10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

ANNUAL REPORT
PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

OR

o 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 0-20707

COLONIAL REALTY LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

Delaware	63-1098468
(State or other jurisdiction of incorporation)	(IRS Employer Identification Number)

2101 Sixth Avenue North, Suite 750, Birmingham, Alabama 35203
(Address of principal executive offices) (Zip Code)

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
Not applicable	Not applicable

Securities registered pursuant to Section 12(g) of the Act: Class A Units of Limited Partnership Interest

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES þ NO o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o NO þ

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

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. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ	Accelerated filer  o
Non-accelerated filer  o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO þ

The aggregate market value of common units of partnership interest held by non-affiliates of the Registrant as of June 29, 2007 (the last business day of the Registrant’s most recently completed second fiscal quarter) was approximately $1,725,602,596, based on the last reported sale price of the common shares of Colonial Properties Trust into which common units are exchangeable.

TABLE OF CONTENTS

PART I
Item 1. Business
	Item 1A. Risk Factors
	Item 1B. Unresolved Staff Comments
	Item 2. Operating Properties
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
PART II
	Item 5. Market for Registrant’s Common Equity and Related Shareholder Matters
	Item 6. Selected Financial Data
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A. Quantitative and Qualitative Disclosures about Market Risk
	Item 8. Financial Statements and Supplementary Data
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
	Item 9A. Controls and Procedures
	Item 9B. Other Information
PART III
	Item 10. Trustees, Executive Officers and Corporate Governance
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	Item 13. Certain Relationships and Related Transactions, and Director Independence
	Item 14. Principal Accountant Fees and Services
Part IV
	Item 15. Exhibits and Financial Statement Schedules
SIGNATURES
Index to Exhibits
EX-12.1 RATIO OF EARNINGS TO FIXED CHARGES
EX-21.1 LIST OF SUBSIDIARIES
EX-23.1 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.2 CONSENT OF WEISER LLP
EX-23.3 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
EX-32.1 SECTION 906 CERTIFICATION OF THE CEO
EX-32.2 SECTION 906 CERTIFICATION OF THE CFO

     Documents Incorporated by Reference

     Portions of Colonial Properties Trust’s proxy statement for the annual shareholders meeting to be held on April 25, 2008 are incorporated by reference into Part III of this report. Colonial Properties Trust expects to file its proxy statement within 120 days after December 31, 2007.

PART I

     This annual report on Form 10-K contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “estimates,” “predicts,” “potential,” or the negative of these terms or comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our and our affiliates, or the industry’s actual results, performance, achievements or transactions to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements including, but not limited to, the risks described herein. Such factors include, among others, the following:

• national and local economic, business and real estate conditions, including, but not limited to, the effect of demand for multifamily units, office and retail rental space, the extent, strength and duration of any economic recovery, such as the effects on demand for units and rental space and the creation of new multifamily, office and retail developments, availability and creditworthiness of tenants, the level of lease rents, and the availability of financing for both tenants and us;

• adverse changes in real estate markets, including, but not limited to, the extent of tenant bankruptcies, financial difficulties and defaults, the extent of future demand for multifamily units and office and retail space in our core markets and barriers of entry into new markets which we may seek to enter in the future, the extent of decreases in rental rates, competition, our ability to identify and consummate attractive acquisitions on favorable terms, our ability to consummate any planned dispositions in a timely manner on acceptable terms, and our ability to reinvest sale proceeds in a manner that generates favorable returns;

• completion of our general partner’s strategic initiative to become a multifamily focused real estate investment trust (“REIT”), which increases our exposure to risks inherent in investments in a single industry;

• actions, strategies and performance of affiliates that we may not control or companies, including joint ventures, in which we have made investments;

• changes in operating costs, including real estate taxes, utilities, and insurance;

• higher than expected construction costs;

• risks of development or conversion of for-sale projects including, but not limited to, delays in obtaining required governmental permits and authorizations, cost overruns, and operating deficits;

• legislative or other regulatory decisions, including government approvals, actions and initiatives, including the need for compliance with environmental and safety requirements, and changes in laws and regulations or the interpretation thereof;

• effects of tax legislative action;

• our general partner’s ability to continue to maintain its status as a REIT for federal income tax purposes, our ability to maintain our status as a partnership for federal income tax purposes, the ability of certain of our subsidiaries to maintain their status as taxable REIT subsidiaries for federal income tax purposes, and our ability and the ability of our subsidiaries to operate effectively within the limitations imposed by these rules;

• effect of any rating agency actions on the cost and availability of new debt financing;

• level and volatility of interest or capitalization rates or capital market conditions;

• effect of any terrorist activity or other heightened geopolitical crisis;

• other factors affecting the real estate industry generally; and

• other risks identified in this annual report on Form 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate.

     Colonial Realty Limited Partnership undertakes no obligation to publicly update or revise these forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report.

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Item 1. Business.

     As used herein, the terms “CRLP”, “we”, “us” and “our” refer to Colonial Realty Limited Partnership, a Delaware limited partnership, and its subsidiaries and other affiliates, including, Colonial Properties Services Limited Partnership(“CPSLP”), Colonial Properties Services, Inc (“CPSI”), CLNL Acquisition Sub, LLC and Colonial VRS L.L.C. or, as the context may require, Colonial Realty Limited Partnership only. As used herein, the term the “Trust” refers to Colonial Properties Trust, an Alabama real estate investment trust, and one or more of its subsidiaries and other affiliates, including CRLP, CPSLP and Colonial Properties Services, Inc. (“CPSI”), CLNL Acquisition Sub, LLC and Colonial VRS L.L.C. or, as the context may require, Colonial Properties Trust only.

     We are the operating partnership of the Trust, our general partner, which is a publicly traded real estate investment trust (“REIT”) that owns, develops and operates multifamily, office and retail properties primarily in the Sunbelt region of the United States. The Trust is a fully-integrated real estate company, which means that it is engaged in the acquisition, development, ownership, management and leasing of commercial real estate property and for-sale residential property. The Trust’s assets are owned by, and substantially all of its business is conducted through, us and our subsidiaries and other affiliates. The Trust holds approximately 82.5% of the interests in us. Our activities include full or partial ownership of a diversified portfolio of 200 properties as of December 31, 2007, located in Alabama, Arizona, California, Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Texas, and Virginia, 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. As discussed below, we anticipate that, consistent with the Trust’s strategic initiative to become a multifamily focused REIT, we will generate the majority of our future net operating income from multifamily apartment communities.

     As of December 31, 2007, we owned or maintained a partial ownership in 122 multifamily apartment communities containing a total of 36,314 apartment units (consisting of 102 wholly-owned consolidated properties and 20 properties partially-owned through unconsolidated joint venture entities aggregating 30,371 and 5,943 units, respectively) (the “multifamily apartment communities”), 48 office properties containing a total of approximately 16.1 million square feet of office space (consisting of two wholly-owned consolidated properties and 46 properties partially-owned through unconsolidated joint-venture entities aggregating 0.2 and 15.9 million square feet, respectively) (the “office properties”), 30 retail properties containing a total of approximately 7.8 million square feet of retail space, excluding anchor-owned square-footage (consisting of four wholly-owned properties and 26 properties partially-owned through unconsolidated joint venture entities aggregating 0.7 million and 7.1 million square feet, respectively) (the “retail properties”), and certain parcels of land adjacent to or near certain of these properties (the “land”). The multifamily apartment communities, the office properties, the retail properties and the land are referred to herein collectively as the “properties”. As of December 31, 2007, consolidated multifamily, office and retail properties that had achieved stabilized occupancy (which we have defined as having occurred once the property has attained 93% physical occupancy) were 96.0%, 97.1% and 90.4% leased, respectively.

     As a lessor, the majority of our revenue is derived from residents and tenants under existing leases at our properties. Therefore, our operating cash flow is dependent upon the rents that we are able to charge to our tenants and residents, and the ability of these tenants and residents to make their rental payments. Additionally, our reliance on third-party management fees has increased significantly as a result of an increase in joint venture activities and the related third-party management agreements.

     We were formed in Delaware on August 6, 1993. Our executive offices are located at 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama, 35203 and our telephone number is (205) 250-8700.

Formation of the Trust and CRLP

     The Trust and CRLP were formed to succeed to substantially all of the interests of Colonial Properties, Inc., an Alabama corporation, its affiliates and certain other entities in a diversified portfolio of multifamily, office, and retail properties located in Alabama, Florida, and Georgia and to the development, acquisition, management, leasing, and brokerage businesses of Colonial Properties, Inc.

Business Strategy

     In November 2006, we announced that we were accelerating our plan to become a multifamily focused REIT. To facilitate this plan, in June 2007, we completed two joint venture transactions, one involving 26 properties and the other involving 11 properties. In addition, in July 2007, we completed the outright sale of an additional 12 retail properties. Each of these transactions is discussed in more detail below.

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     On June 15, 2007, we completed the office joint venture transaction with DRA G&I Fund VI Real Estate Investment Trust, an entity advised by DRA Advisors LLC (“DRA”). The Trust sold to DRA its 69.8% interest in the newly formed joint venture (the “DRA/CLP JV”) that became the owner of 24 office properties and two retail properties that were previously wholly-owned by CRLP. Total sales proceeds from the sale of this 69.8% interest were approximately $379.0 million. CRLP retained a 15% minority interest in the DRA/CLP JV (see Notes 2 and 9 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K), as well as management and leasing responsibilities for the 26 properties. In addition to the approximate 69.8% interest purchased from the Trust, DRA purchased an aggregate of 2.6% of the interests in the DRA/CLP JV from our limited partners. As of December 31, 2007, DRA owned an approximate 72.4% interest in the DRA/CLP JV, a subsidiary of CRLP owned a 15% interest and certain of our limited partners that did not elect to sell their interests in DRA/CLP JV owned the remaining approximate 12.6% interest. The purchase price paid by DRA for each limited liability company interest it acquired in the DRA/CLP JV was based on a portfolio value of approximately $1.13 billion, of which approximately $588.2 million was funded with mortgage indebtedness. The Trust recorded a net gain of approximately $211.8 million on the sale of its 69.8% interest to DRA. The Trust also deferred a gain of approximately $7.2 million as a result of certain obligations it assumed in the transaction. The Trust recognized approximately $3.0 million of this deferred gain as a result of a reduction of certain of the related obligations during 2007. In connection with the office joint venture transaction, 85% of the DRA/CLP JV membership units were distributed to the Trust and all of our limited partners on a pro-rata basis. We recorded this distribution at book value.

     On June 20, 2007, we completed the retail joint venture transaction with OZRE Retail, LLC (“OZRE”). The Trust sold to OZRE its 69.8% interest in the newly formed joint venture (the “OZRE JV”) that became the owner of 11 retail properties that were previously wholly-owned by CRLP. Total sales proceeds from the sale of this 69.8% interest were approximately $115.0 million. CRLP retained a 15% minority interest in the OZRE JV (see Notes 2 and 9 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K), as well as management and leasing responsibilities for the 11 properties. In addition to the approximate 69.8% interest purchased from the Trust, OZRE purchased an aggregate of 2.7% of the interests in the OZRE JV from our limited partners. As of December 31, 2007, OZRE owned an approximate 72.5% interest in the OZRE JV, a subsidiary of CRLP owned a 15% interest and certain of our limited partners that did not elect to sell their interests in the OZRE JV owned the remaining approximate 12.5% interest. The purchase price paid by OZRE for each limited liability company interest it acquired in the OZRE JV was based on a portfolio value of approximately $360.0 million, of which approximately $187.2 million was funded with mortgage indebtedness. The Trust recorded a net gain of approximately $64.7 million on the sale of its 69.8% interest to OZRE. The Trust also deferred a gain of approximately $8.5 million as a result of certain obligations it assumed in the transaction. The Trust recognized approximately $5.5 million of this deferred gain as a result of a reduction of certain of the related obligations during 2007. In connection with the retail joint venture transaction, 85% of the OZRE JV membership units were distributed to the Trust and all of our limited partners on a pro-rata basis. We recorded this distribution at book value.

     In July 2007, we completed our strategic initiative to become a multifamily focused REIT with the outright sale by CRLP of an additional 12 retail assets and the sale of our interests in one other retail asset (the asset sales, together with the joint venture transactions completed in June 2007 are collectively referred to herein as the “Strategic Transactions”). As a result of the sale of one of these wholly-owned assets, we recorded an impairment charge of approximately $2.5 million during 2007. This charge is included in Income from Discontinued Operations in the Consolidated Statements of Income and Comprehensive Income included in Item 8 of this Form 10-K.

     As a result of the joint venture transactions discussed above, the Trust paid a special distribution of $10.75 per share on June 27, 2007. The remaining proceeds from these transactions were used to pay down a portion of our outstanding indebtedness (see Note 11 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K). During June 2007, we incurred approximately $29.2 million in prepayment penalties, which was partially offset by the write-off of approximately $16.7 million of debt intangibles. These amounts are included in Losses on retirement of debt in the Consolidated Statements of Income and Comprehensive Income included in Item 8 of this Form 10-K.

     While there will be less capital allocated to the commercial businesses, the Trust will continue to utilize its development, leasing and management expertise. The Trust expects to continue its emphasis on value creation through the development of multifamily, office, mixed-use and open-air shopping center properties.

Merger with Cornerstone Realty Income Trust

     On April 1, 2005, the Trust completed the merger with Cornerstone Realty Income Trust, Inc. (“Cornerstone”), a Virginia corporation, pursuant to an Agreement and Plan of Merger, dated as of October 25, 2004, as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated January 24, 2005 (the “Merger Agreement”). As a result of the merger, we succeeded by operation of law to all of the assets and liabilities of Cornerstone prior to the merger, which consisted of 86 apartment communities with 22,981 apartment homes, a third party property management business, apartment land under

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development and ownership in four real estate joint ventures. In connection with the merger, the Trust issued 11,277,358 Colonial common shares, 5,326,349 Colonial Series E preferred depositary shares and 578,358 CRLP common units to former shareholders of Cornerstone.

Acquisitions and Developments

     The following table summarizes our acquisitions and developments that were completed in 2007. For the purposes of the following table and throughout this Form 10-K, the size of a multifamily property is measured by the number of units and the size of an office property and retail property is measured in square feet.

				Total
		Total Units/		Cost
	Location	Square Feet (1)		(in thousands)
Consolidated Acquisitions:
Multifamily Properties
Colonial Grand at Old Town Scottsdale North	Phoenix, AZ		208	$	33,800
Colonial Grand at Old Town Scottsdale South	Phoenix, AZ		264		42,200
Colonial Grand at Inverness Commons	Phoenix, AZ		300		41,298
Merritt at Godley Station (2)	Savannah, GA		312		20,900
Total Consolidated Acquisitions			1,084	$	138,198
Unconsolidated Acquisitions:
Multifamily Properties (3)
Fairmont at Fossil Creek (4)	Fort Worth, TX		240	$	3,195
Auberry at Twin Creeks (4)	Dallas, TX		216		3,098
Colonial Village at Cary	Raleigh, NC		319		5,980
			775		12,273
Office Properties (3)
Huntsville TIC	Huntsville, AL		1,701,925		88,743
Total Unconsolidated Acquisitions				$	101,016
Completed Developments:
Multifamily Property
Colonial Grand at Round Rock	Austin, TX		422	$	35,000
Colonial Grand at Canyon Creek (5)	Austin, TX		336		7,900
			758		42,900
Office Properties
Colonial Center Brookwood	Birmingham, AL		169,256		42,800
Northrup Grumman Building (6)	Huntsville, AL		110,275		17,000
Colonial Center TownPark 300 (6)	Orlando, FL		150,000		21,600
			429,531		81,400
Retail Properties
Colonial Pinnacle Tutwiler Farms II	Birmingham, AL		65,000		9,000
Colonial Promenade Alabaster II	Birmingham, AL		353,519		22,600
Colonial Pinnacle Craft Farms I	Gulf Shores, AL		368,024		48,100
			786,543		79,700
For-Sale Properties
Regatta at James Island	Charleston, SC		212		25,700
Southgate on Fairview (7)	Charlotte, NC		47		16,400
			259		42,100
Total Completed Developments				$	246,100

(1)	Square footage includes anchor-owned square footage.
(2)	Prior to our acquisition of the remaining 65% interest in this property in May 2007, we owned a 35% interest in this property through one of our unconsolidated joint ventures.
(3)	Amount represents our portion of the acquisition cost, including mortgage debt issued or assumed.
(4)	In 2008, we sold our interests in these properties. See the discussion under “Recent Events” below.
(5)	Represents 25% of development costs, as we are a 25% equity partner in this unconsolidated development.
(6)	These completed developments are part of the DRA/CLP JV, in which we own 15%.
(7)	Total costs are presented net of a $0.8 million impairment charge recorded during 2007.

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Acquisitions

     During 2007, we acquired three wholly-owned multifamily apartment communities and a partial interest in three multifamily apartment communities. We also acquired the remaining interest in a multifamily apartment community (Merritt at Godley Station), in which we had a partial interest in since April 2005. We provide management services for all partially-owned multifamily properties acquired during 2007. In addition to these acquisitions, we also acquired certain parcels of land to be used in developments (see Development Activity below).

     Multifamily Properties

     Colonial Grand at Old Town Scottsdale North – On January 31, 2007, we acquired a 208-unit multifamily apartment community, Colonial Grand at Old Town Scottsdale North (formerly Monte Carlo Apartments) located in Phoenix, Arizona. The property was acquired for $33.8 million, which was funded with proceeds from asset sales and from borrowings under our unsecured credit facility.

     Colonial Grand at Old Town Scottsdale South – On January 31, 2007, we acquired a 264-unit multifamily apartment community, Colonial Grand at Old Town Scottsdale South (formerly Monaco Apartments) located in Phoenix, Arizona. The property was acquired for $42.2 million, which was funded with proceeds from asset sales and from borrowings under our unsecured credit facility.

     Fairmont at Fossil Creek – On February 15, 2007, we acquired a 15% partnership interest in Fairmont at Fossil Creek, a 240-unit multifamily apartment community located in Fort Worth, Texas. Our 15% investment in the partnership was approximately $3.2 million, which consisted of $2.6 million of newly issued mortgage debt and $0.6 million of cash. The cash portion of this investment was funded from borrowings under our unsecured credit facility.

     Auberry at Twin Creeks – On February 28, 2007, we acquired a 15% partnership interest in Auberry at Twin Creeks, a 216-unit multifamily apartment community located in Dallas, Texas. Our 15% investment in the partnership was approximately $3.1 million, which consisted of $2.6 million of newly issued mortgage debt and $0.5 million of cash. The cash portion of this investment was funded from borrowings under our unsecured credit facility.

     Colonial Grand at Inverness Commons – On March 1, 2007, we acquired a 300-unit multifamily apartment community, Colonial Grand at Inverness Commons (formerly Sandbridge), located in Phoenix, Arizona. The property was acquired for $41.3 million in cash, which was funded by proceeds from asset sales and borrowings under our unsecured credit facility.

     Merritt at Godley Station – On May 1, 2007, we acquired the remaining 65% interest in a 312-unit multifamily apartment community, Merritt at Godley Station, located in Savannah, Georgia. We acquired our initial 35% interest as a part of the merger with Cornerstone Realty Income Trust in April 2005. The remaining 65% interest was acquired for a total price of $20.9 million, which consisted of the assumption of $12.3 million of existing mortgage debt and $8.6 million of cash. The cash portion of this investment was funded by proceeds from asset sales and borrowings under our unsecured credit facility.

     Colonial Village at Cary – On May 23, 2007, we acquired a 20% partnership interest in Colonial Village at Cary, a 319-unit multifamily apartment community located in Raleigh, North Carolina. Our 20% investment in the partnership was approximately $6.0 million, which consisted of $4.3 million of newly issued mortgage debt and $1.7 million of cash. The cash portion of this investment was funded from borrowings under our unsecured credit facility.

     Office Properties

     Huntsville TIC – On November 7, 2007, we and our partner, DRA, disposed of our interest in nine office properties containing 1.7 million square feet located in Huntsville, Alabama that were originally acquired from us in June 2007 in connection with the office joint venture transaction. As part of the transaction, we acquired a 40% interest (of which 30% is owned by CPSI, our taxable REIT subsidiary) in three separate tenancy in common (TIC) investments of the same nine office properties for a total acquisition price of $88.7 million, which included the issuance of $43.0 million of third-party secured financing and $30.4 million of ground lease financing. We continue to manage the nine properties and intend to sell CPSI’s 30% ownership position in each of these TIC investments during 2008 through offerings sponsored by Bluerock Real Estate, LLC (the 60% partner) to unrelated TIC investors, and to retain CRLP’s 10% ownership interest.

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Completed Developments

     Multifamily Properties

     Colonial Grand at Round Rock – During the first quarter of 2007, we completed the development of Colonial Grand at Round Rock, a 422-unit multifamily apartment community located in Austin, Texas. Project development costs, including land acquisition costs, were $35.0 million and were funded through our unsecured credit facility.

     Colonial Grand at Canyon Creek – During the fourth quarter of 2007, we completed the development of Colonial Grand at Canyon Creek, a joint venture development with an affiliate of Abacus Capital Group, LLC in which we own a 25% interest. Colonial Grand at Canyon Creek is a 336-unit multifamily apartment community located in Austin, Texas. Our portion of the project development costs, including land acquisition costs, was $7.9 million and was funded through our unsecured credit facility.

     Office Properties

     Colonial Center TownPark 300 – During the first quarter of 2007, we completed the development of Colonial Center TownPark 300, a 150,000 square foot development located in Orlando, Florida. Project development costs, including land acquisition costs, were $21.6 million and were funded through our unsecured credit facility. We sold 85% of our interest in this building as part of the DRA/CLP JV transaction.

     Colonial Center Brookwood – During the third quarter of 2007, we completed the development of Colonial Center Brookwood, a 169,000 square foot development located in Birmingham, Alabama. Project development costs were $42.8 million and were funded through our unsecured credit facility.

     Northrop Grumman Building – During the first quarter of 2007, we completed the development of the Northrop Grumman Building, an 110,000 square foot development located in Huntsville, Alabama. Project development costs, including land acquisition costs, were $17.0 million and were funded through our unsecured credit facility. We sold 85% of our interest in this building as part of the DRA/CLP JV transaction.

     Retail Properties

     Colonial Pinnacle Craft Farms I – During the third quarter of 2007, we completed the development of Colonial Pinnacle Craft Farms I, a 243,000 square foot development, excluding anchor-owned square-footage (368,000 square feet, including anchor-owned square footage), located in Gulf Shores, Alabama. Project costs, including land acquisition costs, were $48.1 million and were funded through our unsecured credit facility. We sold 85% of our interest in this property to a joint venture partner during the third quarter of 2007.

     Colonial Pinnacle Tutwiler Farms II – During the fourth quarter of 2007, we completed the development of Colonial Pinnacle at Tutwiler Farms II, a 65,000 square foot development located in Birmingham, Alabama. Project development costs, including land acquisition costs, were $9.0 million and were funded through our unsecured credit facility. We sold 95% of our interest in this property to a joint venture partner during the fourth quarter of 2007.

     Colonial Promenade Alabaster II – During the fourth quarter of 2007, we completed the development of Colonial Promenade Alabaster II, a 127,000 square foot development, excluding anchor-owned square-footage (354,000 square feet, including anchor-owned square footage), located in Birmingham, Alabama. Project development costs, including land acquisition costs, were $22.6 million and were funded through our unsecured credit facility. We sold 95% of our interest in this property to a joint venture partner during the fourth quarter of 2007.

     For-Sale Properties

     Regatta at James Island – During 2007, we completed the development of Regatta at James Island, a 212-unit condominium development located in Charleston, South Carolina. Project development costs, including land acquisition costs, were $25.7 million and were funded through our unsecured credit facility.

     Southgate on Fairview – During 2007, we completed the development of Southgate on Fairview, a 47-unit development located in Charlotte, North Carolina. Project development costs, including land acquisition costs, were $16.4 million, net of a $0.8 million impairment charge recorded during 2007, and were funded through our unsecured credit facility.

