniversary of the date of employment, or upon earlier
termination of employment under the circumstances described in Certain
Severance Benefits. See also Stock Loans.

Certain Severance Benefits. If, at any time during any automatic
one-year renewal period, the employment of Mr. Carlson is terminated, he
shall be entitled to receive the benefits described below.

(a) Termination Other Than In Connection with a Change in Control.

(i) Termination by the Company Without Cause. If the executive is
terminated without cause, the executive will receive a lump sum payment equal
to his then annual base salary plus an amount equal to the average of his
annual bonus over the most recent two years, if any. In addition, the
Interest-Free Loan will be forgiven and the Stock Loans made before 2000 will
be forgiven based on a pro rata application of the performance formulas, taking
into consideration the number of full months employed and the Company's
performance through the last quarter ended 45 days or more prior to the
termination date.

(ii) Termination Due to Death or Disability. Upon termination due to death
or disability, the executive or his estate will receive a lump sum payment
equal to the annual bonus the executive would have received for the fiscal year
in question, if any (based on the previous or average annual bonus amounts),
calculated on a pro rata basis to the date of termination. In addition, the
Interest-Free Loan will be forgiven and the Stock Loans made prior to 2000 will
be forgiven based on a pro rata application of certain performance formulas,
taking into consideration the number of full months employed and the Company's
performance through the last quarter ended 45 days or more prior to the
termination date.

(iii) Voluntary Termination or Termination for Cause. Upon voluntary
termination or termination for "cause" by the Company, no further compensation
will be payable to the executive and the outstanding balance of the
Interest-Free Loan and the Stock Loans, together with accrued but unpaid
interest, will be payable in full within 15 days of termination.

(b) Termination Following a Change in Control.

by the executive would vest and be exercisable for a period of three months;
and (c) the Interest-Free Loan would be forgiven and the Stock Loans made prior
to 2000 will be forgiven based on a pro rata application of certain Performance
Formulas, taking into consideration the number of full months employed and the
Company's performance through the last quarter ended 45 days or more prior to
the termination date, with any balance due immediately.

(ii) Termination Due to Death or Disability. Upon termination due to death
or disability following a Change in Control, the executive will receive the
same benefits described in paragraph (a)(ii) above, reduced on a pro rata basis
to the date of termination.

(iii) Voluntary Termination Without Good Reason or Termination for
Cause. Upon voluntary termination of employment by the executive without Good
Reason within 12 months following a Change in Control, the executive will
receive a lump sum payment equal to his then base salary plus an amount equal
to the average of his annual bonus over the most recent two years, if any. The
outstanding balance of the Interest-Free Loan and the Stock Loans, together
with accrued but unpaid interest, will be due on such termination. Upon
termination for "cause" by the Company within 12 months following a Change in
Control, no further compensation will be payable to the executive and the
outstanding balance of the Interest-Free Loan and the Stock Loans, together
with accrued but unpaid interest, will be payable in full within 15 days of
termination.

Any of the foregoing amounts payable to Mr. Carlson following a Change in
Control are subject to reduction to the extent such payments would constitute
"parachute payments" as defined in Section 280G of the Code.

Mr. Lange

Effective June 23, 2000, the Company entered into an employment agreement
with Edward F. Lange, Jr. for a term of three years, unless terminated in
accordance with its terms. Certain material terms of these agreements are as
follows:

Base Salary. Mr. Lange currently receives a base salary of $250,000. The
base salary will be subject to review each year based on relevant
circumstances.

Annual Incentive Bonus. Mr. Lange shall be eligible to receive an annual
incentive bonus targeted at 40% of base salary and up to 80% of base salary.
The amount of the annual bonus will be based on the achievement of
management by objective criteria established by the Board of Directors.

Stock Loans. Upon the commencement of his employment with the Company,
Mr. Lange received a loan of $296,825 to exercise options to purchase 10,000
shares of Common Stock (at an exercise price of $29.68 per share) issued on
that date. See also Stock Loans.

Moving Assistance Loan. The Company shall provide Mr. Lange with a
five-year, full recourse loan in an original principal amount of $150,000 at
an interest rate equal to mid-term federal rate. The loan is to be forgiven
on a pro-rata basis on each anniversary date of employment, or upon earlier
termination of employment under the circumstances described in Certain
Severance Benefits. See also Stock Loans.

Certain Severance Benefits. If, at any time during the three-year
period, the employment of Mr. Lange is terminated, he shall be entitled to
receive the benefits described below.

(a) Termination Other Than In Connection with a Change in Control.

