EXHIBIT 3.3 AGREEMENT OF LIMITED PARTNERSHIP OF NNN APARTMENT REIT HOLDINGS, L.P. TABLE OF CONTENTS

<PAGE>

EXHIBIT 3.3

AGREEMENT

OF LIMITED PARTNERSHIP

OF

NNN APARTMENT REIT HOLDINGS, L.P.

<PAGE>

TABLE OF CONTENTS

<TABLE>

<CAPTION>

PAGE

----

<S> <C>

ARTICLE I ............................................................... 1

ARTICLE II .............................................................. 9

SECTION 2.01 ORGANIZATION ........................................... 9

SECTION 2.02 NAME ................................................... 9

SECTION 2.03 REGISTERED OFFICE AND AGENT; PRINCIPAL OFFICE .......... 9

SECTION 2.04 PARTNERS ............................................... 9

SECTION 2.05 TERM AND DISSOLUTION ................................... 10

SECTION 2.06 FILING OF CERTIFICATE AND PERFECTION OF LIMITED

PARTNERSHIP ............................................ 10

SECTION 2.07 CERTIFICATES DESCRIBING PARTNERSHIP UNITS .............. 10

ARTICLE III ............................................................. 11

SECTION 3.01 PURPOSE AND NATURE ..................................... 11

SECTION 3.02 POWERS ................................................. 11

ARTICLE IV .............................................................. 11

SECTION 4.01 CAPITAL CONTRIBUTIONS .................................. 11

SECTION 4.02 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF

ADDITIONAL PARTNERSHIP INTERESTS ....................... 11

SECTION 4.03 ADDITIONAL FUNDING ..................................... 13

SECTION 4.04 CAPITAL ACCOUNTS ....................................... 13

SECTION 4.05 PERCENTAGE INTERESTS ................................... 13

SECTION 4.06 NO INTEREST ON CONTRIBUTIONS ........................... 14

SECTION 4.07 RETURN OF CAPITAL CONTRIBUTIONS ........................ 14

SECTION 4.08 NO THIRD-PARTY BENEFICIARY ............................. 14

ARTICLE V ............................................................... 14

SECTION 5.01 ALLOCATIONS ............................................ 14

SECTION 5.02 DISTRIBUTIONS .......................................... 18

SECTION 5.03 REIT DISTRIBUTION REQUIREMENTS ......................... 20

SECTION 5.04 NO RIGHT TO DISTRIBUTIONS IN KIND ...................... 20

SECTION 5.05 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS ......... 20

SECTION 5.06 DISTRIBUTIONS UPON LIQUIDATION ......................... 20

SECTION 5.07 SUBSTANTIAL ECONOMIC EFFECT ............................ 21

ARTICLE VI .............................................................. 21

SECTION 6.01 MANAGEMENT OF THE PARTNERSHIP BY GENERAL PARTNER ....... 21

SECTION 6.02 DELEGATION OF AUTHORITY ................................ 23

SECTION 6.03. INDEMNIFICATION AND EXCULPATION OF INDEMNITEES ......... 23

SECTION 6.04 LIABILITY OF THE GENERAL PARTNER ....................... 24

SECTION 6.05 REIMBURSEMENT OBLIGATIONS OF PARTNERSHIP ............... 25

SECTION 6.06 OUTSIDE ACTIVITIES ..................................... 25

SECTION 6.07 EMPLOYMENT OR RETENTION OF AFFILIATES .................. 26

SECTION 6.08 TITLE OF PARTNERSHIP ASSETS ............................ 26

</TABLE>

i

<PAGE>

<TABLE>

<S> <C>

SECTION 6.09 MISCELLANEOUS .......................................... 26

ARTICLE VII ............................................................. 27

SECTION 7.01 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP

INTEREST ............................................... 27

SECTION 7.02 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL

PARTNER................................................. 28

SECTION 7.03 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION

OF A GENERAL PARTNER ................................... 29

SECTION 7.04 REMOVAL OF A GENERAL PARTNER ........................... 29

ARTICLE VIII ............................................................ 30

SECTION 8.01 NO MANAGEMENT OF THE PARTNERSHIP BY LIMITED PARTNERS ... 30

SECTION 8.02 POWER OF ATTORNEY ...................................... 30

SECTION 8.03 LIMITATION OF LIABILITY OF LIMITED PARTNERS ............ 30

SECTION 8.04 REDEMPTION OF INCENTIVE LIMITED PARTNERSHIP INTEREST ... 31

SECTION 8.05 REDEMPTION RIGHT ....................................... 31

SECTION 8.06 REGISTRATION ........................................... 33

ARTICLE IX .............................................................. 34

SECTION 9.01 PURCHASE FOR INVESTMENT ................................ 34

SECTION 9.02 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP

INTERESTS .............................................. 35

SECTION 9.03 ADMISSION OF SUBSTITUTE LIMITED PARTNER ................ 36

SECTION 9.04 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS ........... 37

SECTION 9.05 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE, OR

TERMINATION OF A LIMITED PARTNER ....................... 37

SECTION 9.06 JOINT OWNERSHIP OF INTERESTS ........................... 37

ARTICLE X ............................................................... 38

SECTION 10.01 BOOKS AND RECORDS ...................................... 38

SECTION 10.02 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS ............ 38

SECTION 10.03 FISCAL AND TAXABLE YEAR ................................ 38

SECTION 10.04 ANNUAL TAX INFORMATION AND REPORT ...................... 38

SECTION 10.05 TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS

ADJUSTMENTS ............................................ 38

SECTION 10.06 REPORTS TO LIMITED PARTNERS ............................ 39

ARTICLE XI .............................................................. 39

SECTION 11.01 AMENDMENT OF THIS AGREEMENT ............................ 39

ARTICLE XII ............................................................. 40

SECTION 12.01 NOTICES ................................................ 40

SECTION 12.02 SURVIVAL OF RIGHTS ..................................... 40

SECTION 12.03 ADDITIONAL DOCUMENTS ................................... 40

SECTION 12.04 SEVERABILITY ........................................... 40

SECTION 12.05 ENTIRE AGREEMENT ....................................... 40

SECTION 12.06 PRONOUNS AND PLURALS ................................... 40

SECTION 12.07 HEADINGS ............................................... 40

SECTION 12.08 COUNTERPARTS ........................................... 40

SECTION 12.09 GOVERNING LAW .......................................... 40

</TABLE>

ii

<PAGE>

EXHIBITS

EXHIBIT A - Partners, Capital Contributions and Percentage Interests

EXHIBIT B - Notice of Exercise of Redemption Right

EXHIBIT C - Certification of Non-Foreign Status

iii

<PAGE>

AGREEMENT

OF LIMITED PARTNERSHIP

OF

NNN APARTMENT REIT HOLDINGS, L.P.