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Development Activity

     The following table summarizes our properties that are under construction, including undeveloped land, at December 31, 2007. Unless otherwise noted, all developments will be funded through our unsecured credit facility (discussed in this Form 10-K below under the heading “Management’s Discussion and Analysis – Liquidity and Capital Resources”):

	Total						Costs
	Units/				Estimated		Capitalized
	Square		Estimated		Total Costs		to Date
	Feet (1)		Completion		(in thousands)		(in thousands)
Multifamily Projects:
Current:
Colonial Grand at Ayrsley		368		2008	$	34,900	$	26,560
Colonial Grand at Ashton Oaks		362		2009		34,300		5,718
Colonial Grand at Huntersville		250		2008		25,900		22,088
Colonial Grand at Onion Creek (formerly Double Creek)		300		2008		31,800		14,132
Colonial Grand at Shelby Farms II		154		2008		13,100		12,301
Colonial Village at Godley Lake		288		2008		26,200		10,235
Colonial Village at Matthews Commons		216		2008		21,100		2,904
Enclave (2)(3)		84		2008		26,200		19,456
Future:
Colonial Grand at Azure		188		2009		26,400		6,855
Colonial Grand at Cityway (formerly Ridell Ranch)		376		2010		34,300		4,490
Colonial Grand at Desert Vista		380		2009		52,000		15,621
Colonial Grand at Hampton Preserve		486		2010		60,800		11,660
Colonial Grand at Randal Park (4)		600		2009		76,700		10,668
Colonial Grand at South End		344		2010		52,100		10,148
Colonial Grand at Sweetwater		195		2009		24,200		6,333
Colonial Grand at Thunderbird		244		2009		29,500		7,666
Colonial Grand at Wakefield		365		2009		36,800		4,402
Commercial
Current:
Office Projects:
Colonial Center TownPark 400 (4)		176,000		2008		30,400		16,513
Metropolitan (4)		153,000		2008		35,200		26,800
Retail Projects:
Colonial Promenade Fultondale (5)		100,400		2008		7,136		2,657
Colonial Promenade Tannehill		474,000		2008		50,700		21,653
Metropolitan (4)		189,000		2008		53,700		25,900
Future:
Retail Projects:
Colonial Pinnacle Craft Farms II		75,000		2011		11,100		1,415
Colonial Promenade Huntsville		220,000		2010		17,600		8,556
For Sale Projects:
Lots:
Colonial Traditions at Gulf Shores (3)(6)		—		2012		22,800		21,576
Cypress Village (lots) (3)		236		2014		20,884		17,986
Spanish Oaks (lots)(7)		200		2011		16,896		14,044
Residential:
Grander (3)		26		2010		11,374		8,171
Cypress Village II (townhomes)(3)		96		2014		26,600		21,539
Metropolitan (4)		101		2009		41,200		12,700
Other Projects and Undeveloped Land
For-Sale Land and Predevelopment								73,587
Heathrow Land and Infrastructure								14,101
TownPark Land and Infrastructure								4,191
Land & Other								48,784
Total Consolidated Construction in Progress							$	531,410
Unconsolidated:
Regents Park (For-Sale) (3)(8)		23		2009		18,700		17,400
Colonial Promenade Smyrna (4)(9)		441,324		2008		17,400		16,400
Colonial Grand at Traditions (4)(10)		324		2008		15,100		13,100
Colonial Grand at Lake Forest (11)		529		2010		12,600		1,200
Total Unconsolidated Construction in Progress							$	48,100

Footnotes on the following page

8

(1)	Square footage for the retail assets including anchor-owned square-footage.
(2)	Enclave, formerly a for-sale residential project, is now being developed as a multifamily apartment community.
(3)	During the third quarter of 2007, we recorded a $43.3 million non-cash impairment charge ($26.8 million net of income tax) associated with these projects as a result of the deterioration in the single family housing market. Estimated Total Costs and Costs Capitalized to Date are net of the $43.3 million impairment charge, $0.8 million of which relates to Southgate on Fairview, a for-sale residential property classified as held for sale on our Consolidated Balance Sheet.
(4)	These projects are part of mixed-use developments.
(5)	Estimated Total Costs and Costs Capitalized to Date are net of $17.2 million, which represent a portion of the development placed into service during 2007. Total Square Feet is net of 261,000 square feet which represents the portion of the development placed into service during 2007.
(6)	This project will include the sale of undeveloped land parcels.
(7)	Estimated Total Costs and Costs Capitalized to Date are net of $0.7 million, which represent portions of lots sold during 2007.
(8)	Development costs represent 40% of total development costs, as we are a 40% partner in this project.
(9)	Development costs represent 50% of total development costs, as we are a 50% partner in this project.
(10)	Development costs represent 35% of total development costs, as we are a 35% partner in this project.
(11)	Development costs represent 20% of total development costs, as we are a 20% partner in this project.

Multifamily Development Activity

     Colonial Grand at Ayrsley – During 2007, we continued the development of Colonial Grand at Ayrsley, a 368-unit multifamily apartment community located in Charlotte, North Carolina. Project development costs, including land acquisition costs, are expected to be $34.9 million. The development is expected to be completed in the third quarter of 2008.

     Colonial Grand at Ashton Oaks – We expect to begin the development of Colonial Grand at Ashton Oaks, a 362-unit multifamily apartment community located in Austin, Texas, in the first quarter of 2008. Project development costs, including land acquisition costs, are expected to be $34.3 million. The development is expected to be completed in the fourth quarter of 2009.

     Colonial Grand at Huntersville – During 2007, we continued the development Colonial Grand at Huntersville, a 250-unit multifamily apartment community located in Charlotte, North Carolina. Project development costs, including land acquisition costs, are expected to be $25.9 million. The development is expected to be completed in the first quarter of 2008.

     Colonial Grand at Onion Creek (formerly Double Creek) – During 2007, we continued the development of Colonial Grand at Onion Creek, a 300-unit multifamily apartment community located in Austin, Texas. Project development costs, including land acquisition costs, are expected to be $31.8 million. The development is expected to be completed in the fourth quarter of 2008.

     Colonial Grand at Shelby Farms II – During the first quarter of 2007, we began the development of Colonial Grand at Shelby Farms II, a 154-unit multifamily apartment community located in Memphis, Tennessee. Project development costs, including land acquisition costs, are expected to be $13.1 million. The development is expected to be completed in the first quarter of 2008.

     Colonial Village at Godley Lake – During the third quarter of 2007, we began the development of Colonial Village at Godley Lake, a 288-unit multifamily apartment community located in Savannah, Georgia. Project development costs, including land acquisition costs, are expected to be $26.2 million. The development is expected to be completed in the fourth quarter of 2008.

     Colonial Village at Matthews Commons – During the fourth quarter of 2007, we began the development of Colonial Village at Matthews Commons, a 216-unit multifamily apartment community located in Charlotte, North Carolina. Project development costs, including land acquisition costs, are expected to be $21.1 million. The development is expected to be completed in the fourth quarter of 2008.

     Enclave (formerly The Renwick) – During 2007, we continued the development of Enclave, an 84-unit development located in Charlotte, North Carolina. This project was initially a for-sale residential project but is now being developed as a multifamily apartment community. Project development costs, including land acquisition costs, are expected to total $26.2 million, net of a $5.4 million impairment charge recorded during 2007. The development is expected to be completed in the second quarter of 2008.

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     Colonial Grand at Traditions – During 2007, we continued the development of Colonial Grand at Traditions, a 324-unit multifamily apartment community located in Gulf Shores, Alabama, which we are developing through one of our unconsolidated joint ventures. Our portion of the project development costs, including land acquisition costs, is expected to be $15.1 million, and will be funded primarily through a secured construction loan. We are a 35% partner in this project; therefore, development costs represent 35% of total development costs. The development, which is part of the Traditions mixed use development, is expected to be completed in the first quarter of 2008.

Future Multifamily Development Activity

     Colonial Grand at Azure – We expect to begin the development of Colonial Grand at Azure, a 188-unit multifamily apartment community located in Las Vegas, Nevada, in the second quarter of 2008. Project development costs, including land acquisition costs, are expected to be $26.4 million. The development is expected to be completed in the fourth quarter of 2009.

     Colonial Grand at Cityway (formerly Ridell Ranch) – We expect to begin the development of Colonial Grand at Cityway, a 376-unit multifamily apartment community located in Austin, Texas, in the third quarter of 2008. Project development costs, including land acquisition costs, are expected to be $34.3 million. The development is expected to be completed in second quarter of 2010.

     Colonial Grand at Desert Vista (formerly Pecos) – We expect to begin the development of Colonial Grand at Desert Vista, a 380-unit multifamily apartment community located in Las Vegas, Nevada, in the first quarter of 2008. Project development costs, including land acquisition costs, are expected to be $52.0 million. The development is expected to be completed in the second quarter of 2009.

     Colonial Grand at Hampton Preserve – We expect to begin the development of Colonial Grand at Hampton Preserve, a 486-unit multifamily apartment community located in Tampa, Florida, in the second quarter of 2008. Project development costs, including land acquisition costs, are expected to be $60.8 million. The development is expected to be completed in the third quarter of 2010.

     Colonial Grand at Randal Park – We expect to begin the development of Colonial Grand at Randal Park, a 600-unit multifamily apartment community located in Orlando, Florida, in the second quarter of 2008. Project development costs, including land acquisition costs, are expected to be $76.7 million. The development is expected to be completed in the fourth quarter of 2009.

     Colonial Grand at South End – We expect to begin the development of Colonial Grand at South End, a 344-unit multifamily apartment community located in Charlotte, North Carolina, in the second quarter of 2008. Project development costs, including land acquisition costs, are expected to be $52.1 million. The development is expected to be completed in the fourth quarter of 2010.

     Colonial Grand at Sweetwater –We expect to begin the development of Colonial Grand at Sweetwater, a 195-unit multifamily apartment community located in Phoenix, Arizona, in the second quarter of 2008. Project development costs, including land acquisition costs, are expected to be $24.2 million. The development is expected to be completed in the third quarter of 2009.

     Colonial Grand at Thunderbird – We expect to begin the development of Colonial Grand at Thunderbird, a 244-unit multifamily apartment community located in Phoenix, Arizona, in the second quarter of 2008. Project development costs, including land acquisition costs, are expected to be $29.5 million. The development is expected to be completed in the fourth quarter of 2009.

     Colonial Grand at Wakefield – We expect to begin the development of Colonial Grand at Wakefield, a 365-unit multifamily apartment community located in Raleigh, North Carolina, in the first quarter of 2008. Project development costs, including land acquisition costs, is expected to be $36.8 million. The development is expected to be completed in the third quarter of 2009.

     Colonial Grand at Lake Forest – We expect to begin the development of Colonial Grand at Lake Forest, a 529-unit multifamily apartment community located in Dallas, Texas, in the second quarter of 2008, which we are developing through one of our unconsolidated joint ventures. Our portion of the project development costs, including land acquisition costs, is expected to be $12.6 million. We are a 20% partner in this project; therefore, development costs represent 20% of total development costs. The development is expected to be completed in the first quarter of 2010.

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     All of the new multifamily communities listed above will have numerous amenities, including a cyber café, a fitness center, a resort style swimming pool and a resident business center.

Office Development Activity

     Colonial Center TownPark 400 – During the second quarter of 2007, we began the development of Colonial Center TownPark 400, a 176,000 square foot office property, located in Orlando, Florida. Project development costs, including land acquisition costs, are expected to be $30.4 million. The development, which is part of the Colonial TownPark Lake Mary mixed use development, is expected to be completed in the second quarter of 2008.

     Metropolitan – During 2007, we continued the development of Metropolitan, a 153,000 square foot office property, located in Charlotte, North Carolina. Project development costs, including land acquisition costs, are expected to be $35.2 million. The development, which is part of the Metropolitan mixed use development, is expected to be completed in the second quarter of 2008.

Retail Development Activity

     Colonial Promenade Fultondale – During 2007, we continued the development of Colonial Promenade at Fultondale, a 234,000 square foot development, excluding anchor-owned square footage (397,000 square feet, including anchor-owned square footage), located in north Birmingham, Alabama. Project development costs, including land acquisition costs, are expected to total $24.3 million. We expect to complete the project in the second quarter of 2008.

     Colonial Promenade Tannehill – During 2007, we continued the development of Colonial Promenade at Tannehill, a 346,800 square foot development, excluding anchor-owned square-footage (474,400 square feet, including anchor-owned square footage), located in Birmingham, Alabama. Project development costs, including land acquisition costs, are expected to total $50.7 million. We expect to complete the project in the third quarter of 2008.

     Metropolitan – During 2007, we continued the development of Metropolitan, an 189,000 square foot development, located in Charlotte, North Carolina. Project development costs, including land acquisition costs, are expected to total $53.7 million. The development, which is part of the Metropolitan mixed use development, is expected to be completed in the fourth quarter of 2008.

     Colonial Promenade Smyrna – During 2007, we continued the development of Colonial Promenade at Smyrna, a 50% joint venture development with Blanchard and Calhoun Commercial. The center is expected to total approximately 174,000 square feet, excluding anchor-owned square-footage (441,000 square feet, including anchor-owned square footage), and is located in Nashville, Tennessee. Our portion of project development costs, including land acquisition costs, is expected to be $17.4 million and will be funded primarily through a construction loan. We expect to complete the project in the second quarter of 2008.

Future Retail Development Activity

     Colonial Pinnacle Craft Farms II – We expect to begin the development of Colonial Pinnacle at Craft Farms II, a 75,000 square foot development, located in Gulf Shores, Alabama, in 2010. Project development costs, including land acquisition costs, are expected to total $11.1 million. We expect to complete construction on the project in 2011.

     Colonial Promenade Huntsville – We expect to begin the development of Colonial Promenade Huntsville, a 90,000 square foot development, excluding anchor-owned square-footage (220,000 square feet, including anchor-owned square footage), located in Huntsville, Alabama, in 2009. Project development costs, including land acquisition costs, are expected to total $17.6 million. We expect to complete construction on the project in 2010.

Ongoing For-Sale Development Activity

     We are developing each of the for-sale projects discussed below through our taxable REIT subsidiary, CPSI.

     Colonial Traditions at Gulf Shores – During 2007, we continued the development of the Colonial Traditions at Gulf Shores, a residential lot development located in Gulf Shores, Alabama. Project development costs, including land acquisition costs, are expected to total $22.8 million. We expect to begin sales of completed lots in the third quarter of 2009. This project will also include the sale of undeveloped land parcels.

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     Grander – During 2007, we continued the development of Grander, a 26-unit residential development located in Gulf Shores, Alabama. Project development costs, including land acquisition costs, are expected to total $18.9 million, net of a $4.3 million impairment charge recorded during 2007. We began selling these units in the fourth quarter of 2006 and had sold 12 of the 26 townhouse units as of December 31, 2007.

     Cypress Village – During 2007, we continued the development of Cypress Village, a residential community that will consist of 96 townhouse units and 236 for-sale residential lots located in Gulf Shores, Alabama. Project development costs, including land acquisition costs, are expected to total $48.1 million, net of a $31.6 million impairment charge recorded during 2007. We began selling lots in this development in the fourth quarter of 2006 and had sold five of the 236 available lots as of December 31, 2007. During January 2008, we moved this development project out of the for-sale residential pipeline and into the multifamily rental pool.

     Spanish Oaks – During 2007, we continued to sell undeveloped land parcels at Spanish Oaks, a 200-lot residential development located in Mobile, Alabama. Project development costs, including land acquisition costs, are expected to total $16.9 million. We began selling lots in the first quarter of 2007 and had sold 14 of the 200 available lots as of December 31, 2007.

     Metropolitan – During 2007, we continued the development of Metropolitan, a 101-unit condominium development located in Charlotte, North Carolina. Project development costs, including land acquisition costs, are expected to total $41.2 million. The development is part of the Metropolitan mixed use development. We expect to begin sales of completed units in the third quarter of 2008.

     Regents Park – During 2007, we continued the development of Regents Park, a joint venture development with Carter and Associates in which we own a 40% interest. This development will consist of 23 townhomes located in Atlanta, Georgia. Our portion of project development costs, including land acquisition costs, is expected to total $18.7 million, net of a $1.2 million impairment charge recorded during 2007. In addition, we provided a $40.0 million construction loan to the joint venture, under which $25.6 million was outstanding as of December 31, 2007. We began closing on sales of completed units in the fourth quarter of 2007 and had sold four of the 23 available units as of December 31, 2007.

Dispositions

     During 2007, we disposed of all or a portion of our interests in 14 multifamily apartment communities, 24 office properties, 29 retail properties and three retail developments, having an aggregate value of approximately $2.1 billion. We also generated approximately $48.6 million from our pro rata share of the dispositions of two properties held through two of our joint ventures. In addition, throughout 2007, we sold various parcels of land located adjacent to our existing properties for an aggregate sales price of approximately $15.2 million. The proceeds from the 2007 dispositions were used to repay a portion of the borrowings outstanding under our unsecured credit facility, to repay collateralized debt, and to fund other investment activities. These dispositions are summarized below.

     Multifamily Dispositions

     During 2007, we disposed of 12 multifamily apartment communities and our 25% interest in two multifamily apartment communities representing an aggregate of 3,880 units.

     Office Dispositions

     During 2007, we sold 85% of our interest in 24 office assets to the DRA/CLP JV. Subsequently, the DRA/CLP JV sold nine of these assets to Bluerock Real Estate, LLC. As a part of that transaction, we acquired a 40% interest (of which 30% is owned by CPSI, our taxable REIT subsidiary) in three separate TIC investments of the same nine properties. In addition, the DRA/CRT joint venture sold two office assets during 2007. These office assets represent, in the aggregate, approximately 7.8 million square feet, 6.6 million of which we continue to manage and lease.

     Retail Dispositions

     During 2007, we sold 15 wholly-owned retail assets and our 90% interest in a retail center. We also sold 85% of our interest in two retail assets to the DRA/CLP JV and 85% of our interest in 11 retail assets to the OZRE JV. These retail assets, sold during 2007, represent, in the aggregate, approximately 6.1 million square feet, 3.0 million of which we continue to manage and lease. In addition to these dispositions, we also disposed of our majority interests in three retail developments completed during 2007. These retail development assets represent, in the aggregate, approximately 0.7 million square feet, all of which we continue to manage and lease.

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     The following table is a summary of our operating property disposition activity in 2007:

		Units/Square				Gain on
Property	Location	Feet		Sales Price (1)		Sales of Property
				(in thousands)		(in thousands)
Multifamily
Beacon Hill	Charlotte, NC		349	$	15,909	$	1,144
Clarion Crossing	Raleigh, NC		260		15,909		1,144
Colonial Grand at Enclave	Atlanta, GA		200		16,863		1,212
Colonial Village at Regency Place	Raleigh, NC		180		10,339		743
Colonial Village at Timothy Woods	Athens, GA		204		13,250		953
Colonial Village at Poplar Place	Atlanta, GA		324		19,573		1,404
Colonial Village at Spring Lake	Atlanta, GA		188		11,543		830
					103,386		7,430	(2)
Cape Landing	Myrtle Beach, SC		288		19,513		3,221
Colonial Grand at Bayshore	Sarasota, FL		376		15,000		9,216	(3)
Colonial Grand at Natchez Trace	Ridgeland, MS		328		25,200		10,876
Colonial Grand at Promenade	Montgomery, AL		384		38,000		15,493
Colonial Grand at The Reservoir	Ridgeland, MS		170		17,000		5,496
Colonial Village at Hendersonville	Nashville, TN		364		6,750		2,309	(3)
Mayflower Seaside	Virginia Beach, VA		265		33,000		6,820
Office
DRA/CLP JV	Multiple Cities		6,931,000		1,131,200		—	(4)
Huntsville TIC	Huntsville, AL		1,701,995		33,000		—	(5)
Las Olas Centre	Fort Lauderdale, FL		469,200		34,635		6,627	(6)
St. Petersburg Center	Tampa, FL		675,000		13,999		—	(6)
Retail (7)
Britt David Shopping Center	Columbus, GA		102,564		6,276		—
Colonial Mall Decatur	Huntsville, AL		576,098		23,050		—
Colonial Mall Lakeshore	Gainesville, GA		518,290		33,165		—
Colonial Mall Staunton	Staunton, VA		423,967		21,795		—
Colonial Mayberry Mall	Mount Airy, NC		206,940		4,562		—
Colonial Promenade Montgomery	Montgomery, AL		209,114		14,509		—
Colonial Promenade Montgomery North	Montgomery, AL		209,912		7,497		—
Colonial Shoppes Bellwood	Montgomery, AL		88,482		3,451		—
Colonial Shoppes McGehee Place	Montgomery, AL		98,255		4,340		—
Colonial Shoppes Quaker Village	Greensboro, NC		102,223		8,615		—
Olde Town Shopping Center	Montgomery, AL		38,660		1,766		—
					129,026		—	(8)
OZRE JV	Multiple Cities		2,591,000		360,000		—	(4)
Rivermont Shopping Center	Chattanooga, TN		73,481		4,200		1,620
Colonial Shoppes Yadkinville	Yadkinville, NC		90,917		8,303		3,302
Colonial Shoppes Wekiva	Orlando, FL		208,568		27,200		11,768
Colonial Shoppes Bear Lake	Orlando, FL		131,655		20,600		11,099
Village on the Parkway	Dallas, TX		381,166		74,400		15,458	(9)
Colonial Pinnacle Craft Farms I	Gulf Shores, AL		270,600		45,730		4,363	(10)
Alabaster II/Tutwiler II	Birmingham, AL		418,500		48,500		15,003	(11)
Total				$	2,188,642	$	130,101

Footnotes on the following page

13

(1)	Sales Price represents the sales price of the property, when sold outright, or the property/portfolio value for those properties that are sold into joint ventures.
(2)	These properties were sold as a single transaction during January 2007.
(3)	Sales Price and Gain on Sale of Property represents our 25% interest in these two properties.
(4)	In connection with the joint venture transactions, 85% of the joint venture membership units were distributed to the Trust and all of our limited partners on a pro-rata basis. We recorded this distribution at book value.
(5)	The DRA/CLP JV sold nine office assets located in Huntsville, Alabama. We acquired a 40% interest (of which 30% is owned by CPSI, our taxable REIT subsidiary) in three separate TIC investments of the same nine properties.
(6)	Sales Price and Gain on Sale of Property represents our 15% interest in these two properties.
(7)	Retail square footage includes total square footage of asset including anchor-owned square footage.
(8)	These properties were sold as a single transaction during July 2007. We did not recognize a gain on this transaction.
(9)	Sales Price and Gain on Sale of Property represents our 90% interest in this property.
(10)	We retained a 15% interest in this property. The sales price represents 100% of the property’s value (not just our pro rata share of the sales price with respect to such property).
(11)	We retained a 5% interest in these properties. The sales price represents 100% of the portfolio’s value (not just our pro rata share of the sales price with respect to such properties).

     In some cases, we use disposition proceeds to fund investment activities through tax-deferred exchanges under Section 1031 of the Internal Revenue Code.  Certain of the proceeds described above were received into temporary cash accounts pending the fulfillment of Section 1031 exchange requirements. Subsequently, the funds were utilized to fund investment activities.

     For-Sale Projects

     During 2007, we, through CPSI, sold 262 condominium units at our condominium conversion properties, 14 residential lots and 101 condominium units at our for-sale residential development properties. During 2007, gains from sales of property on the Consolidated Statements of Income and Comprehensive Income included $13.2 million ($10.6 million net of income taxes) from these condominium conversion and for-sale residential sales. A summary of the revenues and costs from these sales of for-sale projects are set forth in the table below.

	Year Ended
	December 31,
(amounts in thousands)	2007
Condominium conversion revenues	$	51,073
Condominium conversion costs		(40,972	)
Gains on condominium conversion sales, before minority interest and income taxes		10,101
For-sale residential revenues		26,153
For-sale residential costs		(23,016	)
Gains on for-sale residential sales, before minority interest and income taxes		3,137
Minority interest		250
Provision for income taxes		(2,630	)
Gains on condominium conversion and for-sale residential sales, net of minority interest and income taxes	$	10,858
Impairment, net of tax	$	(26,800	)

     The net gains on condominium conversion sales are classified in discontinued operations if we previously operated the related condominium property as an apartment community. For 2007, gains on condominium sales, net of income taxes, of $9.3 million are included in discontinued operations. Condominium conversion properties are reflected in the accompanying Consolidated Balance Sheet as part of real estate assets held for sale, and totaled $2.9 million as of December 31, 2007. For-sale residential projects actively under development of $96.0 million (net of a $42.1 million non-cash impairment charge related to wholly-owned for-sale properties) as of December 31, 2007, are reflected as construction in progress in the accompanying Consolidated Balance Sheet. Completed for-sale residential projects of approximately $22.2 million are reflected in real estate assets held for sale as of December 31, 2007.

14

     For cash flow statement purposes, we classify capital expenditures for newly developed for-sale residential communities and for other condominium conversion communities in investing activities. Likewise, the proceeds from the sales of condominium conversion units and for-sale residential sales are also included in investing activities.

     During 2007, there was a softening in the condominium and single family housing markets due to increasing mortgage financing rates, the decline in the availability of sub-prime lending and other types of mortgages, increasing supplies of such assets, an increase in construction costs, and higher insurance costs, resulting in lower sales prices and reduced sales velocity. In addition, pricing in the single family housing market declined, primarily due to a lack of demand, and certain units that were under contract did not close because buyers elected not to consummate the purchase of the units. As a result, we recorded a non-cash impairment charge of $43.3 million ($26.8 million net of income tax) to reduce the carrying value of certain of our for-sale residential developments to their estimated fair market value. The impairment charge is primarily related to the for-sale residential projects located in Gulf Shores, Alabama (Cypress Village project and Grander condominium development) and one condominium project in downtown Charlotte, North Carolina (The Enclave). An increase in construction costs partially resulting from a contract dispute with a general contractor (see Note 19 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K) during development was also factored into the impairment charge. We utilized a probability weighted discounted future cash flow analysis that incorporates available market information and other assumptions made by management. Including the impairment charge, as of December 31, 2007, we had approximately $135.6 million of capital cost (based on book value, including pre-development and land costs) invested in our consolidated and unconsolidated for-sale residential projects.

     If market conditions do not improve or if there is further market deterioration, it may impact the number of projects we can sell, the timing of the sales and/or the prices at which we can sell them. If we are unable to sell projects, we may incur additional impairment charges on projects previously impaired as well as on projects not currently impaired but for which indicators of impairment may exist, which would decrease the value of our assets as reflected on our balance sheet and adversely affect our shareholders’ equity. There can be no assurances of the amount or pace of future for-sale residential sales and closings, particularly given current market conditions. See “Risk Factors – Risks Associated with Our Operations – The development or conversion of for-sale projects could adversely affect our results of operations.”

