SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996 OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to
---------------
Commission File Number 1-12358
COLONIAL PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Alabama 59-7007599
(State of organization) (I.R.S. employer
identification no.)
2101 Sixth Avenue North 35203
Suite 750 (Zip Code)
Birmingham, Alabama
(Address of principal executive
offices)
Registrant's telephone number, including area code: (205) 250-8700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
Common Shares of Beneficial New York Stock Exchange
Interest,
$.01 par value per share
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days. YES |X| NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. | |
The aggregate market value of the 18,537,792 Common Shares held by
non-affiliates of the Registrant was approximately $535,278,744 based on the
closing price on the New York Stock Exchange for such Common Shares on March 10,
1997.
Number of the Registrant's Common Shares of Beneficial
Interest outstanding as of March 10, 1997: 19,182,732.
Documents Incorporated by Reference
Portions of the annual report to shareholders for the year ended
December 31, 1996, are incorporated by reference into Part II. Portions of the
proxy statement for the annual shareholders meeting to be held in 1997 are
incorporated by reference into Part III.
<PAGE>
PART I
Item 1. Business.
As used herein, the term "Company" includes Colonial Properties
Trust, an Alabama real estate investment trust, and one or more of its
subsidiaries and other affiliates (including Colonial Properties Holding
Company, Inc., Colonial Realty Limited Partnership, Colonial Properties Services
Limited Partnership and Colonial Properties Services, Inc.) or, as the context
may require, Colonial Properties Trust only or Colonial Realty Limited
Partnership only.
The Company is one of the largest owners, developers and operators of
multifamily, retail and office properties in the southeastern United States. It
is a fully-integrated real estate company, whose activities include ownership of
a diversified portfolio of 73 properties located in Alabama, Florida, Georgia,
and South Carolina, development of new properties, acquisition of existing
properties, build-to-suit development, and the provision of management, leasing,
and brokerage services for commercial real estate. The Company is a
self-administered equity real estate investment trust (a "REIT") that currently
owns 42 multifamily apartment communities containing a total of 13,617 apartment
units (the "Multifamily Properties"), 21 retail properties containing a total of
approximately 5.6 million square feet of retail space (the "Retail Properties"),
10 office properties containing a total of approximately 1.0 million square feet
of office space (the "Office Properties"), and certain parcels of land adjacent
to 5 of these properties (the "Land"). (The Multifamily Properties, the Retail
Properties, the Office Properties and the Land are referred to collectively as
the "Properties"). As of December 31, 1996, the Multifamily Properties that had
achieved stabilized occupancy, the Retail Properties, and the Office Properties
were 94.8%, 93.8% and 97.4% leased, respectively.
The Company, through Colonial Properties Holding Company, Inc., a
wholly owned subsidiary ("CPHC"), is the sole general partner of, and holds
approximately 68% of the interests in, Colonial Realty Limited Partnership, a
Delaware limited partnership (the "Operating Partnership"). The Operating
Partnership owns all of the Properties (or interests therein). The Company
conducts all of its business through CPHC, the Operating Partnership, and
Colonial Properties Services Limited Partnership (the "Management Partnership"),
which provides management services for the Properties, and Colonial Properties
Services, Inc. (the "Management Corporation"), which provides management
services for properties owned by third parties.
The Company's executive offices are located at 2101 Sixth Avenue
North, Suite 750, Birmingham, Alabama, 35203 and its telephone number is (205)
250-8700. The Company was formed in Maryland on July 9, 1993. On August 21,
1995, the Company reincorporated as an Alabama real estate investment trust
under a new Alabama REIT statute.
Formation of the Company
The Company and the Operating Partnership were formed to succeed to
substantially all of the interests of Colonial Properties, Inc., an Alabama
corporation ("Colonial"), its affiliates and certain others in a diversified
portfolio of multifamily, retail, and office properties located in Alabama,
Florida, and Georgia and to the development, acquisition, management, leasing,
and brokerage businesses of Colonial.
On September 29, 1993, (i) the Company consummated an initial public
offering (the "IPO") of 8,480,000 of its common shares of beneficial interest,
$.01 par value per share ("Common Shares"), (ii) the Operating Partnership
assumed ownership of 36 Properties (or interests therein) held by Thomas H.
Lowder, James K. Lowder, Robert E. Lowder, and their mother, Catherine Lowder
(the "Lowder family"), and third-party partners of the Lowder family, and the
operating businesses of Colonial, (iii) the Company transferred the net proceeds
from the IPO through CPHC to the Operating Partnership, in exchange for
8,480,000 units of limited partnership interest in the Operating Partnership
("Units"), (iv) the Operating Partnership repaid approximately $150.2 million of
indebtedness and prepayment penalties associated therewith secured by certain of
the Properties, and (v) the Operating Partnership established a $35.0 million
line of credit with SouthTrust Bank, which has since been increased to $125.0
million, to fund development activities and property acquisitions and for
general corporate purposes (collectively, the "Formation Transactions"). On
October 28, 1993, the underwriters of the IPO exercised an over-allotment option
to purchase an additional 686,200 shares.
The Company owns substantially all of the economic interests in the
Management Corporation, but in order to permit the Company to qualify as a REIT,
voting control of the Management Corporation is held by the Lowder family.
Recent Developments
Since the IPO, the Company has significantly expanded its portfolio
of Properties and its operating businesses. Acquisitions by the Company of new
properties represent a total investment of $573.1 million. The Company has also
completed the expansion of four multifamily properties since the IPO, adding a
total of 728 units to the multifamily portfolio. The Company currently has seven
active expansion and development projects in progress for Multifamily Properties
(including additional phases of two existing Multifamily Properties) and major
expansions of the Company's Macon Mall and Montgomery Promenade Retail
Properties.
The following is a summary of the Company's acquisition and
development activity in 1996.
Acquisition Activity
The Company acquired three retail shopping centers in central Florida
and one regional mall in South Carolina containing approximately 1.1 million
leasable square feet for a total purchase price of approximately $90.0 million.
The Company spent $4.3 million to acquire tenant-owned space and underlying land
at an existing retail center.
The Company also acquired five multifamily properties in Alabama and
two multifamily properties in Georgia containing 1,505 units for a total
purchase price of approximately $79.0 million.
Development Activity
During 1996 the Company constructed 873 new apartment units in six
multifamily communities (three of which were completed during the year) and
acquired land on which it intends to develop two additional multifamily
communities during 1997. The aggregate cost of this multifamily development
activity was $68.2 million. As of December 31, 1996, the Company has 1,216
apartment units in six multifamily communities under development and expansion.
Management anticipates that two of the multifamily projects will be completed
during the first half of 1997 and three others will be completed during the
second half of the year. The remaining multifamily project will be completed
during the first half of 1998. Management expects to invest approximately $31.8
million over these periods to complete these projects.
During 1996 the Company also continued its 422,000 square foot
expansion of its regional mall in Macon, Georgia and began a 225,000 square foot
expansion of a community shopping center in Montgomery, Alabama. The aggregate
cost of this retail development activity was $31.6 million. The Macon Mall
expansion was completed and opened during February 1997, and management
anticipates completing its Montgomery project during the last half of 1997.
Management expects to invest approximately $19.8 million during 1997 to complete
these projects.
<PAGE>
The table below provides an overview of the Company's acquisition and
development activity during 1996:
<TABLE>
Summary of Recent
Acquisition and Development
Activity
<CAPTION>
Completion or Cost or
Anticipated Type of Units(M) nticipated
Completion Name of Property GLA (R) Cost (in
Date Property Location (1) (2) Thousands (3)
- -------------- -------------------- ----------- ------ ------- ------------
<S> <C> <C> <C> <C> <C>
Acquisitions:
2nd Qtr 96 Ashford Place Mobile, AL M 168 $ 6,400
2nd Qtr 96 Pointe West Mobile, AL M 104 4,700
2nd Qtr 96 Spring Creek Macon, GA M 296 14,400
2nd Qtr 96 Crowne Chase Birmingham, AL M 244 13,700
2nd Qtr 96 Crowne Point Birmingham, AL M 392 23,100
2nd Qtr 96 Crowne Ridge Birmingham, AL M 125 7,200
3rd Qtr 96 Barrington Club Macon, GA M 176 9,500
3rd Qtr 96 Briarcliffe Mall Myrtle
Beach, SC R 488,000 42,800
3rd Qtr 96 Winter Haven Orlando,
(expansion) FL R 22,000 4,300
4th Qtr 96 Bardmoor Village St.
Petersburg, FL R 158,000 11,900
4th Qtr 96 Island Walk Orlando, FL R 222,000 17,200
4th Qtr 96 Wekiva River Walk Orlando, FL R 209,000 18,100
Developments:
1st Qtr 96 McGehee Place V
(expansion) Montgomery, AL M 16 800
4th Qtr 96 Inverness Lakes
(expansion) Mobile, AL M 180 9,500
4th Qtr 96 Colonial Grand at Birmingham,
Galleria (expansion) AL M 160 8,700
1st Qtr 97 Riverchase III
(expansion) Tampa, FL M 276 14,900
1st Qtr 97 Colonial Grand at
Heathrow Orlando, FL M 312 20,400
1st Qtr 97 Colonial Grand at
Bayshore Bradenton, FL M 212 11,600
4th Qtr 97 Colonial Village at Birmingham,
Inverness (expansion AL M 84 4,100
4th Qtr 97 Colonial Grand at
Bayshore II
(expansion) Bradenton, FL M 164 9,100
4th Qtr 97 Colonial Grand at
Wesleyan Macon, GA M 240 12,800
2nd Qtr 98 Colonial Grand at
Hunter's Creek Orlando, FL M 496 33,000
1st Qtr 97 Macon Mall (expansion)Macon, GA R 422,000(4) 52,000
4th Qtr 97 Montgomery Promenade Montgomery,
(expansion) AL R 225,000(5) 7,000
--------
Total $357,200
========
<FN>
(1) M refers to Multifamily Properties and R refers to Retail Properties.
(2) Units (in this table only) refers to multifamily apartment units and
GLA refers to gross leasable area of retail space.
(3) Amounts in thousands.
(4) Includes 249,000 square feet of GLA and 173,000 square feet of space owned
by an anchor.
(5) Includes 95,000 square feet of GLA and 130,000 square feet of space
owned by an anchor.
</FN>
</TABLE>
<PAGE>
Multifamily Property Acquisitions
Spring Creek Apartments--On April 1, 1996, the Company acquired Spring
Creek Apartments, a 296-unit luxury multifamily community in Macon, Georgia at a
purchase price of $14.4 million which was financed through an advance on the
Company's unsecured line of credit. Spring Creek was constructed in two phases
completed in 1992 and 1994. The development consists of 33 two-story buildings
and a separate clubhouse on approximately 27 acres of land. Amenities include
two swimming pools, a fitness center, and racquetball and tennis courts.
Crowne Chase Apartments--On April 15, 1996, the Company acquired
Crowne Chase Apartments, a 244-unit luxury multifamily community in Birmingham,
Alabama. Crowne Chase was acquired for a purchase price of $13.7 million which
was financed through an advance on the Company's unsecured line of credit. The
development, which was constructed in 1994, consists of 16 two-story buildings
and a separate clubhouse on approximately 20.3 acres. Amenities include a
fitness center, a swimming pool with sauna, lighted tennis courts, and
breathtaking landscaping and waterscaping.
Crowne Point Apartments--On May 10, 1996, the Company also acquired
Crowne Point Apartments, a 392-unit complex comprising 26 two-story buildings in
a suburb of Birmingham, Alabama. The buildings were constructed in two phases in
1987 and 1991. Crowne Point was acquired for a purchase price of $23.1 million
which was financed through the assumption of a mortgage with a balance of $12.4
million, which bears interest at 8.0%, and an advance on the Company's unsecured
line of credit. Crowne Point's amenities include a recreational building, two
swimming pools, a clubhouse with an exercise room, and lighted tennis courts.
Pointe West Apartments and Ashford Place Apartments--On April 1,
1996, the Company acquired Pointe West Apartments in Mobile, Alabama. Pointe
West was completed in 1981 and consists of 104 units in 14 two-story buildings
with a separate clubhouse on approximately 7.6 acres of land.
Also on April 1, 1996, the Company acquired Ashford Place Apartments
in Mobile, Alabama. Ashford Place was completed in 1983 and consists of 168
units in 11 two-story buildings with a separate clubhouse on approximately 8.8
acres of land.
Both properties offer a swimming pool, exercise room, a fireplace in
each unit, and controlled access parking. Pointe West also offers covered
parking to its residents. The combined purchase price of approximately $11.1
million for Ashford Place and Pointe West was paid through the issuance of
182,804 limited partnership units of the Operating Partnership at $24.00 per
unit, the assumption of approximately $6.4 million of indebtedness at an
interest rate of 7.125%, and payment of other acquisition costs estimated at
approximately $330,000.
Crowne Ridge Apartments--On May 10, 1996, the Company acquired Crowne
Ridge Apartments, located in a suburb of Birmingham, Alabama. Crowne Ridge
consists of 125 units in eight two-story buildings which were built in 1992. The
purchase price of $7.2 million was financed through the Company's assumption of
a mortgage with a balance of $3.8 million which bears interest at 8.06% and
through an advance on the Company's line of credit. Crowne Ridge's amenities
include a clubhouse with an exercise room, a swimming pool, and extensive
landscaping.
Barrington Club Apartments--On September 13, 1996, the Company
acquired Barrington Club Apartments, a 176-unit luxury multifamily community in
Macon, Georgia. Barrington Club was acquired for a purchase price of $9.5
million which was financed through an advance on the Company's unsecured line of
credit. The development, which was completed earlier this year, consists of
eight two- and three-story buildings and a separate clubhouse on approximately
14 acres of land. Amenities include a swimming pool, a fitness center, tennis
courts, and a playground. The property is located in the Barrington Hall, a
650-acre Planned Unit Development, which includes a golf club with an 18-hole
course, estate homes, and single family homes. Residents of Barrington Club
Apartments have golf privileges at the club.
The Company intends to continue to pursue acquisitions in the
southeastern United States that meet the Company's acquisition criteria for
property quality, market strength, and investment return.
Completed Multifamily Expansions
McGehee Place V Apartments--The Company completed the 16-unit
expansion of McGehee Place Apartments in Montgomery, Alabama in May 1996 at a
total cost of $0.8 million, including land acquisition costs, funded through
advances under the Company's line of credit. The Company expects to complete
lease-up of this completed expansion during the first quarter of 1997.
Colonial Grand at Galleria--The Company completed the 160-unit
expansion of Colonial Grand at Galleria located in Birmingham, Alabama in
October 1996 at a total cost of $8.7 million, including land acquisition costs,
which were funded through advances under the Company's line of credit. The
Company expects to complete lease-up of this completed expansion during the
second quarter of 1997.
Inverness Lakes Apartments--The Company completed the 180-unit
expansion of Inverness Lakes Apartments located in Mobile, Alabama in September
1996 at a total cost of $9.5 million, including land acquisition costs, which
were funded through advances under the Company's line of credit. The Company
expects to complete lease-up of this completed expansion during the first
quarter of 1997.
Continuing Multifamily Expansion and Development Activity
Riverchase III--The Company continued construction on a 276-unit
expansion of Riverchase III Apartments located in Tampa, Florida. The community
amenities will include a clubhouse, a swimming pool, an exercise center, an air
conditioned racquetball court, tennis courts, and laundry facilities. Project
development costs, including land acquisition costs, are expected to total $14.9
million and will be funded through advances on the Company's line of credit. The
Company expects to complete construction in the first quarter of 1997 and to
complete lease-up during the second quarter of 1998.
Colonial Grand at Bayshore--The Company continued construction on a
212-unit development located in Bradenton, Florida. The new community will offer
a variety of amenities, including a club house, an exercise center, a swimming
pool overlooking a five-acre lake, tennis and basketball courts, a children's
playground, tenant garages, and storage units. Project costs, including land
acquisition costs, are expected to total $11.6 million and will be funded
through advances on the Company's line of credit. The Company expects to
complete construction in the second quarter of 1997 and to complete lease-up
during the third quarter of 1997.
Colonial Grand at Heathrow--The Company continued construction on a
312-unit development located in Heathrow (Orlando), Florida. The Company
acquired the land (30 acres) in December 1994 at a cost of $2.2 million. The new
development will be located adjacent to Heathrow International Business Center
and Heathrow Country Club. The new apartment community will offer a variety of
amenities, including a clubhouse with conference and computer rooms, an exercise
center, tennis and basketball courts, a swimming pool, and laundry facilities.
Project development costs, including land acquisition costs, are expected to
total $20.4 million and will be funded through advances on the Company's line of
credit. The Company expects to complete construction in the first quarter of
1997 and to complete lease-up during the second quarter of 1997.
New Multifamily Expansion and Development Activity
Colonial Village at Inverness--The Company began construction on an
84-unit expansion of Colonial Village at Inverness located in Birmingham,
Alabama during the third quarter of 1996. Project development costs, including
land acquisition costs, are expected to total $4.1 million and will be funded
through advances on the Company's line of credit. The Company expects to
complete construction in the fourth quarter of 1997 and to complete lease-up
during the first quarter of 1998.
Colonial Grand at Bayshore II--The Company began construction on a
164-unit expansion to this development located in Bradenton, Florida. The
Company acquired the land (12.5 acres) at a cost of $1.0 million pursuant to an
option acquired at the time the Company purchased the land for the existing
Colonial Grand at Bayshore development in November 1995. This expansion phase
will offer the same amenities as the existing community. Project development
costs, including land acquisition costs, are expected to total $9.1 million and
will be funded through advances on the Company's line of credit. The Company
expects to complete construction in the fourth quarter of 1997 and to complete
lease-up during the second quarter of 1998.
Colonial Grand at Wesleyan--The Company began construction on a
240-unit development located in Macon, Georgia. The Company acquired the land
(49.8 acres) at a cost of $1.4 million, which was determined pursuant to an
option acquired at the time of the Company's IPO in September 1993. The new
community will offer a variety of amenities, including a clubhouse, an exercise
center, a swimming pool, tennis courts, and storage units for rent. Project
development costs, including land acquisition costs, are expected to total $12.8
million and will be funded through advances on the Company's line of credit. The
Company expects to complete construction in the fourth quarter of 1997 and to
complete lease-up during the second quarter of 1998.
Colonial Grand at Hunter's Creek--The Company began construction on a
496-unit development located in Orlando, Florida. The Company acquired the land
(36 acres) at a cost of $4.0 million. The new apartment community will offer a
variety of amenities, including a swimming pool and spa, an exercise room,
enclosed garages, tennis courts, and a car wash. Project development costs,
including land acquisition costs, are expected to total $33.0 million and will
be funded through advances on the Company's line of credit. The Company expects
to complete construction in the second quarter of 1998 and to complete lease-up
during the first quarter of 1999.
Retail Property Acquisitions
Briarcliffe Mall--On July 1, 1996, the Company acquired Briarcliffe
Mall, a 488,000 square foot regional mall in Myrtle Beach, South Carolina, for a
purchase price of $42.8 million. The mall includes a 50,745 square foot J.C.
Penney, an 84,000 square foot K-Mart, and two Belk's stores, one having 58,000
square feet and the other having 61,000 square feet under a ground lease. The
mall was constructed in 1986 and was 96% leased at December 31, 1996. The
acquisition includes approximately 9 acres of land adjacent to the mall property
which is available for expansion. The Company used proceeds from its July 1996
debt offering to fund $41.6 million of the acquisition price and issued 48,905
limited partnership units of the Operating Partnership valued at $1.2 million.
The units have been allocated to the expansion land portion of the acquisition
and as such will not be eligible to receive distributions for 24 months after
closing.
Wekiva River Walk--On October 1, 1996, the Company acquired Wekiva
River Walk Shopping Center, a 209,000 square foot shopping center in Orlando,
Florida, for a purchase price of $18.1 million. The center includes a 58,000
square foot Goodings Supermarket, a 36,000 square foot Beall's Department Store,
a 26,000 square foot United Artists Cinema, and ground leases for NationsBank
and Barnett Bank. The center includes approximately 34,000 square feet of vacant
in-line shop space the Company anticipates using to enhance the center's
performance. The center was built in 1990 and was 84% leased at December 31,
1996.
Bardmoor Village--On October 1, 1996, the Company acquired Bardmoor
Village Shopping Center, a 158,000 square foot shopping center in St.
Petersburg, Florida, for a purchase price of $11.9 million. The center includes
a 66,000 square foot Publix Super Market, a 36,000 square foot Craft Depot, a
10,000 square foot Eckerd Drug Store, and a ground lease for First Union Bank.
The center was built in 1981, renovated and expanded in 1991, and was 99% leased
at December 31, 1996.
Island Walk--On October 1, 1996, the Company also acquired Island
Walk Shopping Center, a 222,000 square foot shopping center in Orlando, Florida,
for a purchase price of $17.2 million. The center includes a 108,000 square foot
K-Mart and a 56,000 square foot Publix Super Market. The center was built in two
phases with the first phase completed in 1993 and the second phase in 1995. The
center was 95% leased at December 31, 1996. In the acquisition of this property
the Company assumed an existing mortgage of $10.4 million that matures in
October 2001 and bears an interest rate of 8.8%.
