GABLES RESIDENTIAL TRUST, S-3, 1996-10-08

GABLES RESIDENTIAL TRUST
S-3, 1996-10-08
REAL ESTATE INVESTMENT TRUSTS

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<PAGE> 1
As filed with the Securities and Exchange Commission on October 8, 1996

REGISTRATION STATEMENT NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

------------------------

GABLES RESIDENTIAL TRUST
(Exact name of Registrant as specified in its charter)

Maryland 58-2077868
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

2859 Paces Ferry Road
Overlook III, Suite 1450
Atlanta, Georgia 30339
(770) 436-4600
(Address, including zip code, and telephone number, including area code of
Registrant's principal executive offices)

Marcus E. Bromley
Chief Executive Officer
GABLES RESIDENTIAL TRUST
2859 Paces Ferry Road
Overlook III, Suite 1450
Atlanta, Georgia 30339
(770) 436-4600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

------------------------

Copy to:

GILBERT G. MENNA, P.C.
ETTORE A. SANTUCCI, P.C.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000

------------------------

Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.___

If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. X
---

If this form is used to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act Registration Statement number of the earlier
effective registration statement for the same offering.___

If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act Registration Statement number of the earlier effective
registration statement for the same offering.___

If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box.___

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Shares Being Amount to be Offering Price Per Aggregate Offering Registration
Registered Registered Share(1) Price(1) Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares of
Beneficial Interest, par
value $.01 per share 243,787 $24.5625 $5,988,018.19 $2,064.83
====================================================================================================================
</TABLE>

(1) Estimated solely for purposes of determining the registration fee
pursuant to Rule 457(c) based on the average of the high and low sales
prices on the New York Stock Exchange on October 2, 1996.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL NOR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

PRELIMINARY PROSPECTUS DATED OCTOBER 8, 1996
SUBJECT TO COMPLETION
PROSPECTUS
243,787 SHARES

GABLES RESIDENTIAL TRUST

COMMON SHARES OF BENEFICIAL INTEREST
(PAR VALUE $.01 PER SHARE)

This prospectus relates to the offer and sale from time to time of up
to 243,787 common shares (the "Redemption Shares") of beneficial interest, par
value $.01 per share ("Common Shares"), of Gables Residential Trust (the
"Company") by certain holders thereof, or by pledgees, donees, transferees or
other successors in interest thereto (the "Selling Shareholders"). The Selling
Shareholders currently own 243,787 units (the "Acquired Units") of limited
partnership interest ("Units") in Gables Realty Limited Partnership (the
"Operating Partnership"), a Delaware limited partnership which the Company
controls through its ownership of the sole general partner thereof and in which
the Company owns a controlling limited partnership interest. The Redemption
Shares referred to in this Prospectus are the Common Shares that the Selling
Shareholders may acquire upon presentation by the Selling Shareholders of the
Acquired Units to the Operating Partnership for redemption, all in accordance
with the terms of the Operating Partnership's agreement of limited partnership,
as amended. The Acquired Units were originally issued to Morning Grove
Apartments, L.L.C., a Tennessee limited liability company ("Morning Grove"), in
connection with the Company's acquisition of property from Morning Grove. The
Acquired Units were subsequently distributed by Morning Grove to the Selling
Shareholders. At the time of the sale of property and at the time of the
distribution of the Acquired Units to them, the Selling Shareholders were the
sole members of Morning Grove. The Company is registering the Redemption
Shares pursuant to the Company's obligations under a registration rights
agreement but the registration of the Redemption Shares does not necessarily
mean that any of the Redemption Shares will be offered or sold by the Selling
Shareholders hereunder.

The Common Shares are listed on the New York Stock Exchange (the
"NYSE") under the symbol "GBP." To ensure that the Company maintains its
qualification as a Real Estate Investment Trust (a "REIT"), ownership by any
person is limited to 9.8% of the lesser of the number or value of outstanding
Common Shares, with certain exceptions. See "Description of Securities to be
Registered -- Restrictions on Transfers."

SEE "RISK FACTORS" ON PAGE FOUR FOR CERTAIN FACTORS RELEVANT TO AN INVESTMENT
IN THE COMMON SHARES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON
OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.

The Selling Shareholders from time to time may offer and sell any
Redemption Shares that may be acquired by them directly or through agents or
broker-dealers on terms to be determined at the time of sale. To the extent
required, the names of any agent or broker-dealer and applicable commissions or
discounts and any other required information with respect to any particular
offer will be set forth in an accompanying Prospectus Supplement. See "Plan of
Distribution." The Selling Shareholders reserve the right to accept or reject,
in whole or in part, any proposed purchase of the Redemption Shares to be made
directly or through agents.

The Selling Shareholders and any agents or broker-dealers that
participate with the Selling Shareholders in the distribution of the Redemption
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), and any commission received by
them and any profit on the resale of the Redemption Shares may be deemed to be
underwriting commissions or discounts under the Securities Act. See
"Registration Rights" for a description of certain indemnification arrangements
between the Company and the Selling Shareholders.

The Company will not receive any proceeds from the sale of the
Redemption Shares by the Selling Shareholders but has agreed to bear certain
expenses of registration of such shares under federal and state securities
laws.

The date of this Prospectus is October __, 1996
<PAGE> 3
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files under Exchange Act file number 1-12590 reports and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the Public Reference Section maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549;
Chicago Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661; and New York Regional Office, 7 World Trade Center, New York, New York
10048. The Common Shares are listed on the NYSE and such reports, proxy
statements and other information concerning the Company can also be inspected
at the office of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.

The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Redemption Shares. For
further information with respect to the Company and the Redemption Shares
reference is made to the Registration Statement and exhibits thereto.
Statements contained in this Prospectus as to the contents of any contract or
other documents are not necessarily complete, and, in each instance, reference
is made to the copy of such contract or documents filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents heretofore filed by the Company with the
Commission are incorporated herein by reference:

(a) Annual Report on Form 10-K for the year ended December 31,
1995, as amended by Form 10-K/A filed with the Commission on
April 26, 1996; Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996; and Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996.

(b) The description of the Company's Common Shares contained in
its Registration Statement on Form 8-A filed with the
Commission pursuant to the Exchange Act, including all
amendments and reports updating such description.

(c) Current Report on Form 8-K dated March 25, 1996, filed with
the Commission on April 1, 1996; Current Report on Form 8-K
dated April 23, 1996, as amended by Form 8-K/A filed with the
Commission on July 2, 1996; Current Report on Form 8-K dated
July 26, 1996, filed with the Commission on August 16, 1996;
and Current Report on Form 8-K dated September 11, 1996, filed
with the Commission on September 26, 1996.

In addition, all documents subsequently filed with the Securities and
Exchange Commission by the Company pursuant to Sections 13(a) and 13(c),
Section 14 and Section 15(d) of the Exchange Act prior to the filing of a
post-effective amendment hereto that indicates that all securities offered
hereunder have been sold or that deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein, in any applicable Prospectus Supplement or in any other document
subsequently filed with the Commission which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.