Recent Events

     Property Acquisitions

     On January 16, 2008, we acquired the remaining 75% interest in a 270-unit multifamily apartment community, Colonial Village at Matthews, located in Charlotte, North Carolina. We acquired our initial 25% interest in March 2006. The remaining 75% interest was acquired for a total price of $24.5 million, consisting of the assumption of $14.7 million of existing mortgage debt and $9.8 million of cash, which was funded through proceeds from asset sales.

     Property Dispositions

     On January 24, 2008, we disposed of our 15% interest in Fairmont at Fossil Creek, a 240-unit multifamily apartment community located in Fort Worth, Texas. Our interest in this asset was sold for a total sales price of $3.2 million and the proceeds will be used to fund future investment activities and for general corporate purposes.

     On January 24, 2008, we disposed of our 15% interest in Auberry at Twin Creeks, a 216-unit multifamily apartment community located in Dallas, Texas. Our interest in this asset was sold for a total sales price of $3.2 million and the proceeds will be used to fund future investment activities and for general corporate purposes.

     On January 31, 2008, we disposed of our 10% interest in Arbors at Windsor Lake, a 228-unit multifamily apartment community located in Columbia, South Carolina. Our interest in this asset was sold for a total sales price of approximately $1.4 million and the proceeds from the sale will be used to fund future investment activities and for general corporate purposes.

     On February 1, 2008, we disposed of 250 Commerce Center, a 37,000 square foot office asset located in Montgomery, Alabama. We sold this asset for approximately $3.1 million, and the proceeds from the sale of this asset will be used to fund future investment activities and for general corporate purposes.

     Financing Activities

     On January 8, 2008, we, together with CRLP, increased the amount of our borrowing capacity by $175 million through the accordion feature included in our existing $500 million unsecured revolving credit facility dated as of March 22, 2005, as

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amended, among us, the Trust, Wachovia Bank, National Association, as administrative agent, Bank of America, N.A., as syndication agent, and the lenders named therein.

     Distribution

     During January 2008, the Board of Trustees of the Trust declared a cash distribution to its shareholders and to our partners in the amount of $0.50 per share and per common partnership unit, totaling approximately $28.6 million. The distribution was made to shareholders and partners of record as of February 11, 2008 and was paid on February 19, 2008.

Business Strategy

     As discussed above, during 2007 we executed our plan to become a multi-family focused REIT by completing the Strategic Transactions. Each of these transactions is discussed in more detail above. As a result of these transactions, we anticipate that we will generate the majority of our future income from operations from multifamily apartment communities.

     Our business objective is to generate stable and increasing cash flow and portfolio value for our shareholders through a strategy of:

• realizing growth in income from our existing portfolio of properties;

• developing multifamily properties to grow our core portfolio and improve the age and quality of our multifamily apartment communities in growth markets located in the Sunbelt region of the United States, where we have first-hand knowledge of growth patterns and local economic conditions;

• developing office, mixed use and open air shopping center properties in growth markets located in the Sunbelt region of the United States, creating value through the sale of a majority interest to a joint venture partner or the outright sale of such properties;

• recycling capital by selectively disposing of assets that are approaching or have reached their maximum investment potential and reinvesting the proceeds into opportunities with more perceived growth potential;

• managing our own properties as well as commercial assets through joint venture arrangements, which enables us to better control our operating expenses and establish and maintain long-term relationships with our office and retail tenants;

• selectively acquiring additional multifamily apartment communities in growth markets located in the Sunbelt region of the United States;

• completing our existing condominium conversion and for-sale residential projects;

• maintaining our third-party property management business, which increases cash flow through management fee income stream and establishes additional relationships with investors and tenants; and

• employing a comprehensive capital maintenance program to maintain properties in first-class condition.

Financing Strategy

     We seek to maintain a well-balanced, conservative and flexible capital structure by:

• maintaining conservative debt service and fixed charge coverage ratios in order to retain our investment grade status;

• extending and sequencing the maturity dates of our debt;

• borrowing primarily at fixed rates; and

• generally pursuing long-term debt financings and refinancings on an unsecured basis.

     We believe that these strategies have enabled, and should continue to enable, us to access the debt and equity capital markets to fund debt refinancings and the acquisition and development of additional properties. However, as a result of our cash position at December 31, 2007, our availability under our existing unsecured credit facility and minimal debt maturities in 2008, we do not anticipate the need to access the capital markets in 2008. This liquidity, along with our projected asset sales is expected to allow us to execute our business plan in the short-term, without the dependency on the capital markets.

     We may modify our borrowing policy and may increase or decrease our ratio of debt to gross asset value in the future. To the extent that the Board of Trustees of the Trust determines to seek additional capital, we may raise such capital through additional asset dispositions, equity offerings, debt financings or retention of cash flow (subject to provisions in the Internal Revenue Code of 1986, as amended, 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.

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     We have historically funded our acquisition and development activities primarily through proceeds received from the disposition of assets, unsecured senior notes offerings and advances on our unsecured credit facility. For additional information regarding current year financing activities and year-end balances, refer to Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K.

Property Management

     We are experienced in the management and leasing of multifamily, office and retail properties and believe that the management and leasing of our own portfolio has helped maintain consistent income growth and has resulted in reduced operating expenses from the properties. The third-party management, leasing and brokerage businesses conducted through CPSI have provided us with both a relatively stable source of cash flow and with the benefits of economies of scale in conjunction with the management and leasing of our own properties. These businesses also allow us to establish additional relationships with tenants who may require additional office or retail space and may help us to identify potential acquisitions.

Operational Structure

     We currently manage our business through, and based on the performance of four operating segments: multifamily, office, retail and for-sale residential. As a result of the impairment charge recorded during 2007 related to our for-sale residential projects, our for-sale residential operating segment met the quantitative threshold to be considered a reportable segment. The results of operations and assets of the for-sale residential operating segment were previously included in other income (expense) and in unallocated corporate assets, respectively, due to the insignificance of this operating segment in prior periods. We have centralized functions that are common to each portfolio, including accounting, information technology and administrative services. Each segment has a separate management team that is responsible for acquiring, developing, managing and leasing properties within such segment. See Note10 – Segment Information in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K for information on our four segments and the reconciliation of total segment revenues to total revenues, total segment net operating income to income from continuing operations and minority interest for the years ended December 31, 2007, 2006 and 2005, and total segment assets to total assets as of December 31, 2007 and 2006. Information regarding our segments contained in such Note 10 – Segment Information in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K is incorporated by reference herein. Additional information with respect to each of the operating portfolios is set forth below:

     Multifamily Portfolio - Multifamily portfolio management is responsible for all aspects of multifamily operations, including day-to-day management and leasing of our 122 multifamily apartment communities (102 of which are wholly-owned properties and 20 of which are partially-owned through unconsolidated joint venture entities), as well as providing third-party management services for apartment communities in which we do not have an ownership interest or have a non-controlling ownership interest. Additionally, all of our condominium conversion and related sales are managed under the multifamily portfolio, as well as for-sale multifamily developments.

     For-Sale Residential – Multifamily portfolio management is also responsible for all aspects of our for-sale residential development and disposition activities. As of December 31, 2007, we had nine for-sale development properties, six of which are residential and three of which are lot developments.

     Office Portfolio - Office portfolio management is responsible for all aspects of our commercial office operations, including the management and leasing services for our 48 office properties (two of which are wholly-owned properties and 46 of which are partially-owned through unconsolidated joint venture entities), as well as third-party management services for office properties in which we do not have an ownership interest and for brokerage services in other office property transactions.

     Retail Portfolio - Retail portfolio management is responsible for all aspects of our retail operations, including the management and leasing services for our 30 retail properties (four of which are wholly-owned properties and 26 of which are partially-owned through unconsolidated joint venture entities), as well as third-party management services for retail properties in which we do not have an ownership interest and for brokerage services in other retail property transactions. Additionally, all of our for-sale retail developments are managed by Retail portfolio management.

Competition

     The ownership, development, operation and leasing of multifamily, office and retail properties are highly competitive. We compete with domestic and foreign financial institutions, other REITs, life insurance companies, pension trusts, trust funds, partnerships and individual investors for the acquisition of properties. See Item 1A — “Risk Factors – Risks Associated with Our Operations – Competition for acquisitions could reduce the number of acquisition opportunities available to us and result in increased prices for properties, which could adversely affect our return on properties we purchase” in this Form 10-K for

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further discussion. In addition, we compete for tenants in our markets primarily on the basis of property location, rent charged, services provided and the design and condition of improvements. With respect to our multifamily business, we also compete with other quality apartment and for-sale (condominium) projects owned by public and private companies. The number of competitive multifamily properties in a particular market could adversely affect our ability to lease our multifamily properties and develop and lease or sell new properties, as well as the rents we are able to charge. In addition, other forms of residential properties, including single family housing and town homes, provide housing alternatives to potential residents of quality apartment communities or potential purchasers of for-sale (condominium) units. With respect to the multifamily business, we compete for residents in our apartment communities based on its high level of resident service, the quality of our apartment communities (including our landscaping and amenity offerings) and the desirability of our locations. Resident leases at our apartment communities are priced competitively based on market conditions, supply and demand characteristics, and the quality and resident service offerings of our communities. We do not seek to compete on the basis of providing a low-cost solution for all residents.

Environmental Matters

     We believe that our properties are in material compliance in all material respects with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. We are not aware of any environmental condition that we believe would have a material adverse effect on our capital expenditures, earnings or competitive position (before consideration of any potential insurance coverage). Nevertheless, it is possible that there are material environmental conditions and liabilities of which we are unaware. Moreover, no assurances can be given that (i) future laws, ordinances or regulations or future interpretations of existing requirements will not impose any material environmental liability or (ii) the current environmental condition of our properties has not been or will not be affected by tenants and occupants of our properties, by the condition of properties in the vicinity of our properties or by third parties unrelated to us. See “Risk Factors—Risks Associated with Our Operations—We could incur significant costs related to environmental issues which could adversely affect our results of operations through increased compliance costs or our financial condition if we become subject to a significant liability” in this Form 10-K for further discussion.

Insurance

     We carry comprehensive liability, fire, extended coverage and rental loss insurance on all of our majority-owned properties. We believe the policy specifications, insured limits of these policies and self insurance reserves are adequate and appropriate. There are, however, certain types of losses, such as lease and other contract claims, which generally are not insured. We anticipate that we will review our insurance coverage and policies from time to time to determine the appropriate levels of coverage, but we cannot predict at this time if we will be able to obtain or maintain full coverage at reasonable costs in the future. In addition, as of December 31, 2007, we are self insured up to $0.8 million, $1.1 million and $1.8 million for general liability, workers’ compensation and property insurance, respectively. We are also self insured for health insurance and responsible for claims up to $125,000 per claim and up to $1.0 million per person. Our policy for all self insured risk is to accrue for expected losses on reported claims and for estimated losses related to claims incurred but not reported as of the end of the reporting period. See “Risk Factors – Risks Associated with Our Operations – Uninsured or underinsured losses could adversely affect our financial condition.”

Employees

     As of December 31, 2007, we employed approximately 1,250 persons, including on-site property employees who provide services for the properties that we own and/or manage.

Tax Status

     We are a partnership for federal income tax purposes. We have no provision for income taxes since all taxable income or loss or tax credits are passed through to our partners. The Trust has made an election to be taxed as a REIT under Sections 856 through 860 of the Code, commencing with its taxable year ending December 31, 1993. If the Trust qualifies for taxation as a REIT, the Trust generally will not be subject to federal income tax to the extent it distributes at least 90% of its REIT taxable income to its shareholders. Even if the Trust qualifies for taxation as a REIT, the Trust 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.

     In addition, our consolidated financial statements include the operations of a taxable REIT subsidiary, CPSI, which is not entitled to a dividends paid deduction and is subject to federal, state and local income taxes. CPSI provides property management, construction management and development services for third-party owned properties and administrative services to us. In addition, we perform all of our for-sale residential and condominium conversion activities through CPSI. We generally reimburse CPSI for payroll and other costs incurred in providing services to us. All inter-company transactions are eliminated in the accompanying consolidated financial statements. We recognized an income tax benefit of $7.4 million in

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2007 and income tax expense of $12.2 million and $6.5 million in 2006 and 2005, respectively, related to the taxable income of CPSI.

Available Information

     Our general partner’s website address is www.colonialprop.com. The information contained on the Trust’s website is not incorporated by reference into this report and such information should not be considered a part of this report. You can obtain on the Trust’s website in the “Investor Relations” section, free of charge, a copy of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to these reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Also available on the website, free of charge, are the Trust’s corporate governance guidelines, charters of the Trust’s governance, audit and executive compensation committees and the Trust’s code of ethics (which applies to all employees, including the Trust’s principal executive officer and principal financial officer). If you are not able to access this website, the information is available in print form to any partner who should request the information directly from us at 1-800-645-3917.

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Executive Officers of the Trust

     We are managed by the Trust, our general partner. The following is a biographical summary of the executive officers of the Trust:

     C. Reynolds Thompson, III, 44, has been a Trustee of the Trust since 2007 and the Trust’s Chief Executive Officer since April 2006. As Chief Executive Officer of the Trust, Mr. Thompson is responsible for providing the vision, strategy, leadership and management that focuses the Trust on profitably and achieving its goals and objectives. From September 1999 to April 2006, Mr. Thompson served as the Trust’s Chief Operating Officer and was responsible for the multifamily, office, retail and mixed-use portfolios where he oversaw the management, acquisition, leasing and development of properties within the multifamily, office and retail operating portfolios and the development of properties within the mixed-use portfolio. Prior to his appointment as the Trust’s Chief Operating Officer, Mr. Thompson was the Trust’s Chief Investment Officer from June 1998 to August 1999, responsible for investment strategies, market research, due diligence, mergers and acquisitions, joint venture development and cross-divisional acquisitions. Prior to his position as the Trust’s Chief Investment Officer, Mr. Thompson served as Executive Vice President, Office Division, from May 1997 to May 1998, with responsibility for management of all office properties owned and/or managed by the Trust. Mr. Thompson joined the Trust in February 1997 as Senior Vice President, Office Acquisitions, with responsibility for all acquisitions of office properties. Prior to joining the Trust, Mr. Thompson worked for CarrAmerica Realty Corporation, a then publicly-traded office REIT, in office building acquisitions and due diligence. His twenty-one-year real estate background includes acquisitions, development, leasing, and management of office properties in the southern United States. Mr. Thompson is currently a member of the National Association of Real Estate Investment Trust (“NAREIT”) Board of Governors, the Executive Committee of the Metropolitan Development Board, the National Association of Industrial and Office Parks and the International Council of Shopping Centers. In addition, Mr. Thompson serves on the Board of Visitors for the University of Alabama Culverhouse College of Commerce and Business Administration. Mr. Thompson holds a Bachelor of Science Degree from Washington and Lee University.

     Weston M. Andress, 47, has been the Trust’s President and Chief Financial Officer since April 2006, and is responsible for all finance and investment matters for the Trust. Previously, he served as Chief Financial and Investment Officer of the Trust since April 2004. Prior to his tenure with the Trust, Mr. Andress held the position of Managing Director of the Corporate and Investment Banking Department of Bank of America. During his fifteen year tenure with the bank, Mr. Andress worked directly with several of the largest public and private real estate companies in the United States, providing investment banking services including equity placement, debt underwriting and merger and acquisition consultation to such companies. Prior to Bank of America, Mr. Andress was Vice President in the Real Estate Capital Markets Group of Salomon Brothers in New York. Mr. Andress graduated with honors from the University of the South with a Bachelor of Arts in Political Science and holds a Master of Business Administration from the University of North Carolina at Chapel Hill.

     Paul F. Earle, 50, has been the Trust’s Chief Operating Officer since January 2008, and is responsible for all operations of the properties owned and/or managed by the Trust. From May 1997 to January 2008, Mr. Earle served as Executive Vice President-Multifamily Division and was responsible for management of all multifamily properties owned and/or managed by the Trust. He joined the Trust in 1991 and has previously served as Vice President – Acquisitions, as well as Senior Vice President – Multifamily Division. Mr. Earle is past Chairman of the Alabama Multifamily Council and is an active member of the National Apartment Association. He also is a board member and is on the Executive Committee of the National Multifamily Housing Council. He is past President and current Board member of Big Brothers/Big Sisters. Before joining the Trust, 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. (now called Allegiance Realty Group, Inc.)

     Robert A. “Bo” Jackson, 53, has been the Trust’s Executive Vice President-Office Division since December 1997, and is responsible for leading all office properties owned by the Trust or managed for investment partners. Under his leadership, the office portfolio has grown from four million to 16 million square feet and maintains one of the industry’s leading occupancy rates. Mr. Jackson created the Trust’s concept of the High-Performance Workplace, which provides companies highly productive workplaces to help them recruit and retain talented workforces. The Trust developed the mixed-use Colonial TownPark in Orlando, Florida, which contributed to the Trust being named National Developer of the Year by the National Association of Industrial and Office Parks (NAIOP). Mr. Jackson is a member of the NAIOP National Mixed-Use Development Forum and is involved with his church, North Point Community Church. He is the founder of The Parker Jackson Legacy Lacrosse Cup. Mr. Jackson holds a Bachelor of Science degree in Business Administration from the University of Delaware.

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     Ray Hutchinson, 38, has been the Trust’s Executive Vice President, Multifamily since January 2008, is responsible for the operations of all multifamily properties owned/or managed by the Trust. Mr. Hutchinson previously served as Senior Vice President, Multifamily since joining the Trust in 2004, in which he was responsible for overseeing the operations of all the Trust’s multifamily units throughout the Southeast. With over 18 years of experience in the multifamily industry, Mr. Hutchinson came to the Trust from Summit Properties, (now known as Camden Property Trust), where he held the title of Vice President from 1991 until joining the Trust in 2004. He previously served as Chairman of the Residential Housing Management Advisory Board at Florida State University and is currently on the Board of Directors of the National Multi-Housing Council, Big Brothers/Big Sisters of Birmingham, Alabama Apartment Association and President-Elect of the Greater Birmingham Apartment Association. Mr. Hutchinson is a graduate of the University of Central Florida and holds a Bachelor of Science in Business Administration – Human Resources.

     John P. Rigrish, 59, has been the Trust’s Chief Administrative Officer since August 1998, and is responsible for the supervision of Corporate Governance, Information Technology, Human Resources and Employee Services. Prior to joining the Trust, Mr. Rigrish worked for BellSouth Corporation in Corporate Administration and Services. Mr. Rigrish holds a Bachelor’s degree from Samford University and did his postgraduate study at Birmingham-Southern College. He previously served on the Edward Lee Norton Board of Advisors for Management and Professional Education at Birmingham-Southern College and the Board of Directors of Senior Citizens, Inc. in Nashville, Tennessee. Mr. Rigrish currently serves as the Chairman of the Board of the American Red Cross Board of Directors-Alabama Chapter, City of Hoover Veteran’s Committee and John Carroll Educational Foundation Board of Directors.

     John E. Tomlinson, 39, has been the Trust’s Executive Vice President and Chief Accounting Officer since February 2005, and is responsible for Internal Control functions, compliance with generally accepted accounting principles, SEC reporting, regulatory agency compliance and reporting, management reporting and accounting operations. Mr. Tomlinson is a Certified Public Accountant (CPA) with over ten years of experience in public accounting. Mr. Tomlinson holds a Bachelor of Science of Professional Accountancy and a Master of Business Administration from Mississippi State University. Prior to joining the Trust, Mr. Tomlinson served as a Senior Manager at Deloitte & Touche LLP, a public accounting firm, from May 2002 through January 2005 and as a Senior Manager / Manager at Arthur Andersen LLP from September 1996 through May 2002. Mr. Tomlinson’s previous experience includes independent audits of public and private entity financial statements, merger and acquisition due diligence, business risk assessment and registration statement work for public debt and stock offerings.

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Item 1A. Risk Factors

     Set forth below are the risks that we believe are material to investors who purchase or own our common, preferred or debt securities. Our units are redeemable for cash or, at the election of the Trust, on a one-for-one basis for the Trust’s common shares of beneficial interest. You should consider carefully the following risks, together with the other information contained in and incorporated by reference in this Annual Report on Form 10-K, and the descriptions included in our consolidated financial statements and accompanying notes.

Risks Associated with Real Estate

     We face numerous risks associated with the real estate industry that could adversely affect our results of operations through decreased revenues or increased costs.

     As a real estate company, we are subject to various changes in real estate conditions, particularly in the Sunbelt region where our properties are concentrated, and any negative trends in such real estate conditions may adversely affect our results of operations through decreased revenues or increased costs. These conditions include:

• worsening of national and regional economic conditions, as well as the local economic conditions in our principal market areas;

• the existence and quality of the competition, such as the attractiveness of our property as compared to our competitors’ properties based on considerations such as convenience of location, rental rates, amenities and safety record;

• increased operating costs, including increased real property taxes, maintenance, insurance and utilities costs;

• weather conditions that may increase or decrease energy costs and other weather-related expenses;

• oversupply of multifamily, office, retail space, or single-family housing or a reduction in demand for real estate in the markets in which our properties are located;

• a favorable interest rate environment that may result in a significant number of potential tenants of our multifamily properties deciding to purchase homes instead of renting;

• rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs; and

• changing trends in the demand by consumers for merchandise offered by retailers conducting business at our retail properties.

     Moreover, other factors may affect our results of operations adversely, including changes in government regulations and other laws, rules and regulations governing real estate, zoning or taxes, changes in interest rate levels, the availability of financing and potential liability under environmental and other laws and other unforeseen events, most of which are discussed elsewhere in the following risk factors. Any or all of these factors could materially adversely affect our results of operations through decreased revenues or increased costs.

     Real estate investments are illiquid, and therefore we may not be able to sell our properties in response to economic changes which could adversely affect our results of operations or financial condition.

     Real estate investments generally are relatively illiquid, and as a result we may not be able to sell a property or properties quickly or on favorable terms in response to changes in the economy or other conditions when it otherwise may be prudent to do so. This inability to respond quickly to changes in the performance of our properties could adversely affect our results of operations if we cannot sell an unprofitable property. Our financial condition could also be adversely affected if we were, for example, unable to sell one or more of our properties in order to meet our debt obligations upon maturity. In addition, the tax laws applicable to REITs require that we hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forego or defer sales of properties that otherwise would be in our best interest. Therefore, we may be unable to vary our portfolio promptly in response to market conditions, which may adversely affect our financial position.

     We are subject to significant regulation, which could adversely affect our results of operations through increased costs and/or an inability to pursue business opportunities.

     Local zoning and use laws, environmental statutes and other governmental requirements may restrict our development, expansion, rehabilitation and reconstruction activities. These regulations may prevent or delay us from taking advantage of economic opportunities. Failure to comply with these requirements could result in the imposition of fines, awards to private litigants of damages against us, substantial litigation costs and substantial costs of remediation or compliance. In addition, we cannot predict what requirements may be enacted in the future or that such a requirement will not increase our costs of regulatory compliance or prohibit us from pursuing business opportunities that could be profitable to us.

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     Compliance or failure to comply with the Americans with Disabilities Act and Fair Housing Act could result in substantial costs.

     Under the Americans with Disabilities Act of 1990, or ADA, and the Fair Housing Amendment Act of 1988, or FHAA, and various state and local laws, all public accommodations and commercial facilities, including office buildings, must meet certain federal requirements related to access and use by disabled persons. Compliance with these requirements could involve removal of structural barriers from certain disabled persons’ entrances. Other federal, state and local laws may require modifications to or restrict further renovations of our properties with respect to such means of access. Noncompliance with the ADA, FHAA or related laws or regulations could result in the imposition of fines by government authorities, awards to private litigants of damages against us, substantial litigation costs and the incurrence of additional costs associated with bringing the properties into compliance.

     Increased competition and increased affordability of residential homes could limit the Company’s ability to retain its residents, lease apartment homes or increase or maintain rents.

 

     Our multifamily communities compete with numerous housing alternatives in attracting residents, including other multi-family and apartment communities and single-family rental homes, as well as owner occupied single- and multifamily homes. Competitive housing in a particular area and the increasing affordability of owner occupied single and multifamily homes caused by declining housing prices, mortgage interest rates and government programs to promote home ownership could adversely affect our ability to retain our residents, lease apartment homes and increase or maintain rents.

Risks Associated with Our Operations

     Our revenues are significantly influenced by demand for multifamily properties generally, and a decrease in such demand will likely have a greater adverse effect on our revenues than if we owned a more diversified real estate portfolio.

     During 2007, we changed the asset mix of our portfolio to focus predominately on multifamily properties. As a result of this change in strategy, we will be subject to a greater extent to risks inherent in investments in a single industry. A decrease in the demand for multifamily properties would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio. Tenant demand at multifamily properties has been and could be adversely affected by weakness in the national, regional and local economies, changes in job growth, household formation or population growth in our markets, changes in interest rates or changes in supply of, or demand for, similar or competing multifamily properties in an area. To the extent that any of these conditions occur, they are likely to affect market rents at multifamily properties, which could cause a decrease in our rental revenue. Any such decrease could impair our ability to satisfy our substantial debt service obligations or make distributions to our shareholders.

     The development or conversion of for-sale projects could adversely affect our results of operations.