This Agreement of Limited Partnership (the "Agreement") of NNN APARTMENT

REIT HOLDINGS, L.P. (the "Partnership"), dated as of December 27, 2005, is

entered into by and among NNN APARTMENT REIT, Inc., a Maryland corporation (the

"Company" or the "General Partner"), NNN APARTMENT REIT ADVISOR, LLC, a Virginia

limited liability company (the "Special Limited Partner"), NNN APARTMENT REIT

ADVISOR, LLC, as the initial limited partner (the "Initial Limited Partner") and

the other Limited Partners (as defined herein).

NOW, THEREFORE, in consideration of mutual covenants between the parties

hereto, and other good and valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINED TERMS

The following defined terms used in this Agreement shall have the meaning

specified below:

"ACT" means the Virginia Revised Uniform Limited Partnership Act, as it may

be amended from time to time.

"ADDITIONAL FUNDS" has the meaning set forth in Section 4.03 hereof.

"ADDITIONAL LIMITED PARTNER" means a Person admitted to this Partnership as

a Limited Partner pursuant to Section 4.02 hereof.

"ADDITIONAL SECURITIES" means any additional REIT Shares (other than REIT

Shares issued in connection with a redemption pursuant to Section 8.05 hereof)

or rights, options, warrants or convertible or exchangeable securities

containing the right to subscribe for or purchase REIT Shares, as set forth in

Section 4.02(a).

"ADJUSTED INVESTED CAPITAL" means Invested Capital, minus, upon the sale of

a Property, the lesser of (i) the Sale Proceeds from that Property that are

available for distribution or (ii) the sum of (A) the Allocable Invested Capital

for that Property and (B) any Cumulative Allocable Invested Capital Shortfall.

"ADMINISTRATIVE EXPENSES" means (i) all administrative and operating costs

and expenses incurred by the Partnership, (ii) those administrative costs and

expenses of the Company, including any salaries or other payments to directors,

officers or employees of the Company, and any accounting and legal expenses of

the Company, which expenses, the Partners have agreed, are expenses of the

Partnership and not the Company, and (iii) to the extent not included in clause

(ii) above, REIT Expenses; provided, however, that Administrative Expenses shall

not include any administrative costs and expenses incurred by the Company that

are attributable to Properties or Subsidiaries that are owned by the Company

directly, rather than through the Partnership.

<PAGE>

"ADVISOR" means the Person, if any, appointed, employed or contracted with

by the Company pursuant to Section 8.1 of the Charter and responsible for

directing or performing the day-to-day business affairs of the Company,

including any Person to whom the Advisor subcontracts substantially all of such

functions.

"AFFILIATE" means, as to any individual, corporation, partnership, trust,

limited liability company or other legal entity, (i) any Person directly or

indirectly owning, controlling or holding, with the power to vote, ten percent

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

any Person ten percent (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,

manager, trustee or general partner.

"AGREED VALUE" means the fair market value of a Partner's non-cash Capital

Contribution as of the date of contribution as agreed to by the Partners. The

names and addresses of the Partners, number of Partnership Units issued to each

Partner and the Agreed Value of non-cash Capital Contributions as of the date of

contribution is set forth on Exhibit A.

"AGREEMENT" means this Agreement of Limited Partnership.

"ALLOCABLE INVESTED CAPITAL" means, for each Property, the product of (i)

the Invested Capital and (ii) a fraction equal to the Partnership's original

investment in that Property divided by the Partnership's total original

investment in all of its Properties.

"ALLOCABLE INVESTED CAPITAL SHORTFALL" means, for each Property that is

sold, the amount, if any, by which the Allocable Invested Capital exceeds the

Sale Proceeds available for distribution.

"CAPITAL ACCOUNT" has the meaning provided in Section 4.04 hereof.

"CAPITAL CONTRIBUTION" means the total amount of cash, cash equivalents and

the Agreed Value of any Property or other asset contributed or agreed to be

contributed, as the context requires, to the Partnership by each Partner

pursuant to the terms of the Agreement. Any reference to the Capital

Contribution of a Partner shall include the Capital Contribution made by a

predecessor holder of the Partnership Interest of such Partner.

"CAPITAL TRANSACTION" means the refinancing, sale, exchange, condemnation,

recovery of a damage award or insurance proceeds (other than business or rental

interruption insurance proceeds not reinvested in the repair or reconstruction

of Properties) or other disposition of any Property (or the Partnership's

interest therein), except for any Terminating Capital Transaction.

"CASH AMOUNT" means an amount of cash per Partnership Unit equal to the

value of the REIT Shares Amount on the date of receipt by the General Partner of

a Notice of Redemption. The value of the REIT Shares Amount shall be based on

the average of the daily market price of REIT Shares for the ten (10)

consecutive Trading Days immediately preceding the date of such valuation. The

market price for each such Trading Day shall be: (i) if the REIT Shares are

listed or admitted to trading on any securities exchange, the sale price,

regular way, on such day, or if no such sale takes place on such day, the

average of a closing bid and asked prices, regular way, on such day, (ii) if the

REIT Shares are not listed or admitted to trading on any securities exchange,

the last reported sale price on such day or, if no sale takes place on such day,

the average of the closing bid and asked prices on such day, as reported by a

reliable quotation source designated by the General Partner or (iii) if the REIT

Shares are not listed or admitted to

2

<PAGE>

trading on any securities exchange and no such last reported sale price or

closing bid and asked prices are available, the average of the reported high bid

and low asked prices on such day, as reported by a reliable quotation source

designated by the General Partner, or if there shall be no bid and asked prices

on such day, the average of the high bid and low asked prices, as so reported,

on the most recent day (not more than ten days prior to the date in question)

for which prices have been so reported; provided, that if there are no bid and

asked prices reported during the ten days prior to the date in question, the

value of the REIT Shares shall be determined by the General Partner acting in

good faith on the basis of such quotations and other information as it

considers, in its reasonable judgment, appropriate. In the event the REIT Shares

Amount includes rights that a holder of REIT Shares would be entitled to

receive, then the value of such rights shall be determined by the General

Partner acting in good faith on the basis of such quotations and other

information as it considers, in its reasonable judgment, appropriate.