Retail Expansion Activity
Macon Mall--On February 12, 1997, the Company completed its 422,000
square foot expansion of Macon Mall, a super regional mall located in Macon,
Georgia. The mall expansion includes new anchor tenants Parisian, Inc. and
Dillard Department Stores, Inc. together with 50 specialty shops, which have
joined existing department stores including Macy's Primary Real Estate, Inc.,
Belk-Matthews Company of Macon, Georgia, a Georgia Corporation, Sears, Roebuck
and Company and J.C. Penney Company, Inc. Macon Mall now contains approximately
1,431,000 square feet of retail shopping space. The project expansion costs
totaled approximately $52 million and were funded through advances on the
Company's line of credit. The Company expects to complete lease-up of this
expansion during the first quarter of 1998.
Montgomery Promenade--The Company began the 225,000 square foot
expansion of Montgomery Promenade, a power center containing approximately
210,000 square feet located in Montgomery, Alabama. The expansion, which will be
known as Montgomery Promenade North, will increase the shopping center to
435,000 square feet of leasable area and will include a 130,000 square foot
tenant-owned Home Depot. Montgomery Promenade is anchored by Winn Dixie Market
Place, Stein Mart, Michael's Arts & Crafts, Goody's, Books-A-Million, and K & B
Drugs. Project expansion costs are expected to total approximately $7 million
and will be funded through advances on the Company's line of credit. The Company
expects to complete construction in the fourth quarter of 1997 and to complete
lease-up during the first quarter of 1998.
Financing Activity
In January 1996 the Company completed a public offering of 4.6
million Common Shares at a price of $24.625 per share. The $106.6 million
proceeds of this offering, net of offering costs of $6.6 million, were used to
fund acquisition and development activity, repay the balances outstanding under
the Company's revolving credit agreements, and to repay the $8.2 million balance
outstanding under a mortgage loan.
In July 1996 the Company completed a public issuance of senior,
unsecured debt securities totaling $130.0 million. The securities were issued in
two series of $65 million each requiring semi-annual payments of interest only.
One series, which matures in July 2001, bears interest at 7.50% and was priced
at a spread of 95 basis points over the five-year treasury bond rate, resulting
in an original issue discount of $145,383. The other series, which matures in
July 2006, bears interest at 8.05% and was priced at a spread of 128 basis
points over the ten-year treasury bond rate, resulting in an original issue
discount of $288,410.
In July 1996 the Company refinanced loans collateralized by five of
the Company's multifamily properties and representing a total of approximately
$53.0 million in outstanding indebtedness. The loans are financed through
tax-exempt bonds which are credit enhanced by Fannie Mae. The loans, which bear
interest at a weekly variable interest rate, require monthly interest payments
through June 2006 and principal and interest payments from July 2006 through
June 2026. The weighted average interest rate of these five loans was 3.42% at
December 31, 1996.
In December 1996 the Company completed a public issuance of unsecured
medium-term debt securities totaling $50.0 million. The securities mature in
December 2003 and bear interest at 7.05% which, at the time of issuance, equated
to a spread of 90 basis points over the seven-year treasury bond rate.
In January 1997 the Company completed an additional issuance of
unsecured medium-term debt securities also totaling $50.0 million. These
securities mature in January 2003 and bear interst at 7.16% which, at the time
of issuance, equated to a spread of 80 basis points over the six-year treasury
bond rate.
In January 1997 the Company also completed a public offering of 1.5
million Common Shares at a price of $29.875 per share. The $43.4 million
proceeds of this offering, net of offering costs of $1.4 million, were used to
fund acquisition and development activity, repay the balances outstanding under
the Company's revolving credit agreement, and to repay $24.5 million outstanding
under four mortgage loans.
Business Strategy
The general business strategy of the Company is to generate stable
and increasing cash flow and portfolio value for its shareholders. The Company
(and its predecessor) has implemented this strategy principally by (i) realizing
growth in income from its existing portfolio of properties, (ii) developing,
expanding, and selectively acquiring additional multifamily, retail, and office
properties in growth markets located in the southeastern United States, where
the Company has first-hand knowledge of growth patterns and local economic
conditions, (iii) managing its own properties, which has enabled it to better
control operating expenses and establish long-term relationships with its retail
and office tenants, (iv) maintaining its third-party property management
business, which has increased cash flow and established additional relationships
with tenants, and (v) employing a comprehensive capital maintenance program to
maintain properties in first-class condition. The Company's business strategy
and the implementation of that strategy are determined by the Company's board of
trustees and may be changed from time to time.
Financing Strategy
The Company intends to maintain a ratio of debt to total market
capitalization (i.e., the total debt divided by the market value of issued and
outstanding Common Shares and Units plus total debt) of approximately 50% or
less. At December 31, 1996, after considering the effect of the January 1997
debt and equity offerings, the Company's total debt included fixed-rate debt of
$426.7 million, or 86.9%, and floating-rate debt of $64.5 million, or 13.1%. The
Company has obtained interest rate protection for $17.8 million of the
floating-rate debt. The Company's total market capitalization as of December 31,
1996, after considering the effect of the January 1997 debt and equity
offerings, was $1.3 billion, and its ratio of debt to total market
capitalization was 37.9%.
The Company may from time to time reevaluate its borrowing policies
in light of then current economic conditions, relative costs of debt and equity
capital, market values of properties, growth and acquisition opportunities, and
other factors. The Company may modify its borrowing policy and may increase or
decrease its ratio of debt to total market capitalization. To the extent that
the board of trustees of the Company determines to seek additional capital, the
Company may raise such capital through additional equity offerings, debt
financings, or retention of cash flow (subject to provisions in the Code
requiring the distribution by a REIT of a certain percentage of taxable income
and taking into account taxes that would be imposed on undistributed taxable
income) or a combination of these methods.
Property Management
The Company is experienced in the management and leasing of
multifamily, retail, and office properties and believes that the management and
leasing of its own portfolio has helped the Properties maintain consistent
income growth and has resulted in reduced operating expenses from the
Properties. The third-party management, leasing, and brokerage businesses
conducted through the Management Corporation have provided the Company both with
a source of cash flow that is relatively stable and with the benefits of
economies of scale in conjunction with the management and leasing of its own
properties. These businesses also allow the Company to establish additional
relationships with tenants who may require additional retail or office space and
to identify potential acquisitions.
Operational Structure
Multifamily Division--The multifamily division of the Company is
responsible for all aspects of the Company's multifamily operations, including
day-to-day management and leasing of the 42 Multifamily Properties, as well as
development and acquisition of additional multifamily properties. The
multifamily division also is responsible for the provision of third-party
management services for apartment communities in which the Company does not have
an ownership interest.
Retail Division--The Company's retail division is responsible for all
aspects of the Company's retail operations, including the provision of
management and leasing services for the 21 Retail Properties, as well as the
development and acquisition of additional retail properties. The retail division
also is responsible for the provision of third-party management services for
retail properties in which the Company does not have an ownership interest and
for brokerage services in other retail property transactions. The retail
division has regional offices in Huntsville and Montgomery, Alabama and Orlando,
Florida and satellite leasing offices in two cities in central Florida.
Office Division--The Company's office division is responsible for all
aspects of the Company's commercial office operations, including the provision
of management and leasing services for the 10 Office Properties, as well as the
development and acquisition of additional office properties. The office division
also is responsible for the provision of third-party management services for
office properties in which the Company does not have an ownership interest and
for brokerage services in other office property transactions.
Employees
The Company employs approximately 560 persons, including on-site
property employees who provide services for the Properties that the Company owns
and/or manages.
Tax Status
The Company has made an election to be taxed as a REIT under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"),
commencing with its taxable year ending December 31, 1993. If the Company
qualifies for taxation as a REIT, the Company generally will not be subject to
Federal income tax to the extent it distributes at least 95% of its REIT taxable
income to its shareholders. Even if the Company qualifies for taxation as a
REIT, the Company may be subject to certain state and local taxes on its income
and property and to federal income and excise taxes on its undistributed income.
<PAGE>
Executive Officers of the Company
The following is a biographical summary of the executive officers of
the Company:
Thomas H. Lowder, 47, is the President and Chief Executive Officer of
the Company and CPHC, a trustee of the Company, and a director of CPHC and the
Management Corporation. Mr. Lowder became President of Colonial in 1976 and
since that time has been actively engaged in the acquisition, development,
management, leasing, and sale of multifamily, retail, and office properties for
Colonial. Mr. Lowder is a member and past president of the Alabama Chapter of
the Commercial Investment Real Estate Institute. Mr. Lowder is a former state
Chairman of the Young Presidents' Organization and a member of the Birmingham
Area Board of Realtors, the National Association of Industrial Office Parks, the
International Council of Shopping Centers, and the National Association of Real
Estate Investment Trusts (NAREIT). He serves on the board of directors for
Discovery 2000, the Children's Hospital of Alabama, American Red
Cross-Birmingham Area Chapter, and the United Way of Central Alabama. He
graduated with honors from Auburn University with a Bachelor of Science Degree.
Howard B. Nelson, Jr., 49, has been Senior Vice President and Chief
Operating Officer of the Company and CPHC, with responsibility for the
day-to-day management of the Company, since September 1993. He joined Colonial
in 1984 as a vice president and became Senior Vice President-Finance in 1987.
Mr. Nelson has served as treasurer, vice president, president, and board member
of the Birmingham Chapter of the National Association of Industrial and Office
Parks as well as vice president and board member of the Building Owners and
Managers Association of Metropolitan Birmingham. He also serves on the Board of
Directors of the Children's Harbor Family Center and the College of Business
Advisory Council of Auburn University. He holds a Bachelor of Science Degree
from Auburn University.
Douglas B. Nunnelley, 54, has been Senior Vice President and Chief
Financial Officer of the Company and CPHC, with general responsibility for
financing matters, since 1993. From 1979 until 1993, Mr. Nunnelley served as
Executive Vice President, Comptroller, and Chief Accounting Officer of the
AmSouth Bancorporation, and as Senior Vice President and Comptroller of the
First National Bank of Birmingham. He serves on the Board of Directors of
Eastern Health Systems, Inc. Mr. Nunnelley holds a Bachelor of Science Degree in
accounting from the University of Alabama and is a graduate of the Stonier
Graduate School of Banking at Rutgers University and is a Certified Public
Accountant.
Paul F. Earle, 39, has been Senior Vice-President-Multifamily
Division of CPHC, with responsibility for management of all multifamily
properties owned and/or managed by the Company, since April 1996. He joined
Colonial in 1991 and has served as Vice President-Acquisitions. Mr. Earle is an
active member of the Alabama Multifamily Council and National Apartment
Association. Before joining Colonial, Mr. Earle was the President and Chief
Operating Officer of American Residential Management, Inc., Executive Vice
President of Great Atlantic Management, Inc., and Senior Vice President of
Balcor Property Management, Inc.
John N. Hughey, 37, has been Senior Vice President-Retail Division
Development of CPHC, with responsibility for the expansion and new development
of Retail Properties, since September 1993. He joined Colonial in 1982 and
assumed responsibility for an increasing number of shopping centers until being
named to Senior Vice President-Retail Division of Colonial in 1991. Mr. Hughey
served as the Alabama/Mississippi State Operations Chairman for the
International Council of Shopping Centers from 1993-1995. He holds a Bachelor of
Science Degree from Auburn University.
Thomas M. LaDow, 46, has been Senior Vice-President Office Division
of CPHC, with responsibility for management and leasing of all office properties
owned and/or managed by the Company, since September 1993. He joined Colonial in
1975 as a property manager and became Senior Vice-President-Office Division of
Colonial in September 1993. Mr. LaDow is a Certified Property Manager (CPM) and
is an active member of the Institute of Real Estate Management, Building Owner's
and Manager's Association and the National Association of Industrial and Office
Park. He holds a Bachelor of Science Degree from Birmingham Southern College in
Birmingham, Alabama.
<PAGE>
Charles A. McGehee, 51, has been Senior Vice President-Multifamily
Acquisitions/Development of CPHC, in charge of the Company's Multifamily
Property acquisitions and the Birmingham sales brokerage departments, since
September 1993. He joined Colonial in 1976 as vice president of retail leasing
and was responsible for leasing all retail space owned and/or managed by
Colonial. He became Senior Vice President-Office Division of Colonial in 1990, a
position he held until assuming his current position. Mr. McGehee has served as
president and a board member of the National Association of Industrial and
Office Parks as well as a member of the board of directors of the Birmingham
Area Board of Realtors. He holds a Bachelor of Science Degree from Auburn
University.
John L. Moss, 47, has been Senior Vice President-Retail Division of
CPHC, with responsibility for management, leasing, and marketing of all retail
property owned and/or managed by the Company, since September 1993. He joined
Colonial in 1973 as a property manager and assumed various positions of
increasing responsibility in the retail area until becoming Senior Vice
President-Retail Division of Colonial in 1990. Mr. Moss, who is a Certified
Shopping Center Manager (CSM), has served as the state director and the
Alabama/Mississippi state governmental affairs chairman of the International
Council of Shopping Centers. He holds a Bachelor of Science Degree from Auburn
University.
C. Reynolds Thompson, III, 34, joined CPHC in February 1997 as Senior
Vice-President Office Acquisitions, with responsibility for all acquisitions of
office properties. Prior to joining Colonial, Mr. Thompson worked for
CarrAmerica Realty Corporation in office building acquisitions and due
diligence. Mr. Thompson's ten year real estate background includes acquisitions,
development, leasing, and management of office properties in the Southeast. He
is an active member of the National Association of Industrial and Office Parks
and holds a Bachelor of Science degree from Washington and Lee University.
<PAGE>
Item 2. Properties.
General
The 73 Properties consist of 42 Multifamily Properties, 21 Retail
Properties, and 10 Office Properties, as described in more detail below.
Thirty-five of the Properties were acquired in connection with the Formation
Transactions, 19 Properties and an additional phase of an existing Property were
acquired during 1994, six Properties were acquired during 1995, and 11
Properties were acquired in 1996. Also, two new multifamily communities are
currently being developed by the Company. <TABLE>
Summary of Properties
<CAPTION>
Percent
of
Total Total
Units/ 1996 1996 Percentage
Number GLA/ Property Property Occupancy
of at
Type of NRA Revenue Revenue Dec. 31,
Property Properties (1) (2) (2) 1996 (3)
- ----------------- --------- -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Multifamily 42 13,617 $ 80,915,000 59.2% 94.8%
Retail 21 5,646,000 45,775,000 33.5% 93.8%
Office 10 1,009,000 10,061,000 7.3% 97.4%
---- ------------ -------
Total 73 $136,751,000 100.0%
==== ============ =======
<FN>
(1)Units (in this table only) refers to multifamily apartment units, GLA refers
to gross leasable area of retail space and NRA refers to net rentable area of
office space. Information is presented as of December 31, 1996.
(2)Includes the Company's proportionate share of revenue from those Office
Properties accounted for under the equity method.
(3)Excludes 2,734 units of expansion phases of six Multifamily Properties that
had not achieved stabilized occupancy as of December 31, 1996.
</FN>
</TABLE>
Multifamily Properties
The 42 Multifamily Properties contain a total of 13,617 garden-style
apartments and range in size from 104 to 1,080 apartment units. Sixteen of the
Multifamily Properties were acquired by the Company in connection with the
Formation Transactions, 17 Properties and one additional phase of an existing
Property were acquired during 1994 from third parties, and seven Properties were
acquired during 1996. Also, two new communities were being developed by the
Company during 1996. Twenty-three Multifamily Properties (containing a total of
8,621 apartment units) are located in Alabama, 13 Multifamily Properties
(containing a total of 3,846 apartment units) are located in Florida and six
Multifamily Properties (containing a total of 1,150 apartments units) are
located in Georgia. Each of the Multifamily Properties is established in its
local market and provides residents with numerous amenities, including a
swimming pool, jacuzzi, clubhouse, laundry room, tennis court(s), and/or a
playground.
<PAGE>
The following table sets forth certain additional information
relating to the Multifamily Properties as of and for the year ended December 31,
1996.
<TABLE>
Year Number Approximate
Multifamily Completed of Rentable Area Percent
Property (1) Location (2) Units(3) (Square Feet) Occupied
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ashford Place Mobile 1983 168 146,000 98.2%
CV at Rocky Ridge Birmingham 1984 226 235,000 96.9%
Colony Park Mobile 1975 201 144,000 88.1%
CG at Galleria Woods Birmingham 1994 244 260,000 93.4%
CG at Mountain Brook Birmingham 1987/91 392 393,000 94.6%
CV at Cahaba Heights Birmingham 1992 125 131,000 99.2%
Grande View
Towers Huntsville 1990 308 323,000 97.4%
CV at Inverness Birmingham 1986/87/90 502 395,000 88.2%
Huntleigh Woods Mobile 1978 233 199,000 98.3%
Inverness Mobile 1983/96 366 371,000 (7)
McGehee Place Montgomery 1986/95 468 387,000 (7)
CV at Monte D'Oro Birmingham 1977 200 296,000 100.0%
Patio Auburn 1966/83/84 240 179,000 99.2%
Pointe West Mobile 1981 104 114,000 97.1%
CG at Galleria Birmingham 1986/96 1,080 1,100,000 (7)
Rime Village-
Huntsville Huntsville 1987/94 736 809,000 92.3%
CG at Riverchase Birmingham 1984/91 468 746,000 97.9%
Ski Lodge I Birmingham 1972/73/76 648 549,000 94.8%
Ski Lodge II Birmingham 1979/86 644 511,000 97.4%
Ski Lodge III Birmingham 1984 554 502,000 95.3%
Ski Lodge
Tuscaloosa Tuscaloosa 1976/92 304 273,000 96.4%
Vieux Carre Montgomery 1971/74/78 250 222,000 82.0%
Willow Bend Montgomery 1984 160 151,000 93.8%
------ ------- -----
Subtotal - Alabama (23 Properties) 8,621 8,436,000 94.7%
------ ------- -----
CG at Kirkman Park Orlando 1991 370 337,000 98.4%
Carrollwood Tampa 1966 244 286,000 98.0%
CG at Bayshore Bradenton 1996 148 203,000 (7)
CG at Heathrow Orlando 1996 280 370,000 (7)
Pelican Pointe Bradenton 1992 340 292,000 90.3%
Plantation Gardens Sarasota 1991 248 252,000 99.6%
Polos Gainesville Gainesville 1989/93/94 560 487,000 97.7%
Polos Pointe Vedra Jacksonville 1988 240 212,000 88.8%
Polos West Orlando 1991 200 169,000 99.5%
Riverchase Tampa 1991 392 431,000 (7)
CV at Lake Mary Orlando 1991/95 504 431,000 94.6%
Sunchase Bradenton 1986 168 135,000 94.1%
Willowtree Pensacola 1983 152 116,000 95.4%
------- -------- -----
Subtotal - Florida (13 Properties) 3,846 3,721,000 95.7%
------- -------- -----
Barrington Club Macon 1966 176 201,000 92.6%
North Ingle Villas Macon 1983 140 133,000 86.4%
Somerset Place Savannah 1986 120 108,000 93.3%
Somerset Wharf Savannah 1986/87 178 151,000 94.4%
Spring Creek Macon 1992/94 296 328,000 97.6%
Stockbridge Manor Stockbridge 1993/94 240 267,000 92.5%
------- -------- -----
Subtotal - Georgia (6 Properties) 1,150 1,188,000 93.5%
------- -------- -----
TOTAL (42 Properties) 13,617 13,345,000 94.8%
======= ======== =====
<PAGE>
(INFORMATION CONTINUED FROM PREVIOUS TABLE)
Average Percent of
Rental Total 1996 Total 1996
Rate Property Property
Per Unit Revenue Revenue (4)
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ashford Place $ 471 $ 702,000 (6) 0.5%
CV at Rocky Ridge 584 1,544,000 1.1%
Colony Park 379 833,000 0.6%
CG at Galleria Woods 654 1,268,000 (6) 0.9%
CG at Mountain Brook 633 1,702,000 (6) 1.2%
CV at Cahaba Heights 685 573,000 (6) 0.4%
Grande View
Towers 568 2,017,000 1.5%
CV at Inverness 539 2,908,000 2.1%
Huntleigh Woods 416 1,129,000 0.8%
Inverness 555 2,035,000 1.5%
McGehee Place 543 2,622,000 1.9%
CV at Monte D'Oro 636 1,477,000 1.1%
Patio 398 1,063,000 0.8%
Pointe West 580 541,000 (6) 0.4%
CG at Galleria 622 6,532,000 4.8%
Rime Village-
Huntsville 577 4,616,000 3.4%
CG at Riverchase 738 3,722,000 2.8%
Ski Lodge I 404 3,186,000 2.4%
Ski Lodge II 407 3,043,000 2.3%
Ski Lodge III 431 2,776,000 2.0%
Ski Lodge
Tuscaloosa 400 1,428,000 1.0%
Vieux Carre 478 1,305,000 1.0%
Willow Bend 548 979,000 0.7%
------ ------- -----
Subtotal - Alabama 533 48,001,000 35.2%
------ ------- -----
CG at Kirkman Park 735 3,363,000 2.5%
Carrollwood 773 2,158,000 1.6%
CG at Bayshore 723 177,000 0.1%
CG at Heathrow 783 743,000 0.5%
Pelican Pointe 659 2,392,000 1.7%
Plantation Gardens 767 2,215,000 1.6%
Polos Gainesville 701 4,534,000 3.3%
Polos Pointe Vedra 654 1,808,000 1.3%
Polos West 617 1,439,000 1.1%
Riverchase 567 1,598,000 1.2%
CV at Lake Mary 610 3,703,000 2.7%
Sunchase 604 1,100,000 0.8%
Willowtree 475 846,000 0.6%
------ ------- -----
Subtotal - Florida 670 26,076,000 19.0%
------ ------- -----
Barrington Club 654 387,000 (6) 0.3%
North Ingle Villas 551 846,000 0.6%
Somerset Place 621 873,000 0.6%
Somerset Wharf 601 1,250,000 0.9%
Spring Creek 612 1,647,000 (6) 1.2%
Stockbridge Manor 661 1,835,000 1.4%
------ ------- -----
Subtotal - Georgia 620 6,838,000 5.0%
------ ------- -----
TOTAL (42 Properties) $579 $ 80,915,000 59.2%
======= ======== =====
<FN>
(1)All Multifamily Properties are 100% owned by the Company. In the listing of
Multifamily Property names, CG has been used as an abbreviation for Colonial
Grand and CV as an abbreviation for Colonial Village.