     We intend to develop for-sale assets and may continue to convert existing apartment communities into condominium units for sale. For-sale development and conversion activities may be conducted through wholly-owned affiliated companies or through joint ventures. Our for-sale development and conversion activities may expose us to the following risks:

• we may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy, and other required governmental permits and authorizations, which could result in increased development costs and/or lower than expected sales;

• local real estate market conditions, such as oversupply or reduction in demand, may result in reduced or fluctuating sales;

• we may incur development or conversion costs for a property that exceed original estimates due to increased materials, labor or other costs or unforeseen environmental conditions, which could make completion of the property uneconomical;

• land, insurance and construction costs continue to increase in our markets and may continue to increase in the future, and we may be unable to attract rents, or sales prices with respect to for-sale product, that compensate for these increases in costs;

• for-sale properties under development or acquired for development usually generate little or no cash flow until completion of development and sale of a significant number of homes or condominium units and may experience operating deficits after the date of completion and until such homes or condominium units are sold;

• we may abandon development or conversion opportunities that we have already begun to explore, and we may fail to recover expenses already incurred in connection with exploring any such opportunities;

• buyers may be unable to qualify for financing;

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• sale prices may be lower than anticipated;

• competition from other condominiums and other types of residential housing;

• changes in applicable zoning and land use laws may require us to abandon projects prior to their completion, resulting in the loss of development costs incurred up to the time of abandonment;

• we may be unable to close on sales of individual units under contract; and

• we could be subject to liability claims from condominium associations or others asserting that construction performed was defective, resulting in litigation and/or settlement discussions.

     During 2007, there was a softening in the condominium and single family housing markets due to increasing mortgage financing rates, the decline in the availability of sub-prime lending and other types of mortgages, increasing supplies of such assets, an increase in construction costs, and higher insurance costs, resulting in lower sales prices and reduced sales velocity. In addition, pricing in the single family housing market declined, primarily due to a lack of demand, and certain units that were under contract did not close because buyers elected not to consummate the purchase of the units.  As a result, we recorded a non-cash impairment charge of $43.3 million ($26.8 million net of income tax) to reduce the carrying value of certain of our for-sale residential developments to their estimated fair market value.  This impairment charge was primarily related to the for-sale residential projects located in Gulf Shores, Alabama and one condominium project in downtown Charlotte, North Carolina. Including the charge, as of December 31, 2007, we had approximately $135.6 million of capital cost (based on book value, including pre-development and land costs) invested in our consolidated and unconsolidated for-sale residential projects.  An increase in construction costs partially resulting from a dispute with a general contractor (see Note 19 to our Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K) during development was also factored into the impairment charge.  If market conditions do not improve or if there is further market deterioration, it may impact the number of projects we can sell, the timing of the sales and/or the prices at which we can sell them.  If we are unable to sell projects, we may incur additional impairment charges on projects previously impaired as well as on projects not currently impaired but for which indicators of impairment may exist, which would decrease the value of our assets as reflected on our balance sheet and adversely affect our shareholders’ equity.  There can be no assurances of the amount or pace of future for-sale residential sales and closings, particularly given current market conditions.

     Our properties may not generate sufficient rental income to pay our expenses if we are unable to lease our new properties or renew leases or re-lease space at our existing properties as leases expire, which may adversely affect our operating results.

     We derive the majority of our income from tenants who lease space from us at our properties. A number of factors may adversely affect our ability to attract tenants at favorable rental rates and generate sufficient income, including:

• local conditions such as an oversupply of, or reduction in demand for, multifamily, office or retail properties;

• the attractiveness of our properties to residents, shoppers and tenants;

• decreases in market rental rates; and

• our ability to collect rent from our tenants.

     If we cannot generate sufficient income to pay our expenses, maintain our properties and service our debt as a result of any of these factors, our operating results may be adversely affected.

     The tenants at our multifamily properties generally enter into leases with an initial term ranging from six months to one year. Tenants at our office properties generally enter into leases with an initial term ranging from three to ten years and tenants at our retail properties generally enter into leases with an initial term ranging from one to ten years. As leases expire at our existing properties, tenants may elect not to renew them. Even if the tenants do renew or if we can re-lease the space, the terms of renewal or re-leasing, including the cost of required renovations may be less favorable than current lease terms. In addition, for new properties, we may be unable to attract enough tenants and the occupancy rates and rents may not be sufficient to make the property profitable. If we are unable to renew the leases or re-lease the space at our existing properties promptly and/or lease the space at our new properties, or if the rental rates upon renewal or re-leasing at existing properties are significantly lower than expected rates, our operating results will be negatively affected.

     We may not be able to control our operating costs or our expenses may remain constant or increase, even if our revenues decrease, causing our results of operations to be adversely affected.

     Factors that may adversely affect our ability to control operating costs include:

• the need to pay for insurance and other operating costs, including real estate taxes, which could increase over time;

• the need periodically to repair, renovate and re-lease space;

• the cost of compliance with governmental regulation, including zoning and tax laws;

• the potential for liability under applicable laws;

• interest rate levels; and

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• the availability of financing.

If our operating costs increase as a result of any of the foregoing factors, our results of operations may be adversely affected.

     The expense of owning and operating a property is not necessarily reduced when circumstances such as market factors and competition cause a reduction in income from the property. As a result, if revenues drop, we may not be able to reduce our expenses accordingly. Costs associated with real estate investments, such as real estate taxes, loan payments and maintenance generally will not be reduced even if a property is not fully occupied or other circumstances cause our revenues to decrease. If a property is mortgaged and we are unable to meet the mortgage payments, the lender could foreclose on the mortgage and take the property, resulting in a further reduction in net income.

     We are subject to increased exposure to economic and other factors due to the concentration of our properties in the Sunbelt region, and an economic downturn, a natural disaster or an act of terrorism in the Sunbelt region could adversely affect our results of operations or financial condition.

     Substantially all of our properties are located in the Sunbelt region of the United States. In particular, we derived approximately 87.5% of our net operating income in 2007 from top quartile cities located in the Sunbelt region. We are therefore subject to increased exposure to economic and other factors specific to these geographic areas. If the Sunbelt region of the United States, and in particular the areas of or near Birmingham, Charlotte, Orlando, Atlanta, Dallas or Fort Worth, experiences a slowdown in the economy, a natural disaster or an act of terrorism, our results of operations and financial condition may be negatively affected as a result of decreased revenues, increased costs or damage or loss of assets.

     Tenant bankruptcies and downturns in tenants’ businesses may adversely affect our operating results by decreasing our revenues.

     At any time, a tenant may experience a downturn in its business that may weaken its financial condition. As a result, our tenants may delay lease commencement, cease or defer making rental payments or declare bankruptcy. A bankruptcy filing by or relating to one of our tenants would bar all efforts by us to collect pre-bankruptcy debts from that tenant, or their property, unless we receive an order permitting us to do so from the bankruptcy court. A tenant bankruptcy could delay our efforts to collect past due balances under the relevant leases, and could ultimately preclude collection of these sums. If a lease is assumed by the tenant in bankruptcy, all pre-bankruptcy balances due under the lease must be paid to us in full. However, if a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. Any unsecured claim we hold may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims, and there are restrictions under bankruptcy laws that limit the amount of the claim we can make if a lease is rejected. As a result, it is likely that we will recover substantially less than the full value of any unsecured claims we hold from a bankrupt tenant. The bankruptcy or financial difficulties of any of our tenants may negatively affect our operating results by decreasing our revenues.

     Risks associated with the property management, leasing and brokerage businesses could adversely affect our results of operations by decreasing our revenues.

     In addition to the risks we face as a result of our ownership of real estate, we face risks relating to the property management, leasing and brokerage businesses of CPSI, including risks that:

• management contracts or service agreements with third-party owners will be terminated and lost to competitors;

• contracts will not be renewed upon expiration or will not be available for renewal on terms consistent with current terms; and

• leasing and brokerage activity generally may decline.

     Each of these developments could adversely affect our results of operations by decreasing our revenues.

     We could incur significant costs related to environmental issues which could adversely affect our results of operations through increased compliance costs or our financial condition if we become subject to a significant liability.

     Under federal, state and local laws and regulations relating to the protection of the environment, a current or previous owner or operator of real property, and parties that generate or transport hazardous substances that are disposed of on real property, may be liable for the costs of investigating and remediating hazardous substances on or under or released from the property and for damages to natural resources. The federal Comprehensive Environmental Response, Compensation & Liability Act, and similar state laws, generally impose liability on a joint and several basis, regardless of whether the owner, operator or other responsible party knew of or was at fault for the release or presence of hazardous substances. In connection with the ownership or operation of our properties, we could be liable in the future for costs associated with investigation and remediation of hazardous substances released at or from such properties. The costs of any required remediation and related liability as to any property could be substantial under these laws and could exceed the value of the property and/or our assets. The presence of hazardous substances, or the failure to properly remediate those substances may result in our being liable for damages suffered by

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a third party for personal injury, property damage, cleanup costs, or otherwise and may adversely affect our ability to sell or rent a property or to borrow funds using the property as collateral. In addition, environmental laws may impose restrictions on the manner in which we use our properties or operate our business, and these restrictions may require expenditures for compliance. The restrictions themselves may change from time to time, and these changes may result in additional expenditures in order to achieve compliance. We cannot assure you that a material environmental claim or compliance obligation will not arise in the future. The costs of defending against any claims of liability, of remediating a contaminated property, or of complying with future environmental requirements could be substantial and affect our operating results. In addition, if a judgment is obtained against us or we otherwise become subject to a significant environmental liability, our financial condition may be adversely affected.

     During 2007, we engaged in the expansion of our Wal-Mart center at Colonial Promenade Winter Haven in Orlando, Florida. We received notice that the property that was purchased for the expansion contained environmental contamination that required remediation. Our obligation was $0.9 million and was paid during 2007. We have been given a permit to proceed with the expansion and expect to have the remediation resolved by the end of the first quarter of 2008. Once remediation is completed, we will seek to obtain a “no further action” letter from the relevant regulatory agency.

     Costs associated with addressing indoor air quality issues, moisture infiltration and resulting mold remediation may be costly.

     As a general matter, concern about indoor exposure to mold or other air contaminants has been increasing as such exposure has been alleged to have a variety of adverse effects on health. As a result, there have been a number of lawsuits in our industry against owners and managers of apartment communities relating to indoor air quality, moisture infiltration and resulting mold. The terms of our property and general liability policies generally exclude certain mold-related claims. Should an uninsured loss arise against us, we would be required to use our funds to resolve the issue, including litigation costs. We make no assurance that liabilities resulting from indoor air quality, moisture infiltration and the presence of or exposure to mold will not have a future impact on our business, results of operations and financial condition.

     As the owner or operator of real property, we could become subject to liability for asbestos-containing building materials in the buildings on our properties.

     Some of our properties may contain asbestos-containing materials. Environmental laws typically require that owners or operators of buildings with asbestos-containing building materials properly manage and maintain these materials, adequately inform or train those who may come in contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition. These laws may impose fines and penalties on building owners or operators for failure to comply with these requirements. In addition, third parties may be entitled to seek recovery from owners or operators for personal injury associated with exposure to asbestos-containing building materials.

     Uninsured or underinsured losses could adversely affect our financial condition.

     As of December 31, 2007, we are self insured up to $0.8 million, $1.1 million and $1.8 million for general liability, workers’ compensation and property insurance, respectively. We are also self insured for health insurance and responsible for claims up to $125,000 per claim and up to $1.0 million per person, according to plan policy limits. If the actual costs incurred to cover such uninsured claims are significantly greater than our budgeted costs, our financial condition will be adversely affected.

     We carry comprehensive liability, fire, extended coverage and rental loss insurance in amounts that we believe are in line with coverage customarily obtained by owners of similar properties and appropriate given the relative risk of loss and the cost of the coverage. There are, however, certain types of losses, such as lease and other contract claims, acts of war or terrorism, acts of God, and in some cases, earthquakes, hurricanes and flooding that generally are not insured because such coverage is not available or it is not available at commercially reasonable rates. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in the damaged property, as well as the anticipated future revenue from the property. The costs associated with property and casualty renewals may be higher than anticipated. We cannot predict at this time if in the future we will be able to obtain full coverage at a reasonable cost. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it impractical or undesirable to use insurance proceeds to replace a property after it has been damaged or destroyed. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged.

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     Competition for acquisitions could reduce the number of acquisition opportunities available to us and result in increased prices for properties, which could adversely affect our return on properties we purchase.

     We compete with other major real estate investors with significant capital for attractive investment opportunities in multifamily, office and retail properties. These competitors include publicly traded REITs, private REITs, domestic and foreign financial institutions, life insurance companies, pension trusts, trust funds, investment banking firms, private institutional investment funds and national, regional and local real estate investors. The current market for acquisitions continues to be extremely competitive. This competition could increase the demand for multifamily properties, and therefore reduce the number of suitable acquisition opportunities available to us and increase the prices paid for such acquisition properties. As a result, our expected return from investment in these properties would deteriorate.

     We may be unable to successfully integrate and effectively manage the properties we acquire, which could adversely affect our results of operations.

     So long as we are able to obtain capital on commercially reasonable terms, we intend to continue to selectively acquire multifamily properties that meet our criteria for investment opportunities, are consistent with our business strategies and we believe will be profitable or will enhance the value of our portfolio, as a whole. The success of these acquisitions will depend, in part, on our ability to efficiently integrate the acquired properties into our organization, and apply our business, operating, administrative, financial and accounting strategies and controls to these acquired properties. As a result of the rapid growth of our portfolio, we cannot assure you that we will be able to adapt our management, administrative, accounting and operational systems or hire and retain sufficient operational staff to integrate these properties into our portfolio and manage any future acquisitions of additional properties without operating disruptions or unanticipated costs. As we develop or acquire additional properties, we will be subject to risks associated with managing new properties, including tenant retention and mortgage default. In addition, acquisitions or developments may cause disruptions in our operations and divert management’s attention away from day-to-day operations, which could impair our relationships with our current tenants and employees. In addition, our profitability may suffer because of acquisition-related costs or amortization costs for acquired goodwill and other intangible assets. If we are unable to successfully integrate the acquired properties into our operations, our results of operations may be adversely affected.

     We may not be able to achieve the anticipated financial and operating results from our acquisitions, which would adversely affect our operating results.

     We will continue to acquire multifamily properties only if they meet our criteria and we believe that they will enhance our future financial performance and the value of our portfolio. Our belief, however, is based on and is subject to risks, uncertainties and other factors, many of which are forward-looking and are uncertain in nature or are beyond our control. In addition, some of these properties may have unknown characteristics or deficiencies or may not complement our portfolio of existing properties. As a result, some properties may be worth less or may generate less revenue than, or simply not perform as well as, we believed at the time of the acquisition, thereby negatively affecting our operating results.

     We may be unable to develop new properties or redevelop existing properties successfully, which could adversely affect our results of operations due to unexpected costs, delays and other contingencies.

     To complement our acquisition strategy, we will continue to develop new properties or expand or redevelop existing properties as opportunities arise. Development activity may be conducted through wholly-owned affiliates or through joint ventures. However, there are significant risks associated with our development activities in addition to those generally associated with the ownership and operation of developed properties. These risks include the following:

• we may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy, and other required governmental permits and authorizations, which could result in increased development costs and/or lower than expected leases;

• local real estate market conditions, such as oversupply or reduction in demand, may result in reduced or fluctuating rental rates;

• we may incur development costs for a property that exceed original estimates due to increased materials, labor or other costs or unforeseen environmental conditions, which could make completion of the property uneconomical;

• land, insurance and construction costs continue to increase in our markets and may continue to increase in the future and we may be unable to attract rents that compensate for these increases in costs;

• we may abandon development opportunities that we have already begun to explore, and we may fail to recover expenses already incurred in connection with exploring any such opportunities;

• rental rates and occupancy levels may be lower than anticipated;

• changes in applicable zoning and land use laws may require us to abandon projects prior to their completion, resulting in the loss of development costs incurred up to the time of abandonment; and

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• we may experience late completion because of construction delays, delays in the receipt of zoning, occupancy and other approvals or other factors outside of our control.

     In addition, if a project is delayed, certain tenants may have the right to terminate their leases. Any one or more of these risks may cause us to incur unexpected costs in connection with our development strategy, which would negatively affect our results of operations.

     Our joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on our joint venture partners’ financial condition, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners.

     As of December 31, 2007, we had ownership interests in 35 joint ventures. Our investments in these joint ventures involve risks not customarily associated with our wholly-owned properties, including the following:

• we share decision-making authority with some of our joint venture partners regarding major decisions affecting the ownership or operation of the joint venture and the joint venture properties, such as the acquisition of properties, the sale of the properties or the making of additional capital contributions for the benefit of the properties, which may prevent us from taking actions that are opposed by those joint venture partners;

• prior consent of our joint venture partners is required for a sale or transfer to a third party of our interests in the joint venture, which restricts our ability to dispose of our interest in the joint venture;

• our joint venture partners might become bankrupt or fail to fund their share of required capital contributions, which may delay construction or development of a joint venture property or increase our financial commitment to the joint venture;

• our joint venture partners may have business interests or goals with respect to the joint venture properties that conflict with our business interests and goals, which could increase the likelihood of disputes regarding the ownership, management or disposition of such properties;

• disputes may develop with our joint venture partners over decisions affecting the joint venture properties or the joint venture, which may result in litigation or arbitration that would increase our expenses and distract our officers and/or trustees from focusing their time and effort on our business, and possibly disrupt the day-to-day operations of the property such as by delaying the implementation of important decisions until the conflict or dispute is resolved (see, for example, the discussion under Note 19 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K); 

• we may suffer losses as a result of the actions of our joint venture partners with respect to our joint venture investments; and

• our joint venture partner may elect to sell or transfer its interests in the joint venture to a third party, which may result in our loss of management and leasing responsibilities and fees that we currently receive from the joint venture properties.

     Failure to succeed in new markets may limit our growth.

     We may from time to time commence development activity or make acquisitions outside of its existing market areas if appropriate opportunities arise. Our historical experience in our existing markets does not ensure that we will be able to operate successfully in new markets. We may be exposed to a variety of risks if we choose to enter new markets. These risks include, among others:

• an inability to evaluate accurately local apartment or for-sale residential housing market conditions and local economies;

• an inability to obtain land for development or to identify appropriate acquisition opportunities;

• an inability to hire and retain key personnel; and

• lack of familiarity with local governmental and permitting procedures.

Risks Associated with Our Indebtedness and Financing

     We have substantial indebtedness and our cash flow may not be sufficient to make required payments on our indebtedness or repay our indebtedness as it matures.

     We rely on debt financing for our business. As of December 31, 2007, the amount of our total debt was approximately $2.2 billion, consisting of $1.6 billion of consolidated debt and $0.6 billion of our pro rata share of joint venture debt. Due to our high level of debt, we may be required to dedicate a substantial portion of our funds from operations to servicing our debt, and our cash flow may be insufficient to meet required payments of principal and interest.

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     If a property were mortgaged to secure payment of indebtedness and we were unable to meet mortgage payments, the mortgagee could foreclose upon that property, appoint a receiver and receive an assignment of rents and leases or pursue other remedies.

     In addition, if principal payments due at maturity cannot be refinanced, extended or paid with proceeds of other capital transactions, such as new equity capital, our cash flow will not be sufficient in all years to repay all maturing debt. Most of our indebtedness does not require significant principal payments prior to maturity. However, we will need to raise additional equity capital, obtain collateralized or unsecured debt financing, issue private or public debt, or sell some of our assets to either refinance or repay our indebtedness as it matures. We cannot assure you that these sources of financing or refinancing will be available to us at reasonable terms or at all. Our inability to obtain financing or refinancing to repay our maturing indebtedness, and our inability to refinance existing indebtedness on reasonable terms, may require us to make higher interest and principal payments, issue additional equity securities, or sell some of our assets on disadvantageous terms, all or any of which may result in foreclosure of properties, partial or complete loss on our investment and otherwise adversely affect our financial conditions and results of operation.

     Our degree of leverage could limit our ability to obtain additional financing which would negatively impact our results of operation and financial condition.

     As of December 31, 2007, our consolidated borrowings and pro rata share of unconsolidated borrowings totaled approximately $2.2 billion ($1.6 billion of which comprised consolidated borrowings and $0.6 billion of which comprised unconsolidated borrowings), which represented approximately 59.0% of our total market capitalization. Total market capitalization represents the sum of the outstanding indebtedness (including our share of joint venture indebtedness), the total liquidation preference of all our preferred units and the total market value of our common units based on the closing price of the Trust’s common shares as of December 31, 2007. Our organizational documents do not contain any limitation on the incurrence of debt. Our leverage and any future increases in our leverage could adversely affect our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, development or other general corporate purposes which would negatively impact our results of operation and financial condition.

     Due to the amount of our variable rate debt, rising interest rates would adversely affect our results of operation.

     As of December 31, 2007, we had approximately $213.4 million of variable rate debt outstanding, consisting of $82.9 million of our consolidated debt and $130.5 million of our pro rata share of variable rate unconsolidated joint venture debt. While we have sought to refinance our variable rate debt with fixed rate debt or cap our exposure to interest rate fluctuations by using interest rate swap agreements where appropriate, failure to hedge effectively against interest rate changes may adversely affect our results of operations. In addition, as opportunities arise, we may borrow additional money with variable interest rates in the future. As a result, a significant increase in interest rates would adversely affect our results of operations.

     We have entered into debt agreements with covenants that restrict our operating activities, which could adversely affect our results of operations, and violation of these restrictive covenants could adversely affect our financial condition through debt defaults or acceleration.

     Our unsecured credit facility contains numerous customary restrictions, requirements and other limitations on our ability to incur debt, including the following financial ratios:

• collateralized debt to total asset value ratio;

• fixed charge coverage ratio;

• total liabilities to total asset value ratio;

• total permitted investments to total asset value ratio; and

• unencumbered leverage ratio.

     The indenture under which our senior unsecured debt is issued also contains financial and operating covenants including coverage ratios. Our indenture also limits our ability to:

• incur collateralized and unsecured indebtedness;

• sell all or substantially all or our assets; and

• engage in mergers, consolidations and acquisitions.

     These restrictions will continue to hinder our operational flexibility through limitations on our ability to incur additional indebtedness, pursue certain business initiatives or make other changes to our business. These limitations could adversely affect our results of operations. In addition, violations of these covenants could cause the declaration of defaults and any related acceleration of indebtedness, which would result in adverse consequences to our financial condition. As of December 31, 2007, we were in compliance with all of the financial and operating covenants under our existing credit facility and indenture, and we believe that we will continue to remain in compliance with these covenants.

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     Our inability to obtain sufficient third party financing could adversely affect our results of operations and financial condition because we depend on third party financing for our development, expansion and acquisition activities.

     To qualify as a REIT, the Trust must distribute to its shareholders each year at least 90% of our REIT taxable income, excluding any net capital gain. Because of these distribution requirements, it is not likely that we will be able to fund all future capital needs from income from operations. As a result, as we continue to develop or acquire new properties or expand existing properties, we will continue to rely on third-party sources of capital, including lines of credit, collateralized or unsecured debt (both construction financing and permanent debt), and equity issuances. These sources, however, may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of factors, including the market’s perception of our growth potential and our current and potential future earnings. Moreover, additional equity offerings of the Trust may result in substantial dilution of our partners’ interests, and additional debt financing may substantially increase our leverage. There can be no assurance that we will be able to obtain the financing necessary to fund new development or project expansions or our acquisition activities on terms favorable to us or at all. If we are unable to obtain sufficient level of third party financing to fund our growth, our results of operations and financial condition may be adversely affected.

     Our senior notes do not have an established trading market; therefore, holders of our notes may not be able to sell their notes.

     Each series of our senior notes is a new issue of securities with no established trading market. We do not intend to apply for listing of any series of notes on any national securities exchange. The underwriters in an offering of senior notes may advise us that they intend to make a market in the notes, but they are not obligated to do so and may discontinue market making at any time without notice. We can give no assurance as to the liquidity of or any trading market for any series of our notes.

Risks Associated with Our Organization

     Some of the Trust’s trustees and officers have conflicts of interest and could exercise influence in a manner inconsistent with the interests of our unitholders.

     As a result of their substantial ownership of common shares and units, Messrs. Thomas Lowder, the Trust’s Chairman of the Board, James Lowder and Harold Ripps, each of whom is a trustee of the Trust, could seek to exert influence over our decisions as to sales or re-financings of particular properties we own.  Any such exercise of influence could produce decisions that are not in the best interest of all of the holders of interests in us.

     The Lowder family and their affiliates hold interests in a company that has performed insurance brokerage services with respect to our properties. This company may perform similar services for us in the future. As a result, the Lowder family may realize benefits from transactions between this company and us that are not realized by other holders of interests in us.  In addition, Thomas and James Lowder, as trustees of the Trust, may be in a position to influence us to do business with companies in which the Lowder family has a financial interest.  Our policies may not be successful in eliminating the influence of conflicts.  Moreover, transactions with companies controlled by the Lowder family, if any, may not be on terms as favorable to us as we could obtain in an arms-length transaction with a third party.

     Restrictions on the acquisition and change in control of the Trust may have adverse effects on the value of our common units.

     Various provisions of the Trust’s Declaration of Trust restrict the possibility for acquisition or change in control of the Trust, even if the acquisition or change in control were in the unitholders’ interest. As a result, the value of our common units (which are redeemable for cash or, at the election of the Trust, on a one-for-one basis for the Trust’s common shares) may be less than they would otherwise be in the absence of such restrictions.

     The Trust’s Declaration of Trust contains ownership limits and restrictions on transferability. The Trust’s Declaration of Trust contains certain restrictions on the number of Trust common shares and preferred shares that individual shareholders may own, which is intended to ensure that the Trust maintains its qualification as a REIT. In order for the Trust to qualify as a REIT, no more than 50% of the value of the Trust’s outstanding shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year and the shares must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year. To help avoid violating these requirements, the Trust’s Declaration of Trust contains provisions restricting the ownership and transfer of its shares in certain circumstances. These ownership limitations provide that no person may beneficially own, or be deemed to own by virtue of the attribution provisions of the Code, more than:

• 9.8%, in either number of shares or value (whichever is more restrictive), of any class of outstanding shares of the Trust;

• 5% in number or value (whichever is more restrictive), of the outstanding common shares and any outstanding excess shares of the Trust; and

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• in the case of certain excluded holders related to the Lowder family: 29% by one individual; 34% by two individuals; 39% by three individuals; or 44% by four individuals.

