BRE Properties Announces Deceleration of Development Program

SAN FRANCISCO, Jan. 12 /PRNewswire-FirstCall/ -- BRE Properties, Inc.
(NYSE: BRE) today announced the deceleration of its development program, a
reduction in workforce and attendant charges associated with both actions.
Management's decision is in response to current and expected economic
conditions, which have fostered uncertainty regarding unemployment levels and
credit availability, and have weakened real estate fundamentals.
Correspondingly, the company will no longer continue predevelopment
activities with respect to three sites under option agreements or letters of
intent. With the fourth quarter 2008 results, the company will record a
nonroutine abandonment charge of approximately $5.1 million, or $0.10 per
share.
Last week, the company notified 33 employees that their positions had been
eliminated. As a result, the company expects to incur cash severance charges
totaling approximately $1.5 million, or $0.03 per share, to be recorded in the
first quarter of 2009. The reduction in force involved management and staff-
level associates primarily in the development area, reducing the overall level
of employees by four percent, and development personnel by 36 percent.
"These decisions are never easy, and we are mindful of the disruption the
reduction in force caused for our associates and their families," said BRE
President and Chief Executive Officer Constance B. Moore. "While development
remains a critical component of our long-term business model, capital
preservation is the leading priority for all businesses. We believe the
tactical changes we have adopted are proportionate with the level of economic
deterioration, and should help us maintain sufficient credit capacity and
liquidity, and ensure our continued success."
The company has five apartment communities under construction, which are
not affected by these actions. Management expects to complete the construction
and lease-up of these communities as planned. The estimated cost to complete
the communities is approximately $100 million. No additional construction
starts are anticipated during 2009.
The company currently has approximately $500 million available under its
unsecured credit facility. Management believes this level of liquidity and
expected retained operating cash flow are sufficient to fund remaining
construction costs and meet scheduled debt maturities for 2009 and 2010. As
previously reported, the company expects the level of property sales in 2009
to range $150 to $175 million. In addition, management anticipates that it
will arrange secured debt financing to meet near-term debt maturities.
Other Nonroutine Items
The company expects to record nonroutine income during fourth quarter
2008, totaling approximately $7.7 million, or $0.15 per share. The nonroutine
income is primarily composed of $4.4 million, or $0.08 per share, from the
settlement of construction defect litigation regarding Pinnacle Galleria, a
236-unit property located in Sacramento, California. The balance reflects
various transactional-related income.
About BRE Properties
BRE Properties -- a real estate investment trust -- develops, acquires and
manages apartment communities convenient to its residents' work, shopping,
entertainment and transit in supply-constrained Western U.S. markets. BRE
directly owns and operates 75 apartment communities totaling 22,126 units in
California, Arizona and Washington. The company currently has seven other
properties in various stages of development and construction, totaling 2,077
units, and joint venture interests in 13 additional apartment communities,
totaling 4,080 units. (Property data as of September 30, 2008) For more
information on BRE Properties, please visit our Web site at
http://www.breproperties.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995
Except for the historical information contained herein, this news release
contains forward-looking statements regarding the company's capital resources,
portfolio performance and results of operations, including statements related
to 2008 and 2009 results of operations, property development, acquisitions and
dispositions and future capital-raising plans, and is based on the company's
current expectations and judgment. You should not rely on these statements as
predictions of future events because there is no assurance that the events or
circumstances reflected in the statements can be achieved or will occur.
Forward-looking statements are identified by words such as "believes,"
"expects," "may," "will," "should," "seeks," "approximately," "intends,"
"plans," "pro forma," "estimates," or "anticipates" or their negative form or
other variations, or by discussions of strategy, plans or intentions. The
following factors, among others, could affect actual results and future
events: defaults or nonrenewal of leases, increased interest rates and
operating costs, failure to obtain necessary outside financing, difficulties
in identifying properties to acquire and in effecting acquisitions, failure to
successfully integrate acquired properties and operations, inability to
dispose of assets that no longer meet our investment criteria under applicable
terms and conditions, risks and uncertainties affecting property development
and construction (including construction delays, cost overruns, liability to
obtain necessary permits and public opposition to such activities), failure to
qualify as a real estate investment trust under the Internal Revenue Code of
1986, as amended, and increases in real property tax rates. The company's
success also depends on general economic trends, including interest rates, tax
laws, governmental regulation, legislation, population changes and other
factors, including those risk factors discussed in the section entitled "Risk
Factors" in the company's most recent Annual Report on Form 10-K as they may
be updated from time to time by the company's subsequent filings with the
Securities and Exchange Commission, or SEC, including its most recent
Quarterly Report on Form 10-Q. Do not rely solely on forward-looking
statements, which only reflect management's analysis. The company assumes no
responsibility 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.
SOURCE BRE Properties, Inc.

Investors, Edward F. Lange, Jr., +1-415-445-6559, or Media, Thomas E.
Mierzwinski, +1-415-445-6525, both of BRE Properties, Inc.