Copies of all documents which are incorporated by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such document) will be provided without charge to
each person, including any beneficial owner, to whom this Prospectus is
delivered, upon written or oral request. Requests should be directed to Gables
Residential Trust, 2859 Paces Ferry Road, Overlook III, Suite 1450, Atlanta,
Georgia 30339, Attention: Chief Financial Officer (telephone number
770/436-4600).
<PAGE> 4
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more
detailed information included elsewhere in this Prospectus or incorporated
herein or therein by reference. Unless the context otherwise requires, all
references in this Prospectus to the "Company" shall mean Gables Residential
Trust and its subsidiaries on a consolidated basis (including Gables Realty
Limited Partnership and its subsidiaries) or, where the context so requires,
Gables Residential Trust only, and, as the context may require, their
predecessors.

This Prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially
from those set forth in the forward-looking statements. Certain factors that
might cause such a difference are discussed in the section entitled "Risk
Factors" on page 4 of this Prospectus.

THE COMPANY

Gables Residential Trust is one of the largest owners, operators and
developers of multifamily communities in the Southeastern and Southwestern
United States. The Company owns multifamily communities (the "Communities")
containing apartment homes located in the following major cities in Georgia,
Texas and Tennessee: Atlanta, Houston, Dallas, Nashville, Memphis, San Antonio
and Austin.

The Company provides a full range of integrated real estate
management, construction and acquisition services through a staff of
approximately 850 employees who have experience in property operations,
development, acquisition and construction. The Company maintains offices in
Atlanta, Houston and Dallas, each with its own fully integrated real estate
staff. The finance, accounting and administrative functions for the Company
are controlled by a central staff located in Atlanta.

The Company operates as a real estate investment trust ("REIT") under
the Internal Revenue Code of 1986, as amended (the "Code"). Substantially all
of the Company's business is conducted through, and all of the Company's
interests in property are held by or through, Gables Realty Limited Partnership
(the "Operating Partnership"), of which the Company is currently an 84.5%
economic owner and which the Company controls through a wholly-owned subsidiary
that is the sole general partner of the Operating Partnership.

The Company's executive offices are located at 2859 Paces Ferry Road,
in Atlanta, Georgia 30339 and its telephone number is (770) 436-4600. The
Company's common shares of beneficial interest, par value $.01 per share
("Common Shares"), are listed on the New York Stock Exchange under the symbol
"GBP."

RISK FACTORS

An investment in Common Shares involves various risks, and prospective
investors should carefully consider the matters discussed under "Risk Factors"
prior to any investment in the Company.

TAX STATUS OF THE COMPANY

The Company intends at all times to operate so as to qualify as a REIT
under the Code. If and as long as the Company qualifies for taxation as a
REIT, the Company generally will not be subject to Federal income tax on that
portion of its ordinary income and capital gains that is currently distributed
to its shareholders. REITs are subject to a number of highly technical and
complex organizational and operational requirements. Although the Company
believes it has operated, and intends to continue to operate, in such a manner
as to qualify as a REIT under the Code, no assurance can be given that the
Company has qualified and will at all times so qualify. If the Company fails
to qualify as a REIT in any taxable year, the Company will be subject to
Federal income tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates. 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. Certain subsidiaries of the Company are subject to
Federal and state income tax on their taxable income at regular corporate
rates. The Company anticipates that initially deductions for interest and
amortization will largely offset the otherwise taxable income of such
subsidiaries, but there can be no assurance

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<PAGE> 5

that this will be the case or that the Internal Revenue Service ("IRS") will
not challenge such deductions. See "Federal Income Tax Considerations."

SECURITIES TO BE OFFERED

This Prospectus relates to the possible offer and sale from time to
time of 243,787 Redemption Shares by the Selling Shareholders. The Redemption
Shares are Common Shares that may be issued to the Selling Shareholders in
exchange for units of limited partnership that the Selling Shareholders
acquired as a result of the distribution of such units to them by Morning Grove
Apartments, L.L.C., a Tennessee limited liability company ("Morning Grove");
Morning Grove originally acquired such units of limited partnership in
connection with the Company's purchase of property from Morning Grove. At the
time of the sale of property and at the time of the distribution of the units
of limited partnership to them, the Selling Shareholders were the sole members
of Morning Grove. The Company is registering the sale by the Selling
Shareholders of the Redemption Shares pursuant to its obligations under a
registration rights agreement.

The Company will not receive any proceeds from the sale of any
Redemption Shares.

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<PAGE> 6
RISK FACTORS

An investment in Common Shares involves various risks. Prospective
investors should carefully consider the following information in conjunction
with the other information contained or incorporated by reference in this
Prospectus Summary and the attached Prospectus before making a decision to
purchase Common Shares.

RISKS OF DEVELOPMENT, CONSTRUCTION AND ACQUISITION ACTIVITIES

The Company intends to actively continue development and construction
of multifamily communities. There can be no assurance that the Company will
undertake to develop any particular site or that it will be able to complete
such development if it is undertaken. Risks associated with the Company's
development and construction activities include: development opportunities may
be abandoned; construction costs of a community may exceed original estimates,
possibly making the community uneconomical; occupancy rates and rents at a
newly completed community may not be sufficient to make the community
profitable; financing may not be available on favorable terms for development
of a community; and construction and lease-up may not be completed on schedule,
resulting in increased debt service expense and construction costs.
Development activities are also subject to risks relating to the inability to
obtain, or delays in obtaining, all necessary zoning, land-use, building,
occupancy and other required governmental permits and authorizations.

The Company intends to continue to acquire multifamily apartment
communities on a select basis. Acquisitions of multifamily communities entail
risks that investments will fail to perform in accordance with expectations.
Estimates of the costs of improvements to bring an acquired property up to
standards established for the market position intended for that property may
prove inaccurate.

The Company anticipates that future developments and acquisitions will
be financed, in whole or in part, under existing credit facilities or loan
commitments or other lines of credit or other forms of secured or unsecured
financing or through the issuance of additional equity by the Company. The use
of equity financing, rather than debt, for future developments or acquisitions
could have a dilutive effect on the interest of existing shareholders of the
Company. If new developments are financed through construction loans, there is
a risk that, upon completion of construction, permanent financing for newly
developed communities may not be available or may be available only on
disadvantageous terms.

REAL ESTATE FINANCING RISKS

No Limitation on Debt. The Company currently has a policy of
incurring debt only if upon such incurrence the ratio of debt to total market
capitalization (i.e., the total consolidated debt of the Company as a
percentage of the market value of issued and outstanding equity securities plus
total consolidated debt) would be 60% or less, but the organizational documents
of the Company do not contain any limitation on the amount of indebtedness the
Company may incur. Accordingly, the Company's Board of Trustees could alter or
eliminate this policy.

Existing Debt Maturities, Balloon Payments and Refinancing Risks. The
Company is subject to the risks normally associated with debt financing,
including the risk that the Company's cash flow will be insufficient to meet
required payments of principal and interest. Because the Company anticipates
that only a small portion of the principal of the Company's mortgage
indebtedness will be repaid prior to maturity, it will be necessary for the
Company to refinance debt. Accordingly, there is a risk that existing
indebtedness on the Communities will not be able to be refinanced or that the
terms of such refinancing will not be as favorable as the terms of the existing
indebtedness.

Risk of Rising Interest Rates. The Company incurred and expects in
the future to incur floating rate indebtedness in connection with the
construction of multifamily apartment communities, as well as for other
purposes. In addition, additional indebtedness that the Company incurs under
the Company's existing secured revolving credit facility also bears interest at
a floating rate. Accordingly, increases in interest rates would increase the
Company's interest costs (to the extent that the related indebtedness was not
protected by the Company's interest rate protection arrangements).