"CASH AVAILABLE FOR DISTRIBUTION" means, for a taxable year of the

Partnership, a positive amount, if any, equal to the cash revenues and receipts

of the Partnership (other than those arising from a Capital Transaction or a

Terminating Capital Transaction) available for distribution to the partners

after payment of the Partnership's expenses and other expenditures and the

creation of any reasonably required reserves, as determined by the General

Partner.

"CERTIFICATE" means any instrument or document that is required under the

laws of the Commonwealth of Virginia, or any other jurisdiction in which the

Partnership conducts business, to be signed and sworn to by the Partners of the

Partnership (either by themselves or pursuant to the power-of-attorney granted

to the General Partner in Section 8.02 hereof) and filed for recording in the

appropriate public offices within the Commonwealth of Virginia or such other

jurisdiction to perfect or maintain the Partnership as a limited partnership, to

effect the admission, withdrawal or substitution of any Partner of the

Partnership or to protect the limited liability of the Limited Partners as

limited partners under the laws of the Commonwealth of Virginia or such other

jurisdiction.

"CHARTER" means the charter of the Company.

"CODE" means the Internal Revenue Code of 1986, as amended, and as

hereafter amended from time to time. Reference to any particular provision of

the Code shall mean that provision in the Code at the date hereof and any

successor provision of the Code.

"COMMISSION" means the U.S. Securities and Exchange Commission.

"COMPANY" means NNN Apartment REIT, Inc., a Maryland corporation.

"CONVERSION FACTOR" means 1.0, provided that in the event that the Company

(i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or

makes a distribution to all holders of its outstanding REIT Shares in REIT

Shares, (ii) subdivides its outstanding REIT Shares or (iii) combines its

outstanding REIT Shares into a smaller number of REIT Shares, the Conversion

Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the

numerator of which shall be the number of REIT Shares issued and outstanding on

the record date for such dividend, distribution, subdivision or combination

(assuming for such purposes that such dividend, distribution, subdivision or

combination has occurred as of such time), and the denominator of which shall be

the actual number of REIT Shares (determined without the above assumption)

issued and outstanding on such date and, provided further, that in the event

that an entity other than an Affiliate of the Company shall become General

Partner pursuant to any merger, consolidation or combination of the Company with

or into another entity (the "Successor Entity"), the Conversion Factor shall be

adjusted by multiplying the Conversion Factor by the number of shares of the

Successor Entity into which one REIT Share is converted pursuant to such merger,

consolidation or combination, determined as of the date of such merger,

consolidation or

3

<PAGE>

combination. Any adjustment to the Conversion Factor shall become effective

immediately after the effective date of such event retroactive to the record

date, if any, for such event; provided, however, that, if a Redeeming Partner is

to receive the Cash Amount and the record date for such event falls during the

valuation period for determining the Cash Amount, the Conversion Factor shall be

appropriately adjusted by the General Partner to produce a fair and equitable

calculation of the Cash Amount.

"CUMULATIVE ALLOCABLE INVESTED CAPITAL SHORTFALL" means the cumulative

Allocable Invested Capital Shortfall from prior sales of Properties that has not

previously been distributed to the General Partner and the Limited Partners.

"EVENT OF BANKRUPTCY" as to any Person means the filing of a petition for

relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978

or similar provision of law of any jurisdiction (except if such petition is

contested by such Person and has been dismissed within 90 days); insolvency or

bankruptcy of such Person as finally determined by a court proceeding; filing by

such Person of a petition or application to accomplish the same or for the

appointment of a receiver or a trustee for such Person or a substantial part of

his assets; commencement of any proceedings relating to such Person as a debtor

under any other reorganization, arrangement, insolvency, adjustment of debt or

liquidation law of any jurisdiction, whether now in existence or hereinafter in

effect, either by such Person or by another, provided that if such proceeding is

commenced by another, such Person indicates his approval of such proceeding,

consents thereto or acquiesces therein or such proceeding is contested by such

Person and has not been finally dismissed within 90 days.

"GENERAL PARTNER" means the Company, and any Person who becomes a

substitute or additional General Partner as provided herein, and any of their

successors as General Partner.

"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest held by the

General Partner that is a general partnership interest.

"INCENTIVE LIMITED PARTNERSHIP INTEREST" means the ownership interest of

the Special Limited Partner in the Partnership at any particular time, including

the right of such Special Limited Partner to any and all benefits to which such

Special Limited Partner may be entitled as provided in this Agreement and in the

Act, together with the obligations of such Special Limited Partner to comply

with all the provisions of this Agreement and of such Act.

"INDEMNITEE" means (i) any Person made a party to a proceeding by reason of

its status as the General Partner or a director, officer or employee of the

Partnership, the Company or the General Partner and (ii) such other Persons

(including Affiliates of the Company, the General Partner or the Partnership) as

the General Partner may designate to from time to time, in its sole and absolute

discretion.

"INDEPENDENT DIRECTOR" means a director who is not, and within the last two

(2) years has not been, directly or indirectly, associated with the Sponsor or

the Advisor by virtue of (i) ownership of an interest in the Sponsor, the

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

their Affiliates, (iii) service as an officer or director of the 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 the Sponsor or advised by

the Advisor or (vi) maintenance of a material business or professional

relationship with the Sponsor, the Advisor or 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 the Sponsor, the

Advisor, any of the Affiliates or the Company. A business or professional

relationship is considered material if the gross revenue derived by the director

from the Sponsor, the Advisor or their Affiliates exceeds five percent (5%) of

either the director's annual gross

4

<PAGE>

revenue derived from all sources during either of the last two (2) years or the

director's net worth, on a fair market value basis. Notwithstanding the

foregoing, serving as a director or owning an interest in a REIT or other real

estate program organized by the Sponsor or advised or managed by the Advisor or

its Affiliates shall not, by itself, cause a director to be deemed associated

with the Sponsor or the Advisor.

"INVESTED CAPITAL" means (i) the sum of (A) the number of REIT Shares

issued by the Company (including any REIT Shares actually issued through the

Company's dividend reinvestment program or the Company's incentive award plans)

and (B) the number of Partnership Units issued by the Partnership to Limited

Partners, multiplied by (ii) amount initially equal to $10.00, which amount

shall be adjusted appropriately to reflect (A) stock dividends, stock splits or

other changes in the capital structure of the Company or the Partnership and (B)

at the discretion of the General Partner, any changes in the average price per

share paid for REIT Shares and Partnership Units after the Offering.

"LIMITED PARTNER" means any Person (other than the Special Limited Partner)

named as a Limited Partner on Exhibit A attached hereto, as Exhibit A may be

amended from time to time, and any Person who becomes a Substitute or Additional

Limited Partner, in such Person's capacity as a Limited Partner in the

Partnership.