(2)Year initially completed and, where applicable, year(s) in which additional
phases were completed at the Property.
(3)Units (in this table only) refers to multifamily apartment units. Number of
Units includes all apartment units occupied or available for occupancy at
December 31, 1996.
(4)Percent of Total 1996 Property Revenue represents the Multifamily Property's
proportionate share of all revenue from the 73 Properties.
(5)Represents weighted average rental rate per unit of the 42 Multifamily
Properties at December 31, 1996.
(6)Represents revenues from the date of the Company's acquisition of this
Property in 1996 through December 31, 1996.
(7)Expanded or newly developed property currently undergoing lease-up.
</FN>
</TABLE>
The following table sets forth the total number of apartment units,
percent leased and average base rental rate per apartment unit as of the end of
each of the last five years for the Multifamily Properties:
<TABLE>
Average Base
Number Percent Rental Rate
Year-End of Units(1) Leased(2) Per Unit
<S> <C> <C> <C>
December 31, 1996 13,617 94.8% $579
December 31, 1995 11,239 95.7% $552
December 31, 1994 10,972 96.0% $531
December 31, 1993 3,618 96.7% $510
December 31, 1992 3,618 94.9% $472
<FN>
(1)Units (in this table only) refers to multifamily apartment units owned at
year end.
(2)Represents weighted average occupancy of the Multifamily Properties that had
achieved stabilized occupancy at the end of the respective period.
</FN>
</TABLE>
<PAGE>
Retail Properties
The 21 Retail Properties contain a total of approximately 5.6 million
square feet (including space owned by anchor tenants). Eight of the Retail
Properties are located in Alabama, 10 are located in Florida, two are located in
Georgia, and one Retail Property is located in South Carolina. The Retail
Properties consist of five enclosed regional malls (Briarcliffe Mall, Gadsden
Mall, Macon Mall, River Oaks Center, and Village Mall), two power centers, and
14 neighborhood shopping centers. Nine of the 21 Retail Properties were
originally developed by Colonial (two Retail Properties were acquired in 1994,
six were acquired in 1995, and four were acquired in 1996), and all of the
Retail Properties are now managed by the Company.
The following table sets forth certain information relating to the
Retail Properties as of and for the year ended December 31, 1996.
<TABLE>
Retail Properties
<CAPTION>
Gross
Leasable
Year Area Number
Retail Completed (Square Of
Property (1) Location (2) Feet) (3) Stores
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama:
River Oaks Decatur 1979/89 494,000 65
81,000 (6)
Gadsden Mall Gadsden 1974/91 492,000 66
Village Mall Auburn 1973/84/89 399,000 65
Montgomery
Promenade Montgomery 1990 165,000 30
44,000 (6)
McGehee Place Montgomery 1986 55,000 14
50,000 (6)
Bellwood Montgomery 1988 37,000 14
50,000 (6)
Old Springville Birmingham 1982 64,000 14
Olde Town Montgomery 1978/90 39,000 19
Other -
------------ --------------
Subtotal-Alabama (8 Properties) 1,970,000 287
------------ --------------
Florida:
University Park
Plaza Orlando 1986/89 399,000 42
Country Lake Orlando 1990 217,000 27
Burnt Store Sq. Punta Gorda 1990 199,000 22
Winter Haven Orlando 1986 197,000 18
Northdale Court Tampa 1984 193,000 29
55,000 (6)
Bear Lake Orlando 1990 125,000 22
Paddock Park Ocala 1984 87,000 19
Bardmoor Village St. Petersburg 1981 158,000 27
Island Walk Orlando 1993/95 222,000 23
Wekiva River Walk Orlando 1990 209,000 23
------------ --------------
Subtotal-Florida (10 Properties) 2,061,000 252
------------ --------------
Georgia:
Macon Mall Macon 1975/88 507,000 115
510,000 (6)
Britt David Columbus 1990 110,000 11
------------ --------------
Subtotal-Georgia (2 Properties) 1,127,000 126
------------ --------------
South Carolina:
Briarcliffe Mall Myrtle Beach 1986 488,000 75
------------ --------------
Subtotal-South Carolina (1 Property) 488,000 75
------------ -------------
TOTAL (21 Properties) 5,646,000 740
============ ==============
<PAGE>
(INFORMATION CONTINUED FROM PREVIOUS TABLE)
Average
Base
Rent
Per Total Percent Of
Total Leased 1996 Retail Total 1996
Percent Annualized Square Property Property
Leased (3) Base Rent Foot (4) Revenue Revenue (5)
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alabama:
River Oaks 91.8% $ 3,326,000 $ 14.84 $ 4,612,000 3.4%
Gadsden Mall 95.1% 2,615,000 13.38 4,021,000 2.9%
Village Mall 98.5% 2,665,000 12.91 3,801,000 2.8%
Montgomery
Promenade 100.0% 1,574,000 14.78 2,055,000 1.5%
McGehee Place 97.4% 538,000 11.34 616,000 0.5%
Bellwood 100.0% 380,000 10.76 485,000 0.4%
Old Springville 91.9% 401,000 8.40 461,000 0.3%
Olde Town 100.0% 365,000 9.26 403,000 0.3%
Other 191,000 (8) 0.1%
------------------------------------------------ -------
Alabama 95.6% 11,864,000 13.11 16,645,000 12.2%
------------------------------------------------ -------
Florida:
University Park
Plaza 97.7% 2,767,000 13.61 3,849,000 2.8%
Country Lake 96.3% 1,296,000 12.15 1,631,000 1.2%
Burnt Store Sq. 90.2% 1,254,000 11.67 1,593,000 1.2%
Winter Haven 82.7% 1,139,000 9.77 1,135,000 0.8%
Northdale Court 83.1% 1,389,000 9.68 2,033,000 1.5%
Bear Lake 85.5% 871,000 12.84 1,205,000 0.9%
Paddock Park 96.0% 640,000 11.69 831,000 0.6%
Bardmoor Village 98.9% 1,360,000 14.34 473,000 (7) 0.3%
Island Walk 95.1% 1,843,000 15.12 516,000 (7) 0.4%
Wekiva River Walk 83.6% 1,781,000 13.17 650,000 (7) 0.5%
------------------------------------------------ -------
Florida 91.5% 14,340,000 13.97 13,916,000 10.2%
------------------------------------------------ -------
Georgia:
Macon Mall 93.3% 5,972,000 20.13 10,821,000 7.9%
Britt David 100.0% 807,000 6.37 936,000 0.7%
------------------------------------------------ -------
Georgia 94.5% 6,779,000 18.18 11,757,000 8.6%
------------------------------------------------ -------
South Carolina:
Briarcliffe Mall 96.0% 4,075,000 15.69 3,457,000 (7) 2.5%
------------------------------------------------ -------
South Carolina 96.0% 4,075,000 17.34 3,457,000 2.5%
------------------------------------------------- -------
TOTAL 93.8% $ 37,058,000 $ 14.66 $ 45,775,000 33.5%
================================================= =======
<FN>
(1)All Retail Properties are 100% owned by the Company.
(2)Year initially completed and, where applicable, year(s) in which the
Property was substantially renovated or an additional phase of the Property
was completed.
(3)Total GLA includes space owned by anchor tenants, but Percent Leased excludes
such space.
(4)Includes specialty store space only.
(5)Percent of Total 1996 Property Revenue represents the Retail Property's
proportionate share of all revenue from the 73 Properties.
(6)Represents space owned by anchor tenants.
(7)Represents revenues from the date of the Company's
acquisitions of the Property in 1996 through December 31, 1996.
(8)Represents revenues from Meadowbrook Mini-Storage, a mini-warehouse rental
storage facility containing 295 rental warehouse units, which the Company
sold in November 1996.
</FN>
</TABLE>
<PAGE>
The following table sets forth the total gross leasable area, percent
leased and average base rent per leased square foot as of the end of each of the
last five years for the Retail Properties: <TABLE>
Gross Average
Leasable Area Percent Base Rent Per
Year-End (Square Feet) Leased Leased Square
(1) Foot (2)
<S> <C> <C> <C>
December 31, 1996 4,856,000 93.8% $14.66
December 31, 1995 3,758,000 93.1% $13.23
December 31, 1994 2,467,000 95.8% $12.61
December 31, 1993 2,158,000 95.0% $12.27
December 31, 1992 2,148,000 93.5% $11.50
<FN>
(1)Excludes 790,000 square feet of space owned by anchor tenants.
(2)Average base rent per leased square foot is calculated using specialty store
year-end base rent figures.
</FN>
</TABLE>
The following table sets out a schedule of the lease expirations for
leases in place as of December 31, 1996, for the Retail Properties:
<TABLE>
Percent of
Total Annual
Base Rent
Net Rentable Represented
Year of Number of Area Of Annualized by Expiring
Lease Tenants with Expiring Leases Base Rent of Leases
Expiration Expiring Leases(Square Feet)(1) Expiring Leases(1)(2) (1)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 105 242,000 $ 2,896,000 7.8%
1998 123 361,000 3,873,000 10.5%
1999 133 468,000 4,537,000 12.2%
2000 106 589,000 5,083,000 13.7%
2001 75 201,000 2,748,000 7.4%
2002 36 127,000 1,450,000 3.9%
2003 30 98,000 1,359,000 3.7%
2004 34 429,000 2,530,000 6.8%
2005 30 138,000 1,960,000 5.3%
2006 38 426,000 3,410,000 9.2%
2007-2014 30 1,372,000 7,212,000 19.5%
======== ===================================== ==============
740 4,451,000 $ 37,058,000 100.0%
======== ===================================== ==============
<FN>
(1)Excludes 790,000 square feet of space owned by anchor tenants and 405,000
square feet of space not leased as of December 31, 1996.
(2)Annualized base rent is calculated using base rents as of December 31, 1996.
</FN>
</TABLE>
The following is a brief description of certain of the Retail
Properties.
Macon Mall--Macon Mall is a super-regional mall with approximately
1,431,000 square feet of rental space (including the recently completed
expansion) located in Macon, Georgia, approximately 100 miles south of Atlanta,
Georgia and serving a trade area of more than 650,000 people. Colonial developed
Macon Mall in 1975, completely renovated its interior in 1988, and completed a
422,000 square foot expansion of the mall in February 1997. As of December 31,
1996, the mall was 93.3% leased to a total of 115 tenants. Parisian, Dillard's,
Macy's, Sears, Belk Matthews and J.C. Penney are the anchor department stores.
As of February 28, 1997, J.C. Penney occupied approximately 169,000 square feet
(approximately 11.8% of the gross leasable area) pursuant to a lease which
expires in August 2000 and Parisian occupied 102,000 square feet (approximately)
7.2% of the gross leasable area) pursuant to a lease which expires in March
2017. J.C. Penney has five options to extend the lease for five years each. Each
of Dillard's, Macy's, Sears, and Belk Matthews owns its store. In the opinion of
the Company, Macon Mall is adequately covered by insurance.
The following table sets out a schedule of the lease expirations for Macon
Mall beginning with 1997. Leases accounting for approximately 11.6% of the
leased space (all of which is specialty space) in the Macon Mall will exprire on
or before December 31, 1997. <TABLE>
Percent of
Total Annual
Net Rentable Base Rent
Year of Number of Area Of Annualized Represented
Lease Tenants with Expiring Leases Base Rent of by Expiring
Expiration Expiring Leases (Square Feet)(1) Expiring Leases(1)(2) Leases(1)
- --------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
1997 20 53,000 $ 749,000 12.5%
1998 15 42,000 753,000 12.6%
1999 15 32,000 679,000 11.4%
2000 17 216,000 1,282,000 21.5%
2001 6 12,000 284,000 4.8%
2002 6 7,000 210,000 3.5%
2003 6 21,000 209,000 3.5%
2004 2 6,000 130,000 2.2%
2005 15 33,000 843,000 14.1%
2006 12 32,000 796,000 13.3%
2007-2014 1 2,000 37,000 0.6%
======== ======================================= ==============
115 456,000 $ 5,972,000 100.0%
======== ======================================= ==============
<FN>
(1) Excludes 510,000 square feet of space owned by anchor tenants and 51,000
square feet of space not leased as of December 31. 1996.
(2) Annualized base rent is calculated using a specialty store base rent as of
December 31, 1996.
</FN>
</TABLE>
The aggregate tax basis of depreciable real property of Macon Mall
for Federal income tax purposes was $21,511,000 as of December 31, 1996. The
aggregate tax basis of depreciable personal property associated with the
Property for Federal income tax purposes was $996,000 as of December 31, 1996.
Depreciation and amortization are computed on a straight-line method or
appropriate accelerated methods over the estimated useful life of the Property's
assets, which range from seven to 40 years. The current realty tax rate for
Macon Mall is $41.30 per $1,000 of assessed value. The aggregate real estate tax
obligation of Macon Mall for 1996 was $786,000, or approximately $1.18 per
square foot of taxable building area.
A 336,457 square foot portion of the land underlying Macon Mall is
subject to a ground lease that expires in 2071. The ground lease requires ground
rent payments of $24,000 each year and is subject to a one-time adjustment per
the wholesale index in the year 2000.
River Oaks Center--River Oaks Center is a 575,000 square foot
regional mall located in Decatur, Alabama. Parisian, J.C. Penney, Sears, Castner
Knott, and Rogers are the anchor tenants. The mall was originally developed in
1979 and renovated in 1989. Colonial acquired the mall in 1995.
Gadsden Mall--Gadsden Mall is a 492,000 square foot regional mall
located in Gadsden, Alabama, approximately 60 miles northeast of Birmingham,
Alabama. J.C. Penney, Sears, McRae's, and Belk's are the anchor tenants. The
mall was expanded in 1990 to allow Belk's to relocate and expand within the mall
with its newest prototype store and to allow J.C. Penney the opportunity to move
to the mall from its downtown location. In addition, the interior of the mall
was totally renovated, including the addition of a food court. McRae's, an
anchor tenant, exercised a one-time option in August 1994 to extend its initial
lease term to July 2014 and completed a major renovation of its store at a cost
of approximately $2 million.
Briarcliffe Mall--Briarcliffe Mall is a 488,000 square foot regional
mall located in Myrtle Beach, South Carolina. J.C. Penney, K-Mart, and two
Belk's stores are the anchor tenants. The mall was originally developed in 1986
and acquired by Colonial in 1996.
Village Mall--Village Mall is a 399,000 square foot regional mall
located in Auburn, Alabama, which is approximately 55 miles east of Montgomery,
Alabama and 45 miles northwest of Columbus, Georgia. Anchored by Gayfer's
(Mercantile), Sears, and J.C. Penney, it is the only enclosed mall in east
central Alabama. Originally built in 1973, the mall was expanded to its current
size in 1984 with the addition of J.C. Penney and approximately 60,000 square
feet of specialty shops. An extensive renovation of the interior in 1989
included the creation of a food court.
University Park--University Park is a 399,000 square foot power
center located in Orlando, Florida. The anchor tenants are Beall's, Stein Mart,
Baby Superstore, Waccamaw, Albertson's, and Books-A-Million. The shopping center
was constructed in two phases, with Phase I and Phase II opening in 1986 and
1989, respectively.
Office Properties
The 10 Office Properties contain a total of approximately 1.0 million
rentable square feet. Nine of the Office Properties are located in Alabama
(representing 93% of the office portfolio's net rentable square feet) and one is
located in Orlando, Florida. The Office Properties range in size from
approximately 25,000 square feet to 227,000 square feet. Four of the Office
Properties were developed by Colonial, and Colonial acquired the other six
Properties at various times between 1980 and 1990. All of the Office Properties
are now managed by the Company.
<PAGE>
The following table sets forth certain additional information
relating to the Office Properties as of and for the year ended December 31,
1996.
<TABLE>
Net
Rentable
Year Area
Office Completed Square Percent
Property (1) Location (2) Feet Leased
- ---------------------------------------------------------- -----------------
<S> <C> <C> <C> <C>
Alabama:
Interstate Park Montgomery 1982-85/89 227,000 95.5%
International Park Birmingham 1987/89 222,000 100.0%
Energen Plaza Birmingham 1982 168,000 99.6%
AmSouth Center Huntsville 1990 157,000 93.4%
P&S Building Gadsden 1946/76/91 40,000 100.0%
250 Commerce St Montgomery 1904/81 35,000 100.0%
Anderson Block (5) Montgomery 1981/83 34,000 96.1%
Land Title Bldg. Birmingham 1975 30,000 100.0%
Whitesburg Bldg. Huntsville 1974 25,000 100.0%
----------------------------------
Subtotal-Alabama (9 Properties) 938,000 97.6%
----------------------------------
Florida:
University Park
Plaza Orlando 1985 71,000 95.5%
----------------------------------
TOTAL (10 Properties) 1,009,000 97.4%
==================================
(INFORMATION CONTINUED FROM PREVIOUS TABLE)
Average
Base
Rent
Per Total Percent Of
Total Leased 1996 Office Total 1996
Annualized Square Property Property
Base Rent Foot Revenue (3) Revenue (4)
------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama:
Interstate Park $ 2,760,000 $ 12.92 $ 2,868,000 2.1%
International Park 3,282,000 14.86 1,029,000 0.8%
Energen Plaza 2,366,000 14.40 1,430,000 1.0%
AmSouth Center 2,538,000 17.36 2,849,000 2.0%
P&S Building 178,000 4.50 144,000 0.1%
250 Commerce St 364,000 10.35 361,000 0.3%
Anderson Block (5) 333,000 10.33 124,000 0.1%
Land Title Bldg. 382,000 12.82 139,000 0.1%
Whitesburg Bldg. 205,000 16.61 322,000 0.2%
---------------------------------------------- -------
Alabama 12,408,000 13.88 9,266,000 6.7%
---------------------------------------------- -------
Florida:
University Park
Plaza 894,000 12.83 795,000 0.6%
---------------------------------------------- -------
TOTAL $ 13,302,000 $ 13.80 $ 10,061,000 7.3%
============================ =============== =======
<FN>
(1)All Office Properties are 100% owned by the Company with the exception of
International Park, which consists of three buildings and is 37.5% owned by
the Company for buildings 1900 and 2100 and is 25% owned by the Company for
building 2000; Energen Plaza, which is 50% owned by the Company; and Anderson
Block and Land Title Building, which are each 33.33% owned by the Company.
(2)Year initially completed and, where applicable, most recent year in which the
Property was substantially renovated or in which an additional phase of the
Property was completed.
(3)Total 1996 Office Property revenue is the Company's share (based on its
percentage ownership of the property) of total Office Property revenue.
(4)Percent of Total 1996 Property Revenue represents the Office Property's
proportionate share of all revenue from the 73 Properties.
(5)The Company has a leasehold interest in this Property.
</FN>
</TABLE>
<PAGE>
The following table sets out a schedule of the lease expirations for leases
in place as of December 31, 1996, for the Office Properties (including all lease
expirations for partially-owned Properties). <TABLE>
Annualized Percent of
Net Rentable Base Rent of Annual Base
Year of Number of Area Of Expiring Rent Represented
Lease Tenants with Expiring Leases Leases by Expiring
Expiration Expiring Leases (Square Feet)(1) (1)(2) Leases (1)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 61 180,000 $ 2,281,000 17.2%
1998 26 225,000 3,129,000 23.5%
1999 41 292,000 4,155,000 31.2%
2000 15 101,000 1,400,000 10.5%
2001 14 86,000 880,000 6.6%
2002 3 18,000 283,000 2.1%
2005 2 56,000 1,063,000 8.0%
2007 1 6,000 111,000 0.9%
========= ================= ================= ===============
163 964,000 $ 13,302,000 100.0%
========= ================= ================= ===============
<FN>
(1)Excludes 45,000 square feet of space not leased as of December 31, 1996.
