(2)	Significant Transactions During the Third Quarter of 2012 and Subsequent Events

Acquisitions

In August, the Company acquired Riley Square (formerly Waterstone Santa Clara) for $38.3 million. Built in 1972, the property contains 156 units and is located in Santa Clara, California. The community was purchased by the Wesco I, LLC ("Wesco I") joint venture of which the Company has a 50% interest. Wesco I assumed a $17.5 million mortgage loan secured by the property at a fixed rate of 5.2% for a term of 8 years. The interest rate on the loan was unfavorable compared to currently available market rates for mortgage loans, and thus in conjunction with the purchase price allocation, Wesco I recorded a $2.3 million loan premium to reflect the debt at fair value. This results in an effective interest rate for this loan of 3.1%.

In September, the Company acquired Park West, a 126 unit apartment community located in San Francisco, California, for $31.6 million. The property was built in 1958 and contains six different buildings. The Company intends to renovate the exterior of the community for $8 million. Also in September, the Company acquired Domaine, a 92 unit property built in 2009 located in Seattle, Washington. The property was purchased for $34.0 million. In connection with the purchase, the Company assumed a $14.6 million loan at a fixed rate of 5.7% for an 8 year term. The interest rate on the loan was unfavorable compared to currently available market rates for mortgage loans, and thus in conjunction with the purchase price allocation, the Company recorded a $2.4 million loan premium to reflect the debt at fair value. This results in an effective interest rate for this loan of 3.0%.

In October, Ascent, a 90 unit community located in Kirkland, Washington, was acquired by the Company for $15.9 million. Built in 1998, the property is located adjacent to the Montebello community acquired by the Company in July 2012. Also in October, the Company acquired Willow Lake Apartments, a 508 unit property located in San Jose, California. The property was purchased for $148 million. The Company intends to renovate the exterior of the community for $4.5 million.

Common Stock

During the third quarter, the Company sold 633,636 shares of common stock for $97.9 million, net of commissions, at an average per share price of $155.97. Year to date through October, the Company has sold 1,775,748 shares of common stock for $269.0 million, net of commissions, at an average price of $152.97.

Mortgage Notes Payable

During the quarter, the Company repaid $86.9 million in secured debt related to six communities. The Company incurred $1.2 million in losses from early retirement of debt and these communities are now unencumbered assets.

Unsecured Debt

In August, the Company issued $300 million of senior unsecured bonds due August 2022. The bonds bear a fixed interest at rate of 3.625% per annum and are payable on February 15th and August 15th of each year, beginning February 15, 2013.

Unsecured Term Loan

During October, the Company drew an additional $150 million on the Company's $350 unsecured term loan which is now fully drawn at LIBOR + 130 basis points. The proceeds were used to fund fourth quarter acquisitions, development pipeline, and pay down the Company's lines of credit.