"LIMITED PARTNERSHIP INTEREST" means the ownership interest of a Limited

Partner in the Partnership at any particular time, including the right of such

Limited Partner to any and all benefits to which such Limited Partner may be

entitled as provided in this Agreement and in the Act, together with the

obligations of such Limited Partner to comply with all the provisions of this

Agreement and of such Act.

"LOSS" shall have the meaning set forth in Section 5.01(k) hereof.

"NOTICE OF REDEMPTION" means the Notice of Exercise of Redemption Right

substantially in the form attached as Exhibit B hereto.

"OFFER" has the meaning set forth in Section 7.01(c) hereof.

"OFFERING" means the initial offer and sale by the Company and the

participating broker-dealers pursuant to the Prospectus of REIT Shares for sale

to the public.

"OPERATING INCOME OR LOSS" means, for a taxable year of the Partnership,

the Profits and Losses of the Partnership (other than the Profits and Losses

arising from a Capital Transaction or a Terminating Capital Transaction), but

subject to the following adjustments:

(i) There shall be no reduction for depreciation or amortization

expenses; and

(ii) Operating Income or Loss shall not include any items of income,

loss, gain or expense that are specially allocated pursuant to Section 5.01(g),

(h) or (i).

"PARTNER" means any General Partner, Limited Partner or Special Limited

Partner.

"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth in

Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt

Minimum Gain shall be determined in accordance with Regulations Section

1.704-2(i)(5).

"PARTNERSHIP INTEREST" means an ownership interest in the Partnership held

by the General Partner, the Special Limited Partner or any Limited Partner and

includes any and all benefits to which the holder of such a Partnership Interest

may be entitled as provided in this Agreement, together with all obligations of

such Person to comply with the terms and provisions of this Agreement.

5

<PAGE>

"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations Section

1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of

Partnership Minimum Gain is determined by first computing, for each Partnership

nonrecourse liability, any gain the Partnership would realize if it disposed of

the property subject to that liability for no consideration other than full

satisfaction of the liability, and then aggregating the separately computed

gains. A Partner's share of Partnership Minimum Gain shall be determined in

accordance with Regulations Section 1.704-2(g)(1).

"PARTNERSHIP RECORD DATE" means the record date established by the General

Partner for the distribution of cash pursuant to Section 5.02 hereof, which

record date shall be the same as the record date established by the Company for

a distribution to its stockholders of some or all of its portion of such

distribution.

"PARTNERSHIP UNIT" means a fractional, undivided share of the Partnership

Interests of all Partners (other than the Special Limited Partner) issued

hereunder. The allocation of Partnership Units among the Partners shall be as

set forth on Exhibit A, as may be amended from time to time.

"PERCENTAGE INTEREST" means the percentage ownership interest in the

Partnership of each Partner, as determined by dividing the Partnership Units

owned by a Partner by the total number of Partnership Units then outstanding.

The Percentage Interest of each Partner shall be as set forth on Exhibit A, as

may be amended from time to time.

"PERSON" means any individual, partnership, limited liability company,

corporation, joint venture, trust or other entity.

"PROFIT" shall have the meaning set forth in Section 5.01(k) hereof.

"PROPERTY" means any office or industrial property or other investment in

which the Partnership holds an ownership interest.

"PROSPECTUS" means the same as that term is defined in Section 2(10) of the

Securities Act of 1933, including a preliminary prospectus, an offering circular

as described in Rule 256 of the General Rules and Regulations under the

Securities Act of 1933 or, in the case of an intrastate offering, any document

by whatever name known, used for the purpose of offering and selling securities

to the public.

"REDEMPTION AMOUNT" means either the Cash Amount or the REIT Shares Amount,

as selected by the General Partner in its sole discretion pursuant to Section

8.05(b) hereof.

"REDEMPTION RIGHT" has the meaning provided in Section 8.05(a) hereof.

"REDEMPTION SHARES" has the meaning provided in Section 8.06(a) hereof.

"REDEEMING PARTNER" has the meaning provided in Section 8.05(a) hereof.

"REGULATIONS" means the Federal Income Tax Regulations issued under the

Code, as amended and as hereafter amended from time to time. Reference to any

particular provision of the regulations shall mean that provision of the

Regulations on the date hereof and any successor provision of the Regulations.

"REIT" means a real estate investment trust under Sections 856 through 860

of the Code.

6

<PAGE>

"REIT EXPENSES" means (i) costs and expenses relating to the formation and

continuity of existence and operation of the Company and any Subsidiaries

thereof (which Subsidiaries shall, for purposes hereof, be included within the

definition of Company), including taxes, fees and assessments associated

therewith, any and all costs, expenses or fees payable to any director, officer

or employee of the Company, (ii) costs and expenses relating to any public

offering and registration of securities by the Company and all statements,

reports, fees and expenses incidental thereto, including, without limitation,

underwriting discounts and selling commissions applicable to any such offering

of securities and any costs and expenses associated with any claims made by any

holders of such securities or any underwriters or placement agents thereof,

(iii) costs and expenses associated with any repurchase of any securities by the

Company, (iv) costs and expenses associated with the preparation and filing of

any periodic or other reports and communications by the Company under federal,

state or local laws or regulations, including filings with the Commission, (v)

costs and expenses associated with compliance by the Company with laws, rules

and regulations promulgated by any regulatory body, including the Commission and

any securities exchange, (vi) costs and expenses associated with any 401(k)

plan, incentive plan, bonus plan or other plan providing for compensation for

the directors or employees of the Company or the Partnership, (vii) costs and

expenses incurred by the Company relating to any issuance or redemption of

Partnership Interests and (viii) all other operating or administrative costs of

the Company incurred in the ordinary course of its business on behalf of or in

connection with the Partnership.

"REIT SHARES" means the shares of common stock, $.01 par value per share,

of the Company (or Successor Entity, as the case may be).

"REIT SHARES AMOUNT" shall mean a number of REIT Shares equal to the

product of the number of Partnership Units offered for redemption by a Redeeming

Partner, multiplied by the Conversion Factor as adjusted to and including the

day immediately preceding the Specified Redemption Date; provided, that in the

event the Company issues to all holders of REIT Shares rights, options, warrants

or convertible or exchangeable securities entitling the stockholders to

subscribe for or purchase REIT Shares or any other securities or property

(collectively, the "rights") and the rights have not expired at the Specified

Redemption Date, then the REIT Shares Amount shall also include the rights

issuable to a holder of the REIT Shares Amount of REIT Shares on the record date

fixed for purposes of determining the holders of REIT Shares entitled to rights.

