8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 22, 2006

NNN Apartment REIT, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Maryland	333-130945	20-3975609
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
1551 N. Tustin Avenue, Suite 200, Santa Ana, California		92705
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 714-667-8252

Not Applicable
______________________________________________
Former name or former address, if changed since last report

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

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

Item 1.01 Entry into a Material Definitive Agreement.

On November 22, 2006, Wachovia Bank, National Association, or Wachovia Bank, assigned 50% of its interest, rights and obligations under our credit agreement with Wachovia Bank dated October 31, 2006, or the Credit Agreement, to LaSalle Bank National Association, or LaSalle Bank, pursuant to an Assignment and Acceptance Agreement dated November 22, 2006 between Wachovia Bank, as assignor and agent, and LaSalle Bank, as assignee, or the Assignment and Acceptance Agreement. Under the Assignment and Acceptance Agreement, Wachovia Bank assigned $37,500,000 of the total $75,000,000 commitment for our secured revolving line of credit under the Credit Agreement to LaSalle Bank and its proportionate rights and obligations under the Credit Agreement. Wachovia Bank retained $37,500,000 of the total $75,000,000 commitment under the Credit Agreement.

In connection with this assignment to LaSalle Bank, we entered into a first amendment to the Credit Agreement dated November 22, 2006, by and among Wachovia Bank, as agent and lender, LaSalle Bank, as lender, NNN Apartment REIT Holdings, L.P., as borrower, and NNN Apartment REIT, Inc, Apartment REIT Walker Ranch, LP and Apartment REIT Walker Ranch GP, LLC, as guarantors, or the First Amendment. The First Amendment acknowledges Wachovia Bank’s assignment of the portion of the commitment to LaSalle Bank and further provides that, if Wachovia Bank assigns a portion of its commitment under the Credit Agreement pursuant to which Wachovia Bank’s commitment is less than $15,000,000 and LaSalle Bank’s commitment is at least $15,000,000, then the lenders under the Credit Agreement (excluding Wachovia Bank) may elect to remove Wachovia Bank as Agent, which resignation or removal would also constitute Wachovia Bank’s resignation as a Swingline Lender, as defined in the Credit Agreement, and, at Wachovia Bank’s option, may also constitute Wachovia Bank’s resignation as Issuing Lender, as defined in the Credit Agreement.

In conne ction with the Assignment and Acceptance Agreement, we executed a revolving note dated November 22, 2006 in the amount of $162,500,000 with Wachovia Bank as lender, or the Wachovia Bank Revolving Note, and a revolving note dated November 22, 2006 in the amount of $37,500,000 with LaSalle Bank as lender, or the LaSalle Bank Revolving Note. These notes are in replacement of the existing revolving note in the amount of $75,000,000 with Wachovia Bank as lender, which was executed by us in connection with the Credit Agreement. The combined amount of the Wachovia Bank Revolving Note and the LaSalle Bank Revolving Note allows for our option to expand our secured revolving line of credit to $200,000,000 if and when exercised by us, as provided in the Credit Agreement.

The Assignment and Acceptance Agreement, the First Amendment, the Wachovia Bank Revolving Note and the LaSalle Bank Revolving Note have been filed as Exhibits 10.1 through 10.4 to this Current Report on Form 8-K and are incorporated into thi s Item 1.01 by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1 Assignment and Acceptance Agreement dated November 22, 2006 by and among Wachovia Bank, National Association, LaSalle Bank National Association and Wachovia Bank, National Association

10.2 First Amendment to Credit Agreement dated November 22, 2006 among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc., Apartment REIT Walker Ranch, LP and Apartment REIT Walker Ranch GP, LLC, Wachovia Bank, National Association and the Lenders.