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<PAGE> 7

Bond Compliance Requirements. Ten of the Communities (including
Arbors of Harbortown, in which the Company has an indirect 25% general partner
interest) are financed with obligations issued by various local government
agencies or instrumentalities, the interest on which is exempt from Federal
income taxation. These obligations are commonly referred to as "tax-exempt
bonds." Under the terms of the bonds, the Company must comply with various
restrictions on the use of the Communities, including that a percentage of
apartments be made available to low and middle income households. The bond
compliance requirements in effect, and the requirements of any future
tax-exempt bond financing utilized by the Company, may have the effect of
limiting the Company's income from the Communities subject to the financing.

REAL ESTATE INVESTMENT RISKS

General Risks. Real property investments are subject to varying
degrees of risk. If the Company's communities do not generate revenues
sufficient to meet operating expenses, including debt service and capital
expenditures, the Company's cash flow and ability to make distributions to its
shareholders will be adversely affected. A multifamily community's revenues
and value may be adversely affected by the general economic climate; the local
economic climate (including the fiscal condition of the relevant governmental
bodies); local real estate conditions (such as oversupply of or reduced demand
for apartment homes); the perceptions by prospective residents of the safety,
convenience and attractiveness of the communities or neighborhoods in which
they are located and the quality of local schools and other amenities; the
ability of the owner to provide adequate management, maintenance and insurance;
and increased operating costs (including real estate taxes and utilities).
Certain significant expenditures associated with each equity investment (such
as mortgage payments, if any, real estate taxes, insurance and maintenance
costs) are generally not reduced when circumstances cause a reduction in income
from the investment.

Dependence on Primary Markets. The Communities are located in various
metropolitan areas in the Southeastern and Southwestern United States,
particularly Atlanta, Houston and Dallas, and the Company's performance and its
ability to make distributions to shareholders could be adversely affected by
economic and social conditions in these geographic areas.

Market Illiquidity. Equity real estate investments are relatively
illiquid. Such illiquidity will tend to limit the ability of the Company to
vary its portfolio promptly in response to changes in economic or other
conditions. In addition, the Code limits the Company's ability to sell
properties held for fewer than four years, which may affect the Company's
ability to sell properties without adversely affecting returns to holders of
Common Shares.

Competition. There are numerous housing alternatives that compete
with the Communities in attracting residents. The Communities compete directly
with other multifamily rental apartments and single family homes that are
available for rent or purchase in the markets in which the Communities are
located. In addition, other competitors for development and acquisitions of
properties, including other REITs, may have greater resources than the Company.
Increased supply of apartment homes in the Company's principal markets over the
past few years and the next few years may adversely affect the current
favorable demand environment for apartment homes, including occupancy and
rental rates.

RISK OF FEE MANAGEMENT BUSINESS

The Company manages for a fee properties owned by third parties.
Risks associated with the management of properties owned by third parties
include the risk that the management contracts will be terminated and that the
rental revenues upon which management fees and based will decline, resulting in
decreased management fee income to the Company.

LIMITS ON CHANGES IN CONTROL

Certain provisions contained in the Company's Amended and Restated
Declaration of Trust (the "Declaration of Trust") and Amended and Restated
Bylaws and under Maryland law may have the effect of discouraging a third party
from making an acquisition proposal for the Company and may thereby inhibit a

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<PAGE> 8

change in control of the Company. For example, such provisions may (i) deter
tender offers for Common Shares, which offers may be attractive to the
shareholders, or (ii) deter purchases of large blocks of Common Shares, thereby
limiting the opportunity for shareholders to receive a premium for their Common
Shares over then-prevailing market prices.

POSSIBLE ADVERSE CONSEQUENCES OF LIMITS ON OWNERSHIP OF COMMON SHARES

In order to maintain its qualification as a REIT, not more than 50% in
value of the outstanding shares of the Company may be owned, directly or
indirectly, by five or fewer persons. In order to protect the Company against
the risk of losing its status as a REIT due to a concentration of ownership
among its shareholders, the Company has limited ownership of the issued and
outstanding Common Shares by any single shareholder to 9.8% of the outstanding
shares of beneficial interest. Although the Board of Trustees presently has no
intention of doing so, the Board of Trustees could waive this restriction if it
were satisfied, based upon the advice of tax counsel, that ownership in excess
of this limit would not jeopardize the Company's status as a REIT and the Board
of Trustees otherwise decided such action would be in the best interests of the
Company. This restriction also does not apply with respect to an offeror in
the event of an all-cash tender offer by it which has been accepted by at least
two-thirds of the Company's outstanding shares. Shares acquired or transferred
in breach of the limitation will be automatically exchanged for shares not
entitled to vote or to participate in dividends or other distributions. In
addition, shares acquired or transferred in breach of the limitation may be
purchased by the Company for the lesser of the price paid and the market price
(as determined in the manner set forth in the Declaration of Trust).

ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT; OTHER TAX LIABILITIES

The Company intends at all times to operate so as to qualify as a REIT
under the Code. Although management of the Company believes that the Company
is organized and operates in such a manner, no assurance can be given that the
Company qualifies or will remain qualified as a REIT. Qualification as a REIT
involves the application of highly technical and complex Code provisions for
which there are only limited judicial and administrative interpretations. The
determination of various factual matters and circumstances not entirely within
the Company's control may affect the Company's ability to qualify as a REIT. If
the Company fails to qualify as a REIT, it will be subject to Federal income
tax (including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. In addition, unless entitled to relief under certain
statutory provisions, the Company will be disqualified from treatment as a REIT
for the four taxable years following the year during which qualification is
lost. The additional tax would significantly reduce the cash flow available
for distribution to shareholders.

POSSIBLE ADVERSE IMPACT OF MARKET CONDITIONS ON MARKET PRICE

The market value of the Common Shares could be substantially affected
by general market conditions, including changes in interest rates, government
regulatory action and changes in tax laws. An increase in market interest
rates may lead purchasers of the Common Shares to demand a higher annual yield
on the price paid for shares from distributions by the Company, which could
adversely affect the market price of the Common Shares.

POSSIBLE ENVIRONMENTAL LIABILITIES

Under various Federal, state and local environmental laws, a current
or previous owner or operator of real estate may be required (typically
regardless of knowledge or responsibility) to investigate and clean up
hazardous or toxic substances or petroleum product releases at such property
and may be held liable to a governmental entity or to third parties for
property damage and for investigation and clean-up costs incurred by such
parties in connection with the contamination, which may be substantial. The
presence of such substances (or the failure to properly remediate the
contamination) may adversely affect the owner's ability to borrow against, sell
or rent such property.

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THE COMPANY

GENERAL

The Company's executive offices are located at 2859 Paces Ferry Road,
in Atlanta, Georgia 30339 and its telephone number is (770) 436-4600. The
Company's common shares of beneficial interest, par value $.01 per share, are
listed on the New York Stock Exchange under the symbol "GBP."

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<PAGE> 10

DESCRIPTION OF SECURITIES TO BE REGISTERED

The description of the Company's common shares of beneficial interest
set forth below does not purport to be complete and is qualified in its
entirety by reference to the Company's Declaration of Trust and Bylaws, copies
of which are exhibits to the Registration Statement of which this Prospectus is
a part. See "Additional Information."

GENERAL

Under the Declaration of Trust, the Company has authority to issue up
to 161,000,000 shares of beneficial interest, consisting of 100,000,000 Common
Shares, par value $.01 per share, 51,000,000 "Excess Shares" (as described
below), par value $.01 per share, and 10,000,000 Preferred Shares, par value
$.01 per share. As of September 26, 1996, the Company had outstanding
19,286,429 Common Shares. In addition, on such date, 3,528,232 Units were
outstanding (other than those held directly or indirectly by the Company) and
may be exchanged for Common Shares on a one-for-one basis.

Under Maryland law, shareholders generally are not responsible for the
corporation's debts or obligations, and the Company's Declaration of Trust
specifically provides that no shareholder of the Company will be personally
liable for any obligations of the Company. The Company's bylaws further
provide that the Company shall indemnify each shareholder against any claim or
liability to which the shareholder may become subject by reason of his being or
having been a shareholder, and that the Company shall reimburse each
shareholder for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. However, with respect to tort
claims, contractual claims where shareholder liability is not so negated,
claims for taxes and certain statutory liability, the shareholder may, in some
jurisdictions, including Texas, be personally liable to the extent that such
claims are not satisfied by the Company. Inasmuch as the Company will carry
public liability insurance which it considers adequate, any risk of personal
liability to shareholders is limited to situations in which the Company's
assets plus its insurance coverage would be insufficient to satisfy the claims
against the Company and its shareholders.

COMMON SHARES

All Common Shares which may be offered hereby will be duly authorized,
fully paid and nonassessable. Subject to the preferential rights of any other
shares or series of shares and to the provisions of the Company's Declaration
of Trust regarding Excess Shares, holders of Common Shares will be entitled to
receive distributions on Common Shares if, as and when authorized and declared
by the Board of Trustees of the Company out of assets legally available
therefor and to share ratably in the assets of the Company legally available
for distribution to its shareholders in the event of its liquidation,
dissolution or winding-up after payment of, or adequate provision for, all
known debts and liabilities of the Company.

Subject to the provisions of the Company's Declaration of Trust
regarding Excess Shares, each outstanding Common Share entitles the holder to
one vote on all matters submitted to a vote of shareholders, including the
election of trustees, and, except as otherwise required by law or except as
provided with respect to any other class or series of shares, the holders of
Common Shares will possess exclusive voting power. There is no cumulative
voting in the election of trustees, which means that the holders of a majority
of the outstanding Common Shares can elect all of the trustees then standing
for election, and the holders of the remaining Common Shares will not be able
to elect any trustee.

Holders of Common Shares have no conversion, sinking fund or
redemption rights, or preemptive rights to subscribe for any securities of the
Company.

Subject to the provisions of the Company's Declaration of Trust
regarding Excess Shares, all Common Shares will have equal dividend,
distribution, liquidation and other rights, and will have no preference,
appraisal or exchange rights.

The Company's Declaration of Trust provides that the Company cannot
merge with or sell all or substantially all of the assets of the Company,
except pursuant to a resolution approved by shareholders holding a majority of
the shares entitled to vote on the resolution. In addition, the Partnership
Agreement requires that

8
<PAGE> 11

any merger or sale of all or substantially all of the assets of the Operating
Partnership be approved by partners holding 75% of the Units.

The transfer agent and registrar for the Common Shares is The First
National Bank of Boston, Boston, Massachusetts.

PREFERRED SHARES

Preferred Shares may be issued from time to time, in one or more
series, as authorized by the Board of Trustees. Prior to issuance of shares of
each series, the Board of Trustees is required by the Maryland General
Corporation Law (the "MGCL") and the Company's Declaration of Trust to fix for
each series, subject to the provisions of the Company's Declaration of Trust
regarding Excess Shares, the terms, preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption, as are
permitted by Maryland law. Such rights, powers, restrictions and limitations
could include the right to receive specified dividend payments and payments on
liquidation prior to any such payments being made to the holders of some, or a
majority, of the Common Shares. The Board of Trustees could authorize the
issuance of Preferred Shares with terms and conditions that could have the
effect of discouraging a takeover or other transaction that holders of Common
Shares might believe to be in their best interests or in which holders of some,
or a majority, of Common Shares might receive a premium for their shares over
the then-current market price of such shares. As of the date hereof, no
Preferred Shares are outstanding.

RESTRICTIONS ON TRANSFERS

For the Company to qualify as a REIT under the Code, among other
things, not more than 50% in value of its outstanding shares of beneficial
interest may be owned, directly or indirectly, by five or fewer individuals
(defined in the Code to include certain entities) during the last half of a
taxable year (other than the first year), and such shares of beneficial
interest must be beneficially owned by 100 or more persons during at least 335
days of a taxable year of 12 months (other than the first year) or during a
proportionate part of a shorter taxable year. In order to protect the Company
against the risk of losing its status as a REIT due to a concentration of
ownership among its shareholders, the Declaration of Trust provides that no
holder (other than persons approved by the trustees at their option and in
their discretion) may own, or be deemed to own by virtue of the attribution
provisions of the Code, more than 9.8% (the "Ownership Limit") of the Company's
shares of beneficial interest. The Board of Trustees does not expect that it
would waive the Ownership Limit in the absence of the ruling from the IRS or an
opinion of counsel satisfactory to it that the changes in ownership will not
then or in the future jeopardize the Company's status as a REIT. Any transfer
of shares of beneficial interest or any security convertible into shares of
beneficial interest that would create a direct or indirect ownership of shares
of beneficial interest in excess of the Ownership Limit or that would result in
the disqualification of the Company as a REIT, including any transfer that
results in the shares of beneficial interest being owned by fewer than 100
persons or that results in the Company being "closely held" within the meaning
of Section 856(h) of the Code, shall be null and void, and the intended
transferee will acquire no rights to the shares of beneficial interest. The
foregoing restrictions on transferability and ownership will not apply if the
Board of Trustees determines that it is no longer in the best interests of the
Company to continue to qualify as a REIT. In addition, the foregoing
restrictions do not apply to an all cash tender offer which has been accepted
by at least two-thirds of the Company's outstanding shares.

Shares of beneficial interest owned, or deemed to be owned, or
transferred to a shareholder in excess of the Ownership Limit will
automatically be exchanged for Excess Shares that will be transferred, by
operation of law, to the Company as trustee of a trust for the exclusive
benefit of the transferees to whom such shares of beneficial interest may be
ultimately transferred without violating the Ownership Limit. While the Excess
Shares are held in trust, it will not be entitled to vote, it will not be
considered for purposes of any shareholder vote or the determination of a
quorum for such vote, and, except upon liquidation, it will not be entitled to
participate in dividends or other distributions. Any dividend or distribution
paid to a proposed transferee of Excess Shares prior to the discovery by the
Company that capital stock has been transferred in violation of the provisions
of the Company's Declaration of Trust shall be repaid to the Company upon
demand. The Excess Shares are not treasury stock, but rather constitute a
separate class of issued and outstanding stock of the Company. The original
transferee-shareholder may, at any time the Excess Shares are held by the
Company in trust, transfer the interest in the trust representing the Excess
Shares to any individual whose ownership of

9
<PAGE> 12

the shares of beneficial interest exchanged into such Excess Shares would be
permitted under the Ownership Limit, at a price not in excess of the price paid
by the original transferee-shareholder for the shares of beneficial interest
that were exchanged for Excess Shares. Immediately upon the transfer to the
permitted transferee, the Excess Shares will automatically be exchanged for
shares of beneficial interest of the class from which they were converted. If
the foregoing transfer restrictions are determined to be void or invalid by
virtue of any legal decision, statute, rule or regulation, then the intended
transferee of any Excess Shares may be deemed, at the option of the Company, to
have acted as an agent on behalf of the Company in acquiring the Excess Shares
and to hold the Excess Shares on behalf of the Company.