"RETURN" means an 8% per annum cumulative, non-compounded return on

Adjusted Invested Capital. If Adjusted Invested Capital is adjusted during a

period for which the Return is calculated, the Return will be computed based on

the weighted average Adjusted Invested Capital for the period. The Return shall

be prorated with respect to any Partner that is admitted as a Partner during a

period or that withdraws as a Partner during a period.

"SALE PROCEEDS" means the cash proceeds from a Capital Transaction after

payment of or adequate provision for, transaction expenses, debts of the

Partnership and any reasonably necessary reserves; provided, however, that Sale

Proceeds shall not include proceeds from any Terminating Capital Transaction.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SERVICE" means the Internal Revenue Service.

"SPECIAL LIMITED PARTNER" means NNN Apartment REIT Advisor, LLC a Virginia

limited liability company, or any Person who becomes an Advisor pursuant to the

authority of the Company under Section 8.1 of the Charter.

7

<PAGE>

"SPECIFIED REDEMPTION DATE" means the first business day that is at least

60 days after the receipt by the General Partner of the Notice of Redemption or

such earlier date as shall be designated in writing to the Redeeming Partner by

the General Partner.

"SPONSOR" means 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, accountants and underwriters whose only compensation

is for professional services. A Person may also 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 the Company's

properties;

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

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

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

not negotiated at arms' length with the Company.

"SUBSIDIARY" means, with respect to any Person, any corporation,

partnership or other entity of which a majority of (i) the voting power of the

voting equity securities or (ii) the outstanding equity interests is owned,

directly or indirectly, by such Person.

"SUBSIDIARY PARTNERSHIP" means any partnership in which the General

Partner, a Subsidiary of the General Partner or the Partnership owns a

partnership interest.

"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the Partnership

as a Limited Partner pursuant to Section 9.03 hereof.

"SUCCESSOR ENTITY" has the meaning provided in the definition of

"Conversion Factor" contained herein.

"SURVIVOR" has the meaning set forth in Section 7.01(d) hereof.

"TERMINATING CAPITAL TRANSACTION" means the sale, exchange or other

disposition of all or substantially all of the assets of the Partnership, after

which transaction the Partnership is dissolved and terminated.

8

<PAGE>

"TRADING DAY" means a day on which the principal national securities

exchange on which a security is listed or admitted to trading is open for the

transaction of business or, if a security is not listed or admitted to trading

on any national securities exchange, shall mean any day other than a Saturday, a

Sunday or a day on which banking institutions in the State of New York are

authorized or obligated by law or executive order to close.

"TRANSACTION" has the meaning set forth in Section 7.01(c) hereof.

"TRANSFER" has the meaning set forth in Section 9.02(a) hereof.

"TRANSFER RESTRICTION DATE" means that date on which the Offering is

declared effective by the Commission or such later date as shall be established

by agreement between the Partnership and any Limited Partner.

"WITHHELD AMOUNT" means an amount required to be withheld by the

Partnership under the Code or any other federal, state or local law, including,

without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code.

ARTICLE II

PARTNERSHIP CONTINUATION AND IDENTIFICATION

Section 2.01 Organization. The Partnership is a limited partnership

organized pursuant to the provisions of the Act. Except as expressly provided

herein to the contrary, the rights and obligations of the Partners and the

administration and termination of the Partnership shall be governed by the Act.

The Partnership Interest of each Partner shall be personal property for all

purposes.

Section 2.02 Name. The name of the Partnership shall be NNN Apartment REIT

Holdings, L.P. The Partnership's business may be conducted under any other name

or names deemed advisable by the General Partner, including the name of the

General Partner or any Affiliate thereof. The words "Limited Partnership,"

"L.P.," "Ltd." or similar words or letters shall be included in the

Partnership's name where necessary for the purposes of complying with the laws

of any jurisdiction that so requires. The General Partner, in its sole and

absolute discretion, may change the name of the Partnership at any time and from

to time to time shall notify the Limited Partners of such change in the next

regular communication to the Limited Partners.

Section 2.03 Registered Office and Agent; Principal Office. The name and

address of the Partnership's registered agent in the Commonwealth of Virginia is

James L. Weinberg, Esq., 701 East Byrd Street, 15th Floor, Richmond, Virginia

23219. The principal office of the Partnership 1551 N. Tustin Avenue, Suite 200,

Santa Ana, California 92705 or such other place as the General Partner may from

time to time designate, in its sole and absolute discretion, by notice to the

Limited Partners. The Partnership may maintain offices at such other place or

places within or outside the Commonwealth of Virginia as the General Partner

deems advisable.

Section 2.04 Partners.

(a) The General Partner of the Partnership is the Company. Its principal

place of business be the same as that of the Partnership.

9

<PAGE>

(b) The General Partner hereby consents to admit those persons identified

on Exhibit A as Limited Partners or Special Limited Partners as of the date

hereof. The Limited Partners shall be those Persons identified as Limited

Partners on Exhibit A hereto, as amended from time to time.

Section 2.05 Term and Dissolution.

(a) The term of the Partnership commenced on December 27, 2005, the date

the Certificate was filed with the State Corporation Commission of the

Commonwealth of Virginia in accordance with the Act and shall continue in full

force and effect until December 31, 2055, except that the Partnership shall be

dissolved upon the first to occur of any of the following events:

(i) The occurrence of an Event of Bankruptcy as to a General Partner

or the dissolution, death, removal or withdrawal of a General Partner

unless the business of the Partnership is continued pursuant to Section

7.03(b) hereof; provided that if a General Partner is on the date of such

occurrence a partnership, the dissolution of such General Partner as a

result of the dissolution, death, withdrawal, removal or Event of

Bankruptcy of a partner in such partnership shall not be an event of

dissolution of the Partnership if the business of such General Partner is

continued by the remaining partner or partners, either alone or with

additional partners and such General Partner and such partners comply with

any other applicable requirements of this Agreement;

(ii) The passage of 90 days after the sale or other disposition of all

or substantially all of the assets of the Partnership (provided that if the

Partnership receives an installment obligation as consideration for such

sale or other disposition, the Partnership shall continue, unless sooner

dissolved under the provisions of this Agreement, until such time as such

note or notes are paid in full);

(iii) The election by the General Partner that the Partnership should

be dissolved; or

(iv) As otherwise provided in the Act.

(b) Upon dissolution of the Partnership (unless the business of the

Partnership is continued pursuant to Section 7.03(b) hereof), the General

Partner (or its trustee, receiver, successor or legal representative) shall

amend or cancel the Certificate and liquidate the Partnership's assets and apply

and distribute the proceeds thereof in accordance with Section 5.06 hereof.