These ownership limitations may be waived by the Board of Trustees of the Trust if it receives representations and undertakings of certain facts for the protection of the Trust’s REIT status, and if requested, an IRS ruling or opinion of counsel.

          The Trust’s Declaration of Trust permits the Board of Trustees to issue preferred shares with terms that may discourage a third party from acquiring the Trust. The Trust’s Declaration of Trust permits the Board of Trustees of the Trust to issue up to 20,000,000 preferred shares, having those preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, or terms or conditions of redemption as determined by the Board of Trustees of the Trust. Thus, the Board of Trustees of the Trust could authorize the issuance of preferred shares with terms and conditions that could have the effect of discouraging a takeover or other transaction in which some or a majority of shares might receive a premium for their shares over the then-prevailing market price of shares.

          The Trust’s Declaration of Trust and Bylaws contain other possible anti-takeover provisions. The Trust’s Declaration of Trust and Bylaws contain other provisions that may have the effect of delaying, deferring or preventing an acquisition or change in control of the Trust, and, as a result could prevent our unitholders from being paid a premium for their common units over the then-prevailing market prices. These provisions include:

• a prohibition on shareholder action by written consent;

• the ability to remove trustees only at a meeting of shareholders called for that purpose, by the affirmative vote of the holders of not less than two-thirds of the shares then outstanding and entitled to vote in the election of trustees;

• the limitation that a special meeting of shareholders can be called only by the president or chairman of the board or upon the written request of shareholders holding outstanding shares representing at least 25% of all votes entitled to be cast at the special meeting;

• the advance written notice requirement for shareholders to nominate a trustee before a meeting of shareholders; and

• the requirement that the amendment of certain provisions of the Trust’s Declaration of Trust relating to the removal of trustees, the termination of the Trust and any provision that would have the effect of amending these provisions, require the affirmative vote of the holders of two-thirds of the Trust’s shares then outstanding.

          The Board of Trustees of the Trust has adopted a shareholder rights plan that could discourage a third party from making a proposal to acquire the Trust.

          The Board of Trustees of the Trust has adopted a shareholder rights plan, which may discourage a third party from making a proposal to acquire the Trust. Under the plan, preferred purchase rights, which are attached to the Trust’s common shares, generally will be triggered upon the acquisition of 20% or more of the Trust’s outstanding common shares, unless the rights are redeemed or exchanged. If triggered, these rights would entitle the Trust’s shareholders other than the acquirer, to purchase 1/10,000th of a Colonial Properties Trust Series 1998 preferred share at a price of $92.00, subject to adjustment. The plan expires by its own terms on November 1, 2008.

          We may change our business policies in the future, which could adversely affect our financial condition or results of operations.

          Our major policies, including our policies with respect to development, acquisitions, financing, growth, operations, debt capitalization and distributions, are determined by our Board of Trustees. Although it has no present intention to do so, our Board of Trustees of the Trust may amend or revise these and other policies from time to time. A change in these policies could adversely affect our financial condition or results of operations, including our ability to service debt.

Risks Associated with Income Tax Laws

          The Trust’s failure to qualify as a REIT could have adverse tax consequences.

          We believe that the Trust has qualified for taxation as a REIT for federal income tax purposes commencing with the taxable year ended December 31, 1993. The Trust intends to continue to meet the requirements for taxation as a REIT, but we cannot assure that the Trust will qualify as a REIT. We have not requested and do not plan to request a ruling from the IRS that the Trust qualifies as a REIT and the statements in this Form 10-K are not binding on the IRS or any court. As a REIT, the Trust generally will not be subject to federal income tax on the income that the Trust distributes currently to its shareholders. Many of the REIT requirements are highly technical and complex. The determination that the Trust is a REIT requires an analysis of various factual matters and circumstances that may not be totally within its control. For example, to qualify as a REIT, at least 95% of the Trust’s gross income must come from sources that are itemized in the REIT tax laws. The Trust is generally prohibited from owning more than 10% of the voting securities or more than 10% of the value of the outstanding securities of any one issuer, subject to certain exceptions, including an exception with respect to certain debt instruments and corporations electing to be “taxable REIT subsidiaries.” The Trust is also required to distribute to shareholders at least 90% of

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its REIT taxable income (excluding capital gains). The fact that the Trust holds most of its assets through CRLP further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize the Trust’s REIT status. Furthermore, Congress or the Internal Revenue Service might make changes to the tax laws and regulations, or the courts might issue new rulings that make it more difficult, or impossible, for the Trust to remain qualified as a REIT.

          If the Trust fails to qualify as a REIT for federal income tax purposes, and is unable to avail itself of certain savings provisions set forth in the Internal Revenue Code, it would be subject to federal income tax at regular corporate rates. If the Trust failed to qualify as a REIT, the Trust would have to pay significant income taxes, which would reduce net earnings available for investment or distribution to its shareholders. This would likely have a significant adverse affect on the value of the Trust’s securities and, as a result, on the redemption value of our units. In addition, the Trust would no longer be required to make any distributions to its shareholders, but we would still be required to distribute quarterly substantially all of our net cash revenues (other than capital contributions) to our unitholders, including the Trust. If the Trust fails to qualify as a REIT for federal income tax purposes and is able to avail itself of one or more of the statutory savings provisions in order to maintain its REIT status, the Trust would nevertheless be required to pay penalty taxes of $50,000 or more for each such failure. Moreover, the Trust’s failure to qualify as a REIT also would cause an event of default under our credit facility and may adversely affect our ability to raise capital and to service our debt.

          Even if the Trust qualifies as a REIT, we and our subsidiaries will be required to pay some taxes.

          Any net taxable income earned directly by our taxable REIT subsidiaries, or through entities that are disregarded for federal income tax purposes as entities separate from the Trust’s taxable REIT subsidiaries, will be subject to federal and possibly state corporate income tax. The Trust has elected to treat Colonial Properties Services, Inc. as a taxable REIT subsidiary, and may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a taxable REIT subsidiary will be subject to an appropriate level of federal income taxation. For example, a taxable REIT subsidiary is limited in its ability to deduct interest payments made to an affiliated REIT. In addition, the REIT has to pay a 100% penalty tax on some payments that it receives or on some deductions taken by the taxable REIT subsidiaries if the economic arrangements between the REIT, the REIT’s tenants, and the taxable REIT subsidiary are not comparable to similar arrangements between unrelated parties. Finally, some state and local jurisdictions may tax some of the Trust’s income even though as a REIT it is not subject to federal income tax on that income because not all states and localities treat REITs the same as they are treated for federal income tax purposes. To the extent that we and our affiliates, including the Trust, are required to pay federal, state and local taxes, less cash will be available for distributions to our unitholders and the Trust’s shareholders.

          If the IRS were to challenge successfully our status as a partnership for federal income tax purposes, the Trust would cease to qualify as a REIT and suffer other adverse consequences.

          We believe that we qualify to be treated as a partnership for federal income tax purposes. As a partnership, we are not subject to federal income tax on our income. Instead, each of our partners, including the Trust, is required to pay tax on such partner’s allocable share of its income. However, we will be treated as a corporation for federal income tax purposes if we are a “publicly traded partnership,” unless at least 90% of our income is qualifying income as defined in the Internal Revenue Code. We believe that we are not a publicly traded partnership and, in addition, we believe that we would have sufficient qualifying income, which includes real property rents and other passive income, to ensure that we would be taxed as a partnership even if we were a publicly traded partnership. No assurance can be provided, however, that the IRS will not challenge our status as a partnership for federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating us as a corporation for federal income tax purposes, the Trust would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, cease to qualify as a REIT. If we fail to qualify as a partnership for federal income tax purposes or the Trust fails to qualify as a REIT, either failure would cause an event of default under our credit facility and may adversely affect our ability to raise capital and to service our debt. Also, our failure to qualify as a partnership would cause us to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to our partners, including the Trust.

Item 1B. Unresolved Staff Comments.

          None.

32

Item 2. Operating Properties.

General

          As of December 31, 2007, our consolidated real estate portfolio consisted of 108 consolidated operating properties, located in nine states in the Sunbelt region of the United States. In addition, we maintain non-controlling partial interests ranging from 5% to 50% in an additional 92 properties held through unconsolidated joint ventures. These 200 properties, including consolidated and unconsolidated properties, are located in eleven states in the Sunbelt region of the United States.

          For purposes of the tables included in this Item 2, “Total 2007 Operating Property Revenue from Continuing Operations” is calculated by adding Minimum rent, Minimum rent from affiliates, Percentage rent, Tenant recoveries and Other property related revenues from our Consolidated Statements of Income and Comprehensive Income. Total 2007 Operating Property Revenue in the following tables includes revenue from continuing operations and well as discontinued operations, which corresponds to the manner in which we analyze our operating results. We generally reinvest disposition proceeds into new operating communities and developments and, therefore, believe it is most useful to present continuing and discontinued operations revenues on a combined basis (see Note 5 and Note 10 to our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K). In addition, for purposes of the tables included in this Item 2, we define “stabilized occupancy as having occurred once a property has attained 93% physical occupancy.

          The following table sets forth certain summary information about our consolidated operating properties as of December 31, 2007:

Summary of Consolidated Operating Properties

	Number of
	Operating		Units/ NRA/						Total Operating					Percentage
Type of	Properties at		GRA at		Total 2007 Operating		Revenues from		Property Revenue		Percent of Total			Occupancy at
Operating	December 31,		December 31,		Property Revenue		Discontinued		from Continuing		2007 Operating			Dec. 31, 2007
Property	2007		2007 (1)		(2)(3)		Operations in 2007		Operations (4)		Property Revenue			(5)
Multifamily		102		30,371	$	297,655,822	$	45,395,755	$	252,260,067		73.2	%		96.0%
Office		2		206,703		57,348,924		521,513		56,827,411		14.1	%		97.1%
Retail		4		1,042,306		51,630,567		17,000,584		34,629,983		12.7	%		90.4%
Total		108			$	406,635,313	$	62,917,852	$	343,717,461		100.0	%

(1)	For purposes of this table, units refer to multifamily units, NRA refers to net rentable area of office space and GRA refers to gross retail area, which includes gross leasable area and space owned by anchor tenants.
(2)	Total 2007 Operating Property Revenue is calculated for the year ended December 31, 2007, and, as a result, includes revenue attributable to consolidated properties acquired or disposed of during 2007 that are not reflected in the Number of Operating Properties column.
(3)	Amount includes $62,917,852 of revenue from properties classified as discontinued operations during 2007. In order to arrive at consolidated property revenues of $343,717,461, in accordance with accounting principles generally accepted in the United States (“GAAP”), this amount must be removed from the total property revenue.
(4)	Total Operating Property Revenue from Continuing Operations can be calculated by adding Minimum rent, Minimum rent from affiliates, Percentage rent, Tenant recoveries and Other property related revenue on our Consolidated Statements of Income and Comprehensive Income.
(5)	Excludes the units/square feet of developments of one multifamily apartment community (336 units), one office property (169,256 square feet) and one retail property (260,649 square feet) that had not achieved stabilized occupancy as of December 31, 2007.

Multifamily Properties

          Our multifamily portfolio is comprised of 122 multifamily apartment communities, including those properties in lease-up, consisting of 102 wholly-owned consolidated properties and 20 properties held through unconsolidated joint ventures, which properties contain, in the aggregate, a total of 36,314 garden-style apartments and range in size from 80 to 586 units. Of the 122 multifamily communities, 13 multifamily properties (containing a total of 4,552 apartment units) are located in Alabama, four multifamily properties (containing a total of 952 units) are located in Arizona, one multifamily property (containing a total of 200 units) is located in California, 11 multifamily properties (containing a total of 3,409 units) are located in Florida, 16 multifamily properties (containing a total of 4,789 units) are located in Georgia, 28 multifamily properties (containing a total of 8,087 units) are located in North Carolina, eight multifamily properties (containing a total of 1,997 units) are located in South Carolina, three multifamily properties (containing a total of 899 units) are located in Tennessee, 28 multifamily properties (containing a total of 8,550 units) are located in Texas and 10 multifamily properties (containing a total

33

of 2,879 units) are located in Virginia. Each of the multifamily properties is established in its local market and provides residents with numerous amenities, which may include a swimming pool, exercise room, jacuzzi, clubhouse, laundry room, tennis court(s) and/or a playground. We manage all of the multifamily properties.

          The following table sets forth certain additional information relating to the consolidated multifamily properties as of and for the year ended December 31, 2007.

Consolidated Multifamily Properties

										Average		Total Multifamily			Percent of Total
		Year	Number		Approximate					Rental		Operating Property			Multifamily Property
Consolidated Multifamily		Completed	of		Rentable Area		Percent			Rate		Revenue for			Operating Revenue
Property (1)	Location	(2)	Units (3)		(Square Feet)		Occupied			Per Unit (4)		2007 (5)			for 2007 (6)
Alabama:
CG at Edgewater I	Huntsville	1990		500		541,368		95.2	%	$	762	$	4,636,830			1.5	%
CG at Liberty Park	Birmingham	2000		300		338,684		97.3	%		1,057		3,492,151			1.2	%
CG at Madison	Huntsville	2000		336		354,592		94.9	%		853		3,495,156			1.2	%
CG at Promenade	Montgomery	2000											460,942	(7)		0.2	%
CV at Ashford Place	Mobile	1983		168		145,600		99.4	%		632		1,269,292			0.4	%
CV at Huntleigh Woods	Mobile	1978		233		198,861		96.6	%		596		1,667,654			0.6	%
CV at Inverness II & III	Birmingham	1986/87/90		586		508,597		95.9	%		697		4,188,995			1.4	%
CV at Trussville	Birmingham	1996/1997		376		410,340		94.7	%		819		3,393,784			1.1	%
Subtotal — Alabama				2,499		2,498,042		95.9	%		779		22,604,804			7.6	%
Arizona
CG at Inverness Commons	Scottsdale	2002		300		267,900		95.3	%		905		2,218,762	(8)		0.7	%
CG at OldTown Scottsdale North	Scottsdale	1995		208		181,904		95.2	%		1,143		1,895,122	(8)		0.7	%
CG at OldTown Scottsdale South	Scottsdale	1994		264		234,112		96.6	%		1,135		2,548,423	(8)		0.9	%
CG at Scottsdale	Scottsdale	1999		180		182,857		98.9	%		1,285		2,442,622			0.8	%
Subtotal — Arizona				952		866,773		96.3	%		1,093		9,104,929			3.1	%
Florida:
Azur at Metrowest	Orlando	1997											132,767	(9)		0.0	%
Capri at Hunter’s Creek	Orlando												179,365	(9)		0.1	%
CG at Heather Glen	Orlando	2000		448		523,228		98.0	%		990		5,672,430			1.9	%
CG at Heathrow	Orlando	1997		312		353,040		97.8	%		1,046		3,814,919			1.3	%
CG at Hunter’s Creek	Orlando	1997		496		624,464		96.6	%		1,045		6,466,587	(10)		2.1	%
CG at Lakewood Ranch	Sarasota	1999		288		301,656		99.7	%		1,079		3,726,552			1.3	%
CG at Seven Oaks	Tampa	2004		318		301,521		96.5	%		990		3,693,168			1.2	%
CG at Town Park Reserve	Orlando	2004		80		77,416		95.0	%		1,218		1,161,497			0.4	%
CG at Town Park(Lake Mary)	Orlando	2002		456		564,056		94.7	%		1,094		5,744,596			1.9	%
CV at Twin Lakes	Orlando	2004		460		417,808		95.2	%		959		5,103,185			1.7	%
Murano at Delray Beach	West Palm Beach	2002											181,038			0.1	%
Portofino at Jensen Beach	Port St. Lucie	2002											130,596			0.0	%
Murano at Delray Beach	West Palm Beach	2002		93		112,273		95.7	%		1,196		482,838	(11)		0.2	%
Portofino at Jensen Beach	Port St. Lucie	2002		118		136,670		98.3	%		876		504,479	(11)		0.2	%
Subtotal — Florida				3,069		3,412,132		96.7	%		1,032		36,994,017			12.4	%
Georgia:
CG at Barrett Creek	Atlanta	1999		332		309,962		97.9	%		798		3,522,204			1.2	%
CG at Berkeley Lake	Atlanta	1998		180		244,217		97.2	%		1,110		2,094,610			0.7	%
CG at Enclave	Atlanta	1995											128,292	(7)		0.0	%
CG at Godley Station I	Savannah	2005		312		337,344		94.9	%		943		1,987,995	(8)		0.7	%
CG at Hammocks	Savannah	1997		308		323,844		97.1	%		950		3,673,995			1.2	%
CG at McDaniel Farm	Atlanta	1997		425		456,834		94.6	%		941		4,436,767			1.5	%
CG at McGinnis Ferry	Atlanta	1997		434		509,455		97.7	%		970		4,622,351			1.6	%
CG at Mount Vernon	Atlanta	1997		213		257,180		97.7	%		1,151		2,869,766			1.0	%
CG at Pleasant Hill	Atlanta	1996		502		501,816		95.4	%		1,014		4,803,488			1.7	%
CG at River Oaks	Atlanta	1992		216		276,208		96.8	%		1,101		2,332,002			0.8	%
CG at River Plantation	Atlanta	1994		232		310,364		91.8	%		1,076		2,505,635			0.8	%
CG at Shiloh	Atlanta	2002		498		533,412		94.0	%		983		5,369,947			1.8	%
CG at Sugarloaf	Atlanta	2002		250		328,558		95.6	%		1,034		2,800,994			0.9	%
CV at Greentree	Savannah	1984		194		165,216		96.9	%		765		1,796,631			0.6	%
CV at Huntington	Savannah	1986		147		121,112		97.3	%		806		1,326,090			0.4	%
CV at Marsh Cove	Savannah	1983		188		197,200		98.9	%		847		1,799,914			0.6	%
CV at Poplar Place	Atlanta	1989/1995											152,479	(7)		0.1	%
CV at Spring Lake	Atlanta	1986											83,275	(7)		0.0	%
CV at Timothy Woods	Athens	1996											91,988	(7)		0.0	%
Subtotal — Georgia				4,431		4,872,722		96.0	%		1,041		46,398,424			15.6	%
Mississippi:
CG at Natchez Trace	Jackson	1995/1997											1,418,763	(7)		0.5	%
CG at The Reservoir	Jackson	2000											937,312	(7)		0.3	%
Subtotal — Mississippi													2,356,075			0.8	%

34

										Average		Total Multifamily			Percent of Total
		Year	Number		Approximate					Rental		Operating Property			Multifamily Property
Consolidated Multifamily		Completed	of		Rentable Area		Percent			Rate		Revenue for			Operating Revenue
Property (1)	Location	(2)	Units (3)		(Square Feet)		Occupied			Per Unit(4)		2007(5)			for 2007 (6)
North Carolina:
Autumn Park I & II	Greensboro	2001/2004		402		403,776		95.0	%		874		3,669,313			1.1	%
Beacon Hill	Charlotte	1985											127,317	(7)		0.0	%
CG at Arringdon	Raleigh	2003		320		311,200		94.1	%		927		3,155,029			1.1	%
CG at Ayrsley	Charlotte	Dev											71,018			0.0	%
CG at Beverly Crest	Charlotte	1996		300		278,685		93.7	%		869		2,852,945			1.0	%
CG at Crabtree Valley	Raleigh	1997		210		209,670		98.1	%		923		1,957,595			0.7	%
CG at Huntersville	Charlotte	Dev											180,095			0.1	%
CG at Legacy Park	Charlotte	2001		288		300,768		95.5	%		882		2,719,014			0.9	%
CG at Mallard Creek	Charlotte	2004		252		232,646		100.0	%		927		2,584,436			0.9	%
CG at Mallard Lake	Charlotte	1998		302		300,806		97.4	%		893		2,934,055			1.0	%
CG at Patterson Place	Raleigh	1997		252		236,756		98.8	%		938		2,487,592			0.8	%
CG at Trinity Commons	Raleigh	2000/2002		462		484,404		98.1	%		876		4,356,722			1.5	%
CG at University Center	Charlotte	2006		156		167,028		95.5	%		852		1,485,943			0.5	%
CG at Wilmington	Wilmington	1998/2002		390		355,896		93.6	%		773		3,481,297	(10)		1.2	%
Clarion Crossing	Raleigh	1985											112,808	(7)		0.0	%
CV at Chancellor Park	Charlotte	1996		340		326,410		97.1	%		858		3,020,774			1.0	%
CV at Charleston Place	Charlotte	1986		214		172,405		96.7	%		698		1,560,953	(10)		0.5	%
CV at Deerfield	Raleigh	1985		204		198,180		97.5	%		854		1,771,686			0.6	%
CV at Greystone	Charlotte	1998/2000		408		386,988		92.9	%		768		3,270,505	(10)		1.1	%
CV at Highland Hills	Raleigh	1987		250		262,639		93.6	%		994		2,027,655			0.7	%
CV at Meadow Creek	Charlotte	1984		250		230,430		93.6	%		721		1,963,890			0.7	%
CV at Mill Creek	Winston-Salem	1984		220		209,680		94.1	%		664		1,532,168	(10)		0.5	%
CV at Pinnacle Ridge	Asheville	1948/1985		166		146,856		99.4	%		744		1,335,406			0.4	%
CV at Regency Place	Raleigh	1986											65,305	(7)		0.0	%
CV at South Tryon	Charlotte	2002		216		236,088		94.9	%		846		1,993,520			0.7	%
CV at Stone Point	Charlotte	1986		192		172,928		96.4	%		754		1,724,950	(10)		0.6	%
CV at Timber Crest	Charlotte	2000		282		273,408		94.7	%		836		2,270,439	(10)		0.8	%
Glen Eagles I & II	Winston-Salem	1990/2000		310		313,520		90.0	%		773		2,378,046			0.8	%
Heatherwood	Charlotte	1980		476		438,563		92.2	%		709		3,422,828			1.1	%
Parkside at Woodlake	Raleigh	1996		266		255,124		97.0	%		770		2,093,437			0.7	%
Subtotal — North Carolina				7,128		6,904,854		95.3	%		829		62,606,742			21.0	%
South Carolina:
Cape Landing	Myrtle Beach	1997/1998											1,207,043	(7)		0.4	%
CG at Cypress Cove	Charleston	2001		264		303,996		97.3	%		932		2,836,580			0.9	%
CG at Quarterdeck	Charleston	1987		230		218,880		97.0	%		929		2,538,006			0.9	%
CV at Hampton Pointe	Charleston	1986		304		314,600		95.7	%		816		2,943,600			1.0	%
CV at Waters Edge	Charleston	1985		204		187,640		94.1	%		773		1,823,250			0.6	%
CV at Westchase	Charleston	1985		352		258,170		97.7	%		703		3,012,555			1.0	%
CV at Windsor Place	Charleston	1985		224		213,440		97.8	%		760		2,093,593			0.7	%
Merritt at James Island	Charleston	2002											503	(9)		0.0	%
Subtotal — South Carolina				1,578		1,496,726		96.7	%		813		16,455,128			5.5	%
Tennessee
CG at Bellevue	Nashville	1996		349		343,977		97.1	%		941		3,756,881			1.2	%
CG at Shelby Farms I	Memphis	1998		296		317,596		95.9	%		865		2,973,637	(10)		1.0	%
CG at Shelby Farms II	Memphis	Dev											185,876	(10)		0.1	%
Subtotal — Tennessee				645		661,573		96.6	%		906		6,916,394			2.3	%
Texas:
Brookfield	Dallas	1984		232		165,672		94.0	%		600		1,553,485	(10)		0.5	%
CG at Bear Creek	Fort Worth	1998		436		395,137		97.9	%		1,003		4,474,265			1.5	%
CG at Round Rock	Austin	2006		422		429,650		96.2	%		1,032		4,182,666			1.4	%
CG at Silverado	Austin	2004		238		239,603		91.6	%		1,014		2,306,387			0.8	%
CG at Silverado Reserve	Austin	2006		256		266,446		92.6	%		1,056		2,665,804			0.9	%
CG at Valley Ranch	Dallas	1997		396		462,104		97.7	%		1,120		4,986,743			1.6	%
Cottonwood Crossing	Fort Worth	1985		200		150,200		96.0	%		596		1,284,238	(10)		0.4	%
CV at Bear Creek	Fort Worth	1984		120		90,600		96.7	%		713		955,278	(10)		0.3	%
CV at Bedford	Fort Worth	1983		238		157,564		96.2	%		619		1,672,711	(10)		0.6	%
CV at Canyon Hills	Austin	1996		229		183,056		97.8	%		745		1,992,010			0.7	%
CV at Grapevine I & II	Fort Worth	1985		450		380,468		96.0	%		777		4,030,415	(12)		1.4	%
CV at Main Park	Dallas	1984		192		180,258		97.9	%		829		1,840,532			0.6	%
CV at North Arlington	Fort Worth	1985		240		190,540		97.9	%		702		1,862,695			0.6	%
CV at Oakbend	Dallas	1996		426		382,690		95.3	%		848		3,807,563			1.3	%
CV at Pear Ridge	Dallas	1988		242		198,522		98.3	%		733		1,990,663	(10)		0.7	%
CV at Quarry Oaks	Austin	1996		533		469,988		96.8	%		813		4,810,403			1.6	%
CV at Shoal Creek	Fort Worth	1996		408		388,426		95.8	%		949		4,042,565			1.4	%
CV at Sierra Vista	Austin	1999		232		205,604		94.4	%		807		2,044,477			0.7	%
CV at Vista Ridge	Dallas	1985		300		228,696		97.7	%		662		2,181,377	(13)		0.7	%
CV at Willow Creek	Fort Worth	1996		478		426,909		97.3	%		947		4,495,484			1.5	%
Paces Cove	Dallas	1982		328		219,726		96.6	%		584		1,986,957	(10)		0.7	%
Remington Hills	Dallas	1984		362		346,592		96.4	%		882		3,221,735			1.1	%
Summer Tree	Dallas	1980		232		136,272		95.7	%		562		1,479,747			0.5	%
Subtotal — Texas				7,190		6,294,723		96.3	%		835		63,868,199			21.5	%

35

										Average		Total Multifamily			Percent of Total
		Year	Number		Approximate					Rental		Operating Property			Multifamily Property
Consolidated Multifamily		Completed	of		Rentable Area		Percent			Rate		Revenue for			Operating Revenue
Property (1)	Location	(2)	Units (3)		(Square Feet)		Occupied			Per Unit(4)		2007 (5)			for 2007 (6)
Virginia:
Ashley Park	Richmond	1988		272		194,464		96.3	%		745		2,393,417	(10)		0.8	%
CV at Chase Gayton	Richmond	1984		328		311,196		97.6	%		935		3,121,452			1.1	%
CV at Greenbrier	Washington DC	1980		258		218,235		99.2	%		969		3,085,895			1.0	%
CV at Hampton Glen	Richmond	1986		232		177,760		98.7	%		890		2,454,152			0.8	%
CV at Harbour Club	Norfolk	1988		213		193,163		91.5	%		996		2,468,748			0.8	%
CV at Tradewinds	Norfolk	1988		284		279,884		91.9	%		960		3,036,596			1.0	%
CV at Waterford	Richmond	1989		312		288,840		96.5	%		923		3,210,689			1.2	%
CV at West End	Richmond	1987		224		137,310		99.6	%		831		2,214,481			0.7	%
Mayflower Seaside	Norfolk	1950											1,499,845	(7)		0.5	%
Trolley Square East & West	Richmond	1964/1965		331		169,499		92.7	%		779		3,066,287			1.0	%
Trophy Chase I & II	Charlottesville	1970		425		369,664		91.3	%		788		3,799,545			1.3	%
Subtotal — Virginia				2,879		2,340,015		95.2	%		874		30,351,108			10.2	%
TOTAL				30,371		29,347,560		96.0	%	$	880	$	297,655,822			100.0	%

(1)	At December 31, 2007, only 102 of the properties listed above are 100% owned by us. As reflected in the notes below, the other properties listed above reflect properties that were consolidated during 2007 before being sold outright or sold to joint ventures in which we retain an ownership interest. All properties are 100% owned by us. 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)	Represents year initially completed or, where applicable, year(s) in which additional phases were completed at the property.
(3)	Units (in this table only) refer to multifamily apartment units. Number of units includes all apartment units occupied or available for occupancy at December 31, 2007.
(4)	Represents weighted average rental rate per unit of the 102 consolidated multifamily properties at December 31, 2007.
(5)	Total Multifamily Operating Property Revenue for 2007 includes property operating revenue for each of our 102 consolidated multifamily properties at December 31, 2007, as well as 12 consolidated properties sold during 2007 (through the date of sale), three properties in development, two properties that were previously condominium projects and three that were converted to condominiums.
(6)	Percent of Total Multifamily Operating Property Revenue for 2007 represents each property’s proportionate share of Total Multifamily Operating Property Revenue for 2007 from our 102 consolidated multifamily properties, as well as 12 consolidated properties sold during 2007, three properties in development, two properties that were previously condominium projects and three properties that were converted to condominiums.
(7)	Represents revenues from January 1, 2007 through the date the properties were sold during 2007.
(8)	Represents revenues from the date of our acquisition of this property in 2007 through December 31, 2007.
(9)	These properties are condominium conversions properties that are classified as held for sale.
(10)	These are operating properties that are classified as held for sale.
(11)	These properties were previously condominium projects. During the first quarter of 2007, the Company made the decision to lease all remaining unsold units at both projects.
(12)	This property was renamed during 2007, from CV at Grayson Square I & II to CV at Grapevine I & II.
(13)	This property was renamed during 2007, from CV at Paces Point to CV at Vista Ridge.

          The following table sets forth certain additional information relating to the unconsolidated multifamily properties as of and for the year ended December 31, 2007.

36

Unconsolidated Multifamily Properties

										Average
		Year	Number		Approximate					Rental
Unconsolidated Multifamily		Completed	of		Rentable Area		Percent			Rate
Property (1)	Location	(2)	Units (3)		(Square Feet)		Occupied			Per Unit (4)
Alabama:
CG at Mountain Brook	Birmingham	1987/1991		392		392,700		98.2	%		808
Colony Woods	Birmingham	1988		414		450,682		98.3	%		752
CV at Rocky Ridge	Birmingham	1984		226		258,900		94.7	%		773
Madison at Shoal Run	Birmingham	1985		276		249,300		93.5	%		691
Meadows at Brook Highland	Birmingham	1987		400		465,605		95.5	%		759
The Grove at Riverchase	Birmingham	1996		345		344,625		95.4	%		837
Subtotal — Alabama				2,053		2,161,812		96.2	%		773
California
Park Crossing	Fairfield	2006		200		209,928		96.0	%		1,455
Subtotal — California				200		209,928		96.0	%		1,455
Florida:
CG at Palma Sola	Sarasota	1992		340		293,272		93.2	%		866
Subtotal — Florida				340		293,272		93.2	%		866
Georgia:
CG at Huntcliff	Atlanta	1997		358		364,633		96.1	%		1,074
Subtotal — Georgia				358		364,633		96.1	%		8,355
North Carolina:
CG at Research Park (Durham)	Raleigh	2002		370		383,703		96.8	%		967
CV at Cary	Raleigh	1995		319		400,127		98.4	%		549
CV at Matthews JV	Charlotte	1990		270		255,712		97.4	%		790
Subtotal — North Carolina				959		1,039,542		97.5	%		778
South Carolina:
Arbors at Windsor Lake	Columbia	1991		228		216,240		93.4	%		796
Stone Ridge	Columbia	1972		191		199,226		95.3	%		668
Subtotal — South Carolina				419		415,466		94.3	%		738
Tennessee
CG at Brentwood	Nashville	1995		254		286,922		98.4	%		1,027
Subtotal — Tennessee				254		286,922		98.4	%		1,027
Texas:
Auberry at Twin Creeks	Dallas	2006		216		214,448		97.2	%		831
Belterra	Fort Worth	2006		288		278,292		96.2	%		969
Canyon Creek LP (5)	Austin	2007		336		348,960	LU				—
Cunningham	Austin	2000		280		257,338		93.9	%		888
Fairmont at Fossil Creek	Fort Worth	2005		240		223,252		97.1	%		809
Subtotal — Texas				1,360		1,322,290		96.0	%		663
TOTAL				5,943		6,093,865		96.1	%	$	803

(1)	We hold between a 5% — 35% non-controlling interest in these unconsolidated joint ventures. 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)	Represents year initially completed or, where applicable, year(s) in which additional phases were completed at the property.
(3)	For the purposes of this table, units refer to multifamily apartment units. Number of units includes all apartment units occupied or available for occupancy at December 31, 2007.
(4)	Represents weighted average rental rate per unit of the 19 unconsolidated multifamily properties not in lease-up at December 31, 2007.
(5)	This property is currently in lease-up and is not included in the Percent Occupied and Average Rental Rate per Unit totals.

37

          The following table sets forth the total number of multifamily units, percent leased and average base rental rate per unit as of the end of each of the last five years for our consolidated multifamily properties:

						Average Base
	Number		Percent			Rental Rate
Year-End	of Units		Leased (1)			Per Unit
December 31, 2007		30,371		96.0	%	$	880
December 31, 2006		32,715		95.5	%	$	851
December 31, 2005		34,272		95.3	%	$	817
December 31, 2004		15,489		94.7	%	$	851
December 31, 2003		12,391		92.9	%	$	742

(1) Represents weighted average occupancy of the multifamily properties that had achieved stabilized occupancy at the end of the respective period (excluding one property in lease-up at December 31, 2007).

          The following table sets forth the total number of multifamily units percent leased and average base rental rate per unit as of the end of each of the last five years for our total multifamily portfolio (including our wholly-owned consolidated properties and our partially-owned unconsolidated joint venture properties):

						Average Base
	Number		Percent			Rental Rate
Year-End	of Units		Leased (1)			Per Unit
December 31, 2007		36,314		96.0	%	$	868
December 31, 2006		38,111		95.5	%	$	825
December 31, 2005		44,337		95.3	%	$	771
December 31, 2004		25,009		94.6	%	$	818
December 31, 2003		15,224		92.9	%	$	794

(1) Represents weighted average occupancy of the multifamily properties that had achieved stabilized occupancy at the end of the respective period (excluding one property in lease-up at December 31, 2007).

Office Properties

          Our office portfolio is comprised of 48 office properties (including one property in lease-up), consisting of two wholly-owned consolidated properties and 46 properties held through unconsolidated joint ventures, which properties contain, in the aggregate, a total of approximately 16.1 million net rentable square feet. Of the 48 office properties, 18 are located in Alabama (representing 21% of the total office property net rentable square feet), 14 are located in Florida (representing 35% of the total office property net rentable square feet), eight are located in Atlanta, Georgia (representing 24% of the total office property net rentable square feet), one is located in Rockville, Maryland (representing 1% of the total office property net rentable square feet), two are located in Charlotte, North Carolina (representing 2% of the total office property net rentable square feet), one is located in Memphis, Tennessee (representing 3% of the total office property net rentable square feet), and four are located in Texas (representing 14% of the total office property net rentable square feet). The office properties range in size from approximately 29,988 square feet to 1,196,581 square feet. All of the office properties are managed by us, with the exception of two properties in the DRA/CRT Joint Venture, which are managed by unaffiliated third parties.

          The following table sets forth certain additional information relating to the consolidated office properties as of and for the year ended December 31, 2007:

38

Consolidated Office Properties

											Average Base		Total Office			Percent of Total
			Year	Net Rentable					Total		Rent Per		Operating Property			Office Operating
Consolidated			Completed	Area		Percent			Annualized		Leased		Revenue for			Property Revenue
Office Property (1)		Location	(2)	Square Feet		Leased			Base Rent		Square Foot		2007 (3)			for 2007 (4)
Alabama:
Colonial Center Blue Lake	(5)	Birmingham	1982/95										$	1,350,365	(6)		2.4	%
Colonial Center Colonnade	(5)	Birmingham	1989/99											4,009,272	(6)		7.1	%
Brookwood		Birmingham	2007		169,256	LU								1,585,540	(7)		2.8	%
Riverchase Center	(5)	Birmingham	1984-88											1,426,232	(6)		2.5	%
International Park	(5)	Birmingham	1987/89/99											1,868,449	(6)		3.3	%
Independence Plaza	(5)	Birmingham	1979											820,460	(6)		1.4	%
Colonial Plaza	(5)	Birmingham	1999											1,406,945	(6)		2.5	%
Colonial Center Lakeside	(5)	Huntsville	1989/90											935,181	(6)		1.6	%
Colonial Center Research Park	(5)	Huntsville	1999											987,091	(6)		1.7	%
Colonial Center Research Place	(5)	Huntsville	1979/84/88											1,441,255	(6)		2.5	%
DRS Building	(5)	Huntsville	1972/86/90/03											802,955	(6)		1.4	%
Regions Center	(5)	Huntsville	1990											1,403,311	(6)		2.4	%
Perimeter Corporate Park	(5)	Huntsville	1986/89											1,793,653	(6)		3.1	%
Progress Center	(5)	Huntsville	1983-91											1,206,930	(6)		2.1	%
Research Park Office Center	(5)	Huntsville	1984/00											1,288,818	(6)		2.2	%
Northrop Grumman	(5)	Huntsville	2007											576,744	(6)		1.0	%
250 Commerce St		Montgomery	1904/81		37,447		97.1	%		524,468		14.42		528,264	(8)		0.9	%
Subtotal-Alabama					206,703		97.1	%		524,468		14.42		23,431,464			40.9	%
Florida:
901 Maitland Center	(5)	Orlando	1985											1,072,507	(6)		1.9	%
Colonial Center at TownPark	(5)	Orlando	2001											6,435,237	(6)		11.2	%
Colonial TownPark Office	(5)	Orlando	2004											371,192	(6)		0.6	%
Colonial Center Heathrow	(5)	Orlando	1988/96/00											7,718,949	(6)		13.5	%
Colonial Place I & II	(5)	Tampa	1984/1986											3,857,883	(6)		6.7	%
Colonial Center at Bayside	(5)	Tampa	1988/94/97											1,876,254	(6)		3.3	%
Concourse Center	(5)	Tampa	1981/85											2,492,113	(6)		4.3	%
Subtotal-Florida					—		—			—		—		23,824,135			41.5	%
Georgia:
The Peachtree	(5)	Atlanta	1989											4,168,079	(6)		7.3	%
Subtotal-Georgia					—		—			—		—		4,168,079			7.3	%
North Carolina:
Esplanade	(5)	Charlotte	1981/2007											1,319,315	(6)		2.3	%
Subtotal-North Carolina					—		—			—		—		1,319,315			2.3	%
Texas:
Research Park Plaza III and IV	(5)	Austin	2001											4,605,930	(6)		8.0	%
Subtotal-Texas					—		—			—		—		4,605,930			8.0	%
TOTAL					206,703		97.1	%	$	524,468	$	14.42	$	57,348,924			100.0	%

(1)	At December 31, 2007, only two of the properties listed above are 100% owned by us. As reflected in the notes below, the other properties listed above reflect properties that were consolidated during 2007 before being sold outright or sold to joint ventures in which we retain an ownership interest.
(2)	Represents year initially completed or, 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 Office Operating Property Revenue for 2007 includes property operating revenue for each of our two consolidated office properties at December 31, 2007, as well as 46 consolidated properties sold during 2007 through the date of sale.
(4)	Percent of Total Office Operating Property Revenue for 2007 represents each of the property’s proportionate share of Total Office Operating Property Revenue for 2007 from our two consolidated office properties, as well as 46 consolidated properties sold during 2007.
(5)	These properties were transferred to the DRA/CLP JV. We retained a 15% interest in these properties through a non-controlling interest in this joint venture.
(6)	Represents revenues from January 1, 2007 through the date the property was sold during 2007.
(7)	This property is currently in lease-up and is not included in the Percent Leased and Average Base Rent per Leased Square Foot property totals.
(8)	This operating property is classified as held for sale.

     The following table sets forth certain additional information relating to the unconsolidated office properties as of and for the year ended December 31, 2007.

39

Unconsolidated Office Properties

											Average Base
			Year	Net Rentable					Total		Rent Per
Unconsolidated			Completed	Area		Percent			Annualized		Leased
Office Property (1)		Location	(2)	Square Feet		Leased			Base Rent		Square Foot
Alabama:
Colonial Center Blue Lake DRA/CLPJV		Birmingham	1982/95		166,590		98.8	%	$	3,020,555	$	18.35
Colonial Center Colonnade DRA/CLPJV		Birmingham	1989/99		419,387		98.7	%		8,421,410		20.34
Riverchase Center DRA/CLPJV		Birmingham	1984-88		306,143		93.5	%		2,920,032		10.20
Land Title Bldg.		Birmingham	1975		29,988		100.0	%		409,208		13.65
International Park DRA/CLPJV		Birmingham	1987/89/99		210,984		100.0	%		4,007,593		18.99
Independence Plaza DRA/CLPJV		Birmingham	1979		106,216		96.5	%		1,820,053		17.76
Colonial Plaza DRA/CLPJV		Birmingham	1999		170,850		89.1	%		2,300,144		15.11
Colonial Center Lakeside DRA/CLPJV		Huntsville	1989/90
Colonial Center Lakeside TIC	(3)	Huntsville	1989/90		122,162		100.0	%		1,737,762		14.23
Colonial Center Research Park DRA/CLPJV		Huntsville	1999
Colonial Center Research Park TIC	(3)	Huntsville	1999		133,750		100.0	%		2,344,695		17.53
Colonial Center Research Place DRA/CLPJV		Huntsville	1979/84/88
Colonial Center Research Place TIC	(3)	Huntsville	1979/84/88		272,558		100.0	%		3,458,395		12.69
DRS Building DRA/CLPJV		Huntsville	1972/86/90/03
DRS Building TIC	(3)	Huntsville	1972/86/90/03		215,485		100.0	%		1,757,766		8.16
Regions Center DRA/CLPJV		Huntsville	1990
Regions Center TIC	(3)	Huntsville	1990		154,399		96.1	%		2,540,633		17.12
Perimeter Corporate Park DRA/CLPJV		Huntsville	1986/89
Perimeter Corporate Park TIC	(3)	Huntsville	1986/89		234,851		99.7	%		4,042,403		17.26
Progress Center DRA/CLPJV		Huntsville	1983-91
Progress Center TIC	(3)	Huntsville	1983-91		221,992		93.1	%		2,443,632		11.82
Research Park Office Center DRA/CLPJV		Huntsville	1984/00
Research Park Office Center TIC	(3)	Huntsville	1984/00		236,453		75.0	%		2,001,771		11.29
Northrop Grumman DRA/CLPJV		Huntsville	2007
Northrop Grumman TIC	(3)	Huntsville	2007		110,275		100.0	%		1,445,863		13.11
Subtotal-Alabama					3,112,083		96.6	%		44,671,915		14.86
Florida:
Baymeadows Way		Jacksonville	1993		224,281		100.0	%		2,130,669		9.50
Jacksonville Baymeadows		Jacksonville	1999		751,917		82.2	%		9,304,902		15.05
Jacksonville JTB		Jacksonville	2001		416,773		100.0	%		5,378,849		12.91
901 Maitland Center DRA/CLPJV		Orlando	1985		155,730		76.7	%		2,313,924		19.37
Colonial Center at TownPark DRA/CLPJV		Orlando	2001		657,844		98.7	%		13,472,663		20.75
Colonial TownPark Office DRA/CLPJV		Orlando	2004		37,970		100.0	%		865,367		22.79
Colonial Center Heathrow DRA/CLPJV		Orlando	1988/96/00		922,266		84.1	%		14,178,417		18.28
Orlando Central		Orlando	1980		617,759		90.6	%		9,892,597		17.68
Orlando Lake Mary		Orlando	1999		304,338		88.1	%		4,723,212		17.62
Orlando University		Orlando	2001		385,988		87.0	%		7,354,234		21.90
St. Petersburg Center		St. Petersburg	2000
Colonial Place I & II DRA/CLPJV		Tampa	1984/1986		371,674		97.9	%		8,534,218		23.45
Colonial Center at Bayside DRA/CLPJV		Tampa	1988/94/97		212,896		81.7	%		2,997,807		17.24
Concourse Center DRA/CLPJV		Tampa	1981/85		294,369		97.5	%		6,164,975		21.48
Broward Financial Center		South Florida	1986		325,483		76.6	%		7,012,290		28.13
Las Olas Centre		South Florida	1999
Subtotal-Florida					5,679,288		89.4	%		94,324,124		18.58
Georgia:
Colonial Center at Mansell Overlook JV		Atlanta	1987/96/97/00		652,926		94.3	%		11,940,413		19.39
Shoppes & Lakeside at Mansell JV		Atlanta	1996/97/05		35,748		92.7	%		814,649		24.58
The Peachtree DRA/CLPJV		Atlanta	1989		316,635		90.9	%		6,327,395		21.98
Atlantic Center Plaza		Atlanta	2001		499,709		96.1	%		13,942,902		29.03
Atlanta Chamblee		Atlanta	2000		1,133,828		93.2	%		20,531,676		19.43
Atlanta Perimeter		Atlanta	1985		182,036		87.2	%		2,954,603		18.61
McGinnis Park		Atlanta	2001		202,217		77.4	%		2,784,888		17.79
Ravinia 3		Atlanta	1991		801,264		94.7	%		13,956,126		18.39
Subtotal-Georgia					3,824,363		92.8	%		73,252,652		20.64
Maryland:
Decoverly		Rockville	1989		155,134		83.0	%		3,154,747		24.50
Subtotal-Maryland					155,134		83.0	%		3,154,747		24.50
North Carolina:
Esplanade DRA/CLPJV		Charlotte	1981/2007		202,810		86.3	%		3,184,745		18.20
Charlotte University		Charlotte	1999		182,989		87.2	%		3,014,471		18.89
Subtotal-North Carolina					385,799		86.7	%		6,199,216		18.53
Tennessee:
Germantown Center		Memphis	1999		533,950		86.7	%		9,605,028		20.75
Subtotal-Tennessee					533,950		86.7	%		9,605,028		20.75
Texas:
Research Park Plaza III and IV DRA/CLPJV		Austin	2001		357,689		100.0	%		7,608,047		21.27
Signature Place		Dallas	1986		437,290		77.9	%		5,912,375		17.36
Post Oak		Houston	1982		1,196,581		95.4	%		20,841,677		18.26
Westchase		Houston	2000		184,259		98.5	%		3,960,998		21.82
Subtotal-Texas					2,175,819		92.9	%		38,323,097		18.96
TOTAL					15,866,436		92.3	%	$	269,530,779	$	18.40

Footnotes on the following page

40

(1)	We hold between a 15% — 40% non-controlling interest in these unconsolidated joint ventures.
(2)	Represents year initially completed or, where applicable, most recent year in which the property was substantially renovated or in which an additional phase of the property was completed.
(3)	The DRA/CLP JV sold nine office assets located in Huntsville, Alabama. We acquired a 40% interest (of which 30% is owned by CPSI, our taxable REIT subsidiary) in three separate TIC investments of the same nine properties.

     The following table sets out a schedule of the lease expirations for leases in place as of December 31, 2007, for our consolidated office properties:

			Net Rentable		Annualized		Percent of Total
Year of	Number of		Area Of		Base Rent of		Annual Base Rent
Lease	Tenants with		Expiring Leases		Expiring		Represented by
Expiration	Expiring Leases		(Square Feet) (1)		Leases (1)(2)		Expiring Leases (1)
2008		1		16,478		238,929		7.5	%
2009		—		—		—		—
2010		2		19,897		285,540		9.0	%
2011		—		—		—		—
2012		—		—		—		—
2013		3		151,071		2,648,458		83.5	%
Thereafter		—		—		—		—
		6		187,446	$	3,172,927		100.0	%

(1)	Ecludes approximately 170,332 square feet of space not leased as of December 31, 2007.
(2)	Annualized base rent is calculated using base rents as of December 31, 2007.

     The following table sets out a schedule of the lease expirations for leases in place as of December 31, 2007, for our consolidated office properties and office properties held in unconsolidated joint ventures combined:

			Net Rentable		Annualized		Percent of Total
Year of	Number of		Area Of		Base Rent of		Annual Base Rent
Lease	Tenants with		Expiring Leases		Expiring		Represented by
Expiration	Expiring Leases		(Square Feet) (1)		Leases (1)(2)		Expiring Leases (1)
2008		312		2,022,845	$	41,839,818		14.2	%
2009		273		1,769,934		37,021,270		12.6	%
2010		274		1,725,817		34,955,002		11.9	%
2011		197		1,900,281		37,688,316		12.8	%
2012		153		2,433,827		52,436,501		17.8	%
2013		60		1,225,136		24,828,571		8.4	%
2014		23		1,306,963		19,508,109		6.6	%
2015		29		610,688		10,410,196		3.5	%
2016		19		580,732		11,444,248		3.9	%
2017		10		504,664		8,345,073		2.8	%
Thereafter		7		558,454		16,230,355		5.5	%
		1,357		14,639,341	$	294,707,460		100.0	%

(1)	Excludes approximately 1,224,599 square feet of space not leased as of December 31, 2007.
(2)	Annualized base rent is calculated using base rents as of December 31, 2007.

     The following table 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 our consolidated office properties:

						Average Base
	Rentable Area		Total			Rent Per Leased
Year-End	(Square Feet)		Percent Leased (1)			Square Foot (1)
December 31, 2007		16,073,000		92.3	%	$	18.20
December 31, 2006		16,927,000		93.5	%	$	18.79
December 31, 2005		19,500,000		91.3	%	$	18.35
December 31, 2004		5,870,000		92.2	%	$	17.48
December 31, 2003		5,464,000		89.7	%	$	18.56

(1) Total Percent Leased and Average Base Rent Per Leased Square Foot is calculated excluding one property in lease-up at December 31, 2007.

41

     The following table 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 our consolidated office properties and office properties held in unconsolidated joint ventures combined:

						Average Base
	Rentable Area		Total			Rent Per Leased
Year-End	(Square Feet)		Percent Leased (1)			Square Foot (1)
December 31, 2007		207,000		97.1	%	$	14.42
December 31, 2006		6,534,000		94.7	%	$	17.97
December 31, 2005		7,744,000		92.4	%	$	19.25
December 31, 2004		5,840,000		92.2	%	$	18.28
December 31, 2003		5,434,000		89.7	%	$	18.78

(1) Total Percent Leased and Average Base Rent Per Leased Square Foot is calculated excluding one property in lease-up at December 31, 2007.

