BRE PROPERTIES, INC.

(Company)

Preferred Stock

TERMS AGREEMENT

February 24, 2004

To: The Representatives of the Underwriters identified herein

Ladies and Gentlemen:

The undersigned agrees to sell to the several Underwriters named in Schedule A hereto for their respective accounts, and the Underwriters agree, severally but not jointly, to purchase, on and subject to the terms and conditions of the Underwriting Agreement attached hereto (Underwriting Agreement), the following securities (Offered Securities) on the following terms:

Title of Offered Securities: 6.75% Series C Cumulative Redeemable Preferred Stock.

Over-Allotment Option: None.

Aggregate Number of Offered Securities: 4,000,000

Aggregate Number of Firm Securities: 4,000,000

Aggregate Number of Optional Securities: None.

Dividend Rate: 6.75% per annum.

Optional Redemption: At the option of the Company at any time on or after March 15, 2009, in whole or in part, at a cash redemption price equal to $25.00 per share plus accrued and unpaid dividends, if any, to the date fixed for redemption.

Sinking Fund: None.

Listing: New York Stock Exchange.

Per Share Purchase Price to the Underwriters: The purchase price for the Offered Securities to be paid by the several Underwriters shall be $24.2125 per share, plus accrued dividends, if any, from March 15, 2004.

Selling Concession: $0.50 per share.

Reallowance: $0.45 per share.

First Closing Date: 10:00 A.M. (New York Time) on March 15, 2004, at the offices of Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza, New York, New York 10005.

Method of Payment: Wire transfer in Federal (same day) funds.

Securities Remaining under Shelf: Immediately prior to the issuance of the Offered Securities on the Closing Date, securities with an aggregate principal amount of $235,805,000, exclusive of the Offered Securities, were available for issuance under the Registration Statement.

Settlement and Trading: Book-entry only via DTC.

Blackout: For 30 days subsequent to the date hereof.

Underwriters: The names of the Underwriters and the respective aggregate principal amounts of the Offered Securities to be purchased by each of the Underwriters are set forth opposite their names in Schedule A hereto.

Notices to Underwriters:

Credit Suisse First Boston LLC

Wachovia Capital Markets, LLC

c/o Credit Suisse First Boston LLC

Eleven Madison Avenue

New York, New York 10010-3628

Attn: Joseph Fashano (fax: 212-325-4296)

The provisions of the Underwriting Agreement are incorporated herein by reference.

For purposes of Section 6 of the Underwriting Agreement, the only information furnished to the Company by any Underwriter for use in the Prospectus consists of the following information in the Prospectus furnished on behalf of each Underwriter: (1) the last sentence of the second paragraph under the caption Risk Factors in the Prospectus Supplement; (2) the third paragraph under the caption Underwriting; (3) the third and fourth sentences in the fourth paragraph under the caption Underwriting; and (4) the fifth paragraph under the caption Underwriting.

2

If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the several Underwriters in accordance with its terms.

The foregoing Terms Agreement is hereby confirmed and accepted as of the date first above written.

Acting on behalf of themselves and as the

Representatives of the several Underwriters.

3

SCHEDULE A

EXECUTION COPY

BRE PROPERTIES, INC.

Preferred Stock

UNDERWRITING AGREEMENT

1. Introductory. BRE Properties, Inc., a Maryland corporation (Company), proposes to issue and sell certain of its Series C Preferred Stock, par value $.01 per share, registered under the registration statements referred to in Section 2(a) (the Firm Securities). The Company may also issue and sell pursuant to a Terms Agreement referred to in Section 3, an aggregate number of additional shares (the Optional Securities) as provided in the Terms Agreement. The Firm Securities and the Optional Securities are collectively referred to herein as the Registered Securities. The terms of the Registered Securities will be set forth in articles supplementary (Articles Supplementary) to be filed by the Company with the Maryland State Department of Assessments and Taxation (SDAT). Particular series of the Registered Securities will be sold pursuant to a Terms Agreement referred to in Section 3, for resale in accordance with terms of offering determined at the time of sale.

The Registered Securities involved in any such offering are hereinafter referred to as the Offered Securities. The firm or firms which agree to purchase the Offered Securities are hereinafter referred to as the Underwriters of such securities, and the representative or representatives of the Underwriters, if any, specified in a Terms Agreement referred to in Section 3 are hereinafter referred to as the Representatives; provided, however, that if the Terms Agreement does not specify any representative of the Underwriters, the term Representatives, as used in this Agreement (other than in Sections 2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the Underwriters.

2. Representations and Warranties of the Company. The Company, as of the date of each Terms Agreement referred to in Section 3, and as of the First Closing Date (as defined in Section 3), and as of the Option Closing Date (as defined in Section 3), if any, represents and warrants to, and agrees with, each Underwriter that:

(a) A registration statement on Form S-3 (No. 333-47469), and a registration statement on Form S-3 (No. 333-68914) including a combined prospectus, relating to the Registered Securities have been filed with the Securities and Exchange Commission (Commission) and have become effective. Such registration statements, each as amended at the time of any Terms Agreement referred to in Section 3, are hereinafter collectively referred to as the Registration Statement, and the prospectus included in registration statement No. 333-68914, as supplemented as contemplated by Section 3 to reflect the terms of the Offered Securities and the terms of offering thereof, as first filed with the Commission pursuant to and in accordance with Rule 424(b) (Rule 424(b)) under the Securities Act of 1933, as amended (Act), including all material incorporated by reference therein, is hereinafter referred to as the Prospectus. No document has been or will be prepared or distributed in reliance on Rule 434 under the Act.

(b) On the effective date of the registration statement relating to the Registered Securities and certain other securities, such registration statement, and on the date of each Terms Agreement referred to in Section 3, the Registration Statement, complied in all material respects to the requirements of the Act and the rules and regulations of the Commission under the Act (Rules and Regulations), and the Registration Statement did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus does not and, on the date of each Terms Agreement referred to in Section 3, and as of the First Closing Date (as defined in Section 3), and as of the Option Closing Date (as defined in Section 3), if any, the Prospectus will not, include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein in light of the circumstances under which they were made, not misleading, except that the foregoing representations and warranties do not apply to statements in or omissions from any of such documents based upon written information furnished to the Company by any Underwriter through the Representatives, if any, specifically for use therein.

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