10.3 Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association

10.4 Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and LaSalle Bank National Association

SIGNATURES

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

	NNN Apartment REIT, Inc.
November 28, 2006	By:	/s/ Stanley J. Olander, Jr.
		Name: Stanley J. Olander, Jr.
		Title: Chief Executive Officer

Exhibit Index

Exhibit No.	Description
10.1	Assignment and Acceptance Agreement dated November 22, 2006 by and among Wachovia Bank, National Association, LaSalle Bank National Association and Wachovia Bank, National Association
10.2	First Amendment to Credit Agreement dated Novmeber 22, 2006 among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc., Apartment REIT Walker Ranch, LP and Apartment REIT Walker Ranch GP, LLC, Wachovia Bank, National Association and the Lenders
10.3	Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association
10.4	Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and LaSalle Bank National Association

EX-10.1

ASSIGNMENT AND ACCEPTANCE AGREEMENT

THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT dated as of November 22, 2006 (the “Agreement”) by and among WACHOVIA BANK, NATIONAL ASSOCIATION (the “Assignor”), LASALLE BANK NATIONAL ASSOCIATION (the “Assignee”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent (the “Agent”).

WHEREAS, the Assignor is a Lender under that certain Credit Agreement dated as of October 31, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among NNN Apartment REIT Holdings, L.P., a Virginia limited partnership (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5 thereof (the “Lenders”), the Agent, and the other parties thereto;

WHEREAS, the Assignor desires to assign to the Assignee, among other things, all or a portion of the Assignor’s Commitment under the Credit Agreement, all on the terms and conditions set forth herein; and

WHEREAS, the Agent and, if required by the Credit Agreement, the Borrower consents to such assignment on the terms and conditions set forth herein;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged by the parties hereto, the parties hereto hereby agree as follows:

Section 1. Assignment.

(a) Subject to the terms and conditions of this Agreement and in consideration of the payment to be made by the Assignee to the Assignor pursuant to Section 2 of this Agreement, effective as of November 22, 2006 (the “Assignment Date”), the Assignor hereby irrevocably sells, transfers and assigns to the Assignee, without recourse, the following (such interest being assigned, the “Assigned Commitment”):

					Commitment
					Percentage of
Assigned Facility	Amount Assigned		Amount Retained		Interest Assigned
Revolving Loan	$	37,500,000.00	$	37,500,000.00		50	%

and all voting rights of the Assignor associated with the Assigned Commitment, all rights to receive interest on such amount of such Loans and all commitment and other Fees with respect to the Assigned Commitment and other rights of the Assignor under the Credit Agreement and the other Loan Documents with respect to the Assigned Commitment, all as if the Assignee were an original Lender under and signatory to the Credit Agreement having a Commitment as set forth above equal to the amount of the Assigned Commitment. The Assignee, subject to the terms and conditions hereof, hereby assumes all obligations of the Assignor with respect to the Assigned Commitment as if the Assignee were an original Lender under and signatory to the Credit Agreement having a Commitment as set forth above equal to the Assigned Commitment, which obligations shall include, but shall not be limited to, the obligation of the Assignor to make Revolving Loans to the Borrower with respect to the Assigned Commitment, the obligation to pay amounts due in respect of Swing Loans as required under Section  2.2 of the Credit Agreement, the obligation to pay amounts due in respect of draws under Letters of Credit as required under Section 2.3 of the Credit Agreement, and in any case the obligation to indemnify the Agent as provided therein (the foregoing enumerated obligations, together with all other similar obligations more particularly set forth in the Credit Agreement and the other Loan Documents, shall be referred to hereinafter, collectively, as the “Assigned Obligations”). The Assignor shall have no further duties or obligations with respect to, and shall have no further interest in, the Assigned Obligations or the Assigned Commitment from and after the Assignment Date.

