Recent Transaction

Coventry Village Apartments - Memphis, Tennessee
$11,940,000 Bridge Loan

LOS ANGELES, July 19, 2007 – Legg Mason Real Estate Investors, Inc., a subsidiary of Legg Mason, Inc. (NYSE:LM), recently closed an $11,940,000 bridge loan, the proceeds of which were used for the acquisition of an apartment community in Memphis, Tennessee. The loan was made through Legg Mason Real Estate Capital II (“LMREC II”), a discretionary mezzanine, bridge mortgage, and preferred equity real estate fund.

The subject loan is collateralized by a 470 unit, Class C+ apartment community comprised of thirty (30) two story townhouse style buildings situated on a 33 acre parcel in Memphis, Tennessee. The loan is structured with a $3,488,200 capital improvement reserve to renovate, reposition, and lease the property to its market potential as a Class B+ apartment community.

The floating rate loan represents approximately 90% of the total project cost and includes both a capital improvement reserve and an interest reserve. The loan has a term of 36 months and is pre-payable without penalty after 13 months. The loan is interest only for the first 24 months and amortizes thereafter.

Legg Mason Real Estate Investors, Inc. ("LMREI") manages discretionary debt funds that provide creative and flexible commercial real estate financing to fund entrepreneurial multifamily, office, retail, industrial and other commercial properties. To meet the broad needs of the commercial real estate community, its financing programs include high loan-to-value first mortgages, mezzanine loans and preferred equity. For further information please refer to the company website www.lmrei.com or contact Josh Westerberg at 310-234-2104 or Chris Hoshek at 310-234-2109.