(i) Termination by the Company Without Cause. If the executive is
terminated without cause, the executive will receive a lump sum payment equal
to (i) 140% of his then annual base salary if termination occurs prior to the
determination of his first annual incentive bonus, (ii) his then annual base
salary plus the amount of his annual incentive bonus awarded in the immediately
preceding year if termination occurs subsequent to the determination of his
first annual incentive bonus, but prior to the determination for the second
full year, or (iii) for any subsequent termination, his then base salary plus
the average of his annual bonus over

the most recent two years, if any. In addition, the Moving Assistance Loan will
be forgiven and the Stock Loans made before 2000 will be forgiven based on a
pro rata application of certain performance formulas, taking into consideration
the number of full months employed and the Company's performance through the
last quarter ended 45 days or more prior to the termination date.

(ii) Termination Due to Death or Disability. Upon termination due to death
or disability, the executive or his estate will receive a lump sum payment
equal to the annual bonus the executive would have received for the fiscal year
in question, if any (based on the achievement of management by objective
criteria established by the Board of Directors), calculated on a pro rata basis
to the date of termination. In addition, the Moving Assistance Loan will be
forgiven and the Stock Loans made prior to 2000 will be forgiven based on a pro
rata application of certain performance formulas, taking into consideration the
number of full months employed and the Company's performance through the last
quarter ended 45 days or more prior to the termination date.

(iii) Voluntary Termination or Termination for Cause. Upon voluntary
termination or termination for "cause" by the Company prior to the fifth
anniversary of the agreement, no further compensation will be payable to the
executive and the outstanding balance of the Moving Assistance Loan will be
payable in full within 180 days of termination and the Stock Loans, together
with accrued but unpaid interest, will be payable in full within 15 days of
termination.

(b) Termination Following a Change in Control.

(i) Termination by the Company Without Cause or by the Executive for Good
Reason. If the executive is terminated without cause within 12 months
following a Change in Control or if the executive terminates his employment for
Good Reason within 12 months after a Change in Control, the executive will
receive the following benefits: (a) a lump sum payment equal to (i) 280% of his
then base salary if termination occurs prior to the determination of his first
annual incentive bonus, (ii) two times his then annual base salary plus two
times the amount of his annual incentive bonus awarded in the immediately
preceding year if termination occurs subsequent to the determination of his
first annual incentive bonus, but prior to the determination for the second
full year, or (iii) for any subsequent termination, two times his then base
salary plus the sum of his annual incentive bonus awarded in the prior two
years, if any; (b) all unvested stock options held by the executive would vest
and be exercisable for a period of three months; and (c) the Moving Assistance
Loan would be forgiven and the and the Stock Loans made prior to 2000 will be
forgiven based on a pro rata application of certain performance formulas,
taking into consideration the number of full months employed and the Company's
performance data through the last quarter ended 45 days or more prior to the
termination date, with any balance due within 15 days of termination.

(iii) Voluntary Termination Without Good Reason or Termination for
Cause. Upon voluntary termination of employment by the executive without Good
Reason within 12 months following a Change in Control, the executive will
receive the following benefits within 15 days after such termination: (a) a
lump sum payment equal to (i) 140% of his then base salary if termination
occurs prior to the determination of his first annual incentive bonus, (ii) his
then annual base salary plus the amount of his annual incentive bonus awarded
in the immediately preceding year if termination occurs subsequent to the
determination of his first annual incentive bonus, but prior to the
determination for the second full year, or (iii) for any subsequent
termination, his then base salary plus the average of his annual incentive
bonus awarded in the prior two years. The outstanding balance of the Moving
Assistance Loan will be payable in full within 180 days of termination and the
Stock Loans, together with accrued but unpaid interest, will be payable in full
within 15 days of termination. Upon termination for "cause" by the Company
within 12 months following a Change in Control, no further compensation will be
payable to the executive and the outstanding balance of the Moving Assistance
Loan will be payable in full within 180 days of termination and the Stock
Loans, together with accrued but unpaid interest, will be payable in full
within 15 days of termination.

Any of the foregoing amounts payable to Mr. Lange following a Change in
Control are subject to reduction to the extent such payments would constitute
"parachute payments" as defined in Section 280G of the Code.

Mr. Griggs

Effective December 8, 2000, the Company entered into an employment agreement
with Bradly P. Griggs for a term of three years, unless terminated in
accordance with its terms. Certain material terms of these agreements are as
follows:

Base Salary. Mr. Griggs currently receives a base salary of $250,000.
The base salary will be subject to review each year based on relevant
circumstances.

Annual Incentive Bonus. Mr. Griggs shall be eligible to receive an
annual incentive bonus targeted at 40% of base salary and up to 80% of base
salary. The amount of the annual bonus will be based on the achievement of
management by objective criteria established by the Board of Directors.

Developer Incentive Awards. Mr. Griggs shall be entitled to receive
additional long-term incentive awards based on development of assets with
returns above a company approved, market-specific hurdle rate as established
by the Board of Directors. Awards granted under the program vest after the
first stabilized year of operation of the asset.

Transition Assistance Loan. The Company shall provide Mr. Griggs with a
five-year, interest free, full recourse loan in an original principal amount
of $50,000. The loan is to be forgiven on a monthly pro-rata basis taking
into consideration the number of months executive is employed, or upon
earlier termination of employment under the circumstances described in
Certain Severance Benefits.

Certain Severance Benefits. If, at any time during the three-year
period, the employment of Mr. Griggs is terminated, he shall be entitled to
receive the benefits described below.

(a) Termination Other Than In Connection with a Change in Control.

(i) Termination by the Company Without Cause or Termination of the
Employment Agreement due to Non-Extension. If the executive is terminated
without cause or due to refusal of the Company, within 60 days prior to the end
of the initial term of the Employment Agreement, to extend a written offer for
executive's continued employment on substantially the same terms, the Company
shall provide executive with the following compensation after such termination:
(a) within 15 days, executive shall be entitled to received a lump sum payment
equal to his then annual base salary plus an amount equal to (i) the average of
his annual incentive bonus over the most recent two years or (ii) the previous
annual incentive bonus if only one full annual incentive bonus period has
passed or (iii) 40% of base salary if less than one annual incentive bonus has
passed; (b) executive shall be entitled to receive early vesting in the
Developer Incentive Program with respect to all projects in which he has been
afforded a participation; and (c) Company shall extend six months of
outplacement services. In addition, the unpaid principal under the Transition
Assistance Loan shall be forgiven by the Company.

(ii) Termination Due to Death or Disability. Upon termination due to death
or disability, the executive or his estate will receive: (a) a lump sum payment
equal to the estimated annual incentive bonus executive would have earned for
the fiscal year in question (based on the achievement of management by
objective criteria established by the Board of Directors), calculated on a pro
rata basis to the date of termination; and (b) any vested Developer Incentive
Awards, which shall be awarded pursuant to executive's early vesting rights. In
addition, the unpaid principal under the Transition Assistance Loan shall be
forgiven.

(iii) Voluntary Termination or Termination for Cause. Upon voluntary
termination or termination for "cause" by the Company, no further compensation
will be payable to the executive and the outstanding balance of the Transition
Assistance Loan shall become immediately due and payable.

(b) Termination Following a Change in Control.

(i) Termination by the Company Without Cause or by the Executive for Good
Reason. In the event of termination of executive's employment by the Company
without cause or due to voluntary termination by Executive with good reason,
the executive will receive the following benefits: (a) a lump sum payment from
the

Company equal to two times his then annual base salary plus an amount equal to
(i) two times the average of his annual incentive bonus over the most recent
two years or (ii) two times his previous annual incentive bonus is only one
annual incentive bonus period has passed or (iii) 80% of his annual base salary
if termination occurs prior to determination of executive's first annual
incentive bonus; (b) executive shall be entitled to receive early vesting in
the Developer Incentive Program with respect to all projects in which he has
been afforded a participation; and (c) Company shall extend six months of
outplacement services. In addition, the unpaid principal under the Transition
Assistance Loan shall be forgiven by the Company.

(iii) Voluntary Termination Without Good Reason. In the event of voluntary
termination by executive without good reason following a change in control, the
Company shall pay executive within 15 days after such termination a lump-sum
payment equal to: (i) one hundred and forty percent (140%) of executive's
annual base salary if termination occurs prior to the determination of his
annual incentive bonus; (ii) his then annual base salary plus the amount of the
annual incentive bonus awarded in the immediately preceding year if termination
occurs subsequent to the determination of the annual incentive bonus for his
first full year and prior to the determination for the second full year; (iii)
for any subsequent termination, his then annual base salary plus the average of
the annual incentive bonus awarded in the prior two years. In addition,
executive shall also be entitled to early vesting under the Developer Incentive
Program provided, that any amounts vested shall thereby be reduced by
twenty-five percent (25%). The entire unpaid principal sum under the Transition
Assistance Loan shall become immediately due and payable upon termination.

(iv) Termination for Cause. Upon termination for "cause" by the Company,
no further compensation will be payable to the executive and the outstanding
balance of the Transition Assistance Loan shall become immediately due and
payable.