(2)Annualized base rent is calculated using base rents as of December 31,
1996.
</FN>
</TABLE>
The following sets forth the net rentable area, total percent leased
and average base rent per leased square foot for each of the last five years for
the Office Properties: <TABLE>
Net Average Base
Rentable Area Total Rent Per Leased
Year-end (Square Feet) Percent Leased Square Foot (1)
<S> <C> <C> <C>
December 31, 1996 1,009,000 97.4% $13.80
December 31, 1995 1,009,000 94.0% $13.52
December 31, 1994 1,009,000 95.0% $12.99
December 31, 1993 1,007,000 93.7% $13.05
December 31, 1992 1,007,000 94.1% $12.99
<FN>
- -----------------
(1)Average base rent per leased square foot is calculated using base rents as of
December 31 for each respective year.
</FN>
</TABLE>
<PAGE>
The following is a brief description of certain of the Office
Properties.
Interstate Park--Interstate Park is a master planned suburban office
park located in east Montgomery, Alabama containing a total of 227,000 rentable
square feet. The Property consists of the Interstate Park Center, a four-story
building completed in 1989 containing a total of 78,000 rentable square feet,
and the Interstate Buildings 100 through 600, which were constructed between
1982 and 1985 and which contain a total of 149,000 rentable square feet. The
Property's major tenants include affiliates of The Colonial Company, including
Lowder Construction Company, Inc., Colonial Mortgage Company; Goodwyn Mills &
Cawood; CACI; Webb Crumpton, and the Alabama Housing Finance Authority.
Historical Rehabilitation Properties--Anderson Block (in which the
Company has only a 33.3% interest) and 250 Commerce Street are historic
buildings located in Montgomery, Alabama which have been renovated to Class A
office space. The two Properties benefit from their presence on the National
Historic Register and from their prime locations in Montgomery's downtown
financial district. Both Properties were originally constructed as warehouses in
the late 1800s/early 1900s and later underwent complete renovation in the early
1980s. The Colonial BancGroup, Inc. occupies approximately 43% of 250 Commerce
Street, with the remainder leased to smaller tenants. Anderson Block leases its
entire space to seven separate tenants.
Energen Plaza--Energen Plaza is a 12-story Class A office building
located in the downtown central business district of Birmingham, Alabama
containing a total of 168,000 rentable square feet and in which the Company owns
a 50% interest. The building was constructed in 1982 and includes a four-level
parking garage with 417 parking spaces. It is the headquarters building for
Energen Corp. (the parent company of Alabama Gas Corporation) and for the
Company, which occupies 18,000 square feet. The remainder of the Property is
leased to Gorham & Waldrep (a law firm) and to other smaller tenants.
International Park--International Park is a 100-acre master planned
office park located 15 minutes south of Birmingham in the Highway 280/Southeast
suburban submarket. The Property consists of three separate office buildings
(the 1900, 2000 and 2100 Buildings) which contain a total of 222,000 rentable
square feet. The Company owns 37.5% of the 1900 Building, 25% of the 2000
Building and 37.5% of the 2100 Building in partnership with BE&K, an
international design engineering and construction company, and other partners.
The 1900 Building was constructed in 1987 and contains 65,000 rentable square
feet. Its largest tenants include Hoar Construction, A.B. Shopping Centers and
Innovative Healthcare. The 2000 Building was built in 1987, contains 129,000
rentable square feet and is solely occupied by BE&K. The most recently
constructed building, the 2100 Building (completed in 1989), contains 28,000
rentable square feet and also is solely occupied by BE&K.
AmSouth Center--AmSouth Center is an 11-story Class A office building
located in downtown Huntsville, Alabama. Constructed in 1990, the Property
contains a total of 157,000 rentable square feet and has an attached six-story
parking deck with 424 parking spaces. The building is anchored by AmSouth Bank.
Other major tenants include New York Life; Watson, Gammons & Fees; the Tennessee
Valley Authority; and the law firms of Sirote & Permutt and Bradley, Arant, Rose
& White.
Undeveloped Land
The Company owns seven undeveloped land parcels consisting of
approximately 61.0 acres (collectively, the "Land"). These parcels are adjacent
to five of the Properties and are suitable for potential expansion at those
Properties. The Land suitable for expansion is located adjacent to a Multifamily
Property and four Retail Properties. Land adjacent to Multifamily Properties
typically will be considered for potential development of another phase of an
existing Multifamily Property if the Company determines that the particular
market can absorb additional apartment units. The Company currently owns one
such parcel. For expansions at Retail Properties, the Company owns parcels both
contiguous to the boundaries of Retail Properties, which would accommodate
expansion of the mall or shopping center, and outparcels which are suitable for
restaurants, financial institutions or free standing retailers. The Company owns
six such parcels.
Options to Acquire Additional Land -- In addition to the Land, the
Company has options to acquire certain additional land parcels owned by the
Lowder family (collectively, the "Option Parcels"). The name, location, proposed
use and acreage of each Option Parcel is as follows:
Site Name Location Proposed Use Acres
North Macon (Wimbleton
Forest)..................Macon, GA Retail 87.9
Altamonte Crossing.......Altamonte Retail 2.6
Springs, FL
Bellwood Commercial......Montgomery, AL Retail 1.1
Osprey (Sarasota)........Sarasota, FL Mixed Use 73.9
Interstate Park..........Montgomery, AL Office 11.3
Bellwood Office..........Montgomery, AL Office 4.9
Huntsville Research Park Huntsville, AL Office 9.8
Each option has a term of five years from the date of the closing of
the IPO, subject to earlier termination if the Company elects not to exercise a
right of first opportunity on a proposed sale of such Option Parcel by the
Lowder family. The Company also has a five-year right of first opportunity with
respect to each Option Parcel beginning on the expiration date of the option
term (if the option is not exercised).
Property Markets
The table below sets forth certain information with respect to the
geographic concentration of the Properties as of December 31, 1996.
<TABLE>
Geographic Concentration of Properties
<CAPTION>
Percent
Total Of Total
Units GLA NRA 1996 Property 1996 Property
State (Multifamily)(1)(Retail)(2) (Office)(3) Revenue Revenue
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alabama 8,621 1,970,000 938,000 $ 73,912,000 54.1%
Florida 3,846 2,061,000 71,000 40,787,000 29.8%
Georgia 1,150 1,127,000 -0- 18,595,000 13.6%
South Carolina -0- 488,000 -0- 3,457,000 2.5%
-------------------------------------------------- --------
Total 13,617 5,646,000 1,009,000 $ 136,751,000 100.0%
================================================== ========
<FN>
(1) Units (in this table only) refers to multifamily apartment units.
(2) GLA refers to gross leaseable area of retail space.
(3) NRA refers to net rentable area of office space.
</FN>
</TABLE>
<PAGE>
The Company believes that the demographic and economic trends and
conditions in the markets where the Properties are located indicate a potential
for continued growth in property net operating income. The Properties are
located in a variety of distinct submarkets within Alabama, Georgia, South
Carolina, and Florida; however, Birmingham, Alabama, Orlando, Florida,
Huntsville, Alabama, Macon, Georgia, Montgomery, Alabama, Tampa, Florida, and
Sarasota/Bradenton, Florida are the Company's primary markets. The Company
believes that these seven markets, which are characterized by stable and
increasing population and employment growth, should continue to reflect a steady
demand for multifamily, retail, and office properties.
Mortgage Financing
Certain of the Properties are subject to mortgage indebtedness. The
Properties whose financial results are consolidated in the financial statements
of the Company are subject to existing mortgage indebtedness and other notes
payable in an aggregate amount as of December 31, 1996, of approximately $506.4
million carrying a weighted average interest rate of 7.45% and a weighted
average maturity of 8.5 years. The mortgage indebtedness on the Properties as of
December 31, 1996, is set forth in the table below: <TABLE>
Principal
Interest Balance (as of
Property (1) Rate 12/31/96)
- --------------------------------------------------------------------
<S> <C> <C>
Multifamily Properties:
CG at Kirkman Park 7.900% $ 12,535,549
Ashford Place 7.125% 3,420,517
CV at Rocky Ridge 5.900% 6,000,000
7.625% 1,418,333
CG at Galleria Woods 6.875% 7,395,088
CG at Mountain Brook 8.000% 12,261,239
CV at Cahaba Heights 8.060% 3,772,907
Grande View Towers 7.500% 9,952,418
CV at Inverness 5.960% (4) 9,900,000
Huntleigh Woods 9.500% 3,022,034
Inverness Apartments 5.900% 4,000,000
7.625% 1,741,667
CV at Monte D'Oro 8.750% 5,314,434 (8)
Pointe West 7.125% 2,880,971
Polos West 7.450% 5,777,805
CG at Galleria 4.150% 22,400,000
Rime Village-Huntsville 4.150% 12,775,000
CG at Riverchase 7.150% 9,197,454
Ski Lodge I 9.500% 7,899,217 (8)
Ski Lodge II 9.500% 9,082,891 (8)
Ski Lodge III 5.450% 10,300,000
Ski Lodge-Tuscaloosa 9.500% 4,827,530
Somerset Place 5.960% (4) 4,500,000
Somerset Wharf I 5.960% (4) 3,400,000
Vieux Carre 9.750% 5,158,370
Willow Bend 5.900% 3,330,000
7.625% 1,666,667
Retail Properties:
Bellwood 10.125% 2,995,931
Island Walk 8.800% 10,406,672
Montgomery Promenade 9.250% 10,810,000
Olde Town 10.000% 1,676,561 (8)
Office Properties:
Interstate Park 8.500% 4,731,993
Whitesburg Building 10.250% 1,282,470
Other debt:
Land Loan 7.220% 700,000
6 Mortgages 8.870% 61,520,000
Line of Credit 7.000% (10) 48,815,000 (8)
Unsecured Senior Notes 7.500% 64,854,617
Unsecured Senior Notes 8.050% 64,711,590
Medium Term Notes 7.050% 50,000,000
================
TOTAL $ 506,434,925
================
<PAGE>
(INFORMATION CONTINUED FROM PREVIOUS TABLE)
Anticipated
Annual Debt
Service Estimated
(1/1/97- Maturity Balance Due
Property (1) 12/31/97) Date (2) on Maturity
----------------------------- -------------------------------------------------
<S> <C> <C> <C>
Multifamily Properties:
CG at Kirkman Park $ 1,133,819 03/15/98 $ 12,360,767
Ashford Place 282,876 11/01/24 10,065
CV at Rocky Ridge 354,000 08/01/02 (3) 6,000,000
188,656 08/01/02 (3) 841,667
CG at Galleria Woods 645,716 07/15/99 7,035,235
CG at Mountain Brook 1,134,422 01/10/00 11,742,632
CV at Cahaba Heights 377,274 05/10/00 3,494,138
Grande View Towers 882,571 11/15/98 9,685,749
CV at Inverness 347,492 06/15/26 (5) 9,900,000
Huntleigh Woods 315,823 05/01/02 2,827,436
Inverness Apartments 236,000 07/31/02 (6) 4,000,000
208,454 07/31/02 (7) 1,234,167
CV at Monte D'Oro 78,115 (8) 12/01/99 5,309,917 (8)
Pointe West 245,649 05/01/22 20,354
Polos West 569,276 12/05/03 4,526,555
CG at Galleria 786,240 06/15/26 (5) 22,400,000
Rime Village-Huntsville 448,404 06/15/26 (5) 12,775,000
CG at Riverchase 769,969 12/31/98 8,967,396
Ski Lodge I 124,978 (8) 06/01/99 7,893,013 (8)
Ski Lodge II 143,705 (8) 06/01/99 9,075,757 (8)
Ski Lodge III 656,655 03/01/15 (9) 900,000
Ski Lodge-Tuscaloosa 504,514 05/01/02 4,516,671
Somerset Place 157,952 06/15/26 (5) 4,500,000
Somerset Wharf I 119,340 06/15/26 (5) 3,400,000
Vieux Carre 533,605 06/01/01 4,993,827
Willow Bend 196,472 07/31/02 (6) 3,330,000
197,937 07/31/02 (7) 1,179,167
Retail Properties:
Bellwood 324,826 01/01/99 2,948,518
Island Walk 1,059,697 10/01/01 7,340,184
Montgomery Promenade 999,924 07/01/00 10,810,000
Olde Town 29,359 (8) 03/01/98 1,671,772 (8)
Office Properties:
Interstate Park 643,440 08/01/03 2,648,144
Whitesburg Building 160,494 09/01/01 1,109,612
Other debt:
Land Loan 84,332 09/30/98 648,778
6 Mortgages 545,681 02/05/05 61,520,000
Line of Credit 267,913 (8) 12/18/98 (11) 64,085,000 (8)
Unsecured Senior Notes 4,875,000 07/15/01 65,000,000
Unsecured Senior Notes 5,232,500 07/15/06 65,000,000
Medium Term Notes 3,525,000 12/15/03 50,000,000
=============== ================
TOTAL $ 29,388,080 $ 495,701,521
=============== ================
<FN>
- ----------------
(footnotes presented on the next page)
<PAGE>
(1)As noted in the table, certain Properties were developed in phases and
separate mortgage indebtedness may encumber each of the various phases. In
the listing of property names, CG has been used as an abbreviation for
Colonial Grand and CV as an abbreviation for Colonial Village.
(2)All of the mortgages can be prepaid at any time, subject to prepayment
penalties calculated typically on a yield maintenance basis, except for the
mortgages encumbering Colonial Village at Rocky Ridge, Inverness Apartments,
Willowbend, and Colonial Grand at Riverchase, which are closed to prepayment
for varying lengths of time.
(3)The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the loans
is August 1, 2007.
(4)Represents the maximum interest rate payable by the Company for the next year
and nine months on these loans as the result of an interest rate protection
agreement entered into by the Company. The loans (which are financed through
tax-exempt bonds) secured by these Properties (or phases thereof) bear
interest at a variable rate, determined weekly at the rate necessary to
produce a bid in the process of remarketing the bonds equal to par plus
accrued interest, based on comparable issues in the market. The interest rate
for these debt obligations as of December 31, 1996, was 4.05% for these
Properties.
(5)These loans are financed through tax-exempt bonds which are credit enhanced
by Fannie Mae. The loans, which bear interest at a weekly variable interest
rate, require monthly interest payments through June 2006 and principal and
interest payments from July 2006 through June 2026. The weighted average
interest rate of these five loans was 3.42% at December 31, 1996.
(6)The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the loans
is August 1, 2022.
(7)The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the loans
is August 1, 2010.
(8)The principal balances outstanding on these loans were repaid in January and
February 1997 with proceeds from the January 1997 debt and equity offerings.
The amounts presented for anticipated annual debt service for these loans
represent the principal and interest paid during January and February 1997
(excluding the final principal balance paid). The amounts presented for
estimated balance due on maturity for these loans represent the outstanding
balances that were repaid in January and February 1997.
(9)The maturity date noted represents the date on which the credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the loan is
March 1, 2015.
(10) This loan bears interest at a variable rate, based on LIBOR plus a spread
determined by certain capitalization and coverage ratios that ranges from 100
to 150 basis points.
(11) This credit facility has a term of two years beginning in December 1996 and
provides for a one-year amortization in the event of non-renewal.
</FN>
</TABLE>
In addition to the foregoing mortgage debt, the four Properties in
which the Company owns partial interests (and which therefore are not
consolidated in the financial statements of the Company) also are subject to
existing mortgage indebtedness. The Company's pro-rata share of such
indebtedness as of December 31, 1996, was $7,283,000 which carried a weighted
average interest rate of 8.9%. The maturity dates of these loans range from
February 28, 1997 to July 17, 2000, and as of December 31, 1996, the loans had a
weighted average maturity of 1.1 years.
Item 3. Legal Proceedings.
Neither the Company nor the Properties are presently subject to any
material litigation nor, to the Company's knowledge, is any material litigation
threatened against the Company or the Properties, other than routine litigation
arising in the ordinary course of business which is expected to be covered by
liability insurance.
Item 4. Submission of Matters to a Vote of Security
Holders.
No matters were submitted to the Company's shareholders during the
fourth quarter of 1996.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters.
The following sets forth the high and low sale prices for the Common
Shares for each quarter in the two-year period ended December 31, 1996, as
reported by the New York Stock Exchange Composite Tape and the dividends paid by
the Company with respect to each such period. <TABLE>
Calendar Period High Low Distribution
<CAPTION>
<S> <C> <C> <C>
1996:
First Quarter.......... $ 26.00 $ 23.00........$ .500
Second Quarter......... $ 24.75 $ 22.00........$ .500
Third Quarter......... $ 26.25 $ 23.75........$ .500
Fourth Quarter........ $ 30.375 $ 25.875.......$ .500
1995:
First Quarter.......... $ 23.25 $ 22.25........$ .475
Second Quarter......... $ 23.75 $ 22.125.......$ .475
Third Quarter......... $ 25.50 $ 22.75........$ .475
Fourth Quarter........ $ 26.25 $ 23.75........$ .475
</TABLE>
On March 10, 1997, the last reported sale price of the Common Shares
on the NYSE was $28.875. On March 10, 1997, the Company had 344 shareholders of
record.
Item 6. Selected Financial Data.
The information required by this item is hereby incorporated by
reference to the material appearing in the 1996 annual report to shareholders
(the "Annual Report to Shareholders"), filed as Exhibit 13.1 hereto, under the
caption "Selected Financial Information."
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The information required by this item is hereby incorporated by
reference to the material appearing in the Annual Report to Shareholders under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
Item 8. Financial Statements and Supplementary Data.
The financial statements of the Company are hereby incorporated by
reference to the Consolidated Financial Statements of Colonial Properties Trust
appearing in the Annual Report to Shareholders.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
<PAGE>
PART III
Item 10. Trustees and Executive Officers of the Registrant.
The information required by this item with respect to trustees and
compliance with the Section 16(a) reporting requirements is hereby incorporated
by reference to the material appearing in the Company's definitive proxy
statement for the annual meeting of shareholders to be held in 1997 (the "Proxy
Statement") under the captions "Election of Trustees" and "Section 16(a)
Beneficial Ownership Reporting Compliance." Information required by this item
with respect to executive officers is provided in Item 1 of this report. See
"Executive Officers of the Company."
Item 11. Executive Compensation.
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the caption
"Executive Compensation."
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the caption
"Voting Securities and Principal Holders Thereof."
Item 13. Certain Relationships and Related Transactions.
The information required by this item is hereby incorporated by reference
to the material appearing in the Proxy Statement under the caption "Executive
Compensation Committee Interlocks and Insider Participation."
<PAGE>
Part IV
Item 14. Exhibits, Financial Schedules, and Reports on Form 8-K.
14(a)(1) and (2) Financial Statements and Schedules
Index to Financial Statements and Financial Statement Schedules
Financial Statements:
The following financial statements of the Company are hereby incorporated
by reference to the Consolidated Financial Statements of Colonial Properties
Trust appearing in the Annual Report to Shareholders:
Consolidated Balance Sheets as of December 31, 1996 and 1995
Consolidated Statements of Income for the years ended
December 31, 1996, 1995, and 1994
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1996, 1995, and 1994
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995, and 1994
Notes to Consolidated Financial Statements
Report of Independent Accountants
Financial Statement Schedules:
Schedule III Real Estate and Accumulated Depreciation
Report of Independent Accountants
All other schedules have been omitted because the required information of
such other schedules is not present in amounts sufficient to require submission
of the schedule or because the required information is included in the
consolidated financial statements.
14(a)(3) Exhibits
*3.1 Declaration of Trust of Company.
*3.2 Bylaws of the Company.
**10.1 Second Amended and Restated Agreement of
Limited Partnership of the Operating
Partnership, as amended.
+10.2 Registration Rights and Lock-Up Agreement among the Company
and the persons named herein.
**10.3 ++ First Amended and Restated Employee Share
Option and Restricted Share Plan.
+10.4 Non-employee Trustee Share Option Plan.
+10.5 Non-employee Trustee Option Agreement.
+10.6 ++ Employment Agreement between the Company and
Thomas H. Lowder.
+10.7 Officers and Trustees Indemnification
Agreement.
+10.8 Partnership Agreement of the Management
Partnership.
**10.9 Articles of Incorporation of the Management
Corporation, as amended.
+10.10 Bylaws of the Management Corporation.
**10.11 Articles of Incorporation of CPHC, as amended.
+10.12 Bylaws of CPHC.
+10.13 Land Option Agreement.
++10.14 Credit agreement between the Company and SouthTrust Bank of
Alabama, National Association, AmSouth Bank of Alabama, Wells
Fargo Realty Advisors Funding, Incorporated, and National
Bank of Commerce of Birmingham dated December 18, 1995 and
related promissory notes.
+10.16 ++ Annual Incentive Plan.
++++10.17 Indenture dated as of July 22, 1996, by and between Colonial
Realty Limited Partnership and Bankers Trust Company, as
amended
13.1 Portions of the Annual Report to Shareholders incorporated by
reference in Part II of this Form 10-K.
