ADVISORY AGREEMENT made as of July 19, 2006 between NNN Apartment REIT, Inc., a Maryland corporation (the "Company"), and NNN Apartment REIT Advisor, LLC, a Virginia limited liability company (the "Advisor")

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EXHIBIT 10.4

ADVISORY AGREEMENT

ADVISORY AGREEMENT made as of July 19, 2006 between NNN Apartment REIT,

Inc., a Maryland corporation (the "Company"), and NNN Apartment REIT Advisor,

LLC, a Virginia limited liability company (the "Advisor").

WITNESSETH:

WHEREAS, the Company intends to qualify as a real estate investment trust

(a "REIT") as defined in Sections 856 through 860 of the Internal Revenue Code

of 1986, as amended (the "Code"), and to make investments of the type permitted

to qualified REITs under the Code and not inconsistent with the Charter of the

Company (the "Charter"), and the Bylaws of the Company; and

WHEREAS, the Company desires to avail itself of the experience, sources of

information, advice and assistance of the Advisor and to have the Advisor

undertake the duties and responsibilities hereinafter set forth, on behalf of

and subject to the supervision of the Board of Directors of the Company (the

"Board of Directors"), as provided herein; and

WHEREAS, the Advisor is willing to undertake to render such services,

subject to the supervision of the Board of Directors, on the terms and

conditions herein set forth;

NOW, THEREFORE, in consideration of the mutual covenants herein set forth,

the parties hereto agree as follows:

1. DEFINITIONS.

As used herein, the following terms shall have the meanings set forth

below:

(a) "Acquisition Expenses" shall mean any and all expenses related to

the Company's selection, evaluation and acquisition of, and investment in

properties, whether or not acquired or made, including, but not limited to,

legal fees and expenses, travel and communications expenses, cost of

appraisals and surveys, nonrefundable option payments on property not

acquired, accounting fees and expenses, computer use related expenses,

architectural, engineering and other property reports, environmental and

asbestos audits, title insurance and escrow fees, loan fees or points or

any fee of a similar nature paid to a third party, however designated,

transfer taxes, and personnel and miscellaneous expenses related to the

selection, evaluation and acquisition of properties.

(b) "Advisor" shall mean NNN Apartment REIT Advisor, LLC, a Virginia

limited liability company, any successor advisor to the Company, the

Partnership or any person or entity to which NNN Apartment REIT Advisor,

LLC or any successor advisor subcontracts substantially all of its

functions.

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(c) "Affiliate" shall mean: (i) any Person directly or indirectly

owning, controlling or holding, with the power to vote 10% or more of the

outstanding voting securities of such other Person; (ii) any Person 10% or

more of whose outstanding voting securities are directly or indirectly

owned, controlled or held, with the power to vote, by such other Person;

(iii) any Person directly or indirectly controlling, controlled by or under

common control with such other Person; (iv) any executive officer,

director, trustee or general partner of such other Person; and (v) any

legal entity for which such Person acts as an executive officer, director,

trustee or general partner.

(d) "Asset Management Fee" shall mean an annual amount equal to the

percentage of the Company's Average Invested Assets set forth in Section

9(b).

(e) "Average Invested Assets" shall mean, for any period, the average

of the aggregate Book Value of the assets of the Company invested, directly

or indirectly, in real estate assets or equity interests in and loans

secured by real estate, before deducting depreciation, bad debts or other

similar non-cash reserves, computed by taking the average of such values at

the end of each month during such period.

(f) "Book Value" of an asset shall mean the value of such asset on the

books of the Company, before allowance for depreciation or amortization.

(g) "Common Stock" shall mean the common stock, par value $.01 per

share, of the Company.

(h) "Company" shall have the meaning set forth in the preamble of this

Agreement.

(i) "Competitive Real Estate Commission" shall mean the real estate or

brokerage commission paid for the purchase or sale of a property which is

reasonable, customary and competitive in light of the size, type and

location of such property.

(j) "Contract Purchase Price" shall mean the amount actually paid or

allocated to the purchase or improvement of Real Estate Assets, exclusive

of Real Estate Commissions and Acquisition Expenses.

(k) "Contract Sales Price" shall mean the amount actually paid or

allocated to the Sale of a Property or Properties, exclusive of Disposition

Fees.

(l) "Cumulative Return" shall mean a cumulative, non-compounded return

equal to 8% per annum on Invested Capital commencing upon acceptance by the

Company of an investor's subscription.

(m) "Director" shall mean a member of the Board of Directors of the

Company.

(n) "Fiscal Year" shall mean any period for which any income tax

return is submitted by the Company to the Internal Revenue Service and

which is treated by the Internal Revenue Service as a reporting period.

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(o) "GAAP" means accounting principles generally accepted in the

United States of America.