(b) The assignment by the Assignor to the Assignee hereunder is without recourse to the Assignor. The Assignee makes and confirms to the Agent, the Assignor, and the other Lenders all of the representations, warranties and covenants of a Lender under Article XI of the Credit Agreement. Not in limitation of the foregoing, the Assignee acknowledges and agrees that, except as set forth in Section 4 below, the Assignor is making no representations or warranties with respect to, and the Assignee hereby releases and discharges the Assignor for any responsibility or liability for: (i) the present or future solvency or financial condition of the Borrower, any other Obligor or any of their respective Subsidiaries or the Collateral, (ii) any representations, warranties, statements or information made or furnished by the Borrower, any other Obligor or any of their respective Subsidiaries in connection with the Credit Agreement or otherwise, (iii) the validity, efficacy, sufficiency, or enforceability of the Credit Agreement, any other Loan Document or any other document or instrument executed in connection therewith, or the collectability of the Assigned Obligations, (iv) the perfection, priority or validity of any Lien with respect to any collateral at any time securing the Obligations or the Assigned Obligations under the Notes or the Credit Agreement and (v) the performance or failure to perform by the Borrower or any other Obligor of any obligation under the Credit Agreement or any other Loan Document to which it is a party. Further, the Assignee acknowledges that it has, independently and without reliance upon the Agent, or on any affiliate or subsidiary thereof, the Assignor or any other Lender and based on the financial statements supplied by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to become a Lender under the Credit Agreement. The Assignee also acknowledges that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other Loan Documents or pursuant to any other obligation. Except as expressly provided in the Credit Agreement, the Agent shall have no duty or responsibility whatsoever, either initially or on a continuing basis, to provide the Assignee with any credit or other information with respect to the Borrower or any other Obligor or to notify the Assignee of any Default or Event of Default. The Assignee has not relied on the Agent as to any legal or factual matter in connection therewith or in connection with the transactions contemplated thereunder.

Section 2. Payment by Assignee. In consideration of the assignment made pursuant to Section 1 of this Agreement, the Assignee agrees to pay to the Assignor on the Assignment Date, an amount equal to $11,060,000.00 representing (i) the aggregate principal amount outstanding of the Loans owing to the Assignor under the Credit Agreement and the other Loan Documents being assigned hereby plus (ii) if applicable, the aggregate amount of payments previously made by Assignor to fund participations in Swing Loans and Letters of Credit under Sections 2.2 and 2.3 of the Credit Agreement which have not been repaid and which are being assigned hereby.

Section 3. Payments by Assignor. The Assignor agrees to pay to the Agent on the Assignment Date the administration fee, if any, payable under the applicable provisions of the Credit Agreement.

Section 4. Representations and Warranties of Assignor. The Assignor hereby represents and warrants to the Assignee that (a) as of the Assignment Date (i) the Assignor is a Lender under the Credit Agreement having a Commitment under the Credit Agreement (without reduction by any assignments thereof which have not yet become effective), equal to $75,000,000.00 and that the Assignor is not in default of its obligations under the Credit Agreement; and (ii) the outstanding balance of Revolving Loans owing to the Assignor (without reduction by any assignments thereof which have not yet become effective) is $22,120,000.00; and (b) it is the legal and beneficial owner of the Assigned Commitment which is free and clear of any adverse claim created by the Assignor.

Section 5. Representations, Warranties and Agreements of Assignee. The Assignee (a) represents and warrants that it is (i) legally authorized to enter into this Agreement, (ii) an “accredited investor” (as such term is used in Regulation D of the Securities Act) and (iii) an Eligible Assignee; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant thereto and such other documents and information (including without limitation the Loan Documents) as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (c) appoints and authorizes the Agent to take such action as contractual representative on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof together with such powers as are reasonably incidental thereto; and (d) agrees that it will become a party to and shall be bound by the Credit Agreement and the other Loan Documents to which the other Lenders are a party on the Assignment Date and will perform in accordance therewith all of the obligations which are required to be performed by it as a Lender.

Section 6. Recording and Acknowledgment by the Agent. Following the execution of this Agreement, the Assignor will deliver to the Agent (a) a duly executed copy of this Agreement for acknowledgment and recording by the Agent and (b) the Assignor’s Revolving Note. Upon such acknowledgment and recording, from and after the Assignment Date, the Agent shall make all payments in respect of the interest assigned hereby (including payments of principal, interest, Fees and other amounts) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Assignment Date directly between themselves.