+21.1 List of Subsidiaries.
23.1 Consent of Coopers & Lybrand L.L.P.
27 Financial Data Schedules
- --------------------
* Incorporated by reference to the Annexes to the Company's Proxy Statement
dated September 1, 1995.
**Incorporated by reference to the same titled and number exhibit in the
Company's Annual Report on Form 10-K dated December 31, 1994.
+ Incorporated by reference to the same titled and numbered exhibit in the
Company's Registration Statement on Form S-11, No. 33-65954.
++Management contract or compensatory plan required to be filed pursuant to Item
14(c) of Form 10-K.
++Incorporated by reference to the same titled and number exhibit in the
Company's Annual Report on Form 10-K dated December 31, 1995.
++++ Incorporated by reference to (i) Exhibit D to the Form 8-K dated July 19,
1996, filed by Colonial Realty Limited Partnership, and (ii) Exhibit B to the
Form 8-K dated December 6, 1996, filed by Colonial Realty Limited Partnership.
14(b) Reports on Form 8-K
Reports on Form 8-K filed during the last quarter of 1996: Form 8-K
dated December 19, 1996, reported certain property acquisitions
during 1996 under Item 5, "Other Events."
14(c) Exhibits
The list of Exhibits filed with this report is set forth in response
to Item 14(a)(3).
14(d) Financial Statements
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized,
on March 28, 1997.
Colonial Properties Trust
By:/s/ Thomas H. Lowder
--------------------
Thomas H. Lowder
Chairman of the Board,
President, and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this report has been signed below by the following persons on behalf
of the registrant and the capacities indicated on March 28, 1997.
Signature
/s/ Thomas H. Lowder Chairman of the Board, President,
- ---------------------------------- and Chief Executive Officer
Thomas H. Lowder
/s/ Douglas B. Nunnelley Senior Vice President and Chief
- ---------------------------------- Financial Officer
Douglas B. Nunnelley
/s/ Kenneth E. Howell Vice President, Controller, and Secretary
- ---------------------------------- (Chief Accounting Officer)
Kenneth E. Howell
/s/ Carl F. Bailey Trustee
- ----------------------------------
Carl F. Bailey
/s/ M. Miller Gorrie Trustee
- ----------------------------------
M. Miller Gorrie
/s/ James K. Lowder Trustee
- ----------------------------------
James K. Lowder
Trustee
- ----------------------------------
Herbert A. Meisler
/s/ Claude B. Nielsen Trustee
- ----------------------------------
Claude B. Nielsen
/s/ Harold W. Ripps Trustee
- ----------------------------------
Harold W. Ripps
/s/ Donald T. Senterfitt Trustee
- ----------------------------------
Donald T. Senterfitt
<PAGE>
<TABLE>
SCHEDULE III
COLONIAL PROPERTIES TRUST
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 1996
<CAPTION>
Initial Cost to
Company
Buildings and
Description Encumbrances Land Improvements
<S> <C> <C> <C>
Multifamily:
Colonial Grand at Kirkman Park $12,535,549 $ 2,220,000 $21,747,240
Ashford Place 3,420,517 537,600 5,839,838
Barrington Club -0- 880,000 8,605,143
Carrollwood Apartments 6,230,000 1,464,000 10,657,840
Colonial Village at Rocky Ridge 7,418,333 644,943 8,325,057
Colony Park -0- 409,401 4,345,599
Colonial Grand at Galleria Woods 7,395,088 1,220,000 12,480,949
Colonial Grand at Mountain Brook 12,261,239 1,960,000 21,181,118
Colonial Village at Cahaba Heights 3,772,907 625,000 6,548,683
Grande View Towers 9,952,418 1,540,000 12,671,606
Colonial Village at Inverness 9,900,000 1,713,668 10,352,151
Huntleigh Woods 3,022,034 745,600 4,908,990
Inverness Apts 5,741,667 735,461 7,254,539
Inverness Lakes Apts -0- 641,334 8,873,906
McGehee Place Apts -0- 795,627 -0-
Colonial Village at Monte D'Oro 5,314,434 1,000,000 6,994,227
North Ingle Villas -0- 497,574 4,122,426
Patio I, II & III -0- 249,876 3,305,124
Pelican Pointe 8,245,000 1,479,352 -0-
Plantation Gardens -0- 1,488,000 13,515,075
Pointe West 2,880,971 332,800 4,310,671
Polos at Gainesville 11,360,000 3,360,000 24,173,649
Polos at Ponte Vedra 5,760,000 1,440,000 10,038,593
Polos West 5,777,805 1,200,000 8,581,389
Colonial Grand at Galleria 22,400,000 4,600,000 39,078,925
Rime Village - Rime Reserve -0- 758,439 7,902,382
Rime Village - Huntsville 12,775,000 3,680,000 31,686,621
Riverchase II -0- 857,080 -0-
Colonial Grand at Riverchase 9,197,454 2,340,000 25,248,548
Ski Lodge I 7,899,217 3,270,000 12,574,303
Ski Lodge II 9,082,891 3,220,000 13,678,104
Ski Lodge III 10,300,000 2,770,000 15,244,144
Ski Lodge - Tuscaloosa 4,827,530 1,064,000 6,636,685
Somerset Place 4,500,000 699,128 4,920,872
Somerset Wharf 3,400,000 960,984 3,511,596
Spring Creek -0- 1,184,000 13,243,975
Stockbridge Manor -0- 960,000 11,975,947
Colonial Village at Lake Mary -0- 2,145,480 -0-
Sunchase -0- 1,121,244 -0-
Vieux Carre 5,158,370 32,143 -0-
Willow Bend 4,996,667 511,700 5,508,300
Willowtree -0- 134,000 3,986,304
Retail:
Bardmoor Village -0- 2,143,152 9,746,573
Bear Lake Village -0- 2,134,440 6,551,683
Bellwood 2,995,932 330,000 -0-
Briarcliffe Mall -0- 9,099,972 33,663,654
Britt David -0- 1,755,000 4,951,852
Burnt Store Square -0- 3,750,000 8,198,677
Country Lake Village -0- 3,659,040 6,783,697
Gadsden Mall 15,480,000 639,577 -0-
Island Walk 10,406,672 4,181,760 13,023,401
Macon Mall -0- 1,684,875 -0-
McGehee Place -0- 197,152 -0-
Montgomery Promenade 10,810,000 3,788,913 11,346,754
Northdale Court -0- 3,059,760 8,054,090
Old Springville -0- 272,594 -0-
Olde Town 1,676,562 343,325 -0-
Paddock Park -0- 1,532,520 3,754,879
River Oaks -0- 3,262,800 23,636,229
University Park Plaza 14,445,000 6,946,785 20,104,517
Village Mall -0- 103,480 -0-
Wekiva River Walk -0- 2,817,788 15,302,375
Winter Haven Village -0- 1,768,586 3,928,903
Office:
250 Commerce Street -0- 25,000 200,200
AmSouth Center -0- 764,961 -0-
Interstate Park 4,731,991 1,125,990 7,113,558
P&S Building -0- 104,089 -0-
University Park -0- 396,960 -0-
Whitesburg Building 1,282,470 1,081,618 1,050,000
Active Development Projects:
Colonial Grand at Bayshore -0- 11,155,327 -0-
Colonial Grand at Bayshore II -0- 3,377,532 -0-
Colonial Grand at Wesleyan -0- 7,034,301 -0-
Colonial Village at Inverness -0- 1,462,407 -0-
Colonial Grand at Heathrow -0- 20,050,293 -0-
Colonial Grand at Hunter's Creek -0- 16,824,877 -0-
Inverness Lakes -0- 17,733 -0-
Macon Mall Expansion -0- 37,422,651 -0-
McGehee Place Apts. I -0- 58,548 -0-
Montgomery Promenade -0- 1,100,000 -0-
Riverchase III -0- 13,368,319 -0-
Unimproved Land:
Macon Mall Outparcels -0- 663,142 -0-
Colonial Grand at Wesleyan Land -0- 720,000 3,882
Village Mall -0- 404,187 -0-
McGehee Place Land 700,000 430,151 -0-
- --------------------------------------------------------------------------------
$ 278,053,718 $228,548,039 $ 591,445,443
- --------------------------------------------------------------------------------
(INFORMATION CONTINUED FROM PREVIOUS TABLE)
Cost Gross Amount at Which
Capitalized Carried at Close of Period
Subsequent to Buildings and
Acquisition Land Improvements Total
<S> <C> <C> <C>
$ 313,875 $ 2,220,000 $22,061,115 $24,281,115
15,465 537,600 5,855,303 6,392,903
20,282 880,000 8,625,425 9,505,425
517,598 1,464,000 11,175,438 12,639,438
54,552 644,943 8,379,609 9,024,552
135,648 409,406 4,481,243 4,890,648
4,733 1,220,000 12,485,682 13,705,682
38,214 1,960,000 21,219,332 23,179,332
11,404 625,000 6,560,087 7,185,087
82,008 1,540,000 12,753,614 14,293,614
7,394,197 1,713,668 17,746,348 19,460,016
324,208 745,600 5,233,198 5,978,798
109,111 735,080 7,364,031 8,099,111
-0- 641,334 8,873,906 9,515,240
16,185,893 842,321 16,139,199 16,981,520
554,158 1,000,000 7,548,385 8,548,385
267,212 497,574 4,389,638 4,887,212
1,888,226 366,717 5,076,509 5,443,226
12,219,880 1,479,352 12,219,880 13,699,232
92,851 1,489,500 13,606,426 15,095,926
12,401 332,800 4,323,072 4,655,872
2,447,552 3,361,850 26,619,351 29,981,201
102,400 1,440,000 10,140,993 11,580,993
144,379 1,200,000 8,725,768 9,925,768
578,891 4,600,000 39,657,816 44,257,816
-0- 758,439 7,902,382 8,660,821
(2,241,014) 3,680,000 29,445,607 33,125,607
8,879,587 857,080 8,879,587 9,736,667
308,789 2,340,000 25,557,337 27,897,337
451,675 3,270,000 13,025,978 16,295,978
442,794 3,220,000 14,120,898 17,340,898
248,578 2,770,000 15,492,722 18,262,722
143,739 1,064,000 6,780,424 7,844,424
184,687 699,128 5,105,559 5,804,687
2,987,412 960,984 6,499,008 7,459,992
42,571 1,184,000 13,286,546 14,470,546
29,025 960,000 12,004,972 12,964,972
18,757,353 3,634,094 17,268,739 20,902,833
5,534,992 1,121,244 5,534,992 6,656,236
4,661,083 32,143 4,661,083 4,693,226
124,334 511,700 5,632,634 6,144,334
234,856 134,000 4,221,160 4,355,160
3,175 2,143,152 9,749,748 11,892,900
19,543 2,134,440 6,571,226 8,705,666
2,828,827 330,000 2,828,827 3,158,827
149,589 9,099,972 33,813,243 42,913,215
-0- 1,755,000 4,951,852 6,706,852
25,961 3,750,000 8,224,638 11,974,638
35,544 3,659,040 6,819,241 10,478,281
18,438,004 639,577 18,438,004 19,077,581
-0- 4,181,760 13,023,401 17,205,161
30,519,154 1,684,875 30,519,154 32,204,029
3,669,113 197,152 3,669,113 3,866,265
983,175 4,332,432 11,786,410 16,118,842
20,220 3,059,760 8,074,310 11,134,070
3,321,753 277,975 3,316,372 3,594,347
2,435,727 343,325 2,435,727 2,779,052
18,225 1,532,520 3,773,104 5,305,624
292,218 3,262,800 23,928,447 27,191,247
155,080 6,946,785 20,259,597 27,206,382
13,943,984 319,528 13,727,936 14,047,464
-0- 2,817,788 15,302,375 18,120,163
4,297,159 4,045,045 5,949,603 9,994,648
2,248,010 25,000 2,448,210 2,473,210
16,470,520 764,961 16,470,520 17,235,481
8,014,064 1,125,988 15,127,624 16,253,612
641,336 104,089 641,336 745,425
4,153,866 396,960 4,153,866 4,550,826
25,986 1,081,618 1,075,986 2,157,604
-0- 1,062,827 10,092,500 11,155,327
-0- 984,000 2,393,532 3,377,532
-0- 720,000 6,314,301 7,034,301
-0- 630,858 831,549 1,462,407
-0- 2,201,539 17,848,754 20,050,293
-0- 4,000,000 12,824,877 16,824,877
-0- -0- 17,733 17,733
-0- 3,192,332 34,230,319 37,422,651
1 58,549 -0- 58,549
-0- 1,100,000 -0- 1,100,000
-0- 1,662,913 11,705,406 13,368,319
-0- 663,142 -0- 663,142
-0- 720,000 3,882 723,882
-0- 404,187 -0- 404,187
-0- 430,151 -0- 430,151
- ------------------------------------------------------------------
$197,015,833 $136,985,597 $ 880,023,719 $1,017,009,315
- ------------------------------------------------------------------
(INFORMATION CONTINUED FROM PREVIOUS TABLE)
Date
Acquired/
Accumulated Date Placed in Depreciable
Depreciation Completed Service Lives/Years
<S> <C> <C> <C>
$ 1,731,563 1991 1994 7-40 Years
109,842 1983 1996 7-40 Years
113,100 1996 1996 7-40 Years
1,152,497 1966 1994 7-40 Years
685,639 1984 1993 7-40 Years
367,304 1975 1993 7-40 Years
312,979 1994 1996 7-40 Years
369,205 1987/91 1996 7-40 Years
130,255 1992 1996 7-40 Years
1,349,293 1990 1994 7-40 Years
3,140,548 1986/87/90 1986/87/90 7-40 Years
277,678 1978 1994 7-40 Years
607,849 1983 1993 7-40 Years
257,609 1996 1996 7-40 Years
3,139,011 1986/95 1986/95 7-40 Years
373,817 1977 1994 7-40 Years
367,139 1983 1983 7-40 Years
402,449 1966/83/84 1994/93/93 7-40 Years
2,710,564 1992 1992 7-40 Years
1,269,629 1991 1994 7-40 Years
80,981 1981 1996 7-40 Years
2,297,486 1989/93/94 1994 7-40 Years
714,766 1988 1994 7-40 Years
711,946 1991 1994 7-40 Years
2,043,734 1986 1994 7-40 Years
135,201 1996 1996 7-40 Years
1,873,936 1987/94 1994 7-40 Years
2,093,904 1991 1991 7-40 Years
1,478,422 1984/91 1994 7-40 Years
665,845 1972/73/76 1994 7-40 Years
703,702 1979/86 1994 7-40 Years
775,146 1984 1994 7-40 Years
388,992 1976/92 1994 7-40 Years
410,743 1986 1993 7-40 Years
1,335,389 1986/87 1986/93 7-40 Years
334,531 1992/94 1996 7-40 Years
894,806 1993/94 1994 7-40 Years
2,905,302 1991/95 1991/95 7-40 Years
1,759,536 1986 1986 7-40 Years
3,119,253 1971/74/78 1971/74/78 7-40 Years
476,271 1984 1993 7-40 Years
2,037,434 1983 1983 7-40 Years
49,507 1981 1996 7-40 Years
252,138 1990 1995 7-40 Years
796,167 1988 1988 7-40 Years
140,482 1986 1996 7-40 Years
268,225 1990 1994 7-40 Years
513,237 1990 1994 7-40 Years
257,378 1990 1995 7-40 Years
7,235,551 1974 1974 7-40 Years
71,623 1993/95 1996 7-40 Years
13,508,163 1975/88 1975/88 7-40 Years
1,010,591 1986 1986 7-40 Years
1,746,827 1990 1993 7-40 Years
235,422 1988 1995 7-40 Years
2,354,651 1982 1982 7-40 Years
543,272 1978/90 1978/90 7-40 Years
105,386 1988 1995 7-40 Years
812,615 1979/89 1993 7-40 Years
5,120,083 1986/89 1993 7-40 Years
7,312,507 1973/84/89 1973/84/89 7-40 Years
75,433 1990 1996 7-40 Years
165,856 1986 1995 7-40 Years
2,242,334 1904 1980 7-40 Years
4,677,513 1990 1990 7-40 Years
3,684,087 1982-85/89 1982-85/89 7-40 Years
357,335 1946 1974 7-40 Years
1,402,139 1985 1985 7-40 Years
186,865 1974 1990 7-40 Years
76,260 N/A 1985 N/A
-0- N/A 1985 N/A
-0- N/A 1996 N/A
-0- N/A 1985 N/A
234,715 N/A 1994 N/A
-0- N/A 1996 N/A
-0- N/A 1994 N/A
-0- N/A 1987 N/A
-0- N/A 1987 N/A
-0- N/A 1993 N/A
-0- N/A 1985 N/A
-0- N/A 1987 N/A
-0- N/A 1996 N/A
-0- N/A 1981 N/A
-0- N/A 1981 N/A
- ------------------
$ 101,541,658
- ------------------
</TABLE>
<PAGE>
NOTES TO SCHEDULE III
COLONIAL PROPERTIES TRUST
December 31, 1996
The aggregate cost for Federal Income Tax purposes was approximately (1)
$711,887,000 at December 31, 1996.
See description of mortgage notes payable in Note 7 of Notes to (2)
Consolidated Financial Statements.
The following is a reconciliation of real estate to balances (3) reported
at the beginning of the year:
<TABLE>
Reconciliation of Real Estate
<CAPTION>
1996 1995 1994
--------------- ------------- -------------
<S> <C> <C> <C>
Real estate investments:
Balance at beginning of year $ 736,937,703 $ 640,680,718 $ 295,516,276
Acquisitions of new property 173,276,789 67,326,328 328,593,287
Improvements and development 107,834,251 29,121,438 17,362,104
Disposition of property (1,039,428) (190,781) (790,949)
------------ ------------- -------------
Balance at end of year $1,017,009,315 $ 736,937,703 $ 640,680,718
=============== ============= =============
</TABLE>
<TABLE>
Reconciliation of Accumulated Depreciation
<CAPTION>
1996 1995 1994
--------------- ------------- -------------
<S> <C> <C> <C>
Accumulated depreciation:
Balance at beginning of year $79,780,292 $61,773,344 $51,354,506
Depreciation
22,015,054 18,044,446 10,817,424
Depreciation of disposition of
property (253,688) (37,498) (398,586)
--------------- ------------- -------------
Balance at end of year $101,541,658 $79,780,292 $61,773,344
=============== ============= =============
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Colonial Properties Trust:
Our report on the consolidated financial statements of Colonial Properties Trust
has been incorporated by reference in this Form 10-K from the 1996 Annual Report
to Shareholders of Colonial Properties Trust. In connection with our audits of
such financial statements, we have also audited the related financial statement
schedules listed in the index in Item 14 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
January 24, 1997
<PAGE>
Exhibit 13.1
<TABLE>
SELECTED FINANCIAL INFORMATION
<CAPTION>
Dollar amounts in thousands,
except share data 1996 1995 1994 1993(1) 1992
===============================================================================
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Total revenue $ 134,881 $110,890 $ 64,031 $ 42,610 $ 35,226
Expenses:
Depreciation and
amortization 23,533 20,490 13,061 7,874 6,449
Other operating 46,819 41,772 24,026 16,737 14,787
Income from operations 64,529 48,628 26,944 17,999 13,990
Interest expense 24,584 24,060 10,877 12,772 14,509
Other income (expense), net 1,303 736 578 (1,007) (261)
Income (loss) before
extraordinary items
and minority interest 41,248 25,479 16,767 4,220 (759)
Net income (loss) 27,506 14,936 11,317 (2,991) -
Per share:
Income before
extraordinary item $1.60 $1.29 $1.18 $0.19 -
Extraordinary loss from
early extinguishment
of debt (0.02) - - (0.51) -
Net income (loss) 1.58 1.29 1.18 (0.32) -
Dividends declared 2.00 1.90 1.73 - -
===============================================================================
BALANCE SHEET DATA
Land, buildings, and
equipment, net $ 801,800 $624,517 $555,581 $236,062 $139,665
Total assets 948,105 681,122 620,413 289,846 156,560
Total debt 506,435 354,100 362,134 110,432 167,275
==============================================================================
OTHER DATA
Funds from operations(2) $ 62,999 $ 44,015 $ 28,123 $ 11,176 $ 5,216
Total market
capitalization(3) 1,298,946 894,342 759,313 417,207 -
Ratio of debt to total
market capitalization 39.0% 39.6% 47.7% 26.5% -
Cash flow provided by (used in):
Operating activities $ 62,872 $ 47,004 $ 27,970 $ 7,518 $ 4,720
Investing activities (224,076) (95,592) (119,162) (22,417) (9,362)
Financing activities 162,957 29,443 84,689 41,880 4,191
Total properties
(at end of period) 73 62 55 36 23
<FN>
(1) Increases (decreases) for 1993 compared to 1992 relate primarily to the
Company's formation as a publicly-owned real estate investment trust on
September 29, 1993.