In addition to the foregoing transfer restrictions, the Company will
have the right, for a period of 90 days during the time any Excess Shares are
held by the Company in trust, to purchase all or any portion of the Excess
Shares from the original transferee-shareholder for the lesser of the price
paid for the shares of beneficial interest by the original
transferee-shareholder or the market price (as determined in the manner set
forth in the Declaration of Trust) of the shares of beneficial interest on the
date the Company exercises its option to purchase. The 90-day period begins on
the date of the violative transfer if the original transferee-shareholder gives
notice to the Company of the transfer or, if no such notice is given, the date
the Board of Trustees determines that a violative transfer has been made.

Every owner of more than 5% (or such lower percentage as required by
the Code or regulations thereunder) of the issued and outstanding Common shares
must file a written notice with the Company containing the information
specified in the Declaration of Trust no later than January 30 of each year.
Each shareholder shall upon demand be required to disclose to the Company in
writing any information with respect to the direct, indirect and constructive
ownership of beneficial interests as the Board of Trustees deems necessary to
comply with the provisions of the Code applicable to REITs, to comply with the
requirements of any taxing authority or governmental agency or to determine any
such compliance.

This ownership limitation may have the effect of precluding
acquisition of control of the Company unless the Board of Trustees determines
that maintenance of REIT status is no longer in the best interests of the
Company.

10
<PAGE> 13

REGISTRATION RIGHTS

The registration of the Redemption Shares pursuant to the registration
statement of which this Prospectus is a part will discharge the Company's
obligations under the terms of a registration rights agreement dated July 26,
1996 (the "Registration Rights Agreement"). The following summary does not
purport to be complete and is qualified in its entirety by reference to the
Registration Rights Agreement.

Under the Registration Rights Agreement, the Company is obligated, at
the written request of the Selling Shareholders, to cause to be filed, as soon
as reasonably practicable after the date of such request, a registration
statement under Rule 415 under the Securities Act covering the sale by the
Selling Shareholders of the Redemption Shares which the Selling Shareholders
may acquire in exchange for their Acquired Units. The Company is further
obligated to use reasonable efforts to cause such registration statement to be
declared effective by the Commission and to keep such registration statement
continuously effective until the earliest of (a) the date on which the Selling
Shareholders no longer hold any Redemption Shares or (b) the date on which all
of the Redemption Shares held or subsequently acquired by the Selling
Shareholders have become eligible for sale pursuant to Rule 144(k) promulgated
under the Securities Act and the Company has delivered to the Selling
Shareholders an opinion of counsel to such effect. As a result of the filing
and effectiveness of the Registration Statement of which this Prospectus is a
part, any Redemption Shares sold by the Selling Shareholders pursuant to this
Prospectus will no longer be entitled to the benefits of the Registration
Rights Agreement.

Pursuant to the Registration Rights Agreement, the Company is
obligated to bear all expenses of effecting the registration of the Redemption
Shares (other than brokerage and underwriting commissions and taxes of any kind
and other than for any legal, accounting and other expenses incurred by the
Selling Shareholders). The Company also has agreed to indemnify the Selling
Shareholders under the Registration Rights Agreement against certain losses,
claims, damages and expenses arising under the securities laws in connection
with the Registration Statement or this Prospectus, subject to certain
limitations. In addition, the Selling Shareholders under the Registration
Rights Agreement agree to indemnify the Company and its respective trustees,
officers and any person who controls the Company against all losses, claims,
damages and expenses arising under the securities laws insofar as such loss,
claim, damage or expense relates to written information furnished to the
Company by the Selling Shareholders for use in the registration statement or
Prospectus or an amendment or supplement thereto or the failure by the Selling
Shareholders to deliver or cause to be delivered this Prospectus or any
amendment or supplement thereto to any purchaser of shares covered by the
Registration Statement from the Selling Shareholders through no fault of the
Company.

FEDERAL INCOME TAX CONSIDERATIONS

In the opinion of Goodwin, Procter & Hoar LLP, tax counsel to the
Company, commencing with the Company's first taxable year ended December 31,
1994, the Company has been organized in conformity with the requirements for
qualification as a "real estate investment trust" under the Code, and its
method of operation will enable it to continue to meet the requirements for
qualification and taxation as a "real estate investment trust" under the Code,
provided that the Company operated and continues to operate in accordance with
various assumptions and factual representations made by the Company concerning
its business, properties and operations. No assurance can be given, however,
that such requirements have been or will continue to be met. Such
qualification depends upon the Company's having met and continuing to meet the
various requirements imposed under the Code through actual operating results.
Goodwin, Procter & Hoar LLP has relied on the Company's representations
regarding its operations and has not and will not review these operating
results. Accordingly, no assurance can be given that actual operating results
will meet these requirements.

The Company believes it has operated, and the Company intends to
continue to operate, in such manner as to qualify as a REIT under the Code, but
no assurance can be given that it will at all times so qualify.

The provisions of the Code pertaining to REITs are highly technical
and complex. The following is a brief and general summary of certain
provisions that currently govern the Federal income tax treatment of the
Company and its shareholders. For the particular provisions that govern the
Federal income tax treatment of the Company and its shareholders, reference is
made to Sections 856 through 860 of the Code and the regulations thereunder.
The following summary is qualified in its entirety by such reference.

11
<PAGE> 14

Under the Code, if certain requirements are met in a taxable year, a
REIT generally will not be subject to Federal income tax with respect to income
that it distributes to its shareholders. If the Company fails to qualify
during any taxable year as a REIT, unless certain relief provisions are
available, it will be subject to tax (including any applicable alternative
minimum tax) on its taxable income at regular corporate rates, which could have
a material adverse effect upon its shareholders.

In any year in which the Company qualifies to be taxed as a REIT,
distributions made to its shareholders out of current or accumulated earnings
and profits will be taxed to shareholders as ordinary income except that
distributions of net capital gains designated by the Company as capital gain
dividends will be taxed as long-term capital gain income to the shareholders.
To the extent that distributions exceed current or accumulated earnings and
profits, they will constitute a return of capital, rather than dividend or
capital gain income, and will reduce the basis for the shareholder's Common
Shares with respect to which the distribution is paid or, to the extent that
they exceed such basis, will be taxed in the same manner as gain from the sale
of those Common Shares.

Investors are urged to consult their own tax advisors with respect to
the appropriateness of an investment in the Common Shares offered hereby and
with respect to the tax consequences arising under federal law and the laws of
any state, municipality or other taxing jurisdiction, including tax
consequences resulting from such investor's own tax characteristics. In
particular, foreign investors should consult their own tax advisors concerning
the tax consequences of an investment in the Company, including the possibility
of United States income tax withholding on Company distributions.