(p) "Gross Offering Proceeds" shall mean the total proceeds from the

sale of Shares before deductions for Organizational and Offering Expenses.

For purposes of calculating Gross Offering Proceeds, the purchase price for

all Shares issued in the Company's initial public offering, including those

for which volume discounts apply, shall be deemed to be $10.00 per Share.

(q) "Gross Income From Properties" shall mean all cash receipts

derived from the operation of the Company's Property, excluding (i) tenant

security deposits unless and until such deposits are forfeited upon a

tenant default, and (ii) proceeds from insurance claims, condemnation

proceedings, sales or refinancings.

(r) "Incentive Distribution Upon Listing" shall mean an amount equal

to 15.0% of the amount, if any, by which (1) the market value of the

outstanding Shares at Listing, measured by taking the average closing price

or the average of the bid and asked price, as the case may be, over a

period of 30 days during which the Shares are traded, with such period

beginning 180 days after Listing (the "Market Value"), plus the total

distributions paid to Stockholders prior to Listing exceeds (2) the sum of

the Invested Capital plus the Cumulative Return.

(s) "Incentive Distribution Upon Sales" shall mean an amount equal to

15% of the net proceeds from the sale of a Property after the Company has

received and paid to Stockholders the sum of (i) Invested Capital, and (ii)

any remaining shortfall in the Cumulative Return as described in Section

9(e).

(t) "Independent Directors" shall mean a Director who is not, and

within the last two (2) years has not been, directly or indirectly

associated with a Sponsor or the Advisor by virtue of (i) ownership of an

interest in a Sponsor, the Advisor or their Affiliates, (ii) employment by

a Sponsor, the Advisor or their Affiliates, (iii) service as an officer or

director of a Sponsor, the Advisor or their Affiliates, (iv) performance of

services, other than as a Director, for the Company, (v) service as a

director or trustee of more than three (3) real estate investment trusts

organized by a Sponsor or advised by the Advisor, or (vi) maintenance of a

material business or professional relationship with a Sponsor, the Advisor

or any of their Affiliates. An indirect relationship shall include

circumstances in which a Director's spouse, parents, children, siblings,

mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or

sisters-in-law is or has been associated with a Sponsor, the Advisor, any

of their Affiliates or the Company. A business or professional relationship

is considered material if the gross revenue derived by the Director from a

Sponsor, the Advisor and Affiliates exceeds five percent (5%) of either the

Director's annual gross revenue during either of the last two (2) years or

the Director's net worth on a fair market value basis.

(u) "Invested Capital" shall mean the total proceeds from the sale of

Shares. When a Property is sold, Invested Capital shall be reduced by the

lesser of (i) the net sale proceeds available for distribution from such

sale or (ii) the sum of (A) the portion of Invested Capital that initially

was allocated to that Property and (B) any remaining shortfall in the

recovery of Invested Capital with respect to prior sales of Properties.

(v) "Joint Venture" shall mean any partnership, limited liability

company, business trust or other unincorporated organization through or by

means of which the Company acts jointly with any Person or Affiliate to

make an investment in Real Estate Assets.

(w) "Listing" shall mean the listing of the Shares on i) the New York

Stock Exchange, the American Stock Exchange, or the National Market System

of the Nasdaq Stock Market (or any successor to such entities), or ii) a

national securities exchange (or tier or segment thereof) that has listing

standards that the U.S. Securities and Exchange Commission has determined

by rule are substantially similar to the listing standards applicable to

securities described in Section 18(b)(1)(A) of the Securities Act of 1933,

as amended. Upon such Listing, the Shares shall be deemed Listed.

(x) "Net Income" shall mean, for any period, total revenues applicable

to such period, less the operating expenses applicable to such period other

than additions to or allowances

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for reserves for depreciation, amortization or bad debts or other similar

noncash reserves; provided, however, that Net Income shall not include any

gain from the sale of the Company's assets.

(y) "Organizational and Offering Expenses" shall mean those expenses

incurred by and to be paid from the assets of the Company in connection

with and in preparing the Company for registration and subsequently

offering and distributing Shares to the public, including, but not limited

to, total underwriting and brokerage discounts and commissions (including

fees of the underwriters' attorneys), expenses for printing, engraving and

mailing, salaries of employees while engaged in sales activities, charges

of transfer agents, registrars, trustees, escrow holders, depositaries and

experts, expenses of qualification of the sale of the securities under

federal and state laws, including taxes and fees, and accountants',

consultants' and attorneys' fees and expenses.

(z) "Partnership" shall mean NNN Apartment REIT Holdings, L.P., a

Virginia limited partnership.

(aa) "Property" or "Properties" shall mean any, or all, respectively,

of the real property and improvements thereon owned or to be owned by the

Company, directly or indirectly.