(2) The Company generally considers Funds From Operations ("FFO") a widely
used and appropriate measure of performance for an equity REIT that provides a
relevant basis for comparison among REITs. FFO, as defined by the National
Association of Real Estate Investment Trusts (NAREIT), means income (loss)
before minority interest (determined in accordance with GAAP), excluding gains
(losses) from debt restructuring and sales of property, plus real estate related
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures. FFO is presented to assist investors in
analyzing the performance of the Company. The Company's method of calculating
FFO may be different from methods used by other REITs and, accordingly, may not
be comparable to such other REITs. FFO (i) does not represent cash flows from
operations as defined by GAAP, (ii) is not indicative of cash available to fund
all cash flow needs and liquidity, including its ability to make distributions,
and (iii) should not be considered as an alternative to net income (as
determined in accordance with GAAP) for purposes of evaluating the Company's
operating performance.
(3) Total market capitalization is the market value of all outstanding
Common Shares of the Company plus total debt. This amount was calculated
assuming the conversion of 8,431,198, 8,141,023, 8,070,159, and 4,693,610 units
of minority interest in Colonial Realty Limited Partnership into the Company's
Common Shares for 1996, 1995, 1994, and 1993, respectively.
</FN>
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Colonial Properties Trust (Colonial or the Company) is engaged in the
ownership, development, management, and leasing of multifamily communities,
retail malls and shopping centers, and office buildings. Colonial is organized
as a real estate investment trust (REIT) and operates in Alabama, Florida,
Georgia, and South Carolina. As of December 31, 1996, the Company's real estate
portfolio consisted of 42 multifamily communities, 21 retail properties, and 10
office properties.
The following commentary should be read in conjunction with the Consolidated
Financial Statements and Notes to Consolidated Financial Statements appearing
elsewhere in this report. As used herein, the terms "Colonial or the Company"
includes Colonial Properties Trust, and one or more of its subsidiaries
including, among others, Colonial Realty Limited Partnership (CRLP). Historical
results and trends which might appear should not be taken as indicative of
future operations.
Any statement contained in this report which is not a historical fact, or
which might be otherwise considered an opinion or projection concerning the
Company or its business, whether express or implied, is meant as and should be
considered a forward-looking statement as that term is defined in the Private
Securities Litigation Reform Act of 1996. Forward-looking statements are based
upon assumptions and opinions concerning a variety of known and unknown risks,
including but not necessarily limited to changes in market conditions, the
supply and demand for leasable real estate, interest rates, increased
competition, changes in governmental regulations, and national and local
economic conditions generally, as well as other risks more completely described
in the Company's filings with the Securities and Exchange Commission. If any of
these assumptions or opinions prove incorrect, any forward-looking statements
made on the basis of such assumptions or opinions may also prove materially
incorrect in one or more respects.
RESULTS OF OPERATIONS -- 1996 AND 1995
Colonial reported net income of $27.5 million for 1996 compared to $14.9
million for 1995. On a per common share basis, net income was $1.58 for 1996
compared to $1.29 for 1995. Net income increased during 1996 when compared to
1995 primarily due to the acquisition of 17 properties during 1995 and 1996, the
completion and placement in service during 1995 and 1996 of five properties
developed or expanded by the Company, and the operations of several properties
whose development was in various stages of completion during 1995 and 1996.
Revenue - Total revenue increased by $24.0 million, or 21.6%, for 1996 when
compared to 1995, primarily due to an increase in rent revenue, which increased
by $23.2 million, or 21.7%, during the same period. Of this increase, $21.2
million represents rent revenues generated by the properties acquired/placed in
service during 1995 and 1996. The $2.0 million remainder of the increase in
rental revenue primarily represents increases in rental rates charged for
existing space. Other revenue increased $0.8 million, or 21.3%, for 1996 when
compared to 1995. This increase is partially attributable to $0.5 million of
other revenues generated by the properties acquired/placed in service during
1995 and 1996. Other revenue also decreased $0.5 million during 1996 compared to
1995 due to one-time revenues received from lease cancellations during the
second quarter of 1995. The remainder of the increase in other revenue of $0.8
million represents increases in other revenues from existing properties.
Operating Expenses - Total operating expenses increased by $8.1 million, or
13.0%, for 1996 when compared to 1995. Of this increase, $9.4 million represents
operating expenses of the properties acquired/placed in service during 1995 and
1996. Operating expenses also decreased by $1.9 million due to the resolution of
certain state tax contingencies and the resulting reduction in related reserves.
The $0.6 million remainder of the net increase during 1996 when compared to 1995
is primarily attributable to an increase in administrative expenses.
Other Income and Expenses - Interest expense reflected a net increase of $0.5
million, or 2.2%, for 1996 when compared to 1995. Interest expense increased
$5.2 million due to an increase in indebtedness, which was incurred to finance
acquisition and development activity. Interest expense also decreased by $1.9
million, which represents interest savings on two mortgages and one revolving
credit agreement that were repaid through a portion of the Company's equity
offering proceeds in January 1996. Interest expense also decreased by $2.8
million due to the capitalization of $3.7 million in interest on construction
expenditures during 1996 compared to $0.9 million capitalized during 1995.
RESULTS OF OPERATIONS -- 1995 AND 1994
Colonial reported net income of $14.9 million for 1995 compared to $11.3
million for 1994. On a per common share basis, net income was $1.29 for 1995
compared to $1.18 for 1994. Net income increased during 1995 when compared to
1994 primarily due to the acquisition of 26 properties during 1994 and 1995, the
completion and placement in service during 1995 of two properties developed or
expanded by the Company, and the operations of several properties whose
development was in various stages of completion during 1994 and 1995.
Revenue - Total revenue increased by $46.9 million, or 73.2%, for 1995 when
compared to 1994, primarily due to an increase in rent revenue, which increased
by $44.9 million during the same period. Of this increase, $39.9 million
represents rent revenues generated by the properties acquired/placed in service
during 1994 and 1995. The $5.0 million remainder of the increase in rental
revenue primarily represents increases in rental rates charged for existing
space. Other revenue increased $2.0 million, or 109.3%, for 1995 when compared
to 1994. This increase is attributable primarily to $1.5 million of other
revenues generated by the properties acquired/placed in service during 1994 and
1995 and $0.5 million received from lease cancellations during the second
quarter of 1995.
Operating Expenses - Total operating expenses increased by $25.2 million, or
67.9%, for 1995 when compared to 1994. Of this increase, $21.2 million
represents operating expenses of the properties acquired/placed in service
during 1994 and 1995. General and administrative expenses increased by $2.0
million, or 56.1%, during 1995 when compared to 1994 due to administrative
expenses associated with the properties acquired/placed in service during 1994
and 1995, an increase in reserve for contingencies, and a general increase in
administrative expenses.
Other Income and Expenses - Interest expense increased $13.2 million, or
121.2%, for 1995 when compared to 1994. This increase is attributed primarily to
properties acquired/placed in service during 1994 and 1995 that were financed
through advances under the Company's lines of credit and the assumption of debt.
The financing of these properties increased interest expense by $13.3 million
for 1995 over 1994. The Company capitalized interest on its development projects
during the construction period, which reduced interest expense by $0.9 million
in 1995, compared to $0.3 million capitalized in 1994.
LIQUIDITY AND CAPITAL RESOURCES
During 1996 the Company invested approximately $273.1 million through
acquisition and development of properties. This acquisition and development
activity added to the Company's multifamily and retail property holdings. The
Company financed this property investment through proceeds from public offerings
of equity and debt totaling approximately $286.6 million during 1996, net of
offering costs, advances on its bank line of credit, the issuance of limited
partnership units in CRLP, and cash from operations. The Company also used
proceeds from these sources of funds to repay $42.6 million outstanding on two
mortgage loans and to reduce its outstanding revolving credit balances by $21.9
million.
Acquisition Activities - During 1996 the Company added 1,505 apartment units
through its acquisition of seven multifamily communities at an aggregate cost of
$79.0 million. The Company also added 1.1 million square feet of retail leasable
area through its acquisition of three community shopping centers and one
regional shopping mall and purchased tenant-owned space and the underlying land
at an existing retail center. The Company completed these retail acquisitions at
an aggregate cost of approximately $94.3 million.
Development Activities - During 1996 the Company constructed 873 new
apartment units in six multifamily communities (three of which were completed
for development during the year) and acquired land on which it intends to
develop two additional multifamily communities during 1997. The aggregate
investment during 1996 in this multifamily development activity was $68.2
million. As of December 31, 1996, the Company has 1,216 apartment units in six
multifamily communities under development and expansion. Management anticipates
that two of the multifamily projects will be completed during the first half of
1997 and three others will be completed during the second half of the year. The
remaining multifamily project will be completed during the first half of 1998.
Management expects to invest approximately $31.8 million over these periods to
complete these projects.
During 1996 the Company also continued its 423,000 square foot expansion of
its regional mall in Macon, Georgia and began a 225,000 square foot expansion of
a community shopping center in Montgomery, Alabama. The aggregate investment
during 1996 in this retail development activity was $31.6 million. The Macon
Mall expansion was completed and opened during February 1997, and management
anticipates completing its Montgomery project during the last half of 1997.
Management expects to invest approximately $19.8 million during 1997 to complete
these projects.
Financing Activities - The Company funded a portion of this investment in
acquisition and development by raising capital. In January 1996 the Company
completed a public offering of 4.6 million common shares of beneficial interest
at a price of $24.625 per share. The $106.6 million proceeds of this offering,
net of offering costs of $6.6 million, were used to fund acquisition and
development activity, repay the balances outstanding under the Company's
revolving credit agreements, and to repay the $8.2 million balance outstanding
under a mortgage loan.
The Company also funded its investment in acquisition and development by
incurring additional debt. During 1996 notes and mortgages payable increased
$152.3 million to total $506.4 million at December 31, 1996. During the year the
Company borrowed $220.0 million through the public issuance of debt securities
and through debt assumed in property acquisitions. During the year the Company
also reduced the principal outstanding on its notes and mortgages payable by
$45.8 million (including $42.6 million on mortgage loans that were extinguished)
and reduced its outstanding revolving credit balances by $21.9 million.
In July 1996 the Company completed a public issuance of senior, unsecured
debt securities totaling $130.0 million. The securities were issued in two
series of $65 million each requiring semi-annual payments of interest only. One
series, which matures in July 2001, bears interest at 7.50% and was priced at a
spread of 95 basis points over the five-year treasury bond rate, resulting in an
original issue discount of $145,383. The other series, which matures in July
2006, bears interest at 8.05% and was priced at a spread of 128 basis points
over the ten-year treasury bond rate, resulting in an original issue discount of
$288,410.
In July 1996 the Company refinanced loans collateralized by five of the
Company's multifamily properties and representing a total of approximately $53.0
million in outstanding indebtedness. The loans are financed through tax-exempt
bonds which are credit enhanced by Fannie Mae. The loans, which bear interest at
a weekly variable interest rate, require monthly interest payments through June
2006 and principal and interest payments from July 2006 through June 2026. The
weighted average interest rate of these five loans was 3.42% at December 31,
1996.
In December 1996 the Company completed a public issuance of unsecured
medium-term debt securities totaling $50.0 million. The securities mature in
December 2003 and bear interest at 7.05% which, at the time of issuance, equated
to a spread of 90 basis points over the seven-year treasury bond rate.
In January 1997, subsequent to year-end, the Company completed an additional
issuance of unsecured medium-term debt securities also totaling $50.0 million.
These securities mature in January 2003 and bear interst at 7.16% which, at the
time of issuance, equated to a spread of 80 basis points over the six-year
treasury bond rate.
In January 1997 the Company also completed a public offering of 1.5 million
common shares of beneficial interest at a price of $29.875 per share. The $43.4
million proceeds of this offering, net of offering costs of $1.4 million, were
used to fund acquisition and development activity, repay the balances
outstanding under the Company's revolving credit agreement, and to repay $24.5
million outstanding under four mortgage loans.
At December 31, 1996, after considering the effect of the January 1997 debt
and equity offerings, the Company's total debt included fixed-rate debt of
$426.7 million, or 86.9%, and floating-rate debt of $64.5 million, or 13.1%. The
Company has obtained interest rate protection for $17.8 million of the
floating-rate debt, which limits this debt to an interest rate of 5.96% through
September 30, 1998. The Company's total market capitalization as of December 31,
1996, after considering the effect of the January 1997 debt and equity
offerings, was $1.3 billion, and its ratio of debt to total market
capitalization was 37.9%.
At December 31, 1996, the Company has one unsecured bank line of credit,
which provides for borrowings up to $125 million, bears interest at LIBOR plus
100 to 150 basis points, has a term of two years beginning in December 1996, and
provides for a one-year amortization in the case of non-renewal. As of December
31, 1996, after considering the effect of the January 1997 debt and equity
offerings, the balance outstanding on the Company's line of credit was $0.5
million.
Management intends to maintain the Company's strength through
diversification, while continuing to pursue acquisitions that meet Colonial's
acquisition criteria for property quality, market strength, and investment
return. Management expects to use its line of credit agreement to fund its
investment in acquisition and development activities and plans to continue to
replace significant borrowings under the bank line of credit with funds
generated from the sale of additional securities and/or permanent financing, as
market conditions permit. Management believes that these potential sources of
funds, along with the possibility of issuing limited partnership units of CRLP
in exchange for properties, will provide the Company with the means to finance
additional acquisitions and development.
Cash and equivalents increased by $1,753,000 during 1996. Management
anticipates that its net cash provided by operations and its existing cash
balances will provide the necessary funds on a short- and long-term basis to
cover its operating expenses, interest expense on outstanding indebtedness,
recurring capital expenditures, and dividends to shareholders in accordance with
Internal Revenue Code requirements applicable to real estate investment trusts.
Management does not anticipate any significant costs associated with Year 2000
software requirements.
INFLATION
Substantially all of the leases at the retail properties provide for
pass-through to tenants of certain operating costs, including real estate taxes,
common area maintenance expenses, and insurance. Leases at the multifamily
properties generally provide for an initial term of six months or one year and
allow for rent adjustments at the time of renewal. Leases at the office
properties typically provide for rent adjustment and pass-through of certain
operating expenses during the term of the lease. All of these provisions permit
the Company to increase rental rates or other charges to tenants in response to
rising prices and, therefore, serve to minimize the Company's exposure to the
adverse effects of inflation.
FUNDS FROM OPERATIONS
The Company generally considers Funds From Operations ("FFO") a widely used
and appropriate measure of performance for an equity REIT that provides a
relevant basis for comparison among REITs. FFO, as defined by the National
Association of Real Estate Investment Trusts (NAREIT), means income (loss)
before minority interest (determined in accordance with GAAP), excluding gains
(losses) from debt restructuring and sales of property, plus real estate related
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures. FFO is presented to assist investors in
analyzing the performance of the Company. The Company's method of calculating
FFO may be different from methods used by other REITs and, accordingly, may not
be comparable to such other REITs. FFO (i) does not represent cash flows from
operations as defined by GAAP, (ii) is not indicative of cash available to fund
all cash flow needs and liquidity, including its ability to make distributions,
and (iii) should not be considered as an alternative to net income (as
determined in accordance with GAAP) for purposes of evaluating the Company's
operating performance. The Company's FFO for the years ended December 31, 1996
and 1995 was computed as follows:
<TABLE>
(in thousands) 1996 1995
- ----------------------------------------------------------------
<S> <C> <C>
Net Income $27,506 $14,936
Adjustments:
Minority interest in CRLP 13,231 10,543
Depreciation (1) 22,621 18,711
Gains from sales of property (1) (870) (175)
Debt prepayment penalties 511 -0-
- ----------------------------------------------------------------
Funds from Operations $62,999 $44,015
================================================================
<FN>
(1) Includes pro-rata share of adjustments for subsidiaries.
