Special Note Regarding Forward - Looking Statements

This Quarterly Report on Form 10-Q contains various "forward-looking statements." Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "may," "will," "would," "could," "should," "seeks," "intends," "plans," "projects," "estimates" or anticipates" or the negative of these words and phrases or similar words or phrases. Statements regarding the following subjects may be impacted by a number of risks and uncertainties:

· our business and investment strategy;
· our projected results of operations;
· our ability to manage our anticipated growth;
· our ability to obtain future financing arrangements;
· our estimates relating to, and our ability to pay, future distributions;
· our understanding of our competition and our ability to compete effectively;
· real estate market and industry trends in the United States, and particularly in the St. Charles, Maryland marketplace and its surrounding areas, and Puerto Rico;
· projected capital and operating expenditures;
· availability and creditworthiness of current and prospective tenants;
· interest rates; and
· lease rates and terms.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements.

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing in Item 1of this Quarterly Report on Form 10-Q.

GENERAL

ACPT is a self managed holding company that is primarily engaged in the business of investing in and managing multifamily rental properties as well as community development and homebuilding through its consolidated subsidiaries. In the first six months of 2009, ACPT operated in two principal lines of business, Operating Real Estate and Land Development, and conducted its operations in both the United States and Puerto Rico.

U.S. Operating Real Estate

Our U.S. Operating Real Estate business is managed through American Rental Properties Trust ("ARPT") and American Rental Management Company ("ARMC"). ARPT holds the general and limited partnership interests in our single-purpose entities that own the U.S. Apartment Properties. ARPT's ownership in these entities ranges from 0.1% to 100%. Our U.S. Operations also include the management of apartment properties in which we have an ownership interest and one third-party owned apartment property.

Puerto Rican Operating Real Estate

Our Puerto Rican Operating Real Estate business is conducted through Interstate General Properties Limited Partnership S.E. ("IGP"). IGP owns interests in the Puerto Rico apartment properties and two commercial properties and provides property management services to the Puerto Rico apartment properties, apartment properties owned by third parties, our Puerto Rican commercial properties, and home-owner associations related to our Puerto Rican planned communities. IGP also provides management services for our Puerto Rican homebuilding and community development operations. The Puerto Rico apartment properties are organized into separate partnerships and receive HUD subsidies. IGP's ownership in these partnerships ranges from 1% to 52.5%. IGP's ownership in the commercial properties ranges from 28% to 100%.

U.S. Land Development

Our U.S. Land Development operations are managed through American Land Development, Inc. ("ALD"). ALD owns and develops our land holdings in St. Charles, Maryland, which consists of a 9,000 acre planned community consisting of residential, commercial, recreational and open space land. ALD also had a 50% interest in a land development joint venture formed to develop land for an active adult community in St. Charles, Maryland, until we sold our interest in the venture in November 2008. In October 2008, the Company entered into an agreement with Surrey Homes, LLC ("Surrey Homes") to contribute $2,000,000 over the next year in exchange for a 50% ownership interest in Surrey Homes.

Our Puerto Rican Land Development operations are conducted through Land Development Associates, S.E. ("LDA"). LDA holds our community development assets in Puerto Rico, which consists of two planned communities. The first planned community, Parque Escorial, is currently under development and consists of residential, commercial and recreational land similar to our U.S. land development operations but on a smaller scale. Our second planned community, Parque El Commandante, is currently in the planning stages. Our homebuilding operation builds condominiums for sale on land located in its planned communities. LDA retained a limited partnership interest in two commercial buildings in Parque Escorial opened in 2001 and 2005, which were built on land contributed by LDA.

ACPT is taxed as a U.S. partnership and its income flows through to its shareholders. ACPT is subject to Puerto Rico taxes on IGP Group's taxable income, generating foreign tax credits that have been passed through to ACPT's shareholders. A Federal tax regulation has been proposed that could eliminate the ability to pass through these foreign tax credits to ACPT's shareholders. Comments on the proposed regulation are currently being evaluated with the final regulation effective for tax years beginning after the final regulation is ultimately published in the Federal Register. ACPT's income consists of (i) certain passive income from IGP Group, a controlled foreign corporation, (ii) distributions from IGP Group and (iii) dividends from ACPT's U.S. subsidiaries. Other than Interstate Commercial Properties ("ICP"), which is taxed as a Puerto Rico corporation, the income from the remaining Puerto Rico operating entities passes through to IGP Group or ALD. Of this income, only the portion attributable to the profits on the residential land sold in Parque Escorial passes through to ALD. ALD, ARMC, and ARPT are taxed as U.S. corporations. The taxable income from the U.S. apartment properties flows through to ARPT.