(ab) "Property Disposition Fee" shall mean a real estate disposition

fee, payable (under certain conditions) to the Advisor and its Affiliates

upon the sale of the Company's Property as described in Section 9(e).

(ac) "Property Management Fee" shall mean any fee paid to an Affiliate

or third party as compensation for management of the Company's Properties

as described in Section 9(c).

(ad) "Property Manager" shall mean an entity that provides property

rental, leasing, operation and management services to the Properties owned

by the Company, directly or indirectly. The Property Manager may be the

Advisor, an Affiliate or a third-party property management firm.

(ae) "Person" shall mean any natural person, partnership, corporation,

association, trust, limited liability company or other legal entity.

(af) "Prospectus" shall mean the final prospectus of the Company in

connection with the initial registration of Shares filed with the

Securities and Exchange Commission on Form S-11, as supplemented and

amended from time to time.

(ag) "Real Estate Assets" shall mean any and all investments in: (i)

Property whether directly or indirectly through owned or controlled

subsidiaries and including amounts invested in Joint Ventures; and (ii)

loans, or other evidence of indebtedness secured, directly or indirectly,

by interests in Property.

(ah) "Real Estate Commission" shall mean the real estate or brokerage

commission paid in connection with the purchase of a Property as described

in Section 9(a).

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(ai) "Sale" or "Sales" shall mean any transaction or series of

transactions whereby: (A) the Company or the Partnership directly or

indirectly (except as described in other subsections of this definition)

sells, grants, transfers, conveys or relinquishes its ownership of any

Property or portion thereof, including the lease of any Property consisting

of a building only, and including any event with respect to any Property

which results in the payment to the Company or the Partnership, directly or

indirectly, of a significant amount of insurance proceeds or condemnation

or similar award related to a Property; (B) the Company or the Partnership

directly or indirectly (except as described in other subsections of this

definition) sells, grants, transfers, conveys or relinquishes its ownership

of all or substantially all of the interests of the Company or the

Partnership in any Joint Venture in which it is a co-venturer or partner;

(C) any Joint Venture directly or indirectly (except as described in other

subsections of this definition) in which the Company or the Partnership as

a co-venturer or partner sells, grants, transfers, conveys or relinquishes

its ownership of any Property or portion thereof, including any event with

respect to any Property which results in the payment to the Joint Venture,

directly or indirectly, of a significant amount of insurance proceeds or

condemnation or similar award related to a Property; or (D) the Company or

the Partnership directly or indirectly (except as described in other

subsections of this definition) sells, grants, conveys or relinquishes its

interest in any loan or mortgage or any portion thereof (including with

respect to any mortgage or loan, all payments thereunder or in satisfaction

thereof other than regularly scheduled interest payments) of amounts owed

pursuant to such loan or mortgage and any event which gives rise to the

payment of a significant amount of insurance proceeds or condemnation or

similar award; or (E) the Company or the Partnership directly or indirectly

(except as described in other subsections of this definition) sells,

grants, transfers, conveys or relinquishes its ownership of any other Real

Estate Asset not previously described in this definition or any portion

thereof.

(aj) "Shares" shall mean the shares of Common Stock of the Company.

(ak) "Sponsor" shall mean any Person directly or indirectly

instrumental in organizing, wholly or in part, the Company or any Person

who will control, manage or participate in the management of the Company,

and any Affiliate of such Person. Not included is any Person whose only

relationship with the Company is that of an independent property manager of

Company assets, and whose only compensation is as such. Sponsor does not

include wholly independent third parties such as attorneys, consultants,

accountants and underwriters whose only compensation is for professional

services. A Person also may be deemed a Sponsor of the Company by:

(i) taking the initiative, directly or indirectly, in founding or

organizing the business or enterprise of the Company, either alone or

in conjunction with one or more other Persons;

(ii) receiving a material participation in the Company in

connection with the founding or organizing of the business of the

Company, in consideration of services or property, or both services

and property;

(iii) having a substantial number of relationships and contacts

with the Company;

(iv) possessing significant rights to control Company properties;

(v) receiving fees for providing services to the Company which

are paid on a basis that is not customary in the industry; or

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(vi) providing goods or services to the Company on a basis which

was not negotiated at arms length with the Company.

(al) "Stockholders" shall mean holders of the Shares.

(am) "Total Development Cost" shall mean, with regard to any Property

acquired by the Company prior to or during the development or acquisition

stages, all costs and expenses paid or incurred by the Company that are in

any way related to the development of such Property, including, but not

limited to, land and construction costs.

