EQUITY RESIDENTIAL (EQR)

3. Related Party Transactions

An affiliate of the Greenwood Properties allocated insurance expense under a master policy to the Properties and various affiliated properties.  Insurance expense for the year ended December 31, 2006 and the period from January 1, 2007 to July 27, 2007 (unaudited) was approximately $217,000 and $126,000, respectively, and is included in real estate taxes and insurance in the accompanying statements.

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4. Related Party Transactions

An affiliate of The Gallery performed the property management function and charged total management fees of approximately $162,000 and $126,000 for the year ended December 31, 2005 and the nine months ended September 30, 2006 (unaudited), respectively.

An affiliate of The Gallery allocated insurance expense under a master policy to the Property and various affiliated properties.  Insurance expense for the year ended December 31, 2005 and the period from January 1, 2006 to September 30, 2006 (unaudited) is approximately $62,000 and $36,000, respectively, and is included in real estate taxes and insurance in the accompanying statements.

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Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders
Equity Residential

The Partners

ERP Operating Limited Partnership

We have audited the accompanying statement of revenue and certain expenses of San Marcos for the year ended December 31, 2005. This statement is the responsibility of the management of San Marcos (the “Property”). Our responsibility is to express an opinion on this statement based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. We were not engaged to perform an audit of the Property’s internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Current Report on Form 8-K of Equity Residential and ERP Operating Limited Partnership, as described in Note 1, and is not intended to be a complete presentation of the Property’s revenue and expenses.

In our opinion, the statement referred to above presents fairly, in all material respects, the revenue and certain expenses of San Marcos for the year ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

Chicago, Illinois

February 22, 2007

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3. Related Party Transactions

An affiliate of Skyline Towers performed the property management function and charged total management fees of 3% of rental and other property income for this service for 2004 and the nine month period ended September 30, 2005. Management fees in the amount of $363,965 and $345,114 were charged to the Property during 2004 and the nine month period ended September 30, 2005 (unaudited), respectively.

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3. Related Party Transactions

Property management fees in the amount of $412,500 and $337,500 were charged by a related party during 2004 and the nine month period ended September 30, 2005, respectively.

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