</FN>
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
<CAPTION>
1996 1995
=============================================================================
<S> <C> <C>
ASSETS:
Land, buildings, and equipment, net $801,800,023 $624,517,030
Undeveloped land and construction in progress 113,689,163 32,640,381
Cash and equivalents 3,341,575 1,588,197
Restricted cash 2,450,335 2,079,796
Accounts receivable, net 4,791,406 2,282,428
Prepaid expenses 4,582,275 3,700,278
Deferred debt and lease costs 6,028,278 3,452,044
Investment in subsidiaries 5,692,247 5,890,233
Other assets 5,729,321 4,971,667
- -----------------------------------------------------------------------------
Total assets $948,104,623 $681,122,054
=============================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Notes and mortgages payable $506,434,925 $354,099,770
Accounts payable 7,699,360 7,618,222
Accounts payable to affiliates 9,972,954 3,983,589
Accrued interest 5,465,237 957,518
Accrued expenses 1,704,383 1,125,514
Tenant deposits 2,926,404 2,401,604
Unearned rent 924,193 843,642
- -----------------------------------------------------------------------------
Total liabilities 535,127,456 371,029,859
Minority interest 133,474,220 119,199,440
- -----------------------------------------------------------------------------
Common shares of beneficial interest,
$.01 par value, 50,000,000 shares
authorized; 17,659,696 and 13,044,935 shares
issued and outstanding at December 31, 1996
and 1995, respectively 176,597 130,449
Additional paid-in capital 302,303,849 205,884,198
Cumulative earnings 50,767,567 23,261,761
Cumulative distributions (73,386,738) (38,080,357)
Deferred compensation on restricted shares (358,328) (303,296)
- -----------------------------------------------------------------------------
Total shareholders' equity 279,502,947 190,892,755
- -----------------------------------------------------------------------------
Total liabilities and shareholders' equity $948,104,623 $681,122,054
=============================================================================
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 1996, 1995, 1994
<CAPTION>
1996 1995 1994
===============================================================================
<S> <C> <C> <C>
REVENUE:
Rent $129,612,153 $106,335,068 $61,478,244
Rent from affiliates 757,818 836,426 775,492
Other 4,511,384 3,718,481 1,776,917
- -------------------------------------------------------------------------------
Total revenue 134,881,355 110,889,975 64,030,653
- -------------------------------------------------------------------------------
PROPERTY OPERATING EXPENSES:
General operating expenses 9,530,324 8,355,107 4,686,304
Salaries and benefits 8,606,321 7,362,486 4,203,958
Repairs and maintenance 13,072,944 10,890,018 5,770,758
Taxes, licenses, and insurance 11,538,481 9,617,090 5,811,472
General and administrative 4,071,156 5,547,143 3,553,489
Depreciation 22,024,933 18,044,446 10,418,838
Amortization 1,508,515 2,445,773 2,642,250
- -------------------------------------------------------------------------------
Total operating expenses 70,352,674 62,262,063 37,087,069
- -------------------------------------------------------------------------------
Income from operations 64,528,681 48,627,912 26,943,584
Other income (expense):
Interest expense (24,584,298) (24,059,736) (10,876,513)
Income from subsidiaries 834,872 735,937 578,227
Gains from sales of property 468,619 174,954 121,600
- -------------------------------------------------------------------------------
Total other expense (23,280,807) (23,148,845) (10,176,686)
- -------------------------------------------------------------------------------
Income before extraordinary
items and minority
interest 41,247,874 25,479,067 16,766,898
Extraordinary loss from early
extinguishment of debt (510,602) -0- -0-
- --------------------------------------------------------------------------------
Income before minority interest 40,737,272 25,479,067 16,766,898
Minority interest in income of CRLP 13,231,466 10,543,238 5,450,064
- --------------------------------------------------------------------------------
Net income $ 27,505,806 $ 14,935,829 $11,316,834
================================================================================
Income per share after consideration of minority interest:
Income before extraordinary item $ 1.60 $ 1.29 $ 1.18
Extraordinary loss from early
extinguishment of debt (0.02) -0- -0-
- --------------------------------------------------------------------------------
Net income per share $ 1.58 $ 1.29 $ 1.18
================================================================================
Weighted average common shares
outstanding 17,377,805 11,613,365 9,582,002
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended December 31, 1996, 1995, 1994
<CAPTION>
Common Shares of Additional
Beneficial Interest Paid-In
- ----------------------------------------------------------------------
Shares Par Value Capital
======================================================================
<S> <C> <C> <C>
Balance, December 31, 1993 9,574,991 $ 95,750 $121,583,507
Distributions ($1.73 per share)
Net income
Issuance of Restricted
Common Shares of
Beneficial Interest 7,270 73 161,685
Amortization of deferred
compensation
Adjustment to minority
interest in Colonial Realty
Limited Partnership due
to issuance of limited
partnership units 19,285,057
Other (101,855)
- ----------------------------------------------------------------------
Balance, December 31, 1994 9,582,261 95,823 140,928,394
Distributions ($1.90 per share)
Net income
Issuance of Restricted
Common Shares of
Beneficial Interest 9,050 90 203,535
Amortization of deferred
compensation
Public offering of common
shares of beneficial
interest, net of offering
costs of $4,831,871 3,450,000 34,500 73,621,129
Issuance of common shares
of beneficial interest through
the Company's dividend
reinvestment plan 3,624 36 86,723
Adjustments to minority
interest in Colonial Realty
Limited Partnership due to
issuance of common shares
of beneficial interest and
limited partnership units (8,955,583)
- ----------------------------------------------------------------------
Balance, December 31, 1995 13,044,935 130,449 205,884,198
Distributions ($2.00 per share)
Net income
Issuance of Restricted
Common Shares of
Beneficial Interest 7,800 78 187,122
Cancellation of Restricted
Common Shares of
Beneficial Interest (1,108) (11) (28,935)
Amortization of deferred
compensation
Public offering of common
shares of beneficial
interest, net of offering
costs of $6,631,817 4,600,000 46,000 106,597,183
Issuance of common shares
of beneficial interest through
the Company's dividend
reinvestment plan 8,069 81 203,890
Adjustments to minority
interest in Colonial Realty
Limited Partnership due to
issuance of common shares
of beneficial interest and
limited partnership units (10,539,609)
- ----------------------------------------------------------------------
Balance, December 31, 1996 17,659,696 $176,597 $302,303,849
======================================================================
<PAGE>
Deferred Total
Cumulative Cumulative Compensation on Shareholders'
Earnings Distributions Restricted Shares Equity
=====================================================
<S> <C> <C> <C> <C>
Balance, December 31, 1993$ (2,990,902) $118,688,355
Distributions ($1.73 per share) $(16,577,312) (16,577,312)
Net income 11,316,834 11,316,834
Issuance of Restricted
Common Shares of
Beneficial Interest $(161,758) -0-
Amortization of deferred
compensation 18,535 18,535
Adjustment to minority
interest in Colonial Realty
Limited Partnership due
to issuance of limited
partnership units 19,285,057
Other (101,855)
- -------------------------------------------------------------------------------
Balance, December 31, 1994 8,325,932 (16,577,312) (143,223) 132,629,614
Distributions ($1.90 per share) (21,503,045) (21,503,045)
Net income 14,935,829 14,935,829
Issuance of Restricted
Common Shares of
Beneficial Interest (203,625) -0-
Amortization of deferred
compensation 43,552 43,552
Public offering of common
shares of beneficial
interest, net of offering
costs of $4,831,871 73,655,629
Issuance of common shares
of beneficial interest through
the Company's dividend
reinvestment plan 86,759
Adjustments to minority
interest in Colonial Realty
Limited Partnership due to
issuance of common shares
of beneficial interest and
limited partnership units (8,955,583)
- -------------------------------------------------------------------------------
Balance,December 31, 1995 23,261,761 (38,080,357) (303,296) 190,892,755
Distributions ($2.00 per share) (35,306,381) (35,306,381)
Net income 27,505,806 27,505,806
Issuance of Restricted
Common Shares of
Beneficial Interest (187,200) -0-
Cancellation of Restricted
Common Shares of
Beneficial Interest 28,946 -0-
Amortization of deferred
compensation 103,222 103,222
Public offering of common
shares of beneficial
interest, net of offering
costs of $6,631,817 106,643,183
Issuance of common shares
of beneficial interest through
the Company's dividend
reinvestment plan 203,971
Adjustments to minority
interest in Colonial Realty
Limited Partnership due to
issuance of common shares
of beneficial interest and
limited partnership units (10,539,609)
- --------------------------------------------------------------------------------
Balance,December 31,1996 $50,767,567 $(73,386,738) $(358,328) $279,502,947
================================================================================
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1996, 1995, 1994
<CAPTION>
1996 1995 1994
================================================================================
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 27,505,806 $ 14,935,829 $ 11,316,834
Adjustments to reconcile net income
to net cash
provided by operating activities:
Depreciation and amortization 23,533,448 20,490,219 13,061,088
Income from subsidiaries (834,872) (735,938) (578,227)
Minority interest 13,231,466 10,543,238 5,450,064
Other 557,828 4,719 15,492
Decrease (increase) in:
Restricted cash (370,539) (933,092) (629,340)
Accounts receivable (3,253,185) (144,852) (1,003,425)
Prepaid expenses (224,131) (108,025) 966,359
Other assets (1,298,312) (1,973,786) (961,450)
Increase (decrease) in:
Accounts payable 81,138 4,456,216 (211,057)
Accrued interest 4,507,719 450,564 255,283
Accrued expenses and other (563,946) 19,167 287,893
- --------------------------------------------------------------------------------
Net cash provided by operating
activities 62,872,420 47,004,259 27,969,514
- --------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of properties (125,926,554) (67,580,603) (106,035,067)
Development expenditures (22,168,286) (3,741,192) (3,364,634)
Development expenditures paid to an
affiliate (70,414,613) (21,646,534) (8,933,717)
Tenant improvements (1,029,075) (1,061,087) (1,531,885)
Capital expenditures (6,824,320) (2,672,625) (658,202)
Proceeds from sales of property 1,254,359 328,237 513,963
Distributions from subsidiaries 1,046,652 1,012,141 1,049,887
Capital contributions to
subsidiaries (13,794) (230,121) (202,269)
- --------------------------------------------------------------------------------
Net cash used in investing
activities (224,075,631) (95,591,784) (119,161,924)
- --------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock issuance, net of
expense 106,643,183 73,655,629 -0-
Principal reductions of debt (45,797,858) (37,131,834) (1,102,053)
Proceeds from additional
borrowings 179,540,450 62,220,000 17,900,000
Net change in revolving credit
balance (21,877,000) (33,205,744) 93,897,744
Dividends paid to common
shareholders (35,306,381) (21,503,045) (16,577,312)
Distributions to minority partners
in CRLP (16,523,316) (13,733,135) (8,119,945)
Payment of mortgage financing cost(3,415,858) (946,018) (1,207,477)
Other, net (306,631) 86,759 (101,855)
- --------------------------------------------------------------------------------
Net cash provided by financing
activities 162,956,589 29,442,612 84,689,102
- --------------------------------------------------------------------------------
Increase (decrease) in cash and
equivalents 1,753,378 (19,144,913) (6,503,308)
Cash and equivalents, beginning
of period 1,588,197 20,733,110 27,236,418
- --------------------------------------------------------------------------------
Cash and equivalents, end of
period $ 3,341,575 $ 1,588,197 $ 20,733,110
================================================================================
Supplemental disclosures of cash flow information:
Cash paid during the year for
interest $ 20,076,579 $ 23,609,172 $ 10,621,230
================================================================================
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization - Colonial Properties Trust (Colonial or the Company), an
Alabama real estate investment trust (REIT), was formed as a Maryland real
estate investment trust on July 9, 1993, to succeed as owner of substantially
all of the predecessor interests of Colonial Properties, Inc. (CPI), and certain
real estate interests of persons and companies affiliated with CPI. On September
29, 1993, the Company completed its initial public offering, and on August 21,
1995, the Company reincorporated as an Alabama real estate investment trust
under a new Alabama REIT statute. The Company is engaged in the ownership,
development, management, and leasing of multifamily housing communities, retail
malls and centers, and office buildings. The Company also owns certain parcels
of land.
Federal Income Tax Status - The Company, which is considered a corporation
for federal income tax purposes, qualifies as a real estate investment trust for
federal income tax purposes and generally will not be subject to federal income
tax to the extent it distributes its REIT taxable income to its shareholders.
REITs are subject to a number of organizational and operational requirements. If
the Company fails to qualify as a REIT in any taxable year, the Company will be
subject to federal income tax on its taxable income at regular corporate rates.
The Company may be subject to certain state and local taxes on its income and
property. No provision for income taxes is included in the financial statements.
Distributions to shareholders are partially taxable to shareholders as ordinary
income and partially non-taxable to shareholders as return of capital. During
1996, 1995, and 1994 the Company's distributions had the following
characteristics: <TABLE>
Distribution Ordinary Return of
Per Share Income Capital
- ----------------------------------------------------------
<S> <C> <C> <C>
1994 $1.73 76.20% 23.80%
1995 $1.90 71.44% 28.56%
1996 $2.00 75.32% 24.68%
</TABLE>
Principles of Consolidation - The Company's consolidated financial statements
include the Company; its wholly-owned subsidiary, Colonial Properties Holding
Company, Inc.; Colonial Realty Limited Partnership (CRLP) (in which Colonial
Properties Holding Company, Inc. held 67.68%, 61.56%, and 54.26% general and
limited partner interests at December 31, 1996, 1995, and 1994, respectively)
and Colonial Properties Services Limited Partnership (in which Colonial Realty
Limited Partnership holds 99% general and limited partner interests). The
minority limited partner interests in Colonial Realty Limited Partnership and
Colonial Properties Services Limited Partnership are included as minority
interest in the Company's consolidated financial statements.
Investments in Subsidiaries - Partnerships and corporations in which the
Company owns a fifty percent or less interest and does not control are reflected
in the consolidated financial statements as investments accounted for under the
equity method. Under this method the investment is carried at cost plus or minus
equity in undistributed earnings or losses since the date of acquisition.
Also included in investments in partnerships and partially-owned corporations
is the Company's 99% nonvoting, equity interest in Colonial Properties Services,
Inc. (CPSI). Colonial holds a one percent voting interest in CPSI. The Company
accounts for its 99% equity interest on the equity method. CPSI provides
property management services for Company-owned properties and third party-owned
properties and administrative services to the Company. CPSI generally bills
Colonial for payroll and other costs incurred in providing services to the
Company.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Land, Buildings, and Equipment - Land, buildings, and equipment is stated at
the lower of cost, less accumulated depreciation, or net realizable value. Where
an impairment of a property's value is determined to be other than temporary, an
allowance for the estimated potential loss is established to record the property
at its net realizable value. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets, which range from 7 to 40
years. Maintenance and repairs are charged to expense as incurred. Replacements
and improvements are capitalized and depreciated over the estimated remaining
useful lives of the assets. When items of land, buildings, or equipment are sold
or retired, the related cost and accumulated depreciation are removed from the
accounts and any gain or loss is included in the results of operations.
Undeveloped Land and Construction in Progress - Undeveloped land and
construction in progress is stated at the lower of cost or net realizable value.
The Company capitalizes all costs associated with land development, including
construction period interest and property taxes, during periods in which
property is undergoing development activities necessary to prepare the asset for
its intended use.
Cash and Equivalents - The Company includes highly liquid marketable
securities and debt instruments purchased with a maturity of three months or
less in cash equivalents.
Restricted Cash - Cash which is legally restricted as to use consists
primarily of tenant deposits.
Deferred Debt and Lease Costs - Amortization of mortgage costs is recorded
using the straight-line method, which approximates the effective interest
method, over the terms of the related mortgages. Leasing commissions and fees
are amortized using the straight-line method over the terms of the related
leases. Interest rate cap agreements are used to reduce the potential impact of
increases in interest rates on variable-rate debt. Premiums paid for purchased
interest rate cap agreements are amortized to expense over the terms of the
caps. Unamortized premiums are included in other assets in the balance sheets.
Amounts receivable under cap agreements are accrued as a reduction of interest
expense.
Deferred Compensation on Restricted Shares - Deferred compensation on
restricted shares relates to the issuance of restricted shares to employees of
the Company which are being amortized to expense over the vesting period of the
respective shares issued.
Revenue Recognition - Rental income attributable to leases is recognized on a
straight-line basis over the terms of the leases.
Net Income Per Share - Net income per share is calculated using the weighted
average numbers of shares outstanding during the periods.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the reported amounts of revenues and expenses. Actual results could differ from
those estimates.
Reclassifications - Certain immaterial reclassifications have been made to
the 1994 and 1995 financial statements in order to conform them to the 1996
financial statement presentation.
<PAGE>
3. PROPERTY ACQUISITIONS
The Company acquired 11 properties during 1996, six properties during 1995,
and 20 properties during 1994 at aggregate costs of approximately $173,700,000,
$68,400,000, and $331,000,000, respectively. The Company funded these
acquisitions with cash proceeds from its public offerings of equity (see Note 8)
and debt (see Note 7), advances on bank lines of credit, proceeds from the
issuance of limited partnership units in Colonial Realty Limited Partnership,
and cash from operations. A portion of the purchase price of Rime
Village-Huntsville was subject to adjustment during 1995 based upon the
operating results of the second phase of the property which was in lease-up when
it was acquired. This portion of the purchase price was paid through the
issuance of 70,864 additional limited partnership units in Colonial Realty
Limited Partnership.
The properties acquired during 1996, 1995, and 1994 are listed below:
<TABLE>
Effective
Acquisition
Location Date
- -----------------------------------------------------------------
<S> <C> <C>
Multifamily Properties:
Carrollwood Tampa, FL January 1, 1994
Grande View Towers Huntsville, AL January 1, 1994
Plantation Gardens Sarasota, FL March 31, 1994
Patio I Auburn, AL March 31, 1994
Arbors at Kirkman Orlando, FL August 10, 1994
Polos at Gainesville Gainesville, FL August 10, 1994
Polos at Ponte Vedra Jacksonville, FL August 10, 1994
Polos West Orlando, FL August 10, 1994
Huntleigh Woods Mobile, AL December 31, 1994
Monte D'Oro Birmingham, AL December 31, 1994
Rime Village-Hoover Birmingham, AL December 31, 1994
Rime Village-Huntsville Huntsville, AL December 31, 1994
Riverchase Manor Birmingham, AL December 31, 1994
Ski Lodge I Birmingham, AL December 31, 1994
Ski Lodge II Birmingham, AL December 31, 1994
Ski Lodge III Birmingham, AL December 31, 1994
Ski Lodge Tuscaloosa Tuscaloosa, AL December 31, 1994
Stockbridge Manor Stockbridge, GA December 31, 1994
Ashford Place Mobile, AL April 1, 1996
Pointe West Mobile, AL April 1, 1996
Spring Creek Macon, GA April 1, 1996
Crowne Chase Birmingham, AL April 15, 1996
Crowne Point Birmingham, AL May 10, 1996
Crowne Ridge Birmingham, AL May 10, 1996
Barrington Club Macon, GA September 13, 1996
Retail Properties:
Burnt Store Square Punta Gorda, FL July 13, 1994
Britt David
Shopping Center Columbus, GA October 25, 1994
Bear Lake Village Orlando, FL July 1, 1995
Country Lake Village Orlando, FL July 1, 1995
Winter Haven Village Orlando, FL July 1, 1995
River Oaks Center Decatur, AL July 14, 1995
North Dale Court Tampa, FL October 1, 1995
Paddock Park Ocala, FL November 16, 1995
Briarcliffe Mall Myrtle Beach, SC July 1, 1996
Wekiva River Walk Orlando, FL October 1, 1996
Bardmoor Village St. Petersburg, FL October 1, 1996
Island Walk Orlando, FL October 1, 1996
</TABLE>
<PAGE>
Results of operations of these properties, subsequent to their respective
acquisition dates, are included in the consolidated financial statements of the
Company. The cash paid to acquire these properties is included in the statements
of cash flows. The acquisitions during 1996, 1995, and 1994 are comprised of the
following: <TABLE>
1996 1995 1994
================================================================================
<S> <C> <C> <C>
Assets purchased:
Land, buildings, and equipment $173,276,789 $68,322,274 $328,593,287
Other assets 454,515 42,691 2,422,530
- --------------------------------------------------------------------------------
173,731,304 68,364,965 331,015,817
Notes and mortgages assumed (40,443,806) -0- (141,005,861)
Other liabilities assumed or recorded (1,773,648) (784,362) (8,436,875)
Issuance of limited partnership units
of Colonial Realty Limited Partnership (5,587,296) -0- (75,538,014)
- --------------------------------------------------------------------------------
Cash paid $125,926,554 $67,580,603 $106,035,067
================================================================================
</TABLE>
The Company's unaudited pro forma results of operations, assuming these
acquisitions had been effected by the Company prior to January 1, 1994, are as
follows:
<TABLE>
For the Year Ended December 31, 1996 1995 1994
================================================================================
<S> <C> <C> <C>
Revenues $145,866,000 $138,975,000 $129,063,000
================================================================================
Income before minority interest $ 41,483,000 $ 36,752,000 $ 35,475,000
================================================================================
Net income $ 28,078,000 $ 24,876,000 $ 24,011,671
================================================================================
Net income per share $ 1.59 $ 1.41 $ 1.36
</TABLE>
The pro forma amounts reflected above are not representative of the effects
on reported net income in future years, because in general, the options granted
typically do not vest for several years and additional awards are made each
year.
On January 8, 1997, subsequent to year end, the Company acquired Riverchase
Center, an office park comprised of eight one-level buildings in Birmingham,
Alabama totaling 306,000 square feet of leasable area. The total purchase price
of $20,800,000 was funded by the assumption of $8,710,000 in mortgage debt, the
issuance of 25,163 limited partnership units in Colonial Realty Limited
Partnership valued at $750,000, and an advance on the Company's bank line of
credit agreement. The effects of this acquisition are not included in the
Company's accompanying consolidated financial statements or in the pro forma
information above.
<PAGE>
4. LAND, BUILDINGS, AND EQUIPMENT
Land, buildings, and equipment consists of the following at December 31, 1996
and 1995:
<TABLE>
1996 1995
================================================================================
<S> <C> <C>
Buildings $736,621,679 $568,861,504
Furniture and fixtures 23,444,740 18,288,680
Equipment 2,569,139 1,406,215
Land improvements 18,327,845 14,218,447
Tenant improvements 11,969,390 10,516,274
- --------------------------------------------------------------------------------
792,932,793 613,291,120
Accumulated depreciation (101,549,355) (79,780,292)
- --------------------------------------------------------------------------------
691,383,438 533,510,828
Land 110,416,585 91,006,202
- --------------------------------------------------------------------------------
$801,800,023 $624,517,030
================================================================================
</TABLE>
5. UNDEVELOPED LAND AND CONSTRUCTION IN PROGRESS
During 1996 the Company completed the construction of three multifamily
expansion projects at a combined total cost of approximately $18,960,000. The
expansion projects produced 356 new apartment units (51 units completed during
1995 and 305 units completed during 1996), 16 units at McGehee Place in
Montgomery, Alabama, 180 units at Colonial Grand at Inverness in Mobile,
Alabama, and 160 units at Colonial Grand at Galleria in Birmingham, Alabama. The
Company currently has nine active expansion and development projects in progress
and various parcels of land available for expansion, construction, or sale.
During 1996 the Company completed construction on 873 apartment units (including
the 305 units in completed projects mentioned above), and the Company has an
additional 1,216 apartment units in progress at December 31, 1996. Undeveloped
land and construction in progress is comprised of the following at December 31,
1996: <TABLE>
Total
Units/ Costs
Square Estimated Estimated Capitalized
Feet Completion Total Costs To Date
================================================================================
<S> <C> <C> <C> <C>
Multifamily Projects:
Colonial Village at
Heatherbrooke (expansion) 84 1997 $ 4,100,000 $ 1,462,407
Colonial Village at
Riverchase (expansion) 276 1997 14,900,000 13,368,319
Colonial Grand at Heathrow 312 1997 20,400,000 20,050,293
Colonial Grand at Bayshore 212 1997 11,600,000 11,155,327
Colonial Grand at Bayshore II 164 1997 9,100,000 3,377,532
Colonial Grand at Wesleyan 240 1997 12,800,000 7,758,183
Colonial Grand at Hunters Creek 496 1998 33,000,000 16,824,877
- --------------------------------------------------------------------------------
1,784 105,900,000 73,996,938
================================================================================
Retail Projects:
Macon Mall (expansion) 423,000 1997 52,000,000 38,085,793
Montgomery
Promenade (expansion) 225,000 1997 7,000,000 1,100,000
- --------------------------------------------------------------------------------
648,000 59,000,000 39,185,793
================================================================================
Other Projects and
Undeveloped Land 506,432
- --------------------------------------------------------------------------------
$164,900,000 $113,689,163
================================================================================
</TABLE>
Interest capitalized on construction in progress during 1996, 1995, and 1994
was $3,745,000, $868,000 and $333,000, respectively. During February 1997, the
Company completed its expansion of Macon Mall.
<PAGE>
6. INVESTMENT IN SUBSIDIARIES
Investment in subsidiaries at December 31, 1996 and 1995 consists of the
following:
<TABLE>
Percent
Owned 1996 1995
================================================================================
<S> <C> <C> <C>
Office:
600 Building Partnership, Birmingham, AL 33.34% $ 5,044 $ 21,143
Anderson Block Properties, Montgomery, AL 33.33% (52,773) (65,760)
Hoar/Colonial/Polar-BEK Partnership I,
Birmingham, AL 37.50% (429,744) (395,691)
Hoar/Colonial/Polar-BEK Partnership II,
Birmingham, AL 37.50% (34,876) (2,438)
Polar-BEK/Colonial Partnership I,
Birmingham, AL 50.00% 4,999,726 5,236,912
Polar-BEK/Rubaiyat/Colonial Partnership,
Birmingham, AL 25.00% 505,338 526,824
- --------------------------------------------------------------------------------
4,992,715 5,320,990
- --------------------------------------------------------------------------------
Other:
Colonial/Polar-BEK Management Company,
Birmingham, AL 50.00% 35,504 42,650
Colonial Properties Services, Inc.,
Birmingham, AL 99.00% 664,028 526,593
- --------------------------------------------------------------------------------
699,532 569,243
- --------------------------------------------------------------------------------
$5,692,247 $5,890,233
================================================================================
</TABLE>
7. NOTES AND MORTGAGES PAYABLE
Notes and mortgages payable at December 31, 1996 and 1995 consists of the
following:
<TABLE>
1996 1995
================================================================================
<S> <C> <C>
Senior unsecured notes, net of unamortized
discounts totaling $433,793 $179,566,207 $ -0-
Revolving credit agreements 48,815,000 70,692,000
Mortgages and other notes:
4.50% to 6.00% 76,605,000 88,095,394
6.01% to 7.50% 39,324,252 49,774,944
7.51% to 9.00% 115,369,461 98,455,300
9.01% to 10.25% 46,755,005 47,082,132
- --------------------------------------------------------------------------------
$506,434,925 $354,099,770
================================================================================
</TABLE>
<PAGE>
As of December 31, 1996, the Company has one unsecured bank line of credit
providing for total borrowings of up to $125,000,000. The line of credit
agreement bears interest at LIBOR plus 100 to 150 basis points, has a term of
two years beginning in December 1996, and provides for a one-year amortization
in the case of non-renewal. The credit facility is primarily used by the Company
to finance property acquisitions and development and had an outstanding balance
at December 31, 1996, of $48,815,000. The weighted average interest rate of this
short-term borrowing facility was 6.81% and 7.47% at December 31, 1996 and 1995,
respectively.