(an) "Total Operating Expenses" shall mean the aggregate expenses of

every character paid or incurred by the Company as determined under

generally accepted accounting principles, including fees paid to the

Advisor, but excluding:

(i) the expenses of raising capital such as Organizational and

Offering Expenses, legal, audit, accounting, underwriting, brokerage,

listing, registration and other fees, printing and other such

expenses, and taxes incurred in connection with the issuance,

distribution, transfer, registration and Listing of the Shares;

(ii) interest payments;

(iii) taxes;

(iv) non-cash expenditures such as depreciation, amortization and

bad debt reserves;

(v) the Incentive Distribution upon Sales and the Incentive

Distribution upon Listing; and

(vi) Acquisition Expenses, real estate commissions on resale of

property and other expenses connected with the acquisition,

disposition (whether by sale, exchange or condemnation) and ownership

of real estate interests, mortgage loans or other property (such as

the costs of foreclosure, insurance premiums, legal services,

maintenance, repair and improvement of property).

2. DUTIES OF ADVISOR.

The Advisor shall consult with the Company and shall, at the request of the

Board of Directors or the officers of the Company, furnish advice and

recommendations with respect to all aspects of the business and affairs of the

Company. In general, the Advisor shall inform the Board of Directors of factors

that come to its attention which could influence the policies of the Company.

Subject to the supervision of the Board of Directors and consistent with the

provisions of the Charter, the Advisor undertakes to use its reasonable efforts

to:

(a) Present to the Company a continuing and suitable investment

program and opportunities to make investments consistent with the

investment policies of the Company and the investment program adopted by

the Board of Directors and in effect at the time and furnish the Company

with advice with respect to the making, acquisition, holding and

disposition of investments and commitments therefor. The Advisor is also

obligated to provide the Company with the first opportunity to purchase any

Class A income producing multi-family property which satisfies the

Company's investment objectives placed under contract by the Advisor or its

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Affiliates. If the Board of Directors of the Company does not vote to make

such purchase within seven (7) days of being offered such property, the

Advisor is free to offer such opportunity to any other Affiliates or

non-Affiliates, as it so chooses. The Advisor shall use commercially

reasonable efforts to identify potential investment opportunities

consistent with the Company's investment objectives and policies including

but not limited to:

(i) locating, analyzing and selecting potential investments in

Real Estate Assets;

(ii) structuring and negotiating the terms and conditions of

acquisition and disposition transactions;

(iii) arranging for financing and refinancing and making other

changes in the asset or capital structure of the Company and

disposing of and reinvesting the proceeds from the sale of,

or otherwise deal with the investments in, Real Estate

Assets; and

(iv) entering into leases and service contracts, on the Company's

behalf, for Real Estate Assets and, to the extent necessary,

performing all functions necessary to maintain and

administer the Company's assets.

(b) Manage the Company's day-to-day operations to effect the

investment program adopted by the Board of Directors and perform or

supervise the performance of such other administrative functions necessary

in connection with the management of the Company as may be agreed upon by

the Advisor and the Company;

(c) Serve as the Company's investment advisor in connection with

policy decisions to be made by the Board of Directors and, as requested,

furnish reports to the Board of Directors and provide research, economic

and statistical data in connection with the Company's investments and

investment policies;

(d) On behalf of the Company, investigate, select and conduct

relations with lenders, consultants, accountants, brokers, property

managers, attorneys, underwriters, appraisers, insurers, corporate

fiduciaries, banks, builders and developers, sellers and buyers of

investments and persons acting in any other capacity specified by the

Company from time to time, and enter into contracts with, retain and

supervise services performed by such parties in connection with investments

which have been or may be acquired or disposed of by the Company;

(e) Act as property manager or cooperate with a third party or

affiliated Property Manager in connection with property management services

and other activities relating to the Company's assets, subject to the

requirement that the Advisor, its Affiliate or the Property Manager, as the

case may be, qualifies as an "independent contractor" as the phrase is used

in connection with applicable laws, rules and regulations affecting REITs

that own real property;

(f) Conduct periodic on-site property visits to some or all (as the

Advisor deems reasonably necessary) of the Properties to inspect the

physical condition of the Properties and to evaluate the performance of the

Property Manager;

(g) Review, analyze and comment on the operating budgets, capital

budgets and leasing plans prepared and submitted by the Property Manager

and aggregate these property budgets into the Company's overall budget;

(h) Review and analyze on-going financial information pertaining to

each Property and the overall portfolio of Properties;

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(i) Upon request of the Company, act, or obtain the services of others

to act, as attorney-in-fact or agent of the Company in making, acquiring

and disposing of investments, disbursing and collecting the funds, paying

the debts and fulfilling the obligations of the Company and handling,

prosecuting and settling any claims of the Company, including foreclosing

and otherwise enforcing mortgage and other liens and security interests

securing investments;

(j) Assist in negotiations on behalf of the Company with investment

banking firms and other institutions or investors for public or private

sales of securities of the Company or for other financing on behalf of the

Comp