12
<PAGE> 15
THE SELLING SHAREHOLDERS

The following table provides the name of and the number of Redemption
Shares and Acquired Units beneficially owned by the Selling Shareholders as of
October 1, 1996. The Redemption Shares set forth below as being beneficially
owned as of the date hereof represent the Common Shares that the Selling
Shareholders may acquire upon presentation of the Acquired Units to the
Operating Partnership for redemption, all in accordance with the agreement of
limited partnership of the Operating Partnership, as amended. The Selling
Shareholders acquired the Acquired Units as a result of the distribution of the
Acquired Units to them by Morning Grove Apartments, L.L.C., a Tennessee limited
liability company ("Morning Grove"); Morning Grove originally acquired the
Acquired Units upon the sale of certain property to the Operating Partnership
on July 26, 1996. The Selling Shareholders were the sole members of Morning
Grove at the time of the sale of property and at the time of the distribution
of the Acquired Units to them.

The Redemption Shares offered by this Prospectus will be offered from
time to time by the Selling Shareholders named below, or by pledgees, donees,
transferees or other successors in interest thereto. As of the date of this
Prospectus, neither Messrs. McNeill, Patton nor Taylor own any other Common
Shares of the Company.

<TABLE>
<CAPTION>
REDEMPTION SHARES ACQUIRED UNITS
BENEFICIALLY BENEFICIALLY OWNED COMMON SHARES
OWNED AS OF AS OF COMMON SHARES TO BE OWNED
NAME OCTOBER 1, 1996 OCTOBER 1, 1996 OFFERED HEREBY AFTER OFFERING
---- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Phillip H. McNeill, Sr. 121,893 121,893 121,893 -

Clyde L. Patton, Jr. 60,947 60,947 60,947 -

Bruce C. Taylor 60,947 60,947 60,947 -
------- ------- -------

TOTAL 243,787 243,787 243,787 -
======= ======= =======
</TABLE>

13
<PAGE> 16
USE OF PROCEEDS

The Company will not receive any of the proceeds of the sale of the
Redemption Shares offered hereby.

PLAN OF DISTRIBUTION

This prospectus relates to the offer and sale from time to time of up
to an aggregate of 243,787 Shares by the Selling Shareholders, or by pledgees,
donees, transferees or other successors in interest thereto. If the Selling
Shareholders present Acquired Units to the Operating Partnership for
redemption, the Company may, at its election, acquire such Units in exchange
for Redemption Shares in accordance with the terms of the Operating
Partnership's agreement of limited partnership, as amended. The Company is
registering the Redemption Shares pursuant to the Company's obligations under a
registration rights agreement but the registration of the Redemption Shares
does not necessarily mean that any of the Redemption Shares will be offered or
sold by the Selling Shareholders hereunder. The Company will not receive any
proceeds from the offering of the Redemption Shares by the Selling Shareholders.

The distribution of the Redemption Shares may be effected from time to
time in one or more underwritten transactions at a fixed price or prices, which
may be changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Any such
underwritten offering may be on a "best efforts" or a "firm commitment" basis.
In connection with any such underwritten offering, underwriters or agents may
receive compensation in the form of discounts, concessions or commissions from
the Selling Shareholders. Underwriters may sell the Redemption Shares to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents.

The Selling Shareholders and any underwriters, dealers or agents that
participate in the distribution of the Redemption Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of the Redemption Shares by them and any discounts, commissions or
concessions received by any such underwriters, dealers or agents might be
deemed to be underwriting discounts and commissions under the Securities Act.

At a time a particular offer of Redemption Shares is made by the
Selling Shareholders, a Prospectus Supplement, if required, will be distributed
that will set forth the name and names of any underwriters, dealers or agents
and any discounts, commissions and other terms constituting compensation from
the Selling Shareholders and any other required information.

The sale of Redemption Shares by the Selling Shareholders may also be
effected from time to time by selling Redemption Shares directly to purchasers
or to or through broker-dealers. In connection with any such sale, any such
broker-dealer may act as agent for the Selling Shareholders or may purchase
from the Selling Shareholders all or a portion of the Redemption Shares as
principal, and may be made pursuant to any of the methods described below.
Such sales may be made on the NYSE or other exchanges on which the Common
Shares are then traded, in the over-the-counter market, in negotiated
transactions or otherwise at prices and at terms then prevailing or at prices
related to the then-current market prices or at prices otherwise negotiated.

The Redemption Shares may also be sold in one or more of the following
transactions: (a) block transactions (which may involve crosses) in which a
broker-dealer may sell all or a portion of such shares as agent but may
position and resell all or a portion of the block as principal to facilitate
the transaction; (b) purchases by any such broker-dealer as principal and
resale by such broker-dealer for its own account pursuant to a Prospectus
Supplement; (c) a special offering, an exchange distribution or a secondary
distribution in accordance with applicable NYSE or other stock exchange rules;
(d) ordinary brokerage transactions and transactions in which any such
broker-dealer solicits purchasers; (e) sales "at the market" to or through a
market maker or into an existing trading market, on an exchange or otherwise,
for such shares; and (f) sales in other ways not involving market makers or
established trading markets, including direct sales to purchasers. In
effecting sales, broker-dealers engaged by the Selling Shareholders may arrange
for other broker-dealers to participate. Broker-dealers will receive
commissions or other compensation from the Selling Shareholders in amounts to
be negotiated immediately prior to the sale that will not exceed those
customary in the types of transactions involved. Broker-dealers may also
receive compensation from purchasers of the Redemption Shares which is not
expected to exceed that customary in the types of transactions involved.

14
<PAGE> 17

In order to comply with the securities laws of certain states, if
applicable, the Redemption Shares may be sold only through registered or
licensed brokers or dealers. In addition, in certain states, Redemption Shares
may not be sold unless they have been registered or qualified for sale in such
state or an exemption from such registration or qualification requirement is
available and is complied with.

All expenses incident to the offering and sale of the Redemption
Shares, other than commissions, discounts and fees of underwriters,
broker-dealers or agents, shall be paid by the Company. The Company has agreed
to indemnify the Selling Shareholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act. See
"Registration Rights."

EXPERTS

The audited financial statements and schedules incorporated by
reference in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.

LEGAL MATTERS

The validity of the Common Shares offered hereby are being passed upon
for the Company by Goodwin, Procter & Hoar LLP, Boston, Massachusetts.

15
<PAGE> 18
================================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS.
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE COMMON SHARES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM,
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH
IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

SUMMARY TABLE OF CONTENTS

<TABLE>
<S> <C>
PAGE

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . 1
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . 2
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
DESCRIPTION OF SECURITIES TO BE REGISTERED . . . . . . . . . . . . . 8
REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . 11
FEDERAL INCOME TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . 11
THE SELLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . 13
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . 14
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>

--------

================================================================================
================================================================================

243,787
SHARES

GABLES RESIDENTIAL
TRUST

COMMON SHARES
OF BENEFICIAL INTEREST
(PAR VALUE $.01 PER SHARE)

----------

PROSPECTUS

----------

OCTOBER __, 1996

================================================================================
<PAGE> 19
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The expenses in connection with the issuance and distribution of the
securities being registered are set forth in the following table (all amounts
except the registration fee are estimated):

<TABLE>
<S> <C>
Registration fee -- Securities and Exchange Commission . . . $ 2,065
Accountants' fees and expenses . . . . . . . . . . . . . . . 5,000
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . 1,500
Legal fees and expenses (other than Blue Sky) . . . . . . . 7,500
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 1,500

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,565
========
</TABLE>

All expenses in connection with the issuance and distribution of the
securities being offered shall be borne by the Company.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Declaration of Trust and the partnership agreement of
Gables Realty Limited Partnership, a Delaware limited partnership and operating
subsidiary of the Company, provide certain limitations on the liability of the
Company's trustees and officers for monetary damages to the Company. The
Declaration of Trust and the Bylaws obligate the Company to indemnify its
trustees and officers, and permit the Company to indemnify its employees and
other agents, against certain liabilities incurred in connection with their
service in such capacities. These provisions could reduce the legal remedies
available to the Company and the shareholders against these individuals.