EXECUTIVE SUMMARY FOR THE SECOND QUARTER 2009 RESULTS

Consolidated operating revenues are derived primarily from rental revenue, community development land sales and home sales.

For the six and three months ended June 30, 2009, our consolidated rental revenues increased $293,000 and $199,000, or 2%, to $17,172,000 and $8,677,000, respectively, as compared to $16,879,000 and $8,478,000, respectively, for the same periods ended June 30, 2008. The increase was primarily attributable to increased leasing in the Company's Puerto Rico commercial office building as well as overall rent increases at comparable properties in both the United States and Puerto Rico offset by an increase in vacancies. Consolidated net operating income ("NOI"), defined as rental property revenues less rental property operating expenses, is the primary performance measure we use to assess the results of our operations. We provide NOI as a supplement to net income calculated in accordance with GAAP. NOI does not represent net income calculated in accordance with GAAP. As such, it should not be considered an alternative to net income as an indication of our operating performance. ACPT's NOI increased $538,000 and $352,000, or 6% and 8%, to $9,699,000 and $4,937,000, respectively, during the six and three months ended June 30, 2009 as compared to $9,161,000 and $4,585,000, respectively, for the same periods in 2008. This represents ACPT's annual rent increase of 3% and the impact of our costs saving initiatives.

Community development land sales for the six and three months ended June 30, 2009 decreased $2,468,000 and $1,953,000, or 41% and 39%, to $3,529,000 and $2,998,000, respectively, as compared to $5,997,000 and $4,951,000, respectively, for the same periods ended June 30, 2008. During the first six months of 2009, the Company sold 41 lots compared to 69 lots in the first six months of 2008.

There were no home sales for the six and three months ended June 30, 2009 as compared to $2,982,000 and $738,000, respectively, for the same periods of June 30, 2008. The Company closed 12 units during the six months ended June 30, 2008 with three units closed in the second quarter of 2008.

The Company pools its overhead costs, including accounting, human resources, office management, technology and executive office costs, and allocates those costs to its segments based on percentages of management's allocated time. General, administrative, selling and marketing costs company-wide for the six and three months ended June 30, 2009, decreased $653,000 and $658,000, or 13% and 24%, to $4,393,000 and $2,056,000, respectively, as compared to $5,046,000 and $2,714,000, respectively, for the same periods ended June

30, 2008. The decrease in the first six months of 2009 was the result of the reorganization and costs saving initiatives implemented in the fourth quarter of 2008 offset in part by increased legal and accounting costs as well as accruals for stock based compensation issued to the Chief Executive Officer and non-employee Trustees.

During the first quarter of 2009, the Company decided to sell the five U.S. apartment properties in Baltimore, Maryland and is currently working with a broker to complete the five Baltimore transactions. In addition, the Company executed a definitive agreement to sell the Puerto Rico apartment properties. In accordance with SFAS No. 144, the carrying value of the Baltimore and Puerto Rican Properties' assets have been classified as "held for sale" on the Company's consolidated balance sheets at June 30, 2009 and December 31, 2008, and the properties' results of operations have been classified as "discontinued operations" for all periods presented in the consolidated statements of income. Depreciation is suspended during the period the property is held for sale.

In the first and second quarters of 2009, ACPT recognized a loss on write-down of fair value less costs to sell of $750,000 and $88,000, respectively, related to the Baltimore properties currently classified as held for sale. The Company has binding agreements for three of the five properties (Nottingham, Milford I and II) subject to loan assumption. The Company has re-listed Owings Chase and Prescott Square. As a result, the Company revised its estimated sales values in the second quarter and determined that an impairment charge was required to further reduce the carrying values of the Baltimore properties to their estimated fair market value.

On a consolidated basis, the Company reported net income attributable to ACPT of $688,000 and $858,000 for the six and three months ended June 30, 2009, respectively. The net income attributable to ACPT for the six months ended June 30, 2009 included a total benefit for income taxes of $412,000 of which $1,029,000 tax benefit related to losses before discontinued operations and $617,000 tax provision was included in discontinued operations. As a result, the total consolidated effective tax rate attributable to ACPT was approximately (149%). The total consolidated effective rate was impacted by the change in the deferred tax asset valuation allowance and accrued taxes and penalties related to uncertain tax positions. For further discussion of these items, see "Results of Operations-Income Taxes - Provision for (Benefit from) Income Taxes" and Note 8 of our Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q.

