Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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                        BNP Residential Properties, Inc.

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301 South College Street - Suite 3850
Charlotte, North Carolina 28202

Contact:   Philip S. Payne
           Tel:  (704) 944-0100
           Fax:  (704) 944-2039


                          AFFILIATES OF BABCOCK & BROWN

Charlotte, North Carolina
August 31, 2006

BNP Residential Properties, Inc. (AMEX: BNP) announced earlier today that they
have entered into a definitive agreement to merge with a wholly owned subsidiary
of Babcock & Brown Real Estate Investments LLC in a transaction valued at
approximately $766 million. Babcock & Brown is a publicly traded international
investment and advisory firm traded on the Australian Stock Exchange under the
ticker symbol BNB.

As previously announced, under the terms of the agreement, Babcock & Brown will
acquire all of the common stock of BNP for $24.00 per share in cash. Holders of
limited partnership units in BNP's operating partnership will receive $24.00 per
unit in cash or, at the election of Babcock & Brown, the holders of the limited
partnership units may have the option to elect $24.00 per unit in cash or units
in the surviving operating partnership.

In addition to the information released earlier today, the merger agreement
permits BNP to declare and pay regular quarterly cash distributions at a rate
not to exceed $0.26 per share of common stock during the pendency of the merger.
In addition, immediately prior to the merger, the merger agreement permits BNP
to set a record date for and declare payable a special distribution. The
aggregate amount of the special distribution would equal, for the period from
the record date for the previous distribution to the record date for the special
distribution, net income excluding gains (losses) from sales of property and
certain transaction fees and expenses relating to the merger, plus depreciation
and amortization, and after adjustments of unconsolidated partnerships and joint
ventures, all as calculated as provided in the merger agreement; provided that
in no event may the special dividend exceed a quarterly rate (based on the
number of days covered by the "stub" period) of $0.26 per share.


Notwithstanding what is permitted under the merger agreement, BNP can make no
assurances with respect to the payment of future distributions as such payments
are dependent on BNP's future financial condition. Completion of the
transaction, which is expected to occur during the fourth quarter of 2006, is
subject to approval by BNP's common stockholders and certain other customary
closing conditions.

About BNP Residential: BNP Residential Properties, Inc. is a real estate
investment trust focused on owning and operating apartment communities. The
Company currently owns and operates 32 apartment communities containing a total
of 8,180 units, and serves as general partner of partnerships that own three
communities containing 713 units. In addition to the apartment properties, the
Company owns 40 properties that are leased on a triple-net basis to a restaurant
operator. The Company currently operates in the states of North Carolina, South
Carolina and Virginia.

BNP Residential Properties, Inc. is structured as an UPREIT, or umbrella
partnership real estate investment trust. The Company is the sole general
partner and owns a controlling interest in BNP Residential Properties Limited
Partnership, the operating partnership. All of the Company's operations are
conducted through the operating partnership.

For more information on BNP contact Philip Payne or Andrea Burris at (704)
944-0100 ( or visit BNP's website:

About Babcock & Brown: Babcock & Brown is a global investment and advisory firm
with longstanding capabilities in structured finance and the creation,
syndication and management of asset and cash flow-based investments. Babcock &
Brown was founded in 1977 and is listed on the Australian Stock Exchange.

Babcock & Brown operates from 21 offices across Australia, the United States,
Europe, Asia, United Arab Emirates and Africa and has in excess of 810 employees
worldwide. Babcock & Brown has five operating divisions including real estate,
infrastructure and project finance, operating leasing, structured finance and
corporate finance. The company has established a funds management platform
across the operating divisions that has resulted in the creation of a number of
focused investment vehicles in areas including real estate, renewable energy and

For more information about Babcock & Brown contact Kelly Hibbins at +61 2 9229
1800 ( or visit their website:

Forward-Looking Statements

Certain matters discussed in this press release are forward-looking statements
within the meaning of federal securities law. Although BNP believes expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, no assurance 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
indicate future events, achievements or trends or that do not relate to
historical matters.

Forward-looking statements in this press release include, without limitation,
statements regarding the closing of the merger and the payment of the merger
consideration, the possible election that may be offered to limited partners of
BNP's operating partnership and the possible declaration and payment of future
distributions. BNP does not assure the future results or outcome of the matters
described in forward-looking statements; rather, these statements merely reflect
current expectations of the approximate outcomes of the matters discussed.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors, some of which are beyond BNP's control. The reader is cautioned
to make his/her own judgment with regard to the statements discussed in this
press release and the assumptions noted by BNP herein.

Many factors may cause actual results to differ materially from the anticipated
future results or performance expressed or implied by these forward-looking
statements. Certain of the factors that could cause actual results to differ
materially from those expressed or implied by these forward-looking statements
include, but are not limited to, the ability of the parties to perform their
obligations under the merger agreement, general economic conditions, local real
estate conditions and other risks detailed from time to time in BNP's Securities
and Exchange Commission (SEC) reports, including the annual report on form 10-K
for the year ended December 31, 2005.

Additional Information about the Merger and Where to Find It

In connection with the proposed merger of BNP with and into a wholly owned
subsidiary of Babcock & Brown Real Estate Investments LLC, BNP intends to file
relevant materials with the SEC, including a proxy statement. INVESTORS AND
statement and other relevant materials (when they become available) and any
other documents filed by BNP with the SEC may be obtained free of charge at the
SEC's website at In addition, investors and security holders may
obtain free copies of the documents filed with the SEC by BNP by contacting
Andrea Burris, Director of Investor Relations at or (704) 944-0100 or accessing BNP's
website at Investors and security holders are urged to
read the proxy statement and the other relevant materials when they become
available before making any voting or investment decision with respect to the

Proxies may be solicited on behalf of BNP by members of its Board of Directors
and executive officers. Information about such persons can be found in BNP's
definitive proxy statement relating to its 2006 Annual Meeting of Stockholders,
which was filed


with the SEC on April 12, 2006, and may be obtained free of charge at the SEC's
website at or at BNP's website at

This communication shall not constitute an offer to sell or the solicitation of
an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction.