Morgan Stanley Real Estate's Prime Property Fund to Acquire AMLI Residential Properties Trust in an All Cash Transaction

Under the terms of the agreement PRIME will acquire all of AMLI'scommon shares for $37.75 per share in cash. Holders of limitedpartnership units in AMLI's operating partnership will also receive$37.75 per unit in cash. The per share purchase price represents a20.7% premium over AMLI's closing price on October 21, 2005. The totalconsideration of approximately $2.1 billion includes AMLI's debt andpreferred securities. AMLI will continue to pay regular quarterlydistributions at an annualized rate of $1.92 per share and per unitthrough the closing of the transaction, with a pro rated distributionfor the quarter in which the transaction closes being included in themerger consideration.

Completion of the transaction, which is expected to occur duringthe first quarter of 2006, is subject to approval by AMLI's commonshareholders and certain other customary closing conditions. Thetransaction has been unanimously approved by AMLI's Board of Trustees,which will recommend that the common shareholders approve thetransaction.

Gregory T. Mutz, AMLI Chairman and CEO said, "This transaction isa great outcome for our shareholders, demonstrating the value ofAMLI's portfolio, operating platform and brand. We are proud of theperformance and shareholder returns of AMLI as a public company, andthe AMLI team looks forward to continuing the execution of itsstrategy in the private marketplace."

"Multifamily is attractive because of its low volatility andhigher risk-adjusted returns relative to other property types," saidDave Hardman, Managing Director and Head of U.S. Real Estate Investingat Morgan Stanley. "AMLI represents an opportunity to acquire a largeportfolio of high-quality multifamily assets, an outstandingmultifamily management team and organization, strong developmentcapabilities, and a recognized brand name in the sector. We lookforward to this management team leading the company and growing theAMLI franchise going forward."

JP Morgan Securities Inc. acted as financial advisor to AMLI, andMayer, Brown, Rowe & Maw LLP provided legal advice. Morgan Stanleyacted as financial advisor to PRIME and Davis Polk & Wardwell and King& Spalding LLP provided legal advice.

AMLI will discuss this transaction at its regularly scheduledquarterly conference call on Wednesday, October 26, 2005 at 3:30 p.m.Eastern Time. The toll-free number for the call is (800) 946-0706 -Passcode: 994697, and should be accessed approximately five minutesprior to conference time. A live webcast of the conference call willalso be available in the 'Company Info' section on AMLI's website(www.amli.com/comp/) and at www.streetevents.com, a password-protectedevent management site. Additionally, an on-line replay of the webcastwill be available for 60 days following the call.

About AMLI Residential Properties Trust

The AMLI(R) portfolio currently includes 75 apartment communitiescontaining 28,356 apartment homes, with an additional 827 apartmenthomes under development or in lease-up in three locations. AMLI isfocused on the development, acquisition and management ofinstitutional quality multifamily communities in the Southeast,Southwest, Midwest and Mountain regions of the U.S. AMLI Residentialalso serves as institutional advisor and asset manager for largepension funds, tax-exempt foundations and other financial institutionsthrough AMLI's co-investment business. AMLI employs approximately 850people who are dedicated to achieving AMLI's mission -- Provide AnOutstanding Living Environment For Our Residents. More information onAMLI is available at www.amli.com.

About Prime Property Fund and Morgan Stanley Real Estate

PRIME, a $4.5 billion diversified core real estate fund, ismanaged by Morgan Stanley Real Estate. PRIME's assets include office,retail, multifamily, industrial, self storage and hotel properties andare located in major real estate markets throughout the United States.Morgan Stanley Real Estate is comprised of three major globalbusinesses: Investing, Banking, and Lending. Since 1991, MorganStanley has acquired more than $68.7 billion of real estate assetsworldwide and currently manages $38.0 billion in real estate assets onbehalf of its clients. Using its own capital, Morgan Stanley alsooriginates upwards of $11 billion in commercial mortgages annually. Inaddition, Morgan Stanley Real Estate provides a complete range ofinvestment banking services including merger, acquisition andrestructuring advisory and recapitalizations, as well as public andprivate debt and equity financing. Morgan Stanley established its realestate organization in 1969.

Morgan Stanley (NYSE: MWD) is a global financial services firm anda market leader in securities, investment management, and creditservices. With more than 600 offices in 28 countries, Morgan Stanleyconnects people, ideas and capital to help clients achieve theirfinancial aspirations.

Forward-Looking Statements

Certain matters discussed in this press release areforward-looking statements within the meaning of Federal SecuritiesLaw. Although AMLI believes expectations reflected in suchforward-looking statements are based upon reasonable assumptions, noassurance can be given that such expectations will be achieved.Forward-looking statements can be identified by the use of the words"project," "believe," "expect," "anticipate," "intend," "estimate,""assume," and other similar expressions that predict or indicatefuture events, achievements or trends or that do not relate tohistorical matters.

Forward-looking statements in this press release include, withoutlimitation, statements relating to the anticipated closing date of thetransaction, AMLI's ability to generate attractive returns, and thepossibility that any of the conditions to closing, including thoseoutside the control of AMLI, will be satisfied. AMLI does not assurethe future results or outcome of the matters described inforward-looking statements; rather, these statements merely reflectcurrent expectations of the approximate outcomes of the mattersdiscussed. Forward-looking statements involve known and unknown risks,uncertainties and other factors, some of which are beyond AMLI'scontrol. The reader is cautioned to make his/her own judgment withregard to the statements discussed in this press release and theassumptions noted by AMLI herein.

Many factors may cause actual results and AMLI's actualperformance to differ materially from the anticipated future resultsor performance expressed or implied by these forward-lookingstatements. Certain of the factors that could cause actual results orAMLI's actual performance to differ materially from those expressed orimplied by these forward-looking statements include, but are notlimited to, general economic conditions, local real estate conditions,the timely development and lease-up of communities, other risksdetailed from time to time in AMLI's Securities and ExchangeCommission (SEC) reports, including the annual report on form 10-K forthe year ended December 31, 2004.

Additional Information about the Merger and Where to Find It

In connection with the proposed merger of AMLI with and into awholly owned subsidiary of PRIME, AMLI intends to file relevantmaterials with the SEC, including a proxy statement. INVESTORS ANDSECURITY HOLDERS OF AMLI ARE URGED TO READ THESE MATERIALS WHEN THEYBECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUTAMLI, PRIME, MORGAN STANLEY AND THE MERGER. The proxy statement andother relevant materials (when they become available) and any otherdocuments filed by AMLI with the SEC may be obtained free of charge atthe SEC's website at www.sec.gov. In addition, investors and securityholders may obtain free copies of the documents filed with the SEC byAMLI by contacting Sue Bersh, AMLI V.P.-Corporate Communications atsbersh@amli.com or (312) 984-2607 or accessing AMLI's website atwww.amli.com. Investors and security holders are urged to read theproxy statement and the other relevant materials when they becomeavailable before making any voting or investment decision with respectto the merger.

Proxies may be solicited on behalf of AMLI by members of its Boardof Trustees and executive officers. Information about such persons canbe found in AMLI's definitive proxy statement relating to its 2005Annual Meeting of Shareholders, which was filed with the SEC on March16, 2005 and may be obtained free of charge at the SEC's website atwww.sec.gov or at AMLI's website at www.amli.com.

This communication shall not constitute an offer to sell or thesolicitation of an offer to sell or the solicitation of an offer tobuy any securities, nor shall there be any sale of securities in anyjurisdiction in which such offer, solicitation or sale would beunlawful prior to registration or qualification under the securitieslaws of any such jurisdiction.