CRITICAL ACCOUNTING POLICIES

The Securities and Exchange Commission defines critical accounting policies as those that are most important to the portrayal of our financial condition and results of operations. The preparation of financial statements in conformity with GAAP in the United States requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied resulting in a different presentation of our financial statements. Below is a discussion of accounting policies which we consider critical in that they may require complex judgment in their application or require estimates about matters which are inherently uncertain.

Refer to the Company's 2008 Annual Report on Form 10-K for a discussion of critical accounting policies, which include sales, profit recognition and cost capitalization, investment in unconsolidated real estate entities, impairment of long lived assets, depreciation of investments in real estate, income taxes and contingencies. For the six and three months ended June 30, 2009, there were no material changes to our policies.

RESULTS OF OPERATIONS

The following discussion is based on the consolidated financial statements of the Company. It compares the components of the results of operations of the Company by segment for the six and three months ended June 30, 2009 and 2008 (unaudited). Historically, the Company's financial results have been significantly affected by the cyclical nature of the real estate industry. Accordingly, the Company's historical financial statements may not be indicative of future results. This discussion should be read in conjunction with the accompanying consolidated financial statements and notes included elsewhere in this report and within our Annual Report on Form 10-K.

OPERATING REAL ESTATE

For the six and three months ended June 30, 2009, our Operating Real Estate line
of business generated NOI of $9,689,000 and $4,932,000 an increase of $539,000
and $353,000, respectively, compared to $9,150,000 and $4,579,000, respectively,
of NOI generated by that line of business for the same periods in
2008. Additional information and analysis of the U.S. Operating Real Estate and
Puerto Rican Operating Real Estate operations can be found in the tables below.

U.S. Operating Real Estate Operations

                                                                  For the six months ended
                                                                 June 30,           June 30,
U.S. Operating Real Estate:                                        2009               2008

Operating revenues                                             $      16,727       $   16,683
Operating expenses                                                     7,148            7,422
Net operating income                                                   9,579            9,261
 Management and other fees, substantially all from related
entities                                                                  47               79
 General, administrative, selling and marketing                         (859 )           (727 )
 Depreciation                                                         (2,331 )         (2,529 )
Operating income                                                       6,436            6,084
Other expense                                                         (4,196 )         (3,868 )
Income before provision for income taxes                               2,240            2,216
Provision for income taxes                                               327              446
Income from continuing operations                                      1,913            1,770
Discontinued operations                                                 (563 )          (250)
Consolidated net income                                        $       1,350       $    1,520

Depreciation                                                           2,331            3,077
FFO                                                            $       3,681       $    4,597



                                                                   For the three months ended
                                                                  June 30,            June 30,
U.S. Operating Real Estate:                                         2009                2008

Operating revenues                                             $        8,432       $       8,388
Operating expenses                                                      3,561               3,748
Net operating income                                                    4,871               4,640
 Management and other fees, substantially all from related
entities                                                                   15                  41
 General, administrative, selling and marketing                          (477 )              (390 )
 Depreciation                                                          (1,172 )            (1,178 )
Operating income                                                        3,237               3,113
Other expense                                                          (2,107 )            (1,933 )
Income before provision for income taxes                                1,130               1,180
Provision for income taxes                                                274                 (93 )
Income from continuing operations                                         856               1,273
Discontinued operations                                                    33                (106 )
Consolidated net income                                        $          889       $       1,167

Depreciation                                                            1,171               1,454
FFO                                                            $        2,060       $       2,621

NOI increased $318,000 and $231,000, or 3% and 5%, to $9,579,000 and $4,871,000 during the six and three months ended June 30, 2009, respectively, as compared to $9,261,000 and $4,640,000 for the same periods ended June 30, 2008, respectively. As described below, the increase in NOI is due to an overall decrease in rental property operating expenses due to management's cost saving initiatives.

Rental Property Revenues and Operating Expenses

Rental property operating revenues increased $44,000, or 1%, for each of the six and three months periods ended June 30, 2009 to $16,727,000 and $8,432,000, respectively, compared to $16,683,000 and $8,388,000, respectively, for the same periods of 2008. In 2009, annual rent increases have been offset by an increase in vacancies.

Rental property operating expenses decreased $274,000 and $187,000, or 4% and 5%, for the six and three months ended June 30, 2009 to $7,148,000 and $3,561,000, respectively, compared to $7,422,000 and $3,748,000, respectively, for the same periods of 2008. The overall decrease in rental property operating expenses was primarily the result of management's cost saving initiatives with significant decreases in spending on salaries and benefits, repairs and maintenance, office expenses, and vehicle expenses.