The Company's Bylaws require it to indemnify, to the full extent of
Maryland law, any present or former trustee or officer (and such person's
spouse and children) (an "Indemnitee") who is or was a party or threatened to
be made a party to any proceeding by reason of his service in that capacity,
against all expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with the proceeding, provided that
the Company shall have received a written affirmation by the trustee or officer
that he has met the standard of conduct necessary for indemnification by the
Company as authorized by the Bylaws. The Company shall not be required to
indemnify an Indemnitee if (a) it is established that (i) his act or omission
was committed in bad faith or was the result of active or deliberate
dishonesty, (ii) he actually received an improper personal benefit in money,
property or services or (iii) in the case of a criminal proceeding, he had
reasonable cause to believe that his act or omission was unlawful, (b) the
proceeding was initiated by the Indemnitee, (c) the Indemnitee received payment
for such expenses pursuant to insurance or otherwise or (d) the proceeding
arises under Section 16 of the Exchange Act. Pursuant to the Bylaws, the
Indemnitee is required to repay the amount paid or reimbursed by the Company if
it shall ultimately be determined that the standard of conduct was not met.
The Company's Bylaws permit the Company to provide such other and further
indemnification or payment or reimbursement of expenses as may be permitted by
the MGCL or to which the Indemnitee may be entitled. The Bylaws of Gables GP,
Inc., a Texas corporation and wholly owned subsidiary of the Company, contain
similar provisions that are consistent with Texas law.

The Company has entered into indemnification agreements with the
trustees and executive officers of the Company. The indemnification agreements
require, among other matters, that the Company indemnify its trustees and
executive officers to the fullest extent permitted by law and advance to the
trustees and executive officers all related expenses, subject to reimbursement
if it is subsequently determined that indemnification is not permitted. The
Company must also indemnify and advance all expenses incurred by the trustees
and executive officers seeking to enforce their rights under the
indemnification agreements and cover the trustees and executive officers under
the Company's trustees' and officers' liability insurance. Although the form
of indemnification agreement offers substantially the same scope of coverage
afforded by law, it provides assurance to the trustees and executive officers
that indemnification will be available because such contracts cannot be
modified unilaterally in the future by the Board of Trustees or the
shareholders to eliminate the rights they provide.

II-1
<PAGE> 20

The Registration Rights Agreement between the Company and the Selling
Shareholders provides for the indemnification of the Company, its officers,
trustees, and other persons for certain liabilities, including liabilities
under the Security Act.

ITEM 16. EXHIBITS.

4.1 Amended and Restated Declaration of Trust of the Company (incorporated
by reference to the Company's Registration Statement on Form S-11
(File No. 33-70570), as amended).

4.2 Amended and Restated Bylaws of the Company (incorporated by reference
to the Company's Annual Report on Form 10-K for the fiscal year ending
December 31, 1993).

5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities and interests being registered.

8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax matters.

23.1 Consent of Arthur Andersen LLP.

23.2 Consent of Goodwin Procter & Hoar LLP (included as part of Exhibits
5.1 and 8.1).

24.1 Power of Attorney (included on the signature page hereof).

99.1 Registration Rights Agreement dated July 26, 1996 (incorporated by
reference to Exhibit 10.3 to the Company's Current Report on Form 8-K
dated July 26, 1996, filed with the Commission on August 16, 1996).

99.2 First Amended and Restated Agreement of Limited Partnership of Gables
Realty Limited Partnership (incorporated by reference to the Company's
Annual Report on Form 10-K for the fiscal year ending December 31,
1993).

ITEM 17. UNDERTAKINGS.

(a) The Company hereby undertakes:

(1) To file, during any period in which offers or sales
are being made pursuant to this Registration Statement, a post-effective
amendment to this Registration Statement:

(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in this Registration Statement; and

(iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this Registration Statement.

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement;

(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-2
<PAGE> 21
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.

(b) The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE> 22
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia on October 7, 1996.

Gables Residential Trust

By: /s/ Marcus E. Bromley
------------------------------------
Marcus E. Bromley
Chairman and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Gables Residential Trust hereby severally constitute Marcus E.
Bromley, John T. Rippel and Perry M. Parrott, Jr., and each of them singly, our
true and lawful attorneys with full power to them, and each of them singly, to
sign for us and in our names in the capacities indicated below, the
Registration Statement filed herewith and any and all amendments to said
Registration Statement, and generally to do all such things in our names and in
our capacities as officers and directors to enable Gables Residential Trust to
comply with the provisions of the Securities Act of 1933 and all requirements
of the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Marcus E. Bromley Chairman of the Board of Trustees October 7, 1996
- -------------------------------- and Chief Executive Officer
Marcus E. Bromley (Principal Executive Officer)

/s/ Marvin R. Banks, Jr. Chief Financial Officer (Principal Financial October 7, 1996
- -------------------------------- Officer and Principal Accounting Officer)
Marvin R. Banks, Jr.

/s/ John T. Rippel President, Chief Operating Officer October 7, 1996
- -------------------------------- and Trustee
John T. Rippel

/s/ Perry M. Parrott, Jr. Senior Vice President-Development/ October 7, 1996
- -------------------------------- Acquisitions and Trustee
Perry M. Parrott, Jr.

/s/ David M. Holland Trustee October 7, 1996
- --------------------------------
David M. Holland

/s/ Peter D. Linneman Trustee October 7, 1996
- --------------------------------
Peter D. Linneman

/s/ Lauralee E. Martin Trustee October 7, 1996
- --------------------------------
Lauralee E. Martin

/s/ John W. McIntyre Trustee October 7, 1996
- --------------------------------
John W. McIntyre
</TABLE>

II-4
<PAGE> 23
EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION

4.1 Amended and Restated Declaration of Trust of the Company
(incorporated by reference to the Company's Registration
Statement on Form S-11 (File No. 33-70570), as amended).

4.2 Amended and Restated Bylaws of the Company (incorporated by
reference to the Company's Annual Report on Form 10-K for the
fiscal year ending December 31, 1993).

5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the securities and interests being registered.

8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax
matters.

23.1 Consent of Arthur Andersen LLP.

23.2 Consent of Goodwin Procter & Hoar LLP (included as part of
Exhibits 5.1 and 8.1).

24.1 Power of Attorney (included on the signature page hereof).

99.1 Registration Rights Agreement dated July 26, 1996
(incorporated by reference to Exhibit 10.3 to the Company's
Current Report on Form 8-K dated July 26, 1996, filed with the
Commission on August 16, 1996).

99.2 First Amended and Restated Agreement of Limited Partnership of
Gables Realty Limited Partnership (incorporated by reference
to the Company's Annual Report on Form 10-K for the fiscal
year ending December 31, 1993).

