Associated Estates Realty Corporation Reports Third Quarter Results

Same Community NOI Continues to be In-Line with Expectations

CLEVELAND, Oct. 26 /PRNewswire-FirstCall/ -- Associated Estates Realty
Corporation (NYSE: AEC) (Nasdaq: AEC) today reported funds from operations
(FFO) for the third quarter ended September 30, 2009 of $0.26 per common share
(basic and diluted), compared to $0.31 per common share (basic and diluted),
for the third quarter ended September 30, 2008. Total revenue for the third
quarter of 2009 was $32.9 million compared with $34.1 million for the third
quarter of 2008, a decrease of 3.5 percent.

Net loss applicable to common shares was $3.9 million or $0.23 per common
share (basic and diluted) for the third quarter ended September 30, 2009,
compared to a net loss applicable to common shares of $4.2 million or $0.26
per common share (basic and diluted) for the third quarter ended September 30,
2008.

"Our third quarter and year-to-date results track to our full year
expectations," said Jeffrey I. Friedman, president and chief executive
officer. "We believe we are well-positioned to once again deliver top-tier
Same Community NOI performance compared to the multifamily peer group in
2009."

A reconciliation of net (loss) income attributable to the Company to FFO and
FFO as adjusted, is included in the table at the end of this press release and
in the Company's supplemental financial information to be furnished with this
earnings release to the Securities and Exchange Commission on Form 8-K.

Same Community Portfolio Results
Net operating income (NOI) for the third quarter for the Company's Same
Community portfolio declined 2.2 percent as a result of revenue decreasing 2.5
percent and property operating expenses declining 2.9 percent, compared to the
third quarter of 2008. Quarter end physical occupancy was 94.6 percent
compared to 95.8 percent at the end of the third quarter of 2008. Average net
rent per unit for the third quarter for the Same Community portfolio was $917
per month, a 1.1 percent decrease compared to the third quarter of 2008. Net
rent per unit for the third quarter for the Company's Same Community Midwest
portfolio remained flat compared to the third quarter of 2008, at $828. Net
rent per unit for the Company's Same Community Mid-Atlantic portfolio
increased 1.4 percent to $1,238, and net rent per unit for the Company's Same
Community properties in the Southeast markets decreased 4.6 percent to $987.
On a sequential basis, Same Community revenue grew by 0.4 percent relative to
the second quarter of 2009, led by 0.7 percent growth in the Southeast
portfolio and 0.4 percent growth in the Midwest portfolio. In the Mid-Atlantic
region, revenue for the quarter declined by 0.3 percent, when compared to the
second quarter. Average third quarter net rent per unit for the Company's
Same Community portfolio decreased by $3 or 0.3 percent to $917 per month.

Additional quarterly financial information, including performance by region
for the Company's portfolio, is included in the Company's supplemental fact
booklet, which is available on the "Investors" section of the Company's
website at www.AssociatedEstates.com, or by clicking on the following link:
http://ir.AssociatedEstates.com/results.cfm.

Year-to-Date Performance
FFO for the nine months ended September 30, 2009, was $0.94 per common share
(basic and diluted) and includes a credit to expenses of $563,000 or
approximately $0.03 per common share for a refund of defeasance costs on
certain previously defeased loans. FFO as adjusted for the first nine months
of 2009, excludes that credit, and was $0.91 per common share (basic and
diluted).

For the nine months ended September 30, 2009, net income applicable to common
shares was $5.4 million or $0.33 per common share (basic and diluted) compared
to net income applicable to common shares of $31.1 million or $1.92 per common
share (basic and diluted) for the period ended September 30, 2008. The
results for the nine-month period ended September 30, 2009, include gains on
insurance recoveries of $544,000 or $0.03 per common share, gains on
dispositions of properties of $15.4 million or $0.93 per common share and a
credit to expenses of $563,000 or approximately $0.03 per common share
attributable to a refund of defeasance costs on certain previously defeased
loans. The September 30, 2008 results include gains from property sales of
$45.2 million or $2.79 per common share and defeasance and/or prepaid costs of
$2.0 million or $0.12 per common share.

NOI for the nine months ended September 30, 2009, for the Company's Same
Community portfolio, decreased 2.3 percent resulting from a 1.1 percent
decrease in revenue and a 0.5 percent increase in property operating expenses
compared to the first nine months of 2008.

A reconciliation of net (loss) income attributable to the Company to FFO and
FFO as adjusted, is included in the table at the end of this press release and
in the Company's supplemental financial information to be furnished with this
earnings release to the Securities and Exchange Commission on Form 8-K.

2009 Outlook
The Company has updated its current full year FFO as adjusted guidance range
to $1.17 to $1.20 per common share from its previous guidance range of $1.17
to $1.23 per common share. The Company also announced that it does not intend
to acquire any properties for the remainder of the year. Detailed assumptions
relating to the Company's earnings guidance can be found on page 25 of the
third quarter 2009 supplemental fact booklet on the Company's website at
www.AssociatedEstates.com.

Conference Call
A conference call to discuss the results will be held on Tuesday, October 27
at 2:00 p.m. Eastern. To participate in the call:

Via Telephone: The dial-in number is 800-860-2442, and the passcode is
"Estates."

Via the Internet (listen only): Access the Company's website at
www.AssociatedEstates.com. Please log on at least 15 minutes prior to the
scheduled start time in order to register, download and install any necessary
audio software. Select the "Q3 2009 Earnings Webcast" link. The webcast will
be archived through November 10, 2009.

Company Profile
Associated Estates is a real estate investment trust ("REIT") and is a member
of the Russell 2000. The Company is headquartered in Richmond Heights, Ohio.
Associated Estates' portfolio consists of 49 properties containing 12,366
units located in eight states. For more information about the Company, please
visit its website at www.AssociatedEstates.com.

FFO and FFO as adjusted are non-Generally Accepted Accounting Principle (GAAP)
measures. The Company generally considers FFO and FFO as adjusted to be
useful measures for reviewing the comparative operating and financial
performance of the Company because FFO and FFO as adjusted can help one
compare the operating performance of a company's real estate between periods
or to different REITs. A reconciliation of net income (loss) attributable to
the Company to FFO and to FFO as adjusted is included in the table at the end
of this press release and in the Company's supplemental financial information
to be included with this earnings release and furnished to the Securities and
Exchange Commission on Form 8-K.

Safe Harbor Statement
This news release contains forward-looking statements based on current
judgments and knowledge of management, which are subject to certain risks,
trends and uncertainties that could cause actual results to vary from those
projected, including but not limited to, expectations regarding the Company's
2009 performance, which are based on certain assumptions. Accordingly,
readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this news release. These
forward-looking statements are intended to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The words
"expects," "projects," "believes," "plans," "anticipates" and similar
expressions are intended to identify forward-looking statements. Investors
are cautioned that the Company's forward-looking statements involve risks and
uncertainty, that could cause actual results to differ from estimates or
projections contained in these forward-looking statements, including without
limitation the following: changes in the economic climate in the markets in
which the Company owns and manages properties, including interest rates, the
ability of the Company to consummate the sale of properties pursuant to its
current plan, the overall level of economic activity, the availability of
consumer credit and mortgage financing, unemployment rates and other factors;
the ability of the Company to refinance debt on favorable terms at maturity;
the ability of the Company to defease or prepay debt pursuant to its current
plan; risks of a lessening of demand for the multifamily units owned or
managed by the Company; competition from other available multifamily units and
changes in market rental rates; increases in property and liability insurance
costs; unanticipated increases in real estate taxes and other operating
expenses; weather conditions that adversely affect operating expenses;
expenditures that cannot be anticipated such as utility rate and usage
increases, unanticipated repairs and real estate tax valuation reassessments
or millage rate increases; inability of the Company to control operating
expenses or achieve increases in revenue; the results of litigation filed or
to be filed against the Company; changes in tax legislation; risks of personal
injury claims and property damage related to mold claims because of diminished
insurance coverage; catastrophic property damage losses that are not covered
by the Company's insurance; the Company's ability to acquire properties at
prices consistent with the Company's investment criteria; risks associated
with property acquisitions such as environmental liabilities, among others;
changes in or termination of contracts relating to third party management and
advisory business; and risks related to the perception of residents and
prospective residents as to the attractiveness, convenience and safety of the
Company's properties or the neighborhoods in which they are located.

ASSOCIATED ESTATES REALTY CORPORATION
Financial Highlights
(in thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008

Total revenue $32,866 $34,052 $98,004 $97,717

Net (loss) income
attributable to AERC $(2,816) $(3,043) $9,026 $35,423
Add: Depreciation - real
estate assets 8,071 8,175 24,571 24,299
Depreciation - real
estate assets - joint
ventures - 24 - 69
Amortization of
intangible assets 57 1,101 1,068 3,062
Less: Preferred share
dividends (1,049) (1,201) (3,149) (3,603)
Gain on disposition
of properties/gain
on insurance
recoveries 2 - (15,955) (45,203)

Funds from Operations
(FFO) (1) $4,265 $5,056 $15,561 $14,047

Funds from Operations
(FFO) as adjusted (2) $4,265 $5,056 $14,998 $16,006

Add: Depreciation -
other assets 374 326 1,132 1,015
Amortization of
deferred financing
fees 300 320 925 986
Less: Recurring fixed
asset additions (2,411) (3,161) (5,476) (7,108)

Funds Available for
Distribution (FAD) (3) $2,528 $2,541 $11,579 $10,899

Per share
Net (loss) income applicable
to common shares -
basic and diluted $(0.23) $(0.26) $0.33 $1.92
Funds from Operations -
basic and diluted (1) $0.26 $0.31 $0.94 $0.87
Funds from Operations as
adjusted - basic
and diluted (2) $0.26 $0.31 $0.91 $0.99
Dividends per share $0.17 $0.17 $0.51 $0.51
Weighted average shares
outstanding - basic and
diluted (2) 16,539 16,298 16,500 16,222

(1) The Company defines FFO as the inclusion of all operating results,
both recurring and non-recurring, except those results defined as
"extraordinary items" under generally accepted accounting principles
(GAAP), adjusted for depreciation on real estate assets and
amortization of intangible assets, gains on insurance recoveries and
gains and losses from the disposition of properties and land. FFO
does not represent cash generated from operating activities in
accordance with GAAP and is not necessarily indicative of cash
available to fund cash needs and should not be considered an
alternative to net income as an indicator of the Company's operating
performance or as an alternative to cash flow as a measure of
liquidity. The Company generally considers FFO to be a useful measure
for reviewing the comparative operating and financial performance of
the Company because FFO can help one compare the operating
performance of a company's real estate between periods or as compared
to different REITs. It should be noted, however, that certain other
real estate companies may define FFO in a different manner.

(2) The Company defines FFO as adjusted as FFO, as defined above, plus
the add back of defeasance and other prepayment costs/credits of
$(563,000) and $2.0 million for the nine months ended September 30,
2009 and 2008, respectively. In accordance with GAAP, these
prepayment costs/credits are included as interest expense in the
Company's Consolidated Statement of Operations. The Company is
providing this calculation as an alternative FFO calculation as it
considers it a more appropriate measure of comparing the operating
performance of a company's real estate between periods or as compared
to different REITs.

(3) The Company defines FAD as FFO as adjusted, as defined above, plus
depreciation other and amortization of deferred financing fees less
recurring fixed asset additions. Fixed asset additions exclude
development, investment, revenue enhancing and non-recurring capital
additions. The Company considers FAD to be an appropriate
supplemental measure of the performance of an equity REIT because,
like FFO and FFO as adjusted, it captures real estate performance by
excluding gains or losses from the disposition of properties and land
and depreciation on real estate assets and amortization of intangible
assets. Unlike FFO and FFO as adjusted, FAD also reflects that
recurring capital expenditures are necessary to maintain the
associated real estate.

The full text and supplemental schedules of this press release are available
on Associated Estates' website at www.AssociatedEstates.com. To receive a copy
of the results by mail or fax, please contact Investor Relations at
1-800-440-2372. For more information, access the Investors section of
www.AssociatedEstates.com.

Investor Contact:
Swarup Katuri
(216) 797-8743

Media Contact:
Kimberly Kanary
(216) 797-8718

SOURCE Associated Estates Realty Corporation

Investor Contact: Swarup Katuri, +1-216-797-8743, Media Contact: Kimberly
Kanary, +1-216-797-8718