Section 7. Addresses. The Assignee specifies as its address for notices and its Lending Office for all Loans, the offices set forth below:

Notice Address:
Lending Office: On File with Agent
On File with Agent

Section 8. Payment Instructions. All payments to be made to the Assignee under this Agreement by the Assignor, and all payments to be made to the Assignee under the Credit Agreement, shall be made as provided in the Credit Agreement in accordance with the following instructions:

Section 9. Effectiveness of Assignment. This Agreement, and the assignment and assumption contemplated herein, shall not be effective until (a) this Agreement is executed and delivered by each of the Assignor, the Assignee, the Agent, and if required under Section 12.5(d) of the Credit Agreement, the Borrower, and (b) the payment to the Assignor of the amounts, if any, owing by the Assignee pursuant to Section 2 hereof and (c) the payment to the Agent of the amounts, if any, owing by the Assignor pursuant to Section 3 hereof. Upon recording and acknowledgment of this Agreement by the Agent, from and after the Assignment Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Agreement, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Agreement, relinquish its rights (except as otherwise provided in Section 12.10 of the Credit Agreement) and be released from its obligations under the Credit Agreement; provided, however, that if the Assignor does not assign its entire interest under the Loan Documents, it shall remain a Lender entitled to all of the benefits and subject to all of the obligations thereunder with respect to its retained Commitment.

Section 10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

Section 11. Counterparts. This Agreement may be executed in any number of counterparts each of which, when taken together, shall constitute one and the same agreement.

Section 12. Headings. Section headings have been inserted herein for convenience only and shall not be construed to be a part hereof.

Section 13. Amendments; Waivers. This Agreement may not be amended, changed, waived or modified except by a writing executed by the Assignee and the Assignor and, to the extent Borrower’s approval is required under Section 12.5(d) of the Credit Agreement, the identity of the Assignee may not be changed without the approval of Borrower; provided, however, any amendment, waiver or consent which shall affect the rights or duties of the Agent under this Agreement shall not be effective unless signed by the Agent.

Section 14. Entire Agreement. This Agreement embodies the entire agreement between the Assignor and the Assignee with respect to the subject matter hereof and supersedes all other prior arrangements and understandings relating to the subject matter hereof.

Section 15. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

Section 16. Definitions. Terms not otherwise defined herein are used herein with the respective meanings given them in the Credit Agreement.

Section 17. Agreements of the Borrower. Borrower hereby agrees that the Assignee shall be a Lender under the Credit Agreement having a Commitment equal to the Assigned Commitment. Borrower agrees that the Assignee shall have all of the rights and remedies of a Lender under the Credit Agreement and the other Loan Documents as if the Assignee were an original Lender under and signatory to the Credit Agreement, including, but not limited to, the right of a Lender to receive payments of principal and interest with respect to the Assigned Obligations, and to the Revolving Loans made after the date hereof and to receive the commitment and other Fees payable to the Revolving Lenders as provided in the Credit Agreement. Further, the Assignee shall be entitled to the indemnification provisions from the Borrower in favor of the Lenders as provided in the Credit Agreement and the other Loan Documents. Borrower further agrees, upon the execution and delivery of this Agreement, to execute in favor of the Assignee a Revolving Note as required by Section 12.5(d) of the Credit Agreement. Upon receipt by the Assignor of the amounts due the Assignor under Section 2, the Assignor agrees to surrender to the Borrower such Assignor’s Revolving Note as required by the Credit Agreement (subject to the Borrower’s obligations to deliver replacement Notes to the extent that Assignor is retaining a Commitment).

[Signatures on Following Pages]

IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment and Acceptance Agreement as of the date and year first written above.

ASSIGNOR:

WACHOVIA BANK, NATIONAL ASSOCIATION

By: /s/Cathy A. Casey
Name: Cathy A. Casey
Title: Managing Director

ASSIGNEE:

LASALLE BANK NATIONAL ASSOCIATION

By: /s/ A. Brad Feine
Name: A. Brad Feine
Title: AVP

Agreed and consented to as of the

date first written above.

BORROWER:

NNN APARTMENT REIT HOLDINGS, L.P., a Virginia

limited partnership

By:	NNN Apartment REIT, Inc., its sole General Partner By: /s/ Louis J. Rogers
	Name: Louis J. Rogers
	Title: President

[Signatures Continued on Following Page]

Accepted as of the date first written above.

AGENT:

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent

By: /s/Cathy A. Casey
Name: Cathy A. Casey
Title: Managing Director

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”) is dated as of the 22nd day of November, 2006, among NNN APARTMENT REIT HOLDINGS, L.P. (“Borrower”), NNN APARTMENT REIT, INC., APARTMENT REIT WALKER RANCH, LP and APARTMENT REIT WALKER RANCH GP, LLC (collectively, the “Guarantors”), WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent (the “Agent”), and the lenders a party hereto (collectively, the “Lenders”).

W I T N E S S E T H:

WHEREAS, the Borrower, the Agent and the Lenders are party to that certain Credit Agreement, dated as of October 31, 2006 (the “Credit Agreement”);

WHEREAS, the Borrower has requested, and the Agent and the Lenders have agreed to, certain amendments to the Credit Agreement, subject to the terms and conditions hereof;

NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by the parties hereto, the Borrower, the Guarantors, the Agent and the Lenders hereby covenant and agree as follows:

1. Definitions. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Credit Agreement shall from and after the date hereof refer to the Credit Agreement as amended hereby.

2. Modification of the Credit Agreement. The Borrower, the Agent and the Lenders do hereby modify and amend the Credit Agreement as follows:

(a) By deleting the definition of “Interest Period” in Section 1.1 of the Credit Agreement in its entirety, and inserting in lieu thereof the following language:

““Interest Period” means with respect to any LIBOR Loan, each period commencing on the date such LIBOR Loan is made or the last day of the next preceding Interest Period for such Loan and ending one, two, three or six months (or, with the approval of all Lenders, less than thirty (30) days) thereafter, as the Borrower may select in a Notice of Borrowing, Notice of Continuation or Notice of Conversion, as the case may be, except that each Interest Period of one, two, three or six months that commences on the last Business Day of a calendar month shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (i) no Interest Period for a Revolving Loan shall end after the Revolving Loan Termination Date; and (ii) each Interest Period that would otherwise end on a day which is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day).”

(b) By deleting the language appearing in Section 11.8 of the Credit Agreement in its entirety, and inserting in lieu thereof the following language:

“The Agent may resign at any time as Agent under the Loan Documents by giving written notice thereof to the Lenders and the Borrower. In the event that Wachovia Bank shall assign all or any portion of its Commitment and (a) as a result thereof, its Commitment is less than $15,000,000.00 and (b) immediately after giving effect to such assignment LaSalle Bank National Association has a Commitment of $15,000,000.00 or greater, then Wachovia Bank shall promptly provide written notice to the Lenders and the Requisite Lenders (excluding Wachovia Bank) shall have the right (so long as LaSalle Bank National Association has a Commitment of $15,000,000.00 or greater), to be exercised within fifteen (15) days of delivery of such notice by Wachovia Bank, to elect to remove Wachovia Bank as Agent and replace Wachovia Bank as Agent, subject to the terms of this Section 11.8. Any such resignation or removal shall also constitute Agent’s resignation as Swingline Lender and may, at such Agent’s option, also constitute its resignation as Issuing Lender. Upon any such resignation or removal, the Requisite Lenders shall have the right to appoint a successor Agent, Swingline Lender and Issuing Lender, as applicable, which shall be a Lender, if any Lender shall be willing to serve, and otherwise shall be a commercial bank having total combined assets of at least $5,000,000,000.00, which appointment shall, provided no Default or Event of Default shall have occurred and be continuing, be subject to the Borrower’s approval, which approval shall not be unreasonably withheld or delayed (except that the Borrower shall, in all events, be deemed to have approved each Lender and its affiliates as a successor Agent, Swingline Lender and Issuing Lender). If no successor Agent shall have been so appointed in accordance with the immediately preceding sentence, and shall have accepted such appointment, within thirty (30) days after the resigning Agent’s giving of notice of resignation, then the resigning Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a Lender, if any Lender shall be willing to serve, and otherwise shall be a commercial bank having total combined assets of at least $5,000,000,000.00. Upon the acceptance of any appointment as Agent, Swingline Lender and/or Issuing Lender hereunder by a successor Agent, such Successor Agent, Swingline Lender and Issuing Lender, as applicable, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent, and the retiring or removed Agent shall be discharged from its duties and obligations under the Loan Documents as Agent, Swingline Lender and Issuing Lender, as applicable. After any Agent’s resignation or removal hereunder as Agent, the provisions of this Article XI and all provisions of this Agreement relating to Swingline Loans or Letters of Credit shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent, Swingline Lender or Issuing Lender under the Loan Documents. If the resigning or removed Agent shall also resign as the Issuing Lender, such successor Agent shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or shall make other arrangements satisfactory to the current Issuing Lender, in either case, to assume effectively the obligations of the current Agent with respect to such Letters of Credit. Upon any change in the Agent under this Agreement, the resigning or removed Agent shall execute such assignments of and amendments to the Loan Documents as may be necessary to substitute the successor Agent for the resigning or removed Agent.”

3. Restatement of Representations and Warranties. The Borrower and Guarantors hereby restate and renew each and every representation and warranty heretofore made by them in the Credit Agreement and the other Loan Documents as fully as if made on the date hereof (except to the extent such representations and warranties expressly relate to an earlier date) and with specific reference to this First Amendment and all other loan documents executed and/or delivered in connection herewith.

4. References to Credit Agreement. All references in the Loan Documents to the Credit Agreement shall be deemed a reference to the Credit Agreement, as modified and amended herein.

5. Acknowledgment of the Borrower and Guarantors. The Borrower and Guarantors hereby acknowledge, represent and agree that the Loan Documents, as modified and amended herein, remain in full force and effect and constitute the valid and legally binding obligation of the Borrower and Guarantors enforceable against the Borrower and Guarantors in accordance with their respective terms, and that the execution and delivery of this First Amendment does not constitute, and shall not be deemed to constitute, a release, waiver or satisfaction of the Borrower’s or any Guarantors’ obligations under the Loan Documents.

6. Acknowledgment of Agent, Lenders, Borrower and Guarantors. The Borrower and Guarantors, the Agent, and the Lenders hereby acknowledge, represent and agree that the Commitment of Wachovia Bank, National Association, as of the date of this First Amendment, shall be THIRTY-SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($37,500,000.00), and that the Commitment of LaSalle Bank National Association, as of the date of this First Amendment, shall be THIRTY-SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($37,500,000.00).

7. No Default. By execution hereof, the Borrower and Guarantors certify that each of them is and will be in compliance with all covenants under the Loan Documents after the execution and delivery of this First Amendment, and that no Default or Event of Default has occurred and is continuing.

8. Waiver of Claims. The Borrower and Guarantors acknowledge, represent and agree that none of the Borrower or any Guarantor has any defenses, setoffs, claims, counterclaims or causes of action of any kind or nature whatsoever with respect to the Loan Documents, the administration or funding of the Loan or with respect to any acts or omissions of the Agent or any Lender, or any past or present officers, agents or employees of the Agent or any Lender, and the Borrower and each Guarantor does hereby expressly waive, release and relinquish any and all such defenses, setoffs, claims, counterclaims and causes of action, if any.