Notwithstanding the foregoing, the liquidating General Partner may either (i)

defer liquidation of or withhold from distribution for a reasonable time, any

assets of the Partnership (including those necessary to satisfy the

Partnership's debts and obligations) or (ii) distribute the assets of the

Partnership to the Partners in kind.

Section 2.06 Filing of Certificate and Perfection of Limited Partnership.

The General Partner shall execute, acknowledge, record and file at the expense

of the Partnership, the Certificate and any and all amendments thereto and all

requisite fictitious name statements and notices in such places and

jurisdictions as may be necessary to cause the Partnership to be treated as a

limited partnership under and otherwise to comply with, the laws of each state

or other jurisdiction in which the Partnership conducts business.

Section 2.07 Certificates Describing Partnership Units. At the request of a

Limited Partner, the General Partner, at its option, may issue a certificate

summarizing the terms of such Limited Partner's interest in the Partnership,

including the number of Partnership Units owned and the Percentage Interest

10

<PAGE>

represented by such Partnership Units as of the date of such certificate. Any

such certificate (i) shall be in form and substance as approved by the General

Partner, (ii) shall not be negotiable and (iii) shall bear a legend to the

following effect:

This certificate is not negotiable. The Partnership Units represented

by this certificate are governed by and transferable only in

accordance with the provisions of the Agreement of Limited Partnership

of NNN Apartment REIT Holdings, L.P., as amended from time to time.

ARTICLE III

BUSINESS OF THE PARTNERSHIP

Section 3.01 Purpose and Nature. The purpose and nature of the business to

be conducted by the Partnership is (i) to conduct any business that may be

lawfully conducted by a limited partnership organized pursuant to the Act,

provided, however, that such business shall be limited to and conducted in such

manner as to permit the Company at all times to qualify as a REIT, unless the

Company otherwise ceases to qualify as a REIT, (ii) to enter into any

partnership, joint venture or other similar arrangement to engage in any of the

foregoing or the ownership of interests in any entity engaged in any of the

foregoing and (iii) to do anything necessary or incidental to the foregoing. In

connection with the foregoing and without limiting the Company's right in its

sole discretion to cease qualifying as a REIT, the Partners acknowledge that the

Company's current status as a REIT inures to the benefit of all the Partners and

not solely to the Company. The General Partner shall also be empowered to do any

and all acts and things necessary or prudent to ensure that the Partnership will

not be classified a "publicly traded partnership" that is treated as a

corporation under Section 7704 of the Code.

Section 3.02 Powers. The General Partner is empowered to do any and all

acts and things necessary, appropriate, proper, advisable, incidental to or

convenient for the furtherance and accomplishment of the purposes and business

described herein and for the protection and benefit of the Partnership, provided

that the General Partner shall not take or refrain from taking, any actions

which, in the judgment of the General Partner, in its sole and absolute

discretion, could: (i) adversely affect the ability of the General Partner to

initially qualify, or continue to qualify, as a REIT; (ii) subject the General

Partner to any taxes under Section 857 or Section 4981 of the Code (other than

any tax imposed under Code Section 857 on capital gains that the General Partner

elects to retain); or (iii) violate any law or regulation of any governmental

body or agency having jurisdiction over the General Partner or its securities,

unless such action (or inaction) shall have been specifically consented to in

writing by the General Partner.

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ACCOUNTS

Section 4.01 Capital Contributions. The General Partner, the Special

Limited Partner and the Limited Partners have made capital contributions to the

Partnership in exchange for the Partnership Interests set forth opposite their

names on Exhibit A, as amended from time to time.

Section 4.02 Additional Capital Contributions and Issuances of Additional

Partnership Interests. Except as provided in this Section 4.02 or in Section

4.03, the Partners shall have no right or obligation to make any additional

Capital Contributions or loans to the Partnership. The General Partner may

contribute additional capital to the Partnership, from time to time and receive

additional Partnership Interests in respect thereof, in the manner contemplated

in this Section 4.02.

11

<PAGE>

(a) Issuances of Additional Partnership Interests. The General Partner is

hereby authorized to cause the Partnership to issue such additional Partnership

Interests in the form of Partnership Units for any Partnership purpose at any

time or from time to time, to the Partners (including the General Partner and

the Special Limited Partner) or to other Persons for such consideration and on

such terms and conditions as shall be established by the General Partner in its

sole and absolute discretion, all without the approval of the Special Limited

Partner or any Limited Partners. Any additional Partnership Interests issued

thereby may be issued in one or more classes, or one or more series of any of

such classes, with such designations, preferences and relative, participating,

optional or other special rights, powers and duties, including rights, powers

and duties senior to Limited Partnership Interests, all as shall be determined

by the General Partner in its sole and absolute discretion and without the

approval of the Special Limited Partner or any Limited Partner, subject to

Virginia law, including, without limitation, (i) the allocations of items of

Partnership income, gain, loss, deduction and credit to each such class or

series of Partnership Interests; (ii) the right of each such class or series of

Partnership Interests to share in Partnership distributions; and (iii) the

rights of each such class or series of Partnership Interests upon dissolution

and liquidation of the Partnership; provided, however, that no additional

Partnership Interests shall be issued to the Company or any wholly owned

Subsidiary of the Company unless either:

(i)(A) the additional Partnership Interests are issued in connection

with an issuance of REIT Shares of or other interests in the Company,

which shares or interests have designations, preferences and other

rights, all such that the economic interests are substantially similar

to the designations, preferences and other rights of the additional

Partnership Interests issued to the Company by the Partnership in

accordance with this Section 4.02 and (B) the Company shall make a

Capital Contribution (directly or through the General Partner) to the

Partnership in an amount equal to the proceeds raised in connection

with the issuance of such REIT Shares of or other interests in the

Company, or

(ii) the additional Partnership Interests are issued to all Partners

in proportion to their respective Percentage Interests.

Without limiting the foregoing, the General Partner is expressly authorized

to cause the Partnership to issue Partnership Units for less than fair market

value, so long as the General Partner concludes in good faith that such issuance

is in the best interests of the General Partner and the Partnership.

(b) Upon Issuance of Additional Securities. After the Offering, the Company

shall not issue any additional REIT Shares (other than REIT Shares issued in

connection with a redemption pursuant to Section 8.05 hereof) or rights,

options, warrants or convertible or exchangeable securities containing the right

to subscribe for or purchase REIT Shares (collectively, "Additional Securities")

other than to all holders of REIT Shares, unless (A) the General Partner shall

cause the Partnership to issue to the Company Partnership Interests or rights,

options, warrants or convertible or exchangeable securities of the Partnership

having designations, preferences and other rights, all such that the economic

interests are substantially similar to those of the Additional Securities and

(B) the Company contributes (directly or through the General Partner) the

proceeds from the issuance of such Additional Securities and from any exercise

of rights contained in such Additional Securities to the Partnership; provided,

however, that the Company is allowed to issue Additional Securities without

complying with the provisions of (A) and (B) above if such issuance of

Additional Securities has been approved and determined to be in the best

interests of the Company and the Partnership by a majority of the Independent

Directors. Without limiting the foregoing, the Company is expressly authorized

to issue Additional Securities for less than fair market value and the General

Partner is expressly authorized to cause the Partnership to issue to the Company

corresponding Partnership Interests, so long as (x) the General Partner

concludes in good faith that such

12

<PAGE>

issuance is in the best interests of the Partnership and (y) the Company

contributes (directly or through the General Partner) all proceeds from such

issuance to the Partnership. In the event the Company issues REIT Shares for a

cash purchase price and contributes (directly or through the General Partner)

all of the proceeds of such issuance to the Partnership, the General Partner

shall be issued a number of additional Partnership Units equal to the product of

(A) the number of such REIT Shares issued by the Company, the proceeds of which

were so contributed, multiplied by (B) a fraction, the numerator of which is

100%, and the denominator of which is the Conversion Factor in effect on the

date of such contribution.

(c) Certain Deemed Contributions of Proceeds of Offering of REIT Shares. In

connection with any and all offerings of REIT Shares, the Company shall make

(directly or through the General Partner) Capital Contributions to the

Partnership of the net proceeds therefrom, provided that if the proceeds

actually received and contributed are less than the gross proceeds of such

offering as a result of any underwriter's discount or other expenses paid or

incurred in connection with such issuance, then the Company shall make (directly

or through a General Partner if other than the Company) a Capital Contribution

of such net proceeds to the Partnership but the General Partner shall receive

additional Partnership Units with a value equal to the aggregate amount of the

gross proceeds of such issuance pursuant to Section 4.02(a) hereof. Upon any

such Capital Contribution by the Company or the General Partner, its Capital

Account shall be increased by the actual amount of its Capital Contribution

pursuant to Section 4.01 hereof.

Section 4.03 Additional Funding. If the General Partner determines that it

is in the best interests of the Partnership to provide for additional

Partnership funds ("Additional Funds") for any Partnership purpose, the General

Partner may (i) cause the Partnership to obtain such funds from outside

borrowings, or (ii) elect to have the General Partner provide such Additional

Funds to the Partnership through loans or otherwise.

Section 4.04 Capital Accounts. A separate capital account (a "Capital

Account") shall be established and maintained for each Partner in accordance

with Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner

acquires an additional Partnership Interest in exchange for more than a de

minimis Capital Contribution, (ii) the Partnership distributes to a Partner more

than a de minimis amount of Partnership property as consideration for a

Partnership Interest, or (iii) the Partnership is liquidated within the meaning

of Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue

the property of the Partnership to its fair market value (as determined by the

General Partner, in its sole discretion, and taking into account Section 7701(g)

of the Code) in accordance with Regulations Section 1.704-1(b)(2)(iv)(f). When

the Partnership's property is revalued by the General Partner, the Capital

Accounts of the Partners shall be adjusted in accordance with Regulations

Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require such Capital

Accounts to be adjusted to reflect the manner in which the unrealized gain or

loss inherent in such property (that has not been reflected in the Capital

Account previously) would be allocated among the Partners pursuant to Section

5.01 if there were a taxable disposition of such property for its fair market

value (as determined by the General Partner, in its sole discretion, and taking

into account Section 7701(g) of the Code) on the date of the revaluation.

Section 4.05 Percentage Interests. If the number of outstanding Partnership

Units increases or decreases during a taxable year, each Partner's Percentage

Interest shall be adjusted by the General Partner effective as of the effective

date of each such increase or decrease to a percentage equal to the number of

Partnership Units held by such Partner divided by the aggregate number of

Partnership Units outstanding after giving effect to such increase or decrease.

If the Partners' Percentage Interests are adjusted pursuant to this Section

4.05, Operating Income for the taxable year in which the adjustment occurs shall

be allocated between the part of the year ending on the day preceding the

effective date of such adjustment and the part of the year beginning on the

effective date of such adjustment either (i) as if the taxable year had ended on

the date of the adjustment or (ii) based on the number of days in each part.

13

<PAGE>

The General Partner, in its sole discretion, shall determine which method shall

be used to allocate Operating Income for the taxable year in which the

adjustment occurs. The allocation of Operating Income for the earlier part of

the year shall be based on the Percentage Interests before adjustment, and the

allocation of Operating Income for the later part shall be based on the adjusted

Percentage Interests.

Section 4.06 No Interest on Contributions. No Partner shall be entitled to

interest on its Capital Contribution.

Section 4.07 Return of Capital Contributions. No Partner shall be entitled

to withdraw any part of its Capital Contribution or its Capital Account or to

receive any distribution from the Partnership, except as specifically provided

in this Agreement. Except as otherwise provided herein, there shall be no

obligation to return to any Partner or withdrawn Partner any part of such

Partner's Capital Contribution for so long as the Partnership continues in

existence.

Section 4.08 No Third-Party Beneficiary. No creditor or other third party

having dealings with the Partnership shall have the right to enforce the right

or obligation of any Partner to make Capital Contributions or loans or to pursue

any other right or remedy hereunder or at law or in equity, it being understood

and agreed that the provisions of this Agreement shall be solely for the benefit

of, and may be enforced solely by, the parties hereto and their respective

successors and assigns. None of the rights or obligations of the Partners herein

set forth to make Capital Contributions or loans to the Partnership shall be

deemed an asset of the Partnership for any purpose by any creditor or other

third party, nor may such rights or obligations be sold, transferred, or

assigned by the Partnership or pledged or encumbered by the Partnership to

secure any debt or other obligation of the Partnership or of any of the

Partners. In addition, it is the intent of the parties hereto that no

distribution to any Limited Partner shall be deemed a return of money or other

property in violation of the Act. However, if any court of competent

jurisdiction holds that, not withstanding the provisions of this Agreement, any

Limited Partner is obligated to return such money or property, such obligation

shall be the obligation of such Limited Partner and not of the General Partner.

Without limiting the generality of the foregoing, a deficit Capital Account of a

Partner shall not be deemed to be a liability of such Partner nor an asset or

property of the Partnership.