Retail Properties

     The retail portfolio is comprised of 30 retail properties (including one property in lease-up), consisting of four wholly-owned consolidated properties and 26 properties held through unconsolidated joint ventures, which properties contain, in the aggregate, a total of approximately 10.5 million square feet of gross retail area (including space owned by anchor tenants). Of the 30 retail properties, 16 are located in Alabama (representing 48.1% of the total retail property gross rentable area), six are located in Florida (representing 13.4% of the total retail property gross rentable area), three are located in Georgia (representing 13.6% of the total retail property gross rentable area), one is located in North Carolina (representing 5.2% of the total retail property gross rentable area), one is located in South Carolina (representing 6.7% of the total retail property gross rentable area), one is located in Tennessee (representing 6.2% of the total retail property gross rentable area), and two are located in Texas (representing 6.9% of the total retail property gross rentable area). All of the retail properties are managed by us, except Parkway, Glynn Place, Valdosta, Bel Air, University Village, Myrtle Beach and Greenville, which are managed by unaffiliated third parties.

     The following table sets forth certain information relating to the consolidated retail properties as of and for the year ended December 31, 2007.

Consolidated Retail Properties

																Average
																Base
																Rent Per		Total Consolidated			Percent of Total
				Year		GRA			Number					Total		Leased		Retail Property			2007 Consolidated
Consolidated				Completed		(Square			Of		Percent			Annualized		Square		Revenue for			Retail Property
Retail Property (1)			Location	(2)		Feet) (3)			Stores		Leased (3)			Base Rent (4)		Foot (5)		2007 (6)			Revenue (7)
Alabama:
Colonial Promenade Alabaster	(11	)	Birmingham		2005									$		$		$	1,866,912	(8)		3.6	%
Colonial Promenade Alabaster II	(14	)	Birmingham		2007														1,309,221	(9)		2.5	%
Brookwood Village Center			Birmingham		1973/91		16,092			4		100.0	%		273,666		17.01		477,637			0.9	%
Colonial Brookwood Village			Birmingham		1973/91		372,053			71		96.2	%		6,649,886		26.15		10,320,210			20.0	%
Colonial Brookwood Village			Birmingham		1973/91		231,953	(15)
Colonial Shoppes Colonnade	(12	)	Birmingham		1989														1,169,012	(8)		2.3	%
Colonial Shoppes Clay	(11	)	Birmingham		1982														442,327	(8)		0.9	%
Colonial Promenade Fultondale			Birmingham		2007		133,809			21	LU				1,501,611				425,613	(10)		0.8	%
Colonial Promenade Fultondale			Birmingham		2007		126,840	(15)
Colonial Pinnacle Tutwiler II	(14	)	Birmingham		2007														398,885	(9)		0.8	%
Colonial Promenade Trussville	(11	)	Birmingham		2000														1,851,059	(8)		3.6	%
Colonial Promenade Trussville II	(11	)	Birmingham		2004														529,355	(8)		1.0	%
Colonial Mall Decatur			Decatur		1979/89														2,629,585	(8)		5.1	%
Colonial Shoppes McGehee			Montgomery		1986														175,492	(8)		0.3	%
Olde Town			Montgomery		1978/90														374,444	(8)		0.7	%
Colonial Shoppes Bellwood			Montgomery		1988														419,126	(8)		0.8	%
Colonial Promenade Montgomery			Montgomery		1990/97														1,039,914	(8)		2.0	%
Colonial Promenade Montgomery North			Montgomery		1990/97														636,047	(8)		1.2	%
Colonial Promenade Craft Farms	(13	)	Gulf Shores		2007														539,682	(9)		1.0	%
Subtotal-Alabama							880,747			96		96.4	%		8,425,163		25.55		24,604,521			47.7	%

42

														Average
														Base
														Rent Per		Total Consolidated			Percent of Total
			Year		GRA		Number					Total		Leased		Retail Property			2007 Consolidated
Consolidated			Completed		(Square		Of		Percent			Annualized		Square		Revenue for			Retail Property
Retail Property (1)		Location	(2)		Feet) (3)		Stores		Leased (3)			Base Rent (4)		Foot (5)		2007 (6)			Revenue (7)
Florida:
Colonial Promenade Bear Lake		Orlando		1990													611,175	(8)		1.2	%
Colonial Promenade Burnt Store	(11)	Punta Gorda		1990													530,040	(8)		1.0	%
Colonial Promenade Hunter’s Creek	(11)	Orlando		1993/95													1,132,892	(8)		2.2	%
Colonial Promenade Lakewood	(11)	Jacksonville		1995													1,291,362	(8)		2.5	%
Colonial Promenade Northdale	(11)	Tampa		1988													1,126,054	(8)		2.2	%
Colonial Promenade TownPark	(12)	Orlando		2003													2,322,392	(8)		4.5	%
Colonial Promenade Wekiva		Orlando		1990													1,129,535	(8)		2.2	%
Colonial Promenade Winter Haven		Orlando		1986		161,559		21		92.0	%		1,142,059		13.97		1,446,743			2.8	%
Subtotal-Florida						161,559		21		92.0	%		1,142,059		13.97		9,590,192			18.6	%
Georgia:										.
Britt David		Columbus		1990													414,659	(8)		0.8	%
Colonial Mall Lakeshore		Gainesville		1984/97													2,436,064	(8)		4.7	%
Colonial Promenade Beechwood	(11)	Athens		1963/92													2,140,833	(8)		4.1	%
Subtotal-Georgia						—		—		—			—		—		4,991,557			9.7	%
North Carolina:
Colonial Mayberry Mall		Mount Airy		1968/86													585,511	(8)		1.1	%
Colonial Shoppes Quaker		Greensboro		1968/88/97													753,939	(8)		1.5	%
Colonial Shoppes Yadkinville		Yadkinville		1971/97													170,206	(8)		0.3	%
Subtotal-North Carolina						—		—		—			—		—		1,509,656			2.9	%
Tennessee:
Rivermont Shopping Center		Chattanooga		1986/97													55,764	(8)		0.1	%
Subtotal-Tennessee						—		—		—			—		—		55,764			0.1	%
Texas:
Colonial Pinnacle Kingwood Commons	(11)	Houston		2003													1,511,049	(8)		2.9	%
Colonial Promenade Portofino	(11)	Houston															3,148,738	(8)		6.1	%
Village on Parkway		Dallas		1980													4,178,261	(8)		8.1	%
Subtotal-Texas						—		—		—			—		—		8,838,049			17.1	%
Virginia:
Colonial Mall Staunton		Staunton		1969/86/97													2,040,828	(8)		4.0	%
Subtotal-Virginia						—		—		—			—		—		2,040,828			4.0	%
Total						1,042,306		117		95.1	%	$	9,567,222	$	24.09	$	51,630,567			100.0	%

(1)	At December 31, 2007, only four of the properties listed above are 100% owned by us. As reflected in the notes below, the other properties listed above reflect properties that were consolidated during 2007 before being sold outright or sold to joint ventures in which we retained an ownership interest.
(2)	Represents year initially completed or, where applicable, year(s) in which the property was substantially renovated or an additional phase of the property was completed.
(3)	For the purposes of this table, GRA refers to gross retail area, which includes gross leasable area and space owned by anchor tenants. Percent leased excludes anchor-owned space.
(4)	Total Annualized Base Rent includes all base rents for our wholly-owned properties.
(5)	Includes specialty store space only.
(6)	Total Retail Operating Property Revenue for 2007 includes property operating revenue for each of our four consolidated retail properties at December 31, 2007, as well as 29 consolidated properties sold during 2007 through the date of sale.
(7)	Percent of Total Retail Operating Property Revenue for 2007 represents each of the property’s proportionate share of Total Retail Operating Property Revenue for 2007 from our four consolidated retail properties, as well as 29 consolidated properties sold during 2007.
(8)	Represents revenues from January 1, 2007 through the date the property was sold during 2007.
(9)	Represents revenues from the completion of development of the property through December 31, 2007 or the date the property was sold.
(10)	This property is currently in lease-up and is not included in Percent Leased and Average Base Rent per Leased Square Foot property totals.
(11)	These properties were transferred to the OZRE JV. We retained a 15% interest in these properties through a non-controlling interest in this joint venture.
(12)	These properties were transferred to the DRA/CLP JV. We retained a 15% interest in these properties through a non-controlling interest in this joint venture.
(13)	This property was transferred to a joint venture, Colonial Promenade Craft Farms joint venture. We retained a 15% interest in this property through a non-controlling interest in this joint venture.
(14)	These properties were transferred to a joint venture, Colonial Promenade AlabasterII/Tutwiler II joint venture. We retained a 5% interest in these properties through a non-controlling interest in this joint venture.
(15)	Represents space owned by anchor tenants.

43

     The following table sets forth certain information relating to the unconsolidated retail properties as of and for the year ended December 31, 2007.

Unconsolidated Retail Properties

															Average
															Base
															Rent Per
			Year		GRA			Number					Total		Leased
Unconsolidated			Completed		(Square			Of		Percent			Annualized		Square
Retail Property (1)		Location	(2)		Feet) (3)			Stores		Leased (3)			Base Rent (4)		Foot (5)
Alabama:
Colonial Promenade Alabaster OZREJV		Birmingham		2005		218,681			27		94.9	%	$	3,115,566	$	18.69
Colonial Promenade Alabaster OZREJV		Birmingham		2005		319,091	(7)
Colonial Promenade Alabaster II 11/31JV		Birmingham		2007		127,598			26		100.0	%		2,069,313		16.97
Colonial Promenade Alabaster II 11/31JV		Birmingham		2007		225,921	(7)
Colonial Shoppes Colonnade DRA/CLPJV		Birmingham		1989		125,462			30		93.7	%		1,828,594		18.44
Colonial Shoppes Clay OZREJV		Birmingham		1982		66,175			11		91.3	%		716,658		13.97
Colonial Pinnacle Tutwiler II 11/31J/V		Birmingham		2007		65,000			2		100.0	%		877,650		—
Colonial Promenade Hoover		Birmingham		2002		164,866			34		92.4	%		1,852,525		19.05
Colonial Promenade Hoover		Birmingham		2002		215,766	(7)
Colonial Promenade Trussville OZREJV		Birmingham		2000		388,302			22		98.9	%		3,266,563		14.29
Colonial Promenade Trussville II OZREJV		Birmingham		2004		58,182			16		91.8	%		844,699		17.26
Colonial Promenade Trussville II OZREJV		Birmingham		2004		224,509	(7)
Bel Air Mall JV		Mobile		1966/90/97		1,000,511			113		92.7	%		10,396,852		22.63
Bel Air Mall JV		Mobile		1966/90/97		333,990	(7)
Colonial Promenade Madison		Madison		2000		110,712			15		100.0	%		1,181,910		14.96
Parkway Place		Huntsville		1975		287,556			74		76.2	%		6,319,565		28.85
Parkway Place		Huntsville		1975		348,164	(7)
Colonial Promenade Craft Farms LANG/CLPJV	(6)	Gulf Shores		2007		243,024			25					2,060,348
Colonial Promenade Craft Farms LANG/CLPJV	(6)	Gulf Shores		2007		125,000	(7)
University Village Mall JV		Auburn		1973/84/89		402,008			47		87.5	%		2,528,458		20.56
University Village Mall JV		Auburn		1973/84/89		124,707	(7)
Subtotal-Alabama						5,175,225			442		92.1	%		37,058,701		21.68
Florida:
Colonial Promenade Burnt Store OZREJV		Punta Gorda		1990		95,023			22		93.9	%		885,203		15.53
Colonial Promenade Hunter’s Creek OZREJV		Orlando		1993/95		227,536			27		48.6	%		1,462,522		20.96
Colonial Promenade Lakewood OZREJV		Jacksonville		1995		194,567			52		95.1	%		2,157,140		14.19
Colonial Promenade Northdale OZREJV		Tampa		1988		175,917			24		94.6	%		1,760,833		17.25
Colonial Promenade Northdale OZREJV		Tampa		1988		55,000	(7)
Colonial Promenade TownPark DRACLPJV		Orlando		2003		199,221			32		92.6	%		2,485,631		24.02
Subtotal-Florida						947,264			157		82.5	%		8,751,329		18.07
Georgia:											.
Glynn Place Mall JV		Brunswick		1986		278,295			50		86.3	%		2,731,543		18.65
Glynn Place Mall JV		Brunswick		1986		225,558	(7)
Valdosta Mall JV		Valdosta		1982/85		442,549			54		81.6	%		4,094,024		16.65
Valdosta Mall JV		Valdosta		1982/85		93,729	(7)
Colonial Promenade Beechwood OZREJV		Athens		1963/92		350,091			39		99.8	%		3,744,300		15.99
Subtotal-Georgia						1,390,222			143		88.8	%		10,569,867		16.94
North Carolina:
Greenville Mall JV		Greenville		1965/89/99		404,956			57		92.3	%		4,147,725		23.32
Greenville Mall JV		Greenville		1965/89/99		46,051	(7)
Subtotal-North Carolina						451,007			57		92.3	%		4,147,725		23.32
South Carolina:
Myrtle Beach Mall JV		Myrtle Beach		1986		524,133			53		85.6	%		4,278,864		23.16
Subtotal-South Carolina						524,133			53		85.6	%		4,278,864		23.16
Tennessee:
Colonial Pinnacle Turkey Creek		Knoxville		2005		487,284			67		97.4	%		7,730,367		22.38
Subtotal-Tennessee						487,284			67		97.4	%		7,730,367		22.38
Texas:
Colonial Pinnacle Kingwood Commons OZRE JV		Houston		2003		164,356			28		87.6	%		2,460,024		21.33
Colonial Promenade Portofino OZRE JV		Houston				374,012			43		89.3	%		5,056,769		22.22
Subtotal-Texas						538,368			71		88.8	%		7,516,793		21.87
Total						9,513,503			990		90.0	%	$	80,053,646	$	20.62

Footnotes on the following page

44

(1)	We hold between a 5% — 50% non-controlling interest in these unconsolidated joint ventures.
(2)	Represents year initially completed or, where applicable, year(s) in which the property was substantially renovated or an additional phase of the property was completed.
(3)	GRA refers to gross retail area, which includes gross leasable area and space owned by anchor tenants. Percent leased excludes anchor-owned space.
(4)	Total Annualized Base Rent includes all base rents for our partially-owned properties.
(5)	Includes specialty store space only.
(6)	This property is currently in lease-up and is not included in Percent Leased and Average Base Rent per Leased Square Foot property totals.
(7)	Represents space owned by anchor tenants.

     The following table sets out a schedule of the lease expirations for leases in place as of December 31, 2007, for our consolidated retail properties:

			Net Rentable		Annualized		Percent of Total
Year of	Number of		Area Of		Base Rent of		Annual Base Rent
Lease	Tenants with		Expiring Leases		Expiring		Represented by
Expiration	Expiring Leases		(Square Feet) (1)		Leases (1)		Expiring Leases (1)
2008		16		136,052	$	1,128,511		11.7	%
2009		12		29,776		564,980		5.9	%
2010		7		11,954		283,575		2.9	%
2011		18		42,386		1,336,217		13.9	%
2012		26		116,729		2,205,098		22.9	%
2013		8		36,141		477,525		5.0	%
2014		6		13,332		355,995		3.7	%
2015		3		13,100		295,980		3.1	%
2016		3		113,725		708,000		7.4	%
2017		11		76,032		1,460,122		15.2	%
Thereafter		4		55,074		815,345		8.5	%
		114		644,301	$	9,631,348		100.0	%

(1) Annualized base rent is calculated using base rents as of December 31, 2007.

     The following table sets out a schedule of the lease expirations for leases in place as of December 31, 2007, for our consolidated office properties and office properties held in unconsolidated joint ventures combined:

			Net Rentable		Annualized		Percent of Total
Year of	Number of		Area Of		Base Rent of		Annual Base Rent
Lease	Tenants with		Expiring Leases		Expiring		Represented by
Expiration	Expiring Leases		(Square Feet)		Leases (1)		Expiring Leases
2008		146		501,549	$	7,340,124		8.0	%
2009		156		513,811		7,376,496		8.1	%
2010		159		610,202		9,037,447		9.9	%
2011		128		824,344		10,537,471		11.5	%
2012		143		971,821		12,040,926		13.2	%
2013		83		519,764		6,785,514		7.4	%
2014		40		299,619		3,460,055		3.8	%
2015		54		480,976		5,958,547		6.5	%
2016		69		569,468		8,273,357		9.1	%
2017		65		420,356		7,360,057		8.1	%
Thereafter		40		1,341,009		13,124,310		14.4	%
		1,083		7,052,919	$	91,294,304		100.0	%

(1) Annualized base rent is calculated using base rents as of December 31, 2007.

     The following table sets forth the total gross retail area, percent leased and average base rent per leased square foot as of the end of each of the last five years for the consolidated retail properties:

45

	Gross					Average
	Retail Area		Percent			Base Rent Per Leased
Year-End	(Square Feet)		Leased (1)			Square Foot (1) (2)
December 31, 2007		1,042,000		95.1	%	$	24.09
December 31, 2006		7,498,000		92.9	%	$	17.45
December 31, 2005		8,634,000		91.7	%	$	17.39
December 31, 2004		14,676,000		91.0	%	$	18.58
December 31, 2003		13,182,000		89.0	%	$	18.19

(1)	Total Percent Leased and Average Base Rent Per Leased Square Foot is calculated excluding one property in lease-up at December 31, 2007.
(2)	Average base rent per leased square foot is calculated using specialty store year-end base rent figures.

     The following table sets forth the total gross retail area, percent leased and average base rent per leased square foot as of the end of each of the last five years for the total retail portfolio:

	Gross					Average
	Retail Area		Percent			Base Rent Per Leased
Year-End	(Square Feet)		Leased (1)			Square Foot (1) (2)
December 31, 2007		10,556,000		90.4	%	$	20.96
December 31, 2006		12,738,000		93.1	%	$	19.07
December 31, 2005		13,453,000		92.2	%	$	18.81
December 31, 2004		15,294,000		91.4	%	$	19.45
December 31, 2003		15,343,000		89.6	%	$	19.84

(1)	Total Percent Leased and Average Base Rent Per Leased Square Foot is calculated excluding one property in lease-up at December 31, 2007.
(2)	Average base rent per leased square foot is calculated using specialty store year-end base rent figures.

For-Sale Residential

     As of December 31, 2007, we had eight consolidated for-sale developments and one partially-owned development. See Note 8 – Undeveloped Land and Construction in Progress in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K for a list of our for-sale residential projects. As of December 31, 2007, net of the $42.1 million impairment charge recorded on our consolidated assets, we had approximately $118.2 million of capital cost (based on book value, including pre-development and land costs) invested in these eight consolidated projects. See Note 6 – For-Sale Activities and Impairment in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K for additional discussion.

Undeveloped Land

     We own various parcels of land that are held for future developments. Land adjacent to multifamily properties typically will be considered for potential development of another phase of an existing multifamily property if we determine that the particular market can absorb additional apartment units. For expansions at office and retail properties, we own parcels both contiguous to the boundaries of the properties, which would accommodate additional office buildings, expansion of the shopping center, and outparcels which are suitable for restaurants, financial institutions, hotels, or free standing retailers.

Property Markets

     The table below sets forth certain information with respect to the geographic concentration of our consolidated properties as of December 31, 2007.

46

Geographic Concentration of Consolidated Properties

											Total Operating			Percent of Total
							Total 2007 Consolidated		Revenues from		Property Revenue			2007 Consolidated
	Units		NRA		GRA		Operating		Discontinued		from			Operating
State	(Multifamily) (1)		(Office)(2)		(Retail) (3)		Property Revenue		Operations in 2007 (4)		Continuing Operations			Property Revenue
Alabama		2,499		206,703		880,747	$	70,640,789	$	6,229,630	$	64,411,159			18.7	%
Arizona		952		—		—		9,104,929		—		9,104,929			2.6	%
Florida		3,069		—		161,559		70,408,344		7,913,348		62,494,996			18.2	%
Georgia		4,431		—		—		55,558,060		3,289,619		52,268,441			15.2	%
Mississippi		—		—		—		2,356,075		2,356,075		—			0.0	%
North Carolina		7,128		—		—		65,435,713		15,655,888		49,779,825			14.5	%
South Carolina		1,578		—		—		16,455,128		1,207,563		15,247,565			4.4	%
Tennessee		645		—		—		6,972,158		3,207,077		3,765,081			1.1	%
Texas		7,190		—		—		77,312,178		17,124,052		60,188,126			17.5	%
Virginia		2,879		—		—		32,391,939		5,934,600		26,457,339			7.7	%
Total		30,371		206,703		1,042,306	$	406,635,313	$	62,917,852	$	343,717,461	(5)		100.0	%

(1)	Units (in this table only) refer to multifamily apartment units.
(2)	NRA refers to net rentable area of office space.
(3)	GRA refers to gross retail area, which includes gross leasable area and space owned by anchor tenants.
(4)	See Note 5 to our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K.
(5)	Total Operating Property Revenue from Continuing Operations can be calculated by adding Minimum rent, Minimum rent from affiliates, Percentage rent, Tenant recoveries and Other property related revenue on our Consolidated Statements of Income and Comprehensive Income.

     We believe that the demographic and economic trends and conditions in the markets where our operating properties are located indicate a potential for continued growth in property net operating income. Our consolidated and unconsolidated operating properties are located in a variety of distinct submarkets within Alabama, Arizona, California, Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Texas and Virginia. However, Birmingham, Alabama; Orlando, Florida; Atlanta, Georgia; Charlotte and Raleigh, North Carolina; and Austin, Dallas and Houston, Texas are our primary markets. We believe that our markets in these 11 states are characterized by stable and increasing populations and as a result of the recent economic downturn moderate employment growth. These markets should continue to provide a steady demand for multifamily, office and retail properties.

Mortgage Financing

     As of December 31, 2007, we had approximately $1.6 billion of collateralized and unsecured indebtedness outstanding with a weighted average interest rate of 5.8% and a weighted average maturity of 5.8 years. Of this amount, approximately $62.1 million was collateralized mortgage financing and $1.6 billion was unsecured debt. Our mortgaged indebtedness was collateralized by four of our consolidated properties and carried a weighted average interest rate of 5.9% and a weighted average maturity of 5.5 years. The following table sets forth our collateralized and unsecured indebtedness in more detail.

47

Mortgage Debt and Notes Payable

(dollars in thousands)

				Principal Balance			Anticipated Annual Debt				Balance Due on
Property (1)	Interest Rate			(as of 12/31/07)			Service (1/1/08 - 12/31/08)		Maturity Date		Maturity
Multifamily Properties
CG at Trinity Commons		6.100	%(3)	$	16,725		$	17,745		05/31/08	$	16,725
CV at Timber Crest		6.100	%(3)		14,325			15,199		05/31/08		14,325
CG at Wilmington		6.100	%(3)		12,276			13,025		05/31/08		12,276
CG at Godley Station		5.550	%		18,482			1,671		06/01/25		—
Other debt:
Land Loan		5.600	%(3)		249			263		09/30/08		—
Unsecured Credit Facility (2)		5.350	%(3)		39,316			2,103		06/15/12		39,316
Medium Term Notes		8.800	%		20,000			1,760		02/01/10		20,000
Medium Term Notes		8.800	%		5,000			440		03/15/10		5,000
Medium Term Notes		8.050	%		10,000			805		12/27/10		10,000
Medium Term Notes		8.080	%		10,000			808		12/24/10		10,000
Senior Unsecured Notes		6.875	%		100,000			6,875		08/15/12		100,000
Senior Unsecured Notes		6.150	%		125,000			7,688		04/15/13		125,000
Senior Unsecured Notes		4.800	%		100,000			4,800		04/01/11		100,000
Senior Unsecured Notes		6.250	%		300,000			18,750		06/15/14		300,000
Senior Unsecured Notes		4.750	%		275,000			13,063		02/01/10		275,000
Senior Unsecured Notes		5.500	%		325,000			17,875		10/01/15		325,000
Senior Unsecured Notes		6.050	%		275,000			16,638		09/01/16		275,000
Unamortized Discounts					(4,534	)						(4,534	)
TOTAL CONSOLIDATED DEBT		5.804	%	$	1,641,839		$	139,506			$	1,623,108

(1)	Certain of the 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)	This unsecured credit facility bears interest at a variable rate, based on LIBOR plus a spread of 75 basis points. The facility also includes a competitive bid feature that allows us to convert up to $250 million under the unsecured credit facility to a fixed rate, for a fixed term not to exceed 90 days. At December 31, 2007, we had no amounts outstanding under the competitive bid feature.
(3)	Represents variable rate debt.

     In addition to our consolidated debt, all of our unconsolidated joint venture properties are also subject to mortgage loans. Under these unconsolidated joint venture non-recourse mortgage loans, we could, under certain circumstances, be responsible for portions of the mortgage indebtedness in connection with certain customary non-recourse carve-out provisions, such as environmental conditions, misuse of funds, and material misrepresentations. Our pro-rata share of such indebtedness as of December 31, 2007 was $544.2 million. In addition, we have made certain guarantees in connection with our investment in unconsolidated joint ventures (see Note 19 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K).

Item 3. Legal Proceedings.

     We are involved in various lawsuits and claims arising in the normal course of business, many of which are expected to be covered by liability insurance. In the opinion of management, although the outcomes of these normal course suits and claims are uncertain, in the aggregate they should not have a material adverse effect on our business, financial condition, and results of operations. In addition, neither we nor any of our properties are presently subject to any material litigation arising out of the ordinary course of business. For additional information regarding legal disputes, see Note 19 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Item 4. Submission of Matters to a Vote of Security Holders.