9. Ratification. Except as hereinabove set forth, all terms, covenants and provisions of the Credit Agreement remain unaltered and in full force and effect, and the parties hereto do hereby expressly ratify and confirm the Loan Documents and the Credit Agreement as modified and amended herein. Nothing in this First Amendment shall be deemed or construed to constitute, and there has not otherwise occurred, a novation, cancellation, satisfaction, release, extinguishment or substitution of the indebtedness evidenced by the Notes or the other obligations of the Borrower and Guarantors under the Loan Documents.

10. Counterparts. This First Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered (which may be by telecopier pursuant to Section 14 below) shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument.

11. Section References. Section titles and references used in this First Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby.

12. Further Assurances. The Borrower and Guarantors agree to take such further actions as the Agent shall reasonably request in connection herewith to evidence the amendments herein contained.

13. Governing Law. This First Amendment shall be governed by and construed and interpreted in accordance with, the laws of the State of Georgia.

14. Conditions Precedent. This First Amendment shall become effective only upon (i) execution hereof by the Agent, and (ii) execution and return to counsel for the Agent at the telecopier number set forth below of a copy hereof by the Borrower, the Guarantors and the Requisite Lenders. Executed copies hereof shall be sent by facsimile to counsel for the Agent, McKenna Long & Aldridge, LLP, Attention: William F. Timmons, at Telecopier number 404-527-4198, Confirmation number 404-527-8380.

[SIGNATURES COMMENCE ON NEXT PAGE]

IN WITNESS WHEREOF, the Borrower, the Guarantors, the Agent, and the Lenders have caused this First Amendment to be duly executed, under seal, by their duly authorized officers as of the day and year first above written.

BORROWER:

NNN APARTMENT REIT HOLDINGS, L.P., a Virginia limited partnership

By: NNN Apartment REIT, Inc., a Maryland corporation, its sole general partner

By: /s/ Louis J. Rogers
Name: Louis J. Rogers
Title: President

[SEAL]

GUARANTORS:

NNN APARTMENT REIT, INC., a Maryland corporation

By: /s/ Louis J. Rogers
Name: Louis J. Rogers
Title: President

[SEAL]

[Signatures Continued on Next Page]
[Signature Page to First Amendment to Credit Agreement with NNN Apartment REIT
Holdings, L.P.]

NNN APARTMENT REIT WALKER, LP, a Texas limited partnership

By: NNN Apartment REIT Walker Ranch GP, LLC, a Delaware limited liability company, its General Partner

By: NNN Apartment REIT Holdings, L.P., a Virginia limited partnership, its Manager

By: NNN Apartment REIT, Inc., a Maryland corporation, its General Partner

By: /s/ Louis J. Rogers

Name: Louis J.Rogers
Title: President

[SEAL]

[Signatures Continued on Next Page]
[Signature Page to First Amendment to Credit Agreement with NNN Apartment REIT
Holdings, L.P.]

NNN APARTMENT REIT WALKER RANCH GP, LLC, a Delaware limited liability company

By: NNN Apartment REIT Holdings, L.P., a Virginia limited partnership, its Manager

By: NNN Apartment REIT, Inc., a Maryland corporation, its General Partner

By: /s/ Louis J. Rogers
Name: Louis J. Rogers
Title: President

[SEAL]

[Signature Page to First Amendment to Credit Agreement with NNN Apartment REIT
Holdings, L.P.]