Any of the foregoing amounts payable to Mr. Griggs following a Change in
Control are subject to reduction to the extent such payments would constitute
"parachute payments" as defined in Section 280G of the Code.

Ms. Kuring

Effective October 25, 2001, the Company entered into an employment agreement
with Diedre A. Kuring for a term of two years, unless terminated in accordance
with its terms. The agreement shall automatically be extended from year to year
for one-year terms beginning on November 1, 2003 provided that (a) the Company
or executive does not give notice of termination to the other party; (b) the
agreement has not been terminated; or (c) the parties have not entered into a
new employment agreement. Certain material terms of these agreements are as
follows:

Base Salary. Ms. Kuring currently receives a base salary of $225,000.
The base salary will be subject to review each year based on relevant
circumstances.

Annual Incentive Bonus. Ms. Kuring shall be eligible to receive an
annual incentive bonus targeted at 40% of base salary and up to 80% of base
salary. The amount of the annual bonus will be based on the achievement of
management by objective criteria established by the Board of Directors.

Stock Loans. Upon the commencement of her employment with the Company,
Ms. Kuring received a loan of $145,700 to exercise options to purchase 5,000
shares of Common Stock (at an exercise price of $29.14 per share) issued on
that date. See also Stock Loans.

Transition Assistance Loan. The Company shall provide Ms. Kuring with a
five-year, full recourse loan in an original principal amount of $50,000 at
an interest rate equal to the mid-term federal rate. The loan is to be
forgiven on a pro rata basis on each anniversary date or employment, or upon
earlier termination of employment under the circumstances described in
Certain Severance Benefits. See also Stock Loans.

(a) Termination Other Than In Connection with a Change in Control.

(i) Termination by the Company Without Cause. If the executive is
terminated without cause, the executive will receive a lump sum payment equal
to (i) 140% of her then annual base salary if termination occurs prior to the
determination of his first annual incentive bonus, (ii) her then annual base
salary plus the amount of her annual incentive bonus awarded in the immediately
preceding year if termination occurs subsequent to the determination of her
first annual incentive bonus, but prior to the determination for the second
full year, or (iii) for any subsequent termination, her then base salary plus
the average of her annual bonus over the most recent two years, if any. In
addition, the outstanding principal balance of the Transition Assistance Loan
shall be forgiven. The outstanding principal balance under each Stock Loans and
all accrued interest shall be due and payable within 15 days after such
termination. Executive shall be entitled to receive payment under any bonus
arrangement based on a pro rata application of certain performance formulas,
taking into consideration the number of full months employed and the Company's
performance through the last quarter ended 45 days or more prior to the
termination date.

(ii) Termination Due to Death or Disability. Upon termination due to death
or disability, the executive or her estate will receive a lump sum payment
equal to the annual incentive bonus the executive would have received for the
fiscal year in question, if any (based on the achievement of management by
objective criteria established by the Board of Directors), calculated on a pro
rata basis to the date of termination. In addition, the outstanding principal
balance under the Transition Assistance Loan will be forgiven. The outstanding
principal balance under each Stock Loans and all accrued interest shall be due
and payable within 15 days after such termination. The amount of any payment
due under any bonus arrangement shall be determined based on a pro rata
application of certain performance formulas, taking into consideration the
number of full months employed and the Company's performance through the last
quarter ended 45 days or more prior to the termination date.

(iii) Voluntary Termination or Termination for Cause. Upon voluntary
termination or termination for "cause" by the Company prior to the second
anniversary of the agreement, no further compensation will be payable to the
executive and the outstanding principal balance (but not the accrued interest
which shall be forgiven) of the Transition Assistance Loan will be payable in
full within 180 days of termination and the Stock Loans, together with accrued
but unpaid interest, will be payable in full within 15 days of termination.

(b) Termination Following a Change in Control.

(i) Termination by the Company Without Cause or by the Executive for Good
Reason. If the executive is terminated without cause within 12 months
following a Change in Control or if the executive terminates her employment for
Good Reason within 12 months after a Change in Control, the executive will
receive the following benefits: (a) a lump sum payment equal to (i) 280% of her
then base salary if termination occurs prior to the determination of her first
annual incentive bonus, (ii) her then annual base salary plus two times the
amount of her annual incentive bonus awarded in the immediately preceding year
if termination occurs subsequent to the determination of her first annual
incentive bonus, but prior to the determination for the second full year, or
(iii) for any subsequent termination, two times her then base salary plus the
sum of her annual incentive bonus awarded in the prior two years, if any; (b)
all restrictions (except applicable federal and state securities law) on any
shares of Common Stock awarded to executive would be eliminated and such shares
would fully vest in executive; (c) all unvested stock options held by the
executive would vest and be exercisable for a period of three months; and (c)
the amount payable under the Transition Assistance Loan would be forgiven. The
outstanding balance under each Stock Loans and all accrued interest shall be
due and payable within 15 days after such termination. Executive shall be

entitled to receive payment under any bonus arrangement based on a pro rata
application of certain performance formulas, taking into consideration the
number of full months employed and the Company's performance through the last
quarter ended 45 days or more prior to the termination date.

(ii) Termination Due to Death or Disability. Upon termination due to death
or disability, the executive or her estate will receive a lump sum payment
equal to the annual incentive bonus the executive would have received for the
fiscal year in question, if any (based on the achievement of management by
objective criteria established by the Board of Directors), calculated on a pro
rata basis to the date of termination. In addition, the amount payable under
the Transition Assistance Loan will be forgiven. The outstanding balance under
each Stock Loans and all accrued interest shall be due and payable within 15
days after such termination. The amount of any payment due under any bonus
arrangement shall be determined based on a pro rata application of certain
performance formulas, taking into consideration the number of full months
employed and the Company's performance through the last quarter ended 45 days
or more prior to the termination date.

(iii) Voluntary Termination Without Good Reason. In the event of voluntary
termination by executive without good reason following a change in control, the
Company shall pay executive within 15 days after such termination a lump-sum
payment equal to: (i) one hundred and forty percent (140%) of executive's
annual base salary if termination occurs prior to the determination of her
annual incentive bonus; (ii) her then annual base salary plus the amount of the
annual incentive bonus awarded in the immediately preceding year if termination
occurs subsequent to the determination of the annual incentive bonus for her
first full year and prior to the determination for the second full year; (iii)
for any subsequent termination, her then annual base salary plus the average of
the annual incentive bonus awarded in the prior two years.

(iv) Termination for Cause. Upon termination for "cause" by the Company, no
further compensation will be payable to the executive and the outstanding
balance under the Transition Assistance Loan shall become immediately due and
payable.

Any of the foregoing amounts payable to Ms. Kuring following a Change in
Control are subject to reduction to the extent such payments would constitute
"parachute payments" as defined in Section 280G of the Code.

Certain Relationships and Related Transactions

For information on certain relationships and related transactions, please
see the information contained in the headings "Stock Loans" and "Employment
Contracts and Termination of Employment and Changes in Control Arrangements"
above.

COMPENSATION COMMITTEE REPORT ON COMPENSATION
OF EXECUTIVE OFFICERS

Compensation Policies Affecting Executive Officers

General

The Compensation Committee of the Board of Directors (the "Committee")
administers the Company's executive compensation program. The Committee is
composed entirely of outside Directors.

The objective of the Company's executive compensation program is to develop
and maintain executive reward programs, which contribute to the enhancement of
shareholder value, while attracting, motivating and retaining key executives
who are essential to the long-term success of the Company. As discussed in
detail below, the Company's executive compensation program consists of both
fixed (base salary) and variable (incentive) compensation elements. Variable
compensation consists of annual cash incentives, stock option grants, incentive
stock loans and, on occasion, restricted share grants. These elements are
designed to operate on an integrated basis and together comprise total
compensation value.

Each year, the Committee reviews executive compensation in light of the
Company's performance during the year against previously defined objectives and
compensation data at companies that are considered comparable for Company
performance purposes. In reviewing the Company's performance during 2001, the
Committee considered a variety of additional factors. FFO per share increased
approximately 5.9% from 2000 levels, which placed the Company's performance in
the upper quartile of the 10 largest multifamily REITs (the "Comparable Group")
and "same store" net operating income increased approximately 7% for the year,
which was among the highest of the Company's Comparable Group. Also during
2001, BRE completed the development and lease-up of one directly owned
community totaling 248 units located in Bellevue, Washington. The Company also
purchased two multifamily communities located in Seattle, Washington and Laguna
Niguel, California, for a combined total of 597 units. At December 31, 2001,
the Company had nine apartment communities in various stages of construction
and development totaling 2,111 apartment units. Total shareholder return,
taking into account dividends paid and stock price appreciation, was 4% for the
year, and the Company's FFO multiple, an indication of price performance, was
among the highest for the Company's Comparable Group.

Base Salary

Base salary levels of the Company's key executives are largely determined
through an evaluation of the responsibilities of the position held, the
experience of the particular individuals, a comparison with comparable
companies in the real estate industry and the Committee's desire to achieve the
appropriate mix between fixed compensation and incentive based compensation. In
its determination of comparable companies, the Committee gives primary
consideration to comparable companies included in the equity REIT peer group
used for the five-year comparison of total shareholder return (see Comparative
Stock Performance). Salary information about comparable companies is surveyed
by reference to public disclosures made by companies in the real estate
industry. In addition, during 1999, the Committee used salary survey data
supplied by an outside compensation consultant. A change in a key executive's
compensation from the previous year may reflect factors such as performance,
changes in responsibility, contract provisions relative to inflation and
adjustments to maintain a level of consistency with industry practices.

Annual Cash Incentives

The annual cash incentive is designed to provide a short-term (one year)
incentive to executive officers with the potential award based on a percentage
of an executive's base salary. For 2001, incentive awards were based on the
achievement of predetermined corporate expectations and a determination of an
executive's performance compared to specific objectives agreed upon by the
executive and the Committee at the start of the year. In addition, the
Committee used survey data supplied from the Company's outside compensation
consultant relative to total cash compensation, including salary and cash
incentive awards. For the executive officers, targeted annual cash incentive
awards are a percentage of base salary determined by the Committee. The Summary
Compensation Table shows cash incentive bonuses paid to the named executive
officers for 2001 based on such performance.

Stock Options

Stock options are designed to provide long-term (10-year) incentives and
rewards tied to the price of the Common Stock. The Committee believes that
stock options, which provide value to participants only when shareholders
benefit from stock price appreciation, are an important component of the
Company's annual executive compensation program. The number of options or
shares currently held by an officer is not a factor in determining individual
grants, and the Committee has not established any target level of ownership of
Common Stock by executive officers. However, accumulation and retention of
shares of Common Stock by officers is strongly encouraged. To facilitate share
ownership and retention, in 1998 the Company implemented a program whereby
certain executives may receive reload options, which continued through 2001.

Stock options are awarded annually following the close of each year. The
Company does not adhere to any firmly established formulas for the issuance of
options to employees. In 1998, the Company extended the program of granting
stock options to additional qualified employees at the community management
level and above. In 2001, this program was continued. The Option Grants in 2001
table includes the options granted to the named executive officers during 2001
for 2000 performance. In determining the size of the grants to the named
executive officers, the Committee assessed relative levels of responsibility,
Company and individual performance and the long-term incentive practices of
other comparable companies.

In accordance with the provisions of the 1999 BRE Stock Incentive Plan, the
exercise price of all options granted was equal to the market value of the
underlying Common Stock on the date of grant. Accordingly, the value of these
grants to the officers is dependent solely upon the future growth and share
value of the Company's Common Stock.

Incentive Stock Loans

Pursuant to the 1999 BRE Stock Incentive Plan, in 2001 the Company funded
$791,450 aggregate principal amount of incentive stock loans to the named
executive officers. As more fully described in Stock Loans, these loans were
used to exercise some of the options granted to the named executive officers
under the Plan. The Committee believes that these loans, by encouraging
management's acquisition and retention of shares of Common Stock, provide even
greater incentives for management to achieve both the Company's long-term
performance objectives and its current strategic goals.

Bonus Arrangements.

Under Bonus Arrangements entered into in January 2000, 2001 and 2002, the
named executive officers are eligible to receive bonuses payable after terms of
five years. The bonus amount that is actually awarded will be calculated using
a formula whereby: (i) up to 20% of the bonus amount will be awarded based on
the Company's same property growth in net operating income; (ii) up to 50% of
the bonus amount will be awarded based on the increase in FFO per share of
Common Stock; and (iii) up to 30% of the bonus amount will be awarded based on
a FFO Multiple, defined as the closing price per share of the Company's Common
Stock as of the last trading date of the calendar year divided by its FFO per
share for the preceding twelve-month period. Each of these criteria is measured
against the 10 largest publicly traded multifamily REITs.

Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended, places a
limit of $1,000,000 on the amount of compensation that may be deducted by the
Company in any year with respect to each of the Company's five most highly paid
executive officers. Certain performance-based compensation that has been
approved by the shareholders is not subject to this deduction limit. The
Company's 1992 Employee Stock Option Plan and the 1999 BRE Stock Incentive Plan
are qualified so that stock options and certain other awards under such plans
are not subject to the deduction limitations of Section 162(m). However,
certain other types of

compensation payments and their deductibility depend on the timing of an
executive officer's vesting or exercise of previously granted rights, or on
interpretations of changes in the tax laws and other factors beyond the
Company's control. Although the Company generally seeks to preserve the federal
income tax deductibility of compensation paid, to maintain flexibility in
compensating executive officers in a manner designed to promote varying
corporate goals, the Committee has not adopted a policy that all compensation
must be deductible. For 2001, the Committee anticipates that there will be no
deduction limitations for Section 162(m) for compensation to each of the five
most highly paid executive officers.