II-5

<PAGE> 1
EXHIBIT 5.1

[LETTERHEAD] GOODWIN, PROCTER & HOAR LLP

October 4, 1996

Gables Residential Trust
2859 Paces Ferry Road
Atlanta, Georgia 30339

Ladies and Gentlemen:

This opinion is furnished in connection with the registration on Form
S-3 (the "Registration Statement") pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), of 243,787 common shares of beneficial
interest, par value $.01 per share (the "Redemption Shares"), of Gables
Residential Trust, a Maryland real estate investment trust (the "Company").
The Redemption Shares may be issued by the Company if and to the extent that
certain holders (the "Selling Shareholders") of units of limited partnership
("Units") in Gables Realty Limited Partnership (the "Operating Partnership")
tender such Units to the Operating Partnership for redemption and the Company
exercises its contractual right to acquire such tendered Units for Redemption
Shares.

In connection with rendering this opinion, we have examined the
Amended and Restated Declaration of Trust and Amended and Restated Bylaws of
the Company, each as amended to date; such records of the corporate proceedings
of the Company as we deemed material; and such other certificates, receipts,
records and documents as we considered necessary for the purposes of this
opinion. In our examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as certified, photostatic or facsimile copies, the
authenticity of the originals of such copies and the authenticity of telephonic
confirmations of public officials and others. As to facts material to our
opinion, we have relied upon certificates or telephonic confirmations of public
officials and certificates, documents, statements and other information of the
Company or representatives or officers thereof.

We are attorneys admitted to practice in The Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdictions
other than the laws of the United States of America and The Commonwealth of
Massachusetts and the Maryland General Corporation Law.
<PAGE> 2
GOODWIN, PROCTER, & HOAR LLP

Gables Residential Trust
October 4, 1996
Page 2

Based upon the foregoing, we are of the opinion that when the
Redemption Shares being registered for the account of the Selling Shareholders
have been duly issued and exchanged for Units tendered to the Operating
Partnership for redemption by the Selling Shareholders as contemplated by the
Registration Statement, such Redemption Shares will be validly issued, fully
paid and nonassessable.

The foregoing assumes that all requisite steps were taken to comply
with the requirements of the Securities Act and applicable requirements of
state laws regulating the offer and sale of securities.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us with respect to this opinion
under the heading "Legal Matters" in the Prospectus which is a part of such
Registration Statement. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Act.

Very truly yours,

/s/ GOODWIN, PROCTER & HOAR LLP
--------------------------------
GOODWIN, PROCTER & HOAR LLP

<PAGE> 1
EXHIBIT 8.1

[LETTERHEAD] GOODWIN, PROCTER & HOAR LLP

October 4, 1996

Gables Residential Trust
2859 Paces Ferry Road
Overlook Suite 1450
Atlanta, GA 30339

Re: Certain Federal Income Tax Matters

Ladies and Gentlemen:

These opinions are delivered to you in our capacity as counsel to
Gables Residential Trust, a Maryland real estate investment trust (the
"Company"), in connection with the registration by the Company of 243,787
common shares of beneficial interest (the "Common Shares") pursuant to a
Registration Statement dated October 8, 1996 (the "Registration Statement")
filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on October 8, 1996 on Form S-3. This
opinion relates to the Company's qualification for federal income tax purposes
as a real estate investment trust ("REIT") within the meaning of Sections
856-860 of the Internal Revenue Code of 1986, as amended (the "Code").

In rendering the following opinion, we have examined the Amended and
Restated Declaration of Trust and Amended and Restated Bylaws of the Company,
and such other records, certificates and documents as we have deemed necessary
or appropriate for purposes of rendering the opinions set forth herein.

We have reviewed the Registration Statement and the descriptions set
forth therein of the Company and its investments and activities. We have
relied upon the representations of the Company and its affiliates and certain
officers thereof (including, without limitation, representations contained in a
representation letter dated as of this date) regarding the manner in which the
Company has been and will continue to be owned and operated. We have neither
independently investigated nor verified such representations, and we assume
that such representations are true, correct and complete and that all
representations made "to the best of the knowledge and belief" of any person(s)
or party(ies) or with similar qualification are and will be true, correct and
complete as if made without such qualification. We assume that the Company has
been and will be operated in accordance with applicable laws and the terms and
<PAGE> 2
GOODWIN, PROCTER & HOAR LLP

Gables Residential Trust
October 4, 1996
Page 2

conditions of applicable documents and that the descriptions of the Company and
its investments and the proposed investments, activities, operations and
governance of the Company set forth in the Registration Statement and all prior
registration statements filed with the Securities and Exchange Commission
continue to be true. In addition, we have relied on certain additional facts
and assumptions described below.

In rendering the opinions set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to us as originals, (iii) the
conformity to the original documents of all documents submitted to us as
copies, (iv) the conformity of final documents to all documents submitted to us
as drafts, (v) the authority and capacity of the individual or individuals who
executed any such documents on behalf of any person, (vi) the accuracy and
completeness of all records made available to us, and (vii) the factual
accuracy of all representations, warranties and other statements made by all
parties. We also have assumed, without investigation, that all documents,
certificates, warranties and covenants on which we have relied in rendering the
opinion set forth below and that were given or dated earlier than the date of
this letter continue to remain accurate, insofar as relevant to the opinion set
forth herein, from such earlier date through and including the date of this
letter.

The discussion and conclusions set forth below are based upon the
Code, the Income Tax Regulations and Procedure and Administration Regulations
promulgated thereunder and existing administrative and judicial interpretations
thereof, all of which are subject to change. No assurance can therefore be
given that the federal income tax consequences described below will not be
altered in the future.

Based upon and subject to the foregoing, and provided that the Company
continues to meet the applicable asset composition, source of income,
shareholder diversification, distribution, recordkeeping and other requirements
of the Code necessary for a corporation to qualify as a REIT, we are of the
opinion that:

Commencing with the Company's first taxable year ended
December 31, 1994, the Company has been organized in
conformity with the requirements for qualification as a REIT
under the Code, and the Company's method of operation, as
described in the representations referred to above, will
enable it to continue to meet the requirements for
qualification and taxation as a REIT under the Code.
<PAGE> 3
GOODWIN, PROCTER & HOAR LLP

Gables Residential Trust
October 4, 1996
Page 3

We express no opinion with respect to the transactions described in
the Registration Statement other than that expressly set forth herein. You
should recognize that our opinion is not binding on the Internal Revenue
Service ("IRS") and that the IRS may disagree with the opinion contained
herein. Although we believe that our opinion will be sustained if challenged,
there can be no assurance that this will be the case. Except as specifically
discussed above, the opinion expressed herein is based upon the law as it
currently exists. Consequently, future changes in the law may cause the
federal income tax treatment of the transactions described herein to be
materially and adversely different from that described above.

Very truly yours,

/s/ GOODWIN, PROCTER & HOAR LLP
--------------------------------
GOODWIN, PROCTER & HOAR LLP

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 29, 1996
included in Gables Residential Trust's (the "Company") Annual Report on Form
10-K for the fiscal year ended December 31, 1995, our report dated June 22,
1996 included in the Company's Current Report on Form 8-K/A dated April 23,
1996 as filed on July 2, 1996, our report dated August 9, 1996 included in the
Company's Current Report on Form 8-K dated July 26, 1996 as filed on August 16,
1996 and to all references to our firm included in this registration
statement.

/s/ Arthur Andersen LLP

Atlanta, Georgia
October 7, 1996