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent and as a Lender

By: /s/Cathy A. Casey
Name: Cathy A. Casey
Title: Managing Director

LASALLE BANK NATIONAL ASSOCIATION, as a Lender

By: /s/ A. Brad Feine
Name: A. Brad Feine
Title: AVP

REVOLVING NOTE

$162,500,000.00 November 22, 2006

FOR VALUE RECEIVED, the undersigned, NNN APARTMENT REIT HOLDINGS, L.P., a Virginia limited partnership (the “Borrower”), hereby promises to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION (the “Lender”), in care of Agent to Agent’s address at One Wachovia Center, 301 South College Street, Charlotte, North Carolina 28288, or at such other address as may be specified in writing by the Agent to the Borrower, the principal sum of ONE HUNDRED SIXTY-TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($162,500,000.00) (or such lesser amount as shall equal the aggregate unpaid principal amount of Revolving Loans made by the Lender to the Borrower under the Credit Agreement (as herein defined)), on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount owing hereunder, at the rates and on the dates provided in the Credit Agreement.

The date, amount of each Revolving Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender on the schedule attached hereto or any continuation thereof, provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower to make a payment when due of any amount owing under the Credit Agreement or hereunder in respect of the Revolving Loans made by the Lender.

This Note is one of the Revolving Notes referred to in the Credit Agreement dated as of October 31, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower the financial institutions party thereto and their assignees under Section 12.5 thereof (the “Lenders”), the Agent, and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Loans upon the terms and conditions specified therein.

Except as permitted by Section 12.5(d) of the Credit Agreement, this Note may not be assigned by the Lender to any other Person.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

The Borrower hereby waives presentment for payment, demand, notice of demand, notice of non-payment, protest, notice of protest and all other similar notices.

Time is of the essence for this Note.

This Note, together with that certain other Revolving Note being executed by the undersigned, are being executed pursuant to Section 12.5(d) of the Credit Agreement in replacement of a certain Revolving Note issued pursuant to the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Revolving Note under seal as of the date first written above.

NNN APARTMENT REIT HOLDINGS, L.P., a Virginia limited partnership

By: NNN Apartment REIT, Inc., its sole General Partner

By: /s/ Louis J. Rogers
Name: Louis J. Rogers
Title: President

[SEAL]

REVOLVING NOTE

$37,500,000.00 November 22, 2006

FOR VALUE RECEIVED, the undersigned, NNN APARTMENT REIT HOLDINGS, L.P., a Virginia limited partnership (the “Borrower”), hereby promises to pay to the order of LASALLE BANK NATIONAL ASSOCIATION (the “Lender”), in care of Agent to Agent’s address at One Wachovia Center, 301 South College Street, Charlotte, North Carolina 28288, or at such other address as may be specified in writing by the Agent to the Borrower, the principal sum of THIRTY-SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($37,500,000.00) (or such lesser amount as shall equal the aggregate unpaid principal amount of Revolving Loans made by the Lender to the Borrower under the Credit Agreement (as herein defined)), on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount owing hereunder, at the rates and on the dates provided in the Credit Agreement.

The date, amount of each Revolving Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender on the schedule attached hereto or any continuation thereof, provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower to make a payment when due of any amount owing under the Credit Agreement or hereunder in respect of the Revolving Loans made by the Lender.

This Note is one of the Revolving Notes referred to in the Credit Agreement dated as of October 31, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower the financial institutions party thereto and their assignees under Section 12.5 thereof (the “Lenders”), the Agent, and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Loans upon the terms and conditions specified therein.

Except as permitted by Section 12.5(d) of the Credit Agreement, this Note may not be assigned by the Lender to any other Person.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

The Borrower hereby waives presentment for payment, demand, notice of demand, notice of non-payment, protest, notice of protest and all other similar notices.

Time is of the essence for this Note.

This Note, together with that certain other Revolving Note being executed by the undersigned, are being executed pursuant to Section 12.5(d) of the Credit Agreement in replacement of a certain Revolving Note issued pursuant to the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Revolving Note under seal as of the date first written above.

NNN APARTMENT REIT HOLDINGS, L.P., a Virginia limited partnership

By: NNN Apartment REIT, Inc., its sole General Partner

By: /s/ Louis J. Rogers
Name: Louis J. Rogers
Title: President

[SEAL]