In July 1996 the Company completed a public offering of senior, unsecured
debt securities totaling $130,000,000 through its subsidiary Colonial Realty
Limited Partnership. The securities were issued in two series of $65,000,000
each requiring semi-annual payments of interest only. One series, which matures
in July 2001, bears interest at 7.50% and was priced at a spread of 95 basis
points over the five-year treasury bond rate, resulting in an original issue
discount of $145,383. The other series, which matures in July 2006, bears
interest at 8.05% and was priced at a spread of 128 basis points over the
ten-year treasury bond rate, resulting in an original issue discount of
$288,410. The issue discounts are being charged to interest expense over the
life of the corresponding issue.
In July 1996 the Company refinanced loans collateralized by five of the
Company's multifamily properties and representing a total of approximately $53.0
million in outstanding indebtedness. The loans are financed through tax-exempt
bonds which are credit enhanced by Fannie Mae. The loans, which bear interest at
a weekly variable interest rate, require monthly interest payments through June
2006 and principal and interest payments from July 2006 through June 2026. The
weighted average interest rate of these five loans was 3.42% at December 31,
1996.
In December 1996 the Company completed a public offering of unsecured medium
term debt securities totaling $50,000,000 through its subsidiary Colonial Realty
Limited Partnership. The securities mature in December 2003 and pay a coupon
rate of 7.05% which equated to a spread of 90 basis points over the seven-year
treasury bond rate.
In January 1997, subsequent to year-end, the Company completed a public
offering of unsecured medium term debt securities totaling $50,000,000 through
its subsidiary Colonial Realty Limited Partnership. The securities mature in
January 2003 and pay a coupon rate of 7.16% which equated to a spread of 80
basis points over the six-year treasury bond rate. The effect of this issuance
is not reflected in the Company's consolidated financial statements.
In February 1995 the Company entered into a note payable agreement with
Nationwide Life Insurance Company (Nationwide) in the amount of $61,520,000. The
ten-year note requires monthly payments of interest only at 8.87% for the first
five years and monthly payments of interest only at a redetermined interest rate
for the remainder of the term. At the end of the first five years of the term,
the Company may elect to repay the note without penalty.
Colonial has entered into an interest rate cap agreement which limits debt of
$17,800,000 to an interest rate of 5.96% through September 30, 1998. The Company
paid approximately $374,000 in total for the interest rate cap, which is being
amortized over the life of the agreement. Colonial is exposed to credit losses
in the event of nonperformance by the counterparties to its interest rate cap
and nonderivative financial assets but has no off-balance-sheet credit risk of
accounting loss. The Company anticipates, however, that counterparties will be
able to fully satisfy their obligations under the contracts. Colonial does not
obtain collateral or other security to support financial instruments subject to
credit risk but monitors the credit standing of counterparties.
At December 31, 1996, the Company had $228,815,000 in unsecured indebtedness
including balances outstanding on its bank line of credit and certain other
notes payable. The remainder of the Company's notes and mortgages payable are
collateralized by the assignment of rents and leases of certain properties and
assets with an aggregate net book value of $467,203,240 at December 31, 1996.
<PAGE>
The aggregate maturities of notes and mortgages payable at December 31, 1996,
are as follows:
<TABLE>
<S> <C>
1997 $ 2,383,837
1998 84,465,343
1999 33,631,776
2000 27,654,318
2001 82,213,194
Thereafter 276,086,457
- --------------------------------------------------------------------------------
$506,434,925
================================================================================
</TABLE>
A substantial majority of the Company's notes and mortgages payable have been
recently financed or are covered by interest rate cap agreements, and as such,
the balances outstanding on these notes and mortgages are considered to be the
fair values. The Company's line of credit arrangement bears interest at a rate
that varies with changes in LIBOR; therefore, the balances outstanding are
considered to be the fair value.
Certain shareholders and trustees of the Company have guaranteed indebtedness
of the Company totaling approximately $6,300,000 at December 31, 1996. The
Company has indemnified these individuals from their guarantees of approximately
$3,304,000 of this indebtedness. Certain partners of the Company's subsidiary,
Colonial Realty Limited Partnership, have guaranteed indebtedness of the Company
totaling approximately $19,048,000 at December 31, 1996.
8. COMMON STOCK OFFERINGS
During 1995 and 1996 and in the first quarter of 1997, the Company
completed three public offerings of stock totaling 9,550,000 common shares of
beneficial interest (Common Shares). The proceeds of the offerings were used to
fund acquisitions and development expenditures, repay balances outstanding on
the Company's revolving credit agreements, repay certain notes and mortgages
payable, and for general corporate purposes. Details relating to these equity
offerings are as follows: <TABLE>
Number of Stock Price Gross Offering Net
Date Common Shares Per Share Proceeds Costs Proceeds
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
May 1995 3,450,000 $22.750 $ 78,487,500 $4,831,871 $ 73,655,629
January 1996 4,600,000 $24.625 $ 113,275,000 $6,631,817 $ 106,643,183
January 1997 1,500,000 $29.875 $ 44,812,500 $1,422,500 $ 43,390,000
</TABLE>
The effect of the January 1997 offering is not reflected in the Company's
consolidated financial statements.
9. EMPLOYEE SHARE OPTION AND RESTRICTED SHARE PLAN AND TRUSTEE SHARE OPTION PLAN
In September 1993 the Company adopted an Employee Share Option and Restricted
Share Plan (the Employee Plan) designed to attract, retain, and motivate
executive officers of the Company and other key employees. The Employee Plan
authorizes the issuance of up to 675,000 common shares of beneficial interest
pursuant to options or restricted shares granted or issued under the plan,
provided that no more than 300,000 restricted shares may be issued under the
plan. In connection with the grant of options under the Employee Plan, the
Executive Compensation Committee of the Board of Trustees determines the option
exercise period and any vesting requirements. In September 1993 the Company also
adopted a Trustee Share Option Plan (the Trustee Plan). The Trustee Plan
authorizes the issuance of up to 125,000 common shares of beneficial interest
pursuant to options granted under the plan.
The Company applies Accounting Principles Board Opinion 25 and related
Interpretations in accounting for its plans. Accordingly, no compensation
expense has been recognized for its stock option plans. Had compensation expense
for the Company's stock option plans been determined based on the fair value at
the grant dates for awards under those plans consistent with the method of
Statement of Financial Accounting Standards No. 123, the Company's net income
and earnings per share would have been reduced to the pro forma amounts
indicated below: <TABLE>
For the Year Ending December 31,
- --------------------------------------------------------------------------------
1996 1995
================================================================================
<S> <C> <C>
Net Income As reported $27,505,806 $14,935,829
Pro forma $27,179,096 $14,877,509
================================================================================
Net income per share As reported $ 1.58 $ 1.29
Pro forma $ 1.56 $ 1.28
================================================================================
</TABLE>
The pro forma amounts reflected above are not representative of the effects
on reported net income in future years, because in general, the options granted
typically do not vest for several years and additional awards are made each
year.
The Company elected to use the Black-Scholes pricing model to calculate the
fair values of the options awarded, which are included in the pro forma results
above. The following assumptions were used to derive the fair values: a 10-year
option term; an annualized volatility rate of 27.04% and 10.51% for 1996 and
1995, respectively; a risk-free rate of return of 6.49% and 6.44% for 1996 and
1995, respectively; and a dividend yield of 7.70% and 7.99% for 1996 and 1995,
respectively.
The Company issued 7,800, 9,050, and 7,270 restricted shares under the
Employee Plan during 1996, 1995, and 1994, respectively. On October 1, 1996, the
Company cancelled 1,108 restricted shares previously issued during 1994 and
1995. The value of these restricted shares is being charged to compensation
expense based upon the earlier of satisfying the vesting period (eight years) or
satisfying certain performance targets. Option activity under both the Employee
Plan and the Trustee Plan combined is presented in the table below:
<TABLE>
Options Outstanding
- -------------------------------------------------------------------------
Shares Weighted-
Available average
for future Price per
Option Grant Shares Share
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, December 31, 1993 770,000 30,000 $23.000
Options granted (41,690) 41,690 23.000
- -------------------------------------------------------------------------
Balance, December 31, 1994 728,310 71,690 23.000
Options granted (85,205) 85,205 23.000
- -------------------------------------------------------------------------
Balance, December 31, 1995 643,105 156,895 23.000
Options granted (103,450) 103,450 24.371
- -------------------------------------------------------------------------
Balance, December 31, 1996 539,655 260,345 $23.540
=========================================================================
</TABLE>
All options granted to date have a term of ten years and may be exercised in
installments of one-third of the total number of options issued to any
individual on each of the first three anniversary dates of the grant of the
option; the first of such anniversary dates was September 29, 1994. The balance
of options that were exercisable totaled 78,425, 33,897 and 10,000 at December
31, 1996, 1995, and 1994, respectively.
<PAGE>
10. EMPLOYEE BENEFITS
Employees of the Company and CPSI have participated with those of The
Colonial Company (TCC) (an affiliate of certain shareholders and minority
interest holders) and its other related entities in a noncontributory defined
benefit pension plan covering substantially all employees. TCC's policy was to
currently fund the amount of pension cost allowed by the Internal Revenue Code.
Pension expense includes service and interest costs adjusted by actual earnings
on plan assets and amortization of prior service cost and the transition amount,
calculated using the guidelines of Statement of Financial Accounting Standards
No. 87. The benefits are based on years of service and the employees' final
compensation. The allocated pension cost of the Company and CPSI, based on their
portion of total payroll expense for the year ended December 31, 1994, was
$186,000, which was paid to The Colonial Company.
Effective January 1, 1995, the Company created a new noncontributory defined
benefit pension plan designed to cover substantially all employees of the
Company and CPSI. Therefore, these employees did not participate in the pension
plan mentioned above after December 31, 1994. The benefits provided by this plan
are based on years of service and the employee's final average compensation. The
Company's policy is to fund the minimum required contribution under ERISA and
the Internal Revenue Code.
The table below presents a summary of pension plan status as of December 31,
1996 and 1995, as it relates to the employees of the Company and CPSI.
<TABLE>
1996 1995
============================================================================
<S> <C> <C>
Actuarial present value of accumulated
benefit obligation including vested
benefits of$528,000 and $374,000
at December 31, 1996 and 1995,
respectively $ 587,000 $ 401,000
Actuarial present value of projected
benefit obligations at year end 1,439,000 1,140,000
Fair value of assets at year end 644,000 358,000
Accrued pension cost 274,000 176,000
Net pension cost for the year 337,000 216,000
</TABLE>
Actuarial assumptions used in determining the actuarial present value of
projected benefit obligations at January 1, 1996 are as follows:
<TABLE>
1996 1995
==============================================================================
<S> <C> <C>
Weighted-average interest rate 7.75% 7.0%
- ------------------------------------------------------------------------------
Increase in future compensation levels 4.5% 4.0%
</TABLE>
The Company and CPSI also participated with TCC and its other related
entities in a salary reduction profit sharing plan covering substantially all
employees. This plan provided, with certain restrictions, that employees may
contribute a portion of their earnings with the employer matching one-half of
such contributions. Contributions by the Company and CPSI were $108,000 for the
year ended December 31, 1994.
Effective January 1, 1995, the Company also created a new salary reduction
profit sharing plan covering substantially all employees of the Company and
CPSI. Similar to TCC's salary reduction profit sharing plan, this plan provides,
with certain restrictions, that employees may contribute a portion of their
earnings with the employer matching one-half of such contributions. Therefore,
the employees of the Company and CPSI did not participate in the salary
reduction profit sharing plan mentioned above after December 31, 1994.
Contributions by the Company and CPSI were $164,000 and $155,000 for the years
ended December 31, 1996 and 1995, respectively.
<PAGE>
11. LEASING OPERATIONS
The Company is in the business of leasing and managing commercial, retail,
and residential property. For properties owned by the Company, minimum rentals
due in future periods under noncancelable operating leases extending beyond one
year at December 31, 1996, are as follows: <TABLE>
<S> <C>
1997 $40,897,000
1998 35,756,000
1999 30,329,000
2000 23,951,000
2001 19,293,000
Thereafter 99,845,000
- --------------------------------------------------------------------------
$250,071,000
==========================================================================
</TABLE>
The noncancelable leases are primarily with tenants engaged in retail and
commercial operations in Alabama, Georgia, Florida, and South Carolina.
Performance in accordance with the lease terms is in part dependent upon the
economic conditions of the respective areas. No additional credit risk exposure
relating to the leasing arrangements exists beyond the accounts receivable
amounts shown in the December 31, 1996, balance sheet. Leases with tenants in
multifamily properties are generally for one year or less and are thus excluded
from the above table. Substantially all of the Company's land, buildings, and
equipment represent property leased under the above and other short-term leasing
arrangements.
Rental income for 1996, 1995, and 1994 includes contingent rent of
$1,841,000, $1,782,000, and $1,729,000, respectively. This rental income was
earned when certain retail tenants attained sales volumes specified in their
respective lease agreements.
12. RELATED PARTY TRANSACTIONS
Colonial has generally used affiliated construction companies to manage and
oversee its development projects. The Company paid $42,554,000, $16,124,000, and
$8,934,000 for property development costs to Lowder Construction Company, Inc.,
a construction company owned by TCC, during the years ended December 31, 1996,
1995, and 1994, respectively. The Company had outstanding construction invoices
and retainage payable to Lowder Construction Company, Inc. totaling $6,746,000
and $3,306,000 at December 31, 1996 and 1995, respectively. The $3,440,000
increase in construction-related payables to this affiliate, representing
non-cash increases in construction in progress, have been excluded from the 1996
statement of cash flows. The Company also paid $27,861,000 and $5,522,000 for
property development costs to two construction companies owned by three trustees
during the years ended December 31, 1996 and 1995, respectively. The Company had
outstanding construction invoices and retainage payable to these construction
companies totaling $3,227,000 and $678,000 at December 31, 1996 and 1995,
respectively. The $2,549,000 increase in construction-related payables to this
affiliate, representing non-cash increases in construction in progress, have
been excluded from the 1996 statement of cash flows.
The Company received rental income totaling $758,000, $836,000, and $775,000
from TCC, CPSI, and other affiliated companies during the years ended December
31, 1996, 1995, and 1994, respectively.
CPSI provided management and leasing services to entities in which certain
shareholders and minority interest holders have an interest. The amount of fees
paid to CPSI by such entities was $356,000, $321,000, and $320,000 for the years
ended December 31, 1996, 1995, and 1994, respectively.
During 1994, TCC performed certain administrative services for the Company
including payroll processing and computer processing. The Company paid TCC
$82,000 for these services during that year. Colonial Insurance Company provides
insurance brokerage services for the Company for which the Company paid
$187,000, $168,000, and $172,000 during the years ended December 31, 1996, 1995,
and 1994, respectively. The Company paid rent to Polar BEK/Colonial Partnership
I, which is a partnership accounted for by the Company under the equity method
(listed in Note 6), in the amounts of $211,000, $209,000, and $213,000 during
the years ended December 31, 1996, 1995, and 1994, respectively.
Colonial Commercial Investments, Inc., which is owned by trustees James K.
Lowder and Thomas H. Lowder, has guaranteed indebtedness totaling $1,438,000 at
December 31, 1996 for Anderson Block Properties, which is a partnership
accounted for by the Company under the equity method (listed in Note 6). The
Company has indemnified Colonial Commercial Investments, Inc. from its
guarantees of this indebtedness.
In July 1996 Colonial acquired land in Macon, Georgia, on which the Company
is developing its Colonial Grand at Wesleyan multifamily community. The Company
acquired this land from Colonial Commercial Investments, Inc. The purchase price
of $1,440,000, which was determined pursuant to an option acquired at the time
of the Company's initial public offering in September 1993, was paid through the
issuance of 58,466 units of limited partnership interest in CRLP ("CRLP Units").
In December 1994 the Company acquired, in exchange for CRLP Units, ten
multifamily properties developed and owned by The Rime Companies, in which
Messrs. Ripps and Meisler owned an interest. Subsequent to the acquisition,
Messrs. Ripps and Meisler were elected to serve on the Board of Trustees of the
Company. The acquisition agreements relating to the acquisition transaction
provided for the possible issuance of additional CRLP Units to the owners of The
Rime Companies if one of the properties met certain performance criteria after
the acquisition. During 1995 CRLP issued 33,661 Units to Mr. Ripps and 33,660
Units to the adult children of Mr. Meisler, pursuant to these acquisition
agreements.
13. SUBSEQUENT EVENT
On January 24, 1997, the Board of Trustees declared a cash distribution to
shareholders of the Company and partners of Colonial Realty Limited Partnership
in the amount of $.52 per share and per partnership unit, totaling $14,326,333.
The distribution was made to shareholders and partners of record as of February
3, 1997, and was paid on February 10, 1997.
14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following is a summary of the unaudited quarterly financial information
for the years ended December 31, 1996 and 1995:
<TABLE>
1996
(Amounts in thousands, except per share data)
- -------------------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $29,607 $31,824 $34,832 $38,618 $134,881
Income before minority
interest 8,361 9,424 10,216 12,736 40,737
Minority interest 2,773 3,478 3,302 3,678 13,231
Net income 5,588 5,946 6,914 9,058 27,506
Net income per share $0.34 $0.34 $0.39 $0.51 $1.58
Weighted average common
shares outstanding 16,536 17,655 17,656 17,658 17,378
1995
(Amounts in Thousands, except per share data)
- -------------------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
- -------------------------------------------------------------------------
Revenues $25,508 $26,782 $28,426 $30,174 $110,890
Income before minority
interest 5,240 5,748 7,019 7,472 25,479
Minority interest 2,395 2,485 2,683 2,980 10,543
Net income 2,845 3,263 4,336 4,492 14,936
Net income per share $0.30 $0.30 $0.33 $0.34 $1.29
Weighted average common
shares outstanding 9,591 10,721 13,043 13,045 11,613
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
Colonial Properties Trust:
We have audited the accompanying consolidated balance sheets of Colonial
Properties Trust as of December 31, 1996 and 1995 and the consolidated
statements of operations, shareholders' equity and cash flows for each of the
three years in the period ended December 31, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Colonial
Properties Trust as of December 31, 1996 and 1995 and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1996 in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
January 24, 1997
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Colonial Properties Trust on Form S-8 related to certain restricted shares and
stock options filed on September 29, 1994; Form S-3 related to the Shelf
Registration filed on January 8, 1997; Form S-3 related to the Dividend
Reinvestment Plan filed on April 11, 1995, as amended; and Form S-8 related to
the registration of common stock issuable under the Colonial Properties Trust
401(K)/Profit-Sharing Plan filed on October 15, 1996: of our report dated
January 24, 1997 on our audits of the Consolidated Financial Statements and
Financial Statement Schedules of Colonial Properties Trust as of December 31,
1996 and 1995, and for the years ended December 31, 1996, 1995, and 1994, which
report is incorporated by reference in this Form 10-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
March 28, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000909111
<NAME> COLONIAL PROPERTIES TRUST
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1995
<CASH> 3,341,575
<SECURITIES> 0
<RECEIVABLES> 4,791,406
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 903,349,378
<DEPRECIATION> (101,549,355)
<TOTAL-ASSETS> 948,104,623
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 176,597
<OTHER-SE> 279,326,350
<TOTAL-LIABILITY-AND-EQUITY> 279,502,947
<SALES> 130,369,971
<TOTAL-REVENUES> 134,881,355
<CGS> 0
<TOTAL-COSTS> (70,352,674)
<OTHER-EXPENSES> (23,280,807)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (24,584,298)
<INCOME-PRETAX> 41,247,874
<INCOME-TAX> 0
<INCOME-CONTINUING> 41,247,874
<DISCONTINUED> 0
<EXTRAORDINARY> (510,602)
<CHANGES> 0
<NET-INCOME> 27,505,806
<EPS-PRIMARY> 1.58
<EPS-DILUTED> 1.58
</TABLE>