General, Administrative, Selling and Marketing Expenses

The primary component of the general, administrative, selling and marketing expenses is the corporate overhead allocation. General, administrative, selling and marketing expenses increased $132,000 and $87,000, or 18% and 22%, to $859,000 and $477,000 during the six and three months ended June 30, 2009, respectively, as compared to $727,000 and $390,000 and for the same periods in 2008, respectively. Overall, general and administrative expenses decreased for the consolidated Company. However, the increase for this segment was due to the methodology by which the Company allocates general and administrative expenses between segments. See "Results of Operations - Corporate."

Our unconsolidated and managed-only apartment properties reimburse the Company for certain corporate overhead costs that are attributable to the operations of those properties. In accordance with EITF Topic 01-14, "Income Statement Characterization of Reimbursements Received for Out of Pocket Expenses Incurred," the cost and reimbursement of these costs are not included in general and administrative expenses, but rather they are reflected as separate line items on the consolidated income statement.

Depreciation

Depreciation decreased $198,000, or 8%, for the six months ended June 30, 2009 to $2,331,000 compared to $2,529,000 for the same period of 2008. A depreciation catch-up adjustment was recorded in the first quarter of 2008 related to the Sheffield Green apartments. For the three months ended June 30, 2009 and 2008, depreciation expense slightly decreased by $6,000 to $1,172,000 from $1,178,000 as a result of a decrease in depreciable assets.

Interest and other income

Interest and other income decreased $789,000 and $442,000, or 41% and 45%, during the first six and three months of 2009 to $1,143,000 and $548,000, respectively, as compared to $1,932,000 and $989,000, respectively, for the same periods of 2008 as a result of decreased deposits due to the higher than anticipated vacancies as well as a decline in the interest rates from 2008 to 2009.

Interest Expense

For 2009 and 2008, interest expense primarily consisted of interest incurred on the non-recourse debt from our investment properties. Interest expense decreased $468,000 and $274,000, or 7% and 9%, to $5,332,000 and $2,648,000 for the six and three months ended June 30, 2009, respectively, as compared to $5,800,000 and $2,922,000, respectively, for the same periods in 2008. The decrease in interest expense resulted from routine amortization of our loans.

Discontinued Operations

Discontinued operations decreased by $313,000 to ($563,000) for the six months ended June 30, 2009 compared to ($250,000) for the same period of 2008. The decrease was primarily the result of the loss on write-down to fair value less costs to sell of $838,000 offset by the ceasing the recording of depreciation expense on the Baltimore properties which are classified as discontinued operations in the first quarter of 2009. In 2008, these properties had $548,000 in depreciation expenses. Discontinued operations increased by $139,000 to $33,000 for the three months ended June 30, 2009 compared to ($106,000) for the same period of 2008. The increase was primarily the result of ceasing the recording of depreciation expense on the Baltimore properties, which had $235,000 in depreciation expenses for the three months ended June 30, 2008, offset by a $88,000 write-down to fair value during the second quarter of 2009.

Funds from Operations

Funds from Operations ("FFO") is a non-GAAP financial measure that we believe, when considered with the financial statements prepared in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets such as machinery, computers or other personal property. FFO is defined as net income (loss), computed in accordance with GAAP, excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

FFO decreased $916,000 and $561,000, or 20% and 21%, to $3,681,000 and $2,060,000 for the six and three month periods ended June 30, 2009, respectively, compared to $4,597,000 and $2,621,000, respectively, for the same periods in 2008. The decrease was driven by the impact of the loss on write-down to fair value less costs to sell and a decrease in other expenses offset by an increase in the net operating income and a decrease in the income tax provision, related to the deferred tax valuation adjustment.

Puerto Rican Operating Real Estate Operations

                                                                  For the six months ended
                                                                June 30,            June 30,
Puerto Rican Operating Real Estate:                               2009                2008

Operating revenues                                             $       445        $        196
Operating expenses                                                     335                 307
Net operating income                                                   110                (111 )
 Management and other fees, substantially all from related
entities                                                                76                  74
 General, administrative, selling and marketing                       (501 )              (561 )
 Depreciation                                                         (114 )              (113 )
Operating loss                                                        (429 )              (711 )
Other expense                                                         (304 )              (308 )
Loss before (benefit) provision for income taxes                      (733 )            (1,019 )
(Benefit) provision for income taxes                                  (612 )               277
Loss from continuing operations                                       (121 )            (1,296 )
Discontinued operations                                              2,851                 767
Consolidated net income (loss)                                 $     2,730        $       (529 )

Depreciation                                                           114               1,883
FFO                                                            $     2,844        $      1,354

                                                                  For the three months ended
                                                                 June 30,             June 30,
Puerto Rican Operating Real Estate:                                2009                 2008

. . .