     No matters were submitted to a vote of our shareholders during the fourth quarter of 2007.

48

PART II

Item 5. Market for Registrant’s Common Equity and Related Shareholder Matters.

     There is no established market trading for the units. As of February 26, 2008, there were 91 holders of record of units.

     We have made consecutive quarterly distributions since our formation in the third quarter of 1993. Our ability to make distributions depends on a number of factors, including net cash provided by operating activities, capital commitments and debt repayment schedules. Holders of units are entitled to receive distributions when, as and if declared by the Board of Trustees of the Trust out of any funds legally available for that purpose.

     The following table sets forth the distributions per common unit paid by us during the periods indicated below:

Calendar Period	Distribution
2007:
First Quarter	$	.68
Second Quarter (1)	$	.89
Third Quarter	$	.68
Fourth Quarter	$	.50
2006:
First Quarter	$	.68
Second Quarter	$	.68
Third Quarter	$	.68
Fourth Quarter	$	.68

(1) Includes a special distribution paid during the second quarter of 2007 of $0.21 per unit in connection with the completion of the Strategic Transactions (see Note 14 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K).

     The Trust from time to time issues common shares of beneficial interest (“Common Shares”) pursuant to its Direct Investment Program, its Non-Employee Trustee Share Option Plan, its Non-Employee Trustee Share Plan, and its Employee Share Option and Restricted Share Plan, in transactions that are registered under the Securities Act of 1933, as amended (the “Act”). Pursuant to CRLP’s Third Amended and Restated Agreement of Limited Partnership, each time the Trust issues Common Shares pursuant to the foregoing plans, CRLP issues to the Trust, its general partner, an equal number of units for the same price at which the Common Shares were sold, in transactions that are not registered under the Act in reliance on Section 4(2) of the Act due to the fact that units were issued only to the Trust and therefore, did not involve a public offering. During the quarter ended December 31, 2007, CRLP issued 73,145 common units to the Trust for direct investments and other issuances under employee and nonemployee plans for an aggregate of approximately $2.1 million.

49

Item 6. Selected Financial Data.

     The following table sets forth selected financial and operating information on a historical basis for CRLP for each of the five years ended December 31, 2007. The following information should be read together with our consolidated financial statements and notes thereto included in Item 8 of this Form 10-K. Our historical results may not be indicative of future results due, among other things, to our current strategy to generate approximately 75% to 80% of our net operating income from multifamily properties (see Note 1 — Organization and Basis of Presentation in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K).

(in thousands, except per unit data)	2007			2006		2005		2004			2003
OPERATING DATA
Total revenue	$	401,517		$	445,377	$	374,568	$	235,942		$	199,412
Expenses:
Depreciation and amortization		113,703			135,578		140,922		67,600			53,323
Impairment charges		43,679			1,600		—		—			—
Other operating		220,970			214,484		158,909		97,536			78,280
Income from operations		23,165			93,715		74,737		70,806			67,809
Interest expense		90,390			119,445		116,587		67,796			56,712
Interest income		7,590			7,753		4,397		1,051			773
Other income, net		120,728			105,482		12,974		13,139			8,039
Income from continuing operations		(24,300	)		89,111		67,156		16,975			19,909
Income from discontinued operations		100,988			163,754		216,313		60,339			54,872
Distributions to preferred unitholders		20,689			28,153		29,641		22,274			28,608
Net income available to common unitholders		55,639			222,584		253,828		55,040			46,173
Per unit — basic:
Income from continuing operations	$	(0.80	)	$	1.05	$	0.77	$	(0.14	)	$	(0.25	)
Income from discontinued operations		1.78			2.92		4.41		1.61			1.55
Net income per unit — basic	$	0.98		$	3.96	$	5.18	$	1.47		$	1.30
Per unit — diluted:
Income from continuing operations	$	(0.80	)	$	1.03	$	0.75	$	(0.14	)	$	(0.24	)
Income from discontinued operations		1.78			2.89		4.38		1.59			1.54
Net income per unit — diluted	$	0.98		$	3.92	$	5.13	$	1.45		$	1.29
Distributions per unit (1)	$	2.75		$	2.72	$	2.70	$	2.68		$	2.66
BALANCE SHEET DATA
Land, buildings and equipment, net	$	2,394,587		$	3,562,951	$	3,888,927	$	2,426,379		$	1,970,695
Total assets		3,229,637			4,431,774		4,499,227		2,801,324			2,194,867
Total long-term liabilities		1,641,839			2,397,906		2,494,350		1,855,787			1,267,865
OTHER DATA
Total properties (at end of year)		200			223		261		153			112

(1) Includes a special distribution paid during the second quarter of 2007 of $0.21 per unit in connection with the completion of the Strategic Transactions (see Note 14 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K).

50

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

     The following discussion and analysis of the consolidated financial condition and consolidated results of operations should be read together except as otherwise noted, with the consolidated financial statements of CRLP and notes thereto contained in Item 8 of this Form 10-K.

General

          CRLP is the operating partnership of the Trust. The Trust’s shares are listed on the New York Stock Exchange. The Trust is a self-administered equity REIT that owns, develops and operates multifamily, office and retail properties in the Sunbelt region of the United States. The Trust is a fully-integrated real estate company, which means that it is engaged in the acquisition, development, ownership, management and leasing of commercial real estate property and for-sale residential property. The Trust’s assets are owned by, and substantially all of its business is conducted through, us and our subsidiaries and other affiliates. The Trust holds approximately 82.5% of the interests in us. As of December 31, 2007, we owned or maintained a partial ownership in 122 multifamily apartment communities containing a total of 36,314 apartment units (consisting of 102 wholly-owned consolidated properties and 20 properties partially-owned through unconsolidated joint venture entities aggregating 30,371 and 5,943 units, respectively), 48 office properties containing a total of approximately 16.1 million square feet of office space (consisting of two wholly-owned consolidated properties and 46 properties partially-owned through unconsolidated joint-venture entities aggregating 0.2 and 15.9 million square feet, respectively), 30 retail properties containing a total of approximately 7.8 million square feet of retail space, excluding anchor-owned square-footage (consisting of four wholly-owned properties and 26 properties partially-owned through unconsolidated joint venture entities aggregating 0.7 million and 7.1 million square feet, respectively, and certain parcels of land adjacent to or near certain of these properties. As of December 31, 2007, consolidated multifamily, office and retail properties that had achieved stabilized occupancy (which occurs once a property has attained 93% physical occupancy) were 96.0%, 97.1% and 90.4% leased, respectively.

          As a lessor, the majority of our revenue is derived from tenants and residents under existing leases at our properties. Therefore, our operating cash flow is dependent upon the rents that we are able to charge to our tenants and residents, and the ability of these tenants and residents to make their rental payments. Additionally, our reliance on third-party management fees has increased significantly as a result of an increase in joint venture activities and the related third-party management agreements.

          The for-sale residential business, which deteriorated throughout 2007, experienced significant deterioration in the third and fourth quarters of 2007 due to increasing mortgage financing rates, the decline in the availability of sub-prime lending and other types of mortgages. This deterioration led to increasing supplies of such assets, an increase in construction costs, and higher insurance costs, resulting in lower sales prices and reduced sales velocity. In addition, pricing in the single family housing market declined, primarily due to a lack of demand, and certain units that were under contract did not close because buyers backed out of the sales contracts. Because of these factors, we recorded a non-cash impairment charge of $43.3 million ($26.8 million, net of tax) to reduce the carrying value of certain of our for-sale residential developments to their estimated fair market value. This impairment charge was primarily related to the for-sale residential projects located in Gulf Shores, Alabama and one condominium project in downtown Charlotte, North Carolina. Including the charge, as of December 31, 2007, we had approximately $135.6 million of capital cost (based on book value, including pre-development and land costs) invested in our consolidated and unconsolidated for-sale residential projects. If market conditions do not improve or if there is further market deterioration, it may impact the number of projects we can sell, the timing of the sales and/or the prices at which we can sell them. If we are unable to sell projects, we may incur additional impairment charges on projects previously impaired as well as on projects not currently impaired but for which indicators of impairment may exist, which would decrease the value of our assets as reflected on our balance sheet and adversely affect our shareholders’ equity. There can be no assurances of the amount or pace of future for-sale residential sales and closings, particularly given current market conditions.

Strategic Initiative

          In November 2006, we announced that we were accelerating our plan to become a multi-family focused REIT by reducing our ownership interests in our office and retail portfolios. To facilitate this plan, in June 2007, we completed two joint venture transactions, one involving 26 properties and the other involving 11 properties. In addition, in July 2007, we completed the outright sale of an additional 11 retail properties for an aggregate sales price of $129.0 million. As a result of the sale of one of these assets for less than its carrying value, we recorded an impairment charge of approximately $2.5 million during the three months ended June 30, 2007. In addition, we sold a retail property, of which it owned 90%, for a sales price of $74.4 million. These transactions are more fully described under “Business - -Business Strategy” in Item 1 of this Form 10-K.

          As a result of the joint venture transactions, the Trust paid a special dividend of $10.75 per share on June 27, 2007. The remaining proceeds from these transactions were used to pay down our outstanding indebtedness (see Note 11 to our Notes

51

to Consolidated Financial Statements contained in Item 8 of this Form 10-K). During 2007, we incurred approximately $29.2 million in prepayment penalties, which was partially offset by the write-off of approximately $16.7 million in debt intangibles. In addition, we incurred transaction costs of approximately $11.0 million in connection with the office and retail joint venture transactions, including employee incentives of approximately $0.5 million. These transaction costs were recorded as a part of the net gain recorded for the two joint venture transactions for the Trust. During 2007, we also incurred approximately $3.0 million of non-divisional termination benefits and severance costs associated with its strategic initiative. Of the $3.0 million of restructuring charges, approximately $0.2 million was associated with our multifamily portfolio, $0.7 million with our office portfolio, $0.3 million with our retail portfolio and $0.3 million with our for-sale residential portfolio. The remainder of these costs was non-divisional charges.

Executive Summary of Results of Operations

          The following discussion of results of operations should be read in conjunction with the Consolidated Statements of Income and Comprehensive Income and the Operating Results Summary included below. In order to evaluate the operating performance of our properties for the comparative periods presented, we have presented financial information which summarizes the rental and other property revenues, property operating expenses (excluding depreciation and amortization) and net operating income (“NOI”) on a comparative basis. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income as presented in our consolidated financial statements. NOI is a supplemental non-GAAP financial measure. We believe that the line on our Consolidated Statements of Income and Comprehensive Income entitled “net income” is the most directly comparable GAAP measure to NOI. A reconciliation of net operating income to GAAP net income is included below. A reconciliation of segment NOI for our four operating segments with operating properties – multifamily, office, retail and for-sale residential –is set forth in Note 10 to our Consolidated Financial Statements included in Item 8 of this Form 10-K.

          We believe that NOI is an important supplemental measure of operating performance for a REIT’s operating real estate because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs and general and administrative expenses. This measure is particularly useful, in the opinion of management, in evaluating the performance of geographic operations, operating segment groupings, individual properties and geographic operations. Additionally, management believes that NOI is a widely accepted measure of comparative operating performance in the real estate investment community. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered (1) as an alternative to net income (determined in accordance with GAAP), (2) as an indicator of financial performance, (3) as cash flow from operating activities (determined in accordance with GAAP) or (4) as a measure of liquidity nor is it indicative of sufficient cash flow to fund all of our needs.

          The principal factors that influenced our operating results for 2007 are as follows:

• Total multifamily revenues decreased $4.0 million, or 1.3%, compared to 2006 primarily as a result of the net of four acquisitions and 12 dispositions during 2007, compared to 10 acquisitions and 16 dispositions during 2006.

• Total multifamily NOI decreased $1.9 million, or 1.1%, compared to 2006 as a result of the net of four acquisitions and 12 dispositions during 2007, compared to 10 acquisitions and 16 dispositions during 2006.

• Office and Retail NOI and Rental revenues associated with our office and retail assets decreased due to:

o the office and retail joint venture transactions that were consummated during June 2007;

o the sale of 85% of our interest in the office assets contributed to the Colonial Center Mansell joint venture in June 2006;

o the outright sale of three other office assets throughout the remainder of 2006; and

o the outright sale of 16 retail assets during 2007.

• We incurred a $43.3 million non-cash impairment charge ($26.8 million net of income tax) related to our for-sale residential business, a $2.5 million impairment charge related to a retail asset sold during 2007 and an $0.8 million impairment charge as a result of fires at two of our multifamily apartment communities .

• Commercial development sales and for-sale residential sales contributed approximately $17.0 million of net income, excluding impact of impairment charge.

• Operations for 2007 included approximately $20.5 million of net expenses associated with our strategic initiative (see below for detailed discussion of these expenses).

Additionally, our multifamily portfolio physical occupancy for consolidated properties was 96.0%, 95.5% and 95.3% for the years ended December 31, 2007, 2006 and 2005.

52

Reconciliation of Operating Results Summary to Consolidated Statements of Income and Comprehensive Income

                The following schedules are provided to reconcile our Consolidated Statements of Income and Comprehensive Income to the information presented in the Operating Results Summary (dollar amounts in thousands).

	2007									2006									2005
	Continuing			Discontinued						Continuing			Discontinued						Continuing			Discontinued
	Operations			Operations			Total			Operations			Operations			Total			Operations			Operations			Total
Rental revenues (1)	$	343,717		$	62,918		$	406,635		$	397,200		$	138,853		$	536,053		$	366,629		$	175,611		$	542,240
Construction revenues		38,448			—			38,448			30,484			—			30,484			—			—			—
Non-property related revenues		19,352			—			19,352			17,693			—			17,693			7,939			7,049			14,988
Property operating expenses (rental expense and real estate taxes)		(128,386	)		(26,242	)		(154,628	)		(138,767	)		(55,637	)		(194,404	)		(122,169	)		(68,883	)		(191,052	)
Construction expenses		(34,546	)		—			(34,546	)		(29,411	)		—			(29,411	)		—			—			—
Property management expenses		(12,182	)		—			(12,182	)		(12,590	)		—			(12,590	)		(12,615	)		—			(12,615	)
General and adminstrative expenses		(27,160	)		—			(27,160	)		(21,098	)		—			(21,098	)		(19,549	)		—			(19,549	)
Management fee and other expenses		(15,677	)		—			(15,677	)		(12,618	)		—			(12,618	)		(4,576	)		(5,300	)		(9,876	)
Restructuring charges		(3,019	)		—			(3,019	)		—			—			—			—			—			—
Depreciation and amortization		(113,703	)		(11,001	)		(124,704	)		(135,578	)		(36,045	)		(171,623	)		(140,922	)		(52,866	)		(193,788	)
Impairment charges		(43,679	)		(2,950	)		(46,629	)		(1,600	)		—			(1,600	)		—			—			—
Interest expense and debt cost amortization		(90,390	)		(5,501	)		(95,891	)		(119,445	)		(14,918	)		(134,363	)		(116,587	)		(21,605	)		(138,192	)
Loss on retirement of debt		(9,120	)		(3,403	)		(12,523	)		(641	)		(562	)		(1,203	)		—			—			—
Income taxes		15,831			—			15,831			(189	)		—			(189	)		(1,551	)		—			(1,551	)
Gains on hedging activity		345			—			345			5,535			—			5,535			886			—			886
Other		—			—			—			—			—			—			4,000			—			4,000
Interest income		7,590			8			7,598			7,753			34			7,787			4,397			67			4,464
Income (loss) from unconsolidated entities		11,207			—			11,207			34,823			—			34,823			910			(186	)		724
Gains, net of income taxes		29,433			91,147			120,580			66,794			134,619			201,413			105,609			183,011			288,620
Transaction costs		(11,026	)					(11,026	)		—			—			—			—			—			—
Minority interest of limited partners		(1,335	)		(3,988	)		(5,323	)		766			(2,591	)		(1,825	)		(5,245	)		(585	)		(5,830	)
Net income (loss)		(24,300	)		100,988			76,688			89,111			163,754			252,865			67,156			216,313			283,469
Dividends to preferred unitholders		(20,689	)		—			(20,689	)		(28,153	)		—			(28,153	)		(29,641	)		—			(29,641	)
Preferred share issuance costs write-off		(360	)		—			(360	)		(2,128	)		—			(2,128	)		—			—			—
Net income (loss) available to common shareholders	$	(45,349	)	$	100,988		$	55,639		$	58,830		$	163,754		$	222,584		$	37,515		$	216,313		$	253,828

(1) Rental revenues include minimum rent, percentage rent, tenant recoveries and other property related revenue from our Consolidated Statements of Income.

Operating Results Summary

                The following operating results summary is provided for reference purposes and is intended to be read in conjunction with the narrative discussion. This summary includes all operating activities for our consolidated properties, including those classified as discontinued operations for GAAP reporting purposes. This information is presented to correspond with the manner in which we analyze our operating results. We generally reinvest disposition proceeds into new operating communities and developments and, therefore, believe it is most useful to analyze continuing and discontinued operations on a combined basis.

53

										2007 v 2006			2006 v 2005
(amounts in thousands)	2007			2006			2005			Variance			Variance
Rental revenues:
Multifamily	$	297,655		$	301,613		$	264,218		$	(3,958	)	$	37,395
Office		57,349			138,645			124,992			(81,296	)		13,653
Retail		51,631			95,794			153,030			(44,163	)		(57,236	)
Total rental revenues		406,635			536,052			542,240			(129,417	)		(6,188	)
Property operating expenses (rental expenses and real estate taxes):
Multifamily		(119,540	)		(121,586	)		(105,888	)		2,046			(15,698	)
Office		(19,148	)		(46,450	)		(39,744	)		27,302			(6,706	)
Retail		(15,940	)		(26,367	)		(45,420	)		10,427			19,053
Total property operating expenses		(154,628	)		(194,403	)		(191,052	)		39,775			(3,351	)
Net operating income (rental revenues less property operating expenses) (1)	$	252,007		$	341,649		$	351,188		$	(89,642	)	$	(9,539	)
Multifamily Margin (NOI/rental revenues) (2):		59.8	%		59.7	%		59.9	%		(0.1	%)		(0.2	%)
Multifamily occupancy at end of period (3):		96.0	%		95.5	%		95.3	%		0.5	%		0.2	%
Construction revenues		38,448			30,484			—			7,964			30,484
Construction expenses		(34,546	)		(29,411	)		—			(5,135	)		(29,411	)
Non-property related revenues		19,352			17,693			14,988			1,659			2,705
Depreciation & amortization		(124,704	)		(171,623	)		(193,788	)		46,919			22,165
Property management expenses		(12,182	)		(12,590	)		(12,615	)		408			25
General and administrative expenses		(27,160	)		(21,098	)		(19,549	)		(6,062	)		(1,549	)
Management fee and other expense		(15,677	)		(12,618	)		(9,876	)		(3,059	)		(2,742	)
Restructuring charges		(3,019	)		—			—			(3,019	)		—
Impairment charges		(46,629	)		(1,600	)		—			(45,029	)		(1,600	)
Interest expense & debt cost amortization		(95,891	)		(134,363	)		(138,192	)		38,472			3,829
Loss on retirement of debt		(12,523	)		(1,203	)		—			(11,320	)		(1,203	)
Interest income		7,598			7,787			4,464			(189	)		3,323
Income taxes		15,831			(189	)		(1,551	)		16,020			1,362
Gains on hedging activity		345			5,535			886			(5,190	)		4,649
Transaction costs		(11,026	)		—			—			(11,026	)		—
Other		—			—			4,000			—			(4,000	)
Earnings from continuing and discontinued operations		(49,776	)		18,453			(45	)		(57,203	)		18,498
Equity in earnings from unconsolidated entities		11,207			34,823			724			(23,616	)		34,099
Gains from sale of property, net of income taxes		120,580			201,413			288,620			(80,833	)		(87,207	)
Minority interest of limited partners		(5,323	)		(1,825	)		(5,830	)		(3,499	)		4,006
Net income	$	76,688		$	252,865		$	283,469		$	(165,151	)	$	(30,605	)

(1)	Net operating income is a non-GAAP financial measure. See discussion related to this measure above under “Executive Summary of Results of Operations.” Multifamily NOI, Office NOI and Retail NOI each can be calculated by subtracting operating expenses from rental revenues.
(2)	Multifamily Margin is calculated by subtracting multifamily operating expenses from multifamily rental revenues and dividing the difference by multifamily rental revenues.
(3)	Multifamily occupancy at end of period consists of physical occupancy for consolidated properties in our multifamily portfolio at the end of the applicable period.

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Operating Results – 2007 compared to 2006

Multifamily analysis

          For the year ended December 31, 2007 as compared to 2006, total multifamily revenues decreased $4.0 million as a result of disposition activities, which were partially offset by revenues from acquisitions, new developments placed into service and additional ancillary income. Multifamily revenues decreased $45.0 million as a result of the multifamily community dispositions that occurred during 2007 and 2006 and $2.1 million as a result of the conversion of three multifamily communities to for-sale condominiums. This decrease was partially offset by multifamily revenue increases of $31.0 million related to 2007 and 2006 acquisitions, $7.7 million related to improved operations at our properties held for all of 2006 and 2007 ($4.4 million associated with increased rental rates and $3.3 million associated with additional ancillary income), $3.8 million related to new developments placed into service during 2007 and 2006 and $1.0 million as a result of moving two for-sale residential projects into the rental pool.

          For the year ended December 31, 2007 as compared to 2006, total multifamily NOI decreased $1.9 million as a result of disposition activities, which were partially offset by acquisitions, new developments placed into service and improved operations. NOI decreased $27.6 million as a result of the multifamily community dispositions that occurred during 2007 and 2006, $1.3 million related to an increase in salaries and incentives and $1.2 million as a result of the conversion of three multifamily communities to for-sale condominiums. In addition, NOI decreased due to impairment charges recorded as a result of fires at two multifamily apartment communities. These decreases in NOI were partially offset by $19.4 million related to 2007 and 2006 acquisitions, $2.3 million related to new developments placed into service and $7.7 million as a result of improved operations as mentioned above. The markets that experienced the majority of the growth were Austin and Fort Worth, Texas; Charlotte and Raleigh, North Carolina; and Richmond, Virginia.

Commercial property analysis

          For the year ended December 31, 2007 as compared to 2006, rental revenues associated with our office and retail assets decreased $125.5 million and office and retail NOI decreased $87.7 million. As a result of the office joint venture transaction that closed in June 2007, office revenues and office NOI decreased $74.1 million and $46.5 million, respectively. As a result of the retail joint venture transaction that closed in June 2007, retail revenues and retail NOI decreased $16.6 million and $12.4 million, respectively. Additionally, retail rental revenues and retail NOI decreased $11.6 million and $8.4 million, respectively, as a result of the outright sale of 12 of our retail malls and shopping centers during July 2007. The remaining decrease is related to other single property dispositions of office and retail assets during 2007 and 2006.

Construction activities

          Revenues from construction activities increased approximately $8.0 million for the year ended December 31, 2007, as compared to the same period in 2006. Expenses from construction activities increased approximately $5.1 million for the year ended December 31, 2007, as compared to the same period in 2006. We provided construction services to Colonial Grand at Traditions, a wholly-owned development project during 2007, and to Colonial Grand at Canyon Creek, in which we own a 25% interest, during 2006 and 2007. All revenues and expenses associated with our percent interest are eliminated in consolidation.

Non-property related revenues

          Non-property related revenues increased $1.7 million for the year ended December 31, 2007, as compared to the same period in 2006. This increase is a result of the management fees that we began receiving as a result of the office and retail joint venture transactions that closed in June 2007, as well as an increase in construction and development fees. These increases were partially offset by lost management fee revenues from the DRA Southwest Partnership, in which we sold our interest in December 2006, and from the GPT/Colonial Retail Joint Venture, for which we ceased providing management services as of June 2007.

Depreciation and amortization expenses

          Depreciation and amortization expense decreased $46.9 million for the year ended December 31, 2007 compared to the same period in 2006. This decrease resulted from the net disposition activity since December 31, 2006, including, in particular, the dispositions resulting from the office and retail joint venture transactions and retail sales in June 2007 and July 2007, respectively.

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General and administrative expenses

          General and administrative expenses increased approximately $6.1 million during the year ended December 31, 2007 as compared to the same period in 2006 primarily as a result of expenses incurred in connection with the termination of our pension plan, totaling $2.3 million (including a one-time pension bonus of $1.4 million), an increase in corporate office rental fees of $1.0 million, an increase in insurance costs of $1.1 million and an increase in salaries and incentives associated with the growth of the company of $1.0 million. The remaining increase is attributable to costs incurred as a result of unsuccessful ventures.

Management fee and other expenses

          Management fee and other expenses consist of property management and other services provided to third parties, including properties held in unconsolidated joint ventures in which we are a member. These expenses increased $3.1 million for the year ended December 31, 2007 as compared to the same period in 2006 primarily due to an increase in broker commissions paid on leasing and dispositions in 2007, the reallocation of management salaries from property management expenses, and an increase in recruiting and other general corporate expenditures resulting from our office and retail joint venture transactions that closed in June 2007

Property management expenses

          Property management expenses consist of regional supervision and accounting costs related to property operations at our wholly-owned properties. These expenses decreased $0.4 million for the year ended December 31, 2007 as compared to the same period in 2006 primarily due to a reallocation of management salaries to management fee expenses as a result of the office and retail joint venture transactions that closed in June 2007.

Restructuring charges

          The restructuