NEWS RELEASE  FOR IMMEDIATE RELEASE Investor Contact: Lauren L. Barr BRE Properties, Inc. 415.445.6523

Media Contact: Thomas E. Mierzwinski BRE Properties, Inc. 415.445.6525

BRE Properties, Inc. 44 Montgomery Street, 36th Floor San Francisco, CA 94104 Telephone 415.445.6530 Fax: 415.445.6505

FOR IMMEDIATE RELEASE

BRE PROPERTIES REPORTS FIRST QUARTER 2000 RESULTS;

PER SHARE FUNDS FROM OPERATIONS INCREASE 12.7%

Company’s Business Plan to Build Valuable, Innovative Residential Lifestyle Solutions^TM

Yields Strong Results

SAN FRANCISCO (April 11, 2000) – Western U.S.-focused apartment operator BRE Properties, Inc., (NYSE:BRE) today reported funds from operations (FFO) of $29.5 million, or $0.62 per share, for the quarter ended March 31, 2000, a per share increase of 12.7% over FFO of $26.0 million, or $.55 per share, for comparable operations in the same quarter a year ago. Per share numbers are based on the weighted average number of common shares and equivalents outstanding, and include the impact of any potentially dilutive securities.

The company’s total revenues increased by $6.2 million, to $61.6 million, in the first quarter of 2000, an increase of 11.2% from the first quarter of 1999. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by $6.8 million, or 19.1%, to $42.3 million in the same time period.

"With our first quarter results, BRE begins a fifth consecutive year of double-digit FFO growth," said Frank McDowell, BRE’s president and CEO. "During the quarter, we produced significant operating gains that position the company well for continued growth and profitability. We also announced development plans and technology initiatives in keeping with our Customer-focused mission: to build valuable, innovative residential Lifestyle Solutions.

We believe BRE can deliver the highest long-term value to Shareholders by continuously focusing on simplifying and enhancing the residential experience of current and future Customers. Our first quarter 2000 financial results reflect the initial benefit of this focus."

In the first quarter, BRE:

· Generated the majority of its growth internally, producing approximately 75% of the per-share FFO increase from same-store properties;

· Produced same-store growth in net operating income (NOI) of 7%;

· Maintained portfolio occupancy of 96%;

· Achieved operating margins of 71% on the multifamily portfolio, as a whole;

· Achieved an annualized turnover rate of 59%—the lowest level in the portfolio’s history;

· Completed its first joint-venture construction project—a 260-unit Sacramento-area apartment community;

· Increased the size of its direct investment development pipeline by beginning construction of 253 apartment homes in Orange County and acquiring land for a 180-unit community in the Seattle area;

· Increased the quarterly dividend on the common stock by 9%; and,

· Announced plans to spin off VelocityHSI^™—resulting in a new, separately traded entity, independent of BRE.

Portfolio Performance and Same-Store Results

"The first objective of our business plan is to accelerate growth from existing assets," said McDowell. "Approximately 75% of the per-share FFO increase in the first quarter was generated from same-store properties. This reflects the strength of our core property markets, continued demand for our Pinnacle-brand apartment homes and locations, and the Customer service provided by our highly trained and motivated Associates.

"Apartment performance in our core markets is benefiting from continued strength in employment growth, constraints to new apartment supply, declines in housing affordability and the growing number of renters by choice—those who can afford to own a home but choose the convenience of the rental lifestyle," McDowell said. "BRE’s portfolio specifically benefits from an investment focus on building, acquiring and managing apartment communities in locations near essential employment, transportation, education and recreation centers. These demand factors, combined with our Associates’ ability to renew leases of existing Residents and drive higher levels of productivity, resulted in two firsts for the company: a portfolio average turnover rate below 60% and operating margins above 70%." In the first quarter of 2000, the annualized turnover rate for the portfolio was 59%, compared to 61% in first quarter 1999. Operating margins on the multifamily portfolio averaged 70.9% versus 69.2% in the year ago quarter.

"The result of external supply and demand factors, combined with internal management efforts, can be summarized in one performance metric: same-store NOI growth," said John Nunn, BRE’s executive vice president, asset management. "In first quarter 2000, same-store communities posted NOI gains of 7%. Components of this growth included year-over-year gross potential rent growth of 3% and stable occupancy of 96% in the comparable quarters. A general reduction in rental concessions and other income gains drove revenues 5% higher year-over-year. Operating expenses were essentially flat on a year-over-year basis, rising less than 0.4%, as ongoing utility reimbursements, property tax management and bulk purchasing programs continue to improve portfolio performance."

"Our California markets—which total 55% of the portfolio’s NOI—continue to demonstrate same-store leadership with NOI growth rates ranging from 7%-12%. But investors will find much to like outside these markets, as well," said Nunn. "In the Pacific Northwest, Seattle is demonstrating a stable rental environment, strong occupancies and minimal use of concessions. BRE’s Seattle communities posted a 7% NOI gain in the first quarter, up from a 3% NOI growth rate in the trailing quarter. Portland, which comprises 2% of the portfolio’s NOI, produced a very strong turnaround. Our new Portland management team delivered same-store NOI growth of 20%, driving occupancy to 96% in the first quarter of 2000 from 91% a year ago, stabilizing asking rents and reducing concessions.

 

"Our confidence in Denver as a target for future growth appears justified, as this portfolio delivered 8% same-store NOI growth in the first quarter. Other strong performers included: Las Vegas, with NOI growth of 7%; and Tucson and Albuquerque, both with a comparable 5% NOI growth rate. Phoenix was a market performer with 3% growth in revenues," Nunn said. "Property tax reassessment of some Phoenix assets increased operating expenses by 5%, holding NOI growth to just 2%. Only one market’s same-store NOI underperformed in the quarter: Salt Lake City, which comprises 5% of the portfolio’s NOI, declined 8% on weaker rents (-2%), flat occupancy (93%) and timing of tax refunds, which caused a comparable expense fluctuation of 18%. While we have extra work to do in this market, we’re seeing attractive results in 95% of the portfolio."

BRE defines same-store properties as stabilized apartment communities owned by the company for at least five full quarters. In the first quarter of 2000, same-store units totaled 20,255 of the 22,690 directly owned by BRE.

Development and Lease-up Activity

"The second objective of our business plan is to deploy new capital to supply-constrained markets of the West through highly selective development and acquisition activity," said Bruce Ward, BRE’s executive vice president, development and acquisitions. "Our first quarter operating results create a strong climate for our current construction deliveries and newly acquired development sites.

"In the first quarter, we completed construction of a 260-unit joint-venture development, named Pinnacle Blue Ravine, in the Sacramento-area city of Folsom. Our target is to deliver new development communities from the construction phase to the lease-up phase at 50% to 60% occupancy and, from that point, lease approximately 30 units per month. We hit the 60% occupancy target at completion and leased 41 apartments in March. BRE will have an approximate investment of $8.9 million, at an estimated stabilized yield in excess of 9.5%. BRE receives additional construction, development and management fees as part of its joint venture transactions.

"During the quarter, we received permits for and began construction on Pinnacle at MacArthur. Located in the Orange County business and retail district known as South Coast metro," said Ward, "this 253-unit community contains four-story garden apartments over street-level retail, just two miles from the John Wayne/Orange County Airport. BRE estimates a total cost of approximately $49.1 million, a first year stabilized yield of 9.2% and completion of construction in the third quarter of 2001.

"We continue to be enthusiastic about selective, infill locations in the Seattle metropolitan area, as well," said Ward. "Our new Pinnacle at the Bluffs site is conveniently located, with easy access to I-405 and major employers, restaurants, entertainment and shopping. More than two-thirds of the apartment homes will have unobstructed views of Lake Washington. As we near completion of our development plan, we’re targeting a second quarter 2001 completion date and a first year stabilized yield in excess of 9.5%."

At March 31, 2000, BRE had 2,307 apartment units under development in both direct investment and joint-venture structures, with approximately 53% of the units slated for delivery in calendar year 2000. The company’s acquisition and development yield estimates include expenses for a full market-rate property management fee and annual replacement reserves.

Technology Initiatives

"Another critical success factor for our business plan is to use technology in innovative ways—internally and externally—to unlock productivity, service and Shareholder value," said Lee Carlson, BRE’s chief financial officer and the architect of the company’s recently announced technology initiative, VelocityHSI. "During first quarter 2000, BRE hosted MultiTech 2000, demonstrating VelocityHSI’s suite of Internet-based applications, products and services that are designed to provide Lifestyle Solutions for the apartment industry," said Carlson. "VelocityHSI will include a broadband Internet infrastructure, a portable ISP service and an Internet portal site, customized to provide localized communication and commerce content for both the business-to-business and business-to-consumer apartment marketplace."

During the quarter, BRE announced its intention to spin off a majority interest in VelocityHSI to BRE Shareholders, resulting in a separate publicly traded company. VelocityHSI’s

management team and funding sources will be independent of BRE. BRE has appointed Steve Carlson, the former executive director of the California Housing Council, as CEO of VelocityHSI. BRE expects to file an information statement with the SEC within the next few weeks outlining specific assets, activities and certain financial information for the new company. The document will be distributed to BRE Shareholders prior to the spin-off, which the company anticipates will occur midyear.

Balance Sheet Strength and Flexibilty

"Other announcements during the first quarter included a 9% increase in BRE’s quarterly dividend on common shares," said Lee Carlson. "Our current and anticipated growth supports this level of dividend increase, yet allows the company to retain significant amounts of internally generated capital to fund financial commitments and opportunistic growth." BRE has paid uninterrupted quarterly dividends to Shareholders since the company’s founding in 1970. BRE’s dividends per common share have risen 42% over the last five years.

At March 31, 2000, BRE’s use of debt and equity resulted in a total market capitalization of approximately $2.0 billion, with a debt-to-total-market capitalization ratio of 38%. BRE’s outstanding debt of $789.1 million carries a weighted average interest rate of 7.06%. BRE’s coverage ratio of EBITDA to interest expense is 3.6:1. The weighted average maturity for the company’s debt is nine years, excluding amounts drawn on the company’s line of credit, and six years when amounts currently drawn are included. BRE’s $400 million line of credit was drawn $340.5 million at March 31, 2000, at a variable interest rate for the quarter of 6.67%.

Conference Call Information and Resources

BRE will host a conference call on Wednesday, April 12, 2000 at 11:30 a.m., Eastern time (EDT), to review these results and answer questions. Listeners may participate live by phone

at 877.273.7348 or by webcast at www.vcall.com. A playback will be available through April 19, 2000 at 800.642.1687. The access code for the playback is 139113. Current and historical supplemental financial data packages are available on the company’s website at http://www.breproperties.com/analysts.

The company welcomes comments on how its communications can better assist analysts and -+Shareholders in evaluating the company’s performance and prospects. Please use our online Investor Relations comment card located at http://www.breproperties.com/analysts/.

Shareholders and members of the financial community are welcome to attend the company’s 30^th Annual Meeting of Shareholders, at 10:00 a.m., on Tuesday, May 16, 2000, in San Francisco at Sony Metreon. In addition to official Shareholder business outlined in the recently mailed proxy statement, members of management will review the company’s results and outlook, and company Associates will give hands-on demonstrations of VelocityHSI’s product offerings and BRE’s internal productivity and research tools. Please call BRE’s Investor Relations department at 415.445.6550 for additional information.

BRE Properties, Inc., directly owns and operates 85 apartment communities totaling 22,690 units in California, Arizona, Washington, Oregon, Nevada, New Mexico, Utah and Colorado. The company currently has nine other apartment communities in various stages of development and construction totaling 2,307 units in both direct investment and joint venture structures. In 1999, BRE received the Best Use of Technology award from Multifamily Executive magazine for its use of technology "to help improve communications and cut costs, as well as provide technological opportunities to the tenant." Additional information about BRE can be found on the company’s web site¾ www.breproperties.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Except for the historical information contained herein, this news release contains forward-looking statements regarding Company and property performance, and is based on the Company’s current expectations and judgment. Actual results could vary materially depending on risks and uncertainties inherent to general and local real estate conditions, competitive factors specific to markets in which BRE operates, legislative or other regulatory decisions, future interest rate levels or capital markets conditions. The Company assumes no liability to update this information. For more details, please refer to the Company’s SEC filings, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q.

 

(1) Calculated using the FFO definition form NAREIT’s October 1999 White Paper. Previously, the restructuring charge was excluded from FFO for the quarter ended March 31, 1999.