ARTICLE V

ALLOCATIONS; DISTRIBUTIONS

Section 5.01 Allocations.

(a) Operating Income. Operating Income of the Partnership for each taxable

year of the Partnership shall be allocated among the Partners as follows:

(i) First, 100% to the General Partner and the Limited Partners in

accordance with their respective Percentage Interests until the cumulative

amount of Operating Income allocated pursuant to this Section 5.01(a)(i)

for the current and all prior years equals the cumulative amount of

Operating Losses allocated pursuant to Section 5.01(b)(ii) for the current

and all prior years; and

14

<PAGE>

(ii) Thereafter, 100% to the General Partner and the Limited Partners

in accordance with their respective Percentage Interests.

(b) Operating Losses. Operating Losses of the Partnership for each taxable

year of the Partnership shall be allocated among the Partners as follows:

(i) First, 100% to the General Partner and the Limited Partners in

accordance with their respective Percentage Interests until the cumulative

amount of Operating Losses allocated pursuant to this Section 5.01(b)(i)

for the current and all prior years equals the cumulative amount of

Operating Income allocated pursuant to Section 5.01(a)(ii) for the current

and all prior years; and

(ii) Thereafter, 100% to the General Partner and the Limited Partners

in accordance with their respective Percentage Interests.

(c) Gains and Losses from Capital Transactions. (i) Gains from Capital

Transactions shall be allocated among the Partners as follows:

(A) First, 100% to the General Partner and the Limited Partners

in accordance with their respective Percentage Interests until the

cumulative amount of gain allocated pursuant to this Section

5.01(c)(i)(A) for the current and all prior years equals the

cumulative amount of losses allocated pursuant to Section

5.01(c)(ii)(B) for the current and all prior years;

15

<PAGE>

(B) Second, 100% to the General Partner and the Limited Partners

in accordance with their respective Percentage Interests until the

General Partner and the Limited Partners have been allocated an

aggregate amount equal to the sum of (1) any depreciation or

amortization recapture associated with the Partnership's investment in

the property sold, and (2) any amounts distributed to the General

Partner and the Limited Partners pursuant to Section 5.02(b)(i)(B);

and

(C) Thereafter, 85% to the General Partner and the Limited

Partners in accordance with their respective Percentage Interests, and

15% to the Special Limited Partner.

(ii) Losses from Capital Transactions shall be allocated among the

Partners as follows:

(A) First, 85% to the General Partner and the Limited Partners in

accordance with their respective Percentage Interests and 15% to the

Special Limited Partner until the cumulative amount of losses

allocated pursuant to this Section 5.01(c)(ii)(A) for the current and

all prior years equals the cumulative amount of gain allocated

pursuant to Section 5.01(c)(i)(C) for the current and all prior years;

and

(B) Thereafter, 100% to the General Partner and the Limited

Partners in accordance with their respective Percentage Interests.

(d) Gains and Losses from Terminating Capital Transactions. (i) Gains from

a Terminating Capital Transaction shall be allocated among the Partners as

follows:

(A) First, 100% to the General Partner and the Limited Partners

in accordance with their respective Percentage Interests until the

aggregate Capital Account balance of the General Partner and the

Limited Partners equals the sum of (1) the Adjusted Invested Capital

(after reduction by any amounts previously distributed pursuant to

Section 5.02(b)(i)(A) and (2) the cumulative Return for the current

year and all prior years that has not previously been distributed

pursuant to Section 5.02(b)(i)(B); and

(B) Thereafter, 85% to the General Partner and the Limited

Partners in accordance with their respective Percentage Interests, and

15% to the Special Limited Partner.

16

<PAGE>

(ii) Losses from a Terminating Capital Transaction shall be allocated

among the Partners as follows:

(A) First, 85% to the General Partner and the Limited Partners in

accordance with their respective Percentage Interests and 15% to the

Special Limited Partner until the cumulative amount of losses

allocated pursuant to Section 5.01(c)(ii)(A) and this Section

5.01(d)(ii)(A) for the current and all prior years equals the

cumulative amount of gain allocated pursuant to Section 5.01(c)(i)(C)

for the current and all prior years; and

(B) Thereafter, 100% to the General Partner and the Limited

Partners in accordance with their respective Percentage Interests.

(e) Clawback. Notwithstanding Sections 5.01(a), (b), (c) and (d) hereof, to

the extent that the Special Limited Partner is required to repay distributions

to the Partnership pursuant to Section 5.02(c) hereof, the allocations under

Sections 5.01(a), (b), (c) and (d) hereof shall be adjusted to reflect such

repayment.

(f) Depreciation and Amortization Deductions. Depreciation and amortization

deductions for each taxable year of the Partnership shall be allocated to the

General Partner and the Limited Partners in accordance with their respective

Percentage Interests.

(g) Minimum Gain Chargeback. Notwithstanding any provision to the contrary,

(i) any expense of the Partnership that is a "nonrecourse deduction" within the

meaning of Regulations Section 1.704-2(b)(1) shall be allocated in accordance

with the Partners' respective Percentage Interests, (ii) any expense of the

Partnership that is a "partner nonrecourse deduction" within the meaning of

Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears

the "economic risk of loss" of such deduction in accordance with Regulations

Section 1.704-2(i)(1), (iii) if there is a net decrease in Partnership Minimum

Gain within the meaning of Regulations Section 1.704-2(f)(1) for any Partnership

taxable year, then subject to the exceptions set forth in Regulations Section

1.704-2(f)(2), (3), (4) and (5), items of gain and income shall be allocated

among the Partners in accordance with Regulations Section 1.704-2(f) and the

ordering rules contained in Regulations Section 1.704-2(j) and (iv) if there is

a net decrease in Partner Nonrecourse Debt Minimum Gain within the meaning of

Regulations Section 1.704-2(i)(4) for any Partnership taxable year, then,

subject to the exceptions set forth in Regulations Section 1.704(2)(g), items of

gain and income shall be allocated among the Partners in accordance with

Regulations Section 1.704-2(i)(4) and the ordering rules contained in

Regulations Section 1.704-2(j). A Partner's "interest in partnership profits"

for purposes of determining its share of the nonrecourse liabilities of the

Partnership within the meaning of Regulations Section 1.752-3(a)(3) shall be

such Partner's Percentage Interest.

(h) Qualified Income Offset. If a Partner receives in any taxable year an

adjustment, allocation, or distribution described in subparagraph (4), (5), or

(6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a

deficit balance in such Partner's Capital Account that exceeds the sum of such

Partner's shares of Partnership Minimum Gain and Part