CEO Performance Evaluation

For 2001, the Committee evaluated Mr. McDowell's performance based on the
factors discussed above under the caption "General," with particular emphasis
on the achievement of operating, portfolio and performance objectives, growth
in FFO per share and same store net operating income and corporate performance
relative to multifamily peer groups. Based on these factors and Mr. McDowell's
individual performance, in 2001 he received 51% of his targeted annual cash
incentive together with the incentive stock loan and stock option grants
described in Stock Loans and Option Grants on January 24, 2002.

The members of the Compensation Committee give the foregoing report, namely:

L. Michael Foley, Chairman
John McMahan
Gregory M. Simon

COMPARATIVE STOCK PERFORMANCE

The line graph below compares the cumulative total shareholder return on the
Common Stock for the last five years with the cumulative total return on the
S&P 500 Index and the NAREIT Equity REIT Total Return Index over the same
period. This comparison assumes that the value of the investment in the Common
Stock and in each index was $100 on December 31, 1995 and that all dividends
were reinvested (1).

[CHART]

BRE Properties, Inc. S&P 500 Index NAREIT All Equity REIT Index

12/31/96 100.00 100.00 100.00
12/31/97 120.31 133.37 120.26
12/31/98 111.64 171.44 99.21
12/31/99 109.13 207.52 94.63
12/31/00 161.87 188.62 119.59
12/31/01 168.18 166.22 136.24

12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------- -------- -------- -------- -------- --------

BRE Properties, Inc..... $100.00 $120.31 $111.64 $109.13 $161.87 $168.18
S&P 500 Index........... $100.00 $133.37 $171.44 $207.52 $188.62 $166.22
NAREIT Equity REIT Index $100.00 $120.26 $ 99.21 $ 94.63 $119.59 $136.24

--------
(1) Common Stock performance data is provided by SNL Securities and is
calculated using the ex-dividend date. The S&P Index and NAREIT Equity REIT
Total Return Index data are provided by NAREIT, which calculate
reinvestment results using the dividend payable date. The NAREIT Equity
REIT Total Return Index data includes 151 companies with aggregate equity
capitalization (excluding operating company units) of approximately $147
billion.
(2) Indicates appreciation of $100 invested on December 31, 1996 in the Common
Stock, S&P 500, and NAREIT Equity REIT Total Return Index securities,
assuming reinvestment of dividends discussed above.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company's financial reporting process on
behalf of the Board. Management has the primary responsibility for the
financial statements and the reporting process, including the systems of
internal controls. In fulfilling its oversight responsibilities, the Audit
Committee reviewed the audited financial statements in the Annual Report with
management including a discussion of the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements.

The Audit Committee reviewed with the independent auditors, Ernst & Young
LLP, who are responsible for expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting principles,
their judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under generally accepted auditing standards. In
addition, the Audit Committee has discussed with the independent auditors the
auditors' independence from management and the Company including the matters in
the written disclosures required by the Independence Standards Board and has
considered the compatibility of nonaudit services with the auditors'
independence.

The Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee meets with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, their
evaluations of the Company's internal controls, and the overall quality of the
Company's financial reporting. The Audit Committee met formally six times
during 2001.

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board (and the Board has approved) that the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2001 for filing with the Securities and Exchange
Commission.

The Audit Committee recommended and the Board has approved the selection of
Ernst & Young LLP as the Company's independent auditors to audit the financial
statements of the Company for the year ended December 31, 2002.

During 2001, fees paid to Ernst & Young LLP by the Company totaled $901,729.
Fees paid to Ernst & Young LLP included: (i) audit fees, including tax services
required in connection with the audit and to render an opinion, totaled
$294,297; (ii) audit-related fees aggregated to $347,108; (iii) fees related to
internal audit services totaled $33,739; (iv) fees associated with tax services
totaled $109,301; and (v) other advisory service fees aggregated to $117,285.
The audit committee considered and concluded that the provision of services,
other than audit related in nature, by Ernst & Young LLP was compatible with
and did not prejudice the maintenance of the principal auditors' independence.

The responsibilities of the Audit Committee are more specifically contained
in the attached Charter and Powers of the Audit Committee of the Board of
Directors of BRE Properties, Inc., which was originally approved by the full
Board of Directors on October 25, 1999 and which was approved as amended March
2, 2001.

The members of the Audit Committee give the foregoing report, namely:

Arthur G. von Thaden, Chairman
L. Michael Foley
Roger P. Kuppinger

SHAREHOLDER PROPOSALS

Any shareholder who wishes to submit a proposal for presentation at the next
Annual Meeting of Shareholders must submit the proposal to BRE Properties,
Inc., 44 Montgomery Street, 36th Floor, San Francisco, CA 94104-4809,
Attention: Secretary. Such proposal must be received not later than November
25, 2002 for inclusion in the Company's proxy statement and form of proxy
relating to next year's Annual Meeting and provided that the proposals are in
compliance with applicable laws and regulations.

Shareholder proposals to be presented at the 2002 Annual Meeting outside the
process of Rule 14a-8 of the Securities and Exchange Commission's Proxy Rules
must be received by the Company on or before February 10, 2003 or such notice
will be considered untimely under Rule 14a-4(c)(1) of the Commission's Proxy
Rules.

A description of the business experience of the other executive officers of
the Company is contained in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001, filed with the Securities and Exchange Commission.

OTHER MATTERS

It is not expected that any matters other than those described in this Proxy
Statement will be brought before the Annual Meeting.

By Order of the Board of Directors

March 23, 2002

UPON WRITTEN REQUEST OF ANY SHAREHOLDER ENTITLED TO RECEIVE THIS PROXY
STATEMENT, THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITS ANNUAL
REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. ANY
SUCH REQUEST SHOULD BE ADDRESSED TO THE COMPANY AT 44 MONTGOMERY STREET, 36th
FLOOR, SAN FRANCISCO, CA 94104-4809, ATTENTION: INVESTOR RELATIONS DEPARTMENT.
THIS REQUEST MUST INCLUDE A REPRESENTATION BY THE SHAREHOLDER THAT AS OF MARCH
15, 2002, THE SHAREHOLDER WAS ENTITLED TO VOTE AT THE ANNUAL MEETING.

[LOGO] BRE PROPERTIES, INC.

[LOGO] Recycle

PROXY CARD

BRE PROPERTIES, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Frank C. McDowell, John McMahan and Edward
F. Lange, Jr., or any of them, as proxies, with full power of substitution, to
vote as directed all shares of common stock of BRE Properties, Inc., that the
undersigned is entitled to vote at the Annual Meeting of Shareholders of BRE
Properties, Inc. The Annual Meeting will be held in the Union Square Room of the
Omni San Francisco Hotel, 500 California Street, San Francisco, California at
10:00 a.m., PDT, on May 21, 2002, and at any adjournment thereof. By signing
this Proxy, the undersigned also authorizes each designated proxy to vote at his
discretion on any other matter that may properly come before the Annual Meeting
or any adjournment thereof. If this card contains no specific voting
instructions, my (our) shares will be voted FOR election of all nominees for
Director.

(Continued, and to be marked, signed and dated on the reverse side).

FOLD AND DETACH HERE

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ITEM LISTED BELOW. Please mark
your vote as [x]
indicated in
this example

1. ELECTION OF DIRECTORS WILL
ATTEND

FOR all WITHHOLD AUTHORITY *EXCEPTIONS If you plan to attend the Annual Meeting, [_]
nominees listed to vote for all nominees please mark the WILL ATTEND box.
below listed below
[_] [_] [_]

Nominees: 01 John McMahan; 02 L. Michael Foley; and 03 Gregory M. Simon Please sign exactly as name
appears on this proxy. When
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark signing as attorney, executor,
the "Exceptions" box and write that nominee's name in the space provided below.) administrator, trustee, custodian,
guardian or corporate officer, give
full title. If more than one
*Exceptions ________________________________________________________________ trustee, all should sign.

Dated: ______________________, 2002

__________________________________
Signature of Shareholder

___________________________________
Votes MUST be indicated in Black
or Blue Ink.

Sign, Date and Return this Proxy
Card Promptly Using the Enclosed
Envelope.

--------------------------------------------------------------------------------
FOLD AND DETACH HERE

Vote by Telephone or Mail

24 Hours a Day, 7 Days a Week

Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.

Telephone Mail
1-800-435-6710
Mark, sign and date
Use any touch-tone telephone to your proxy card
vote your proxy. Have your proxy and
card in hand when you call. You OR return it in the
will be prompted to enter your enclosed postage-paid
control number, located in the envelope.
box below, and then follow the
directions given.

If you vote your proxy by telephone,
you do NOT need to mail back your proxy card.

You can view the Annual Report and Proxy Statement
on the web in the Shareholder/Investor Relations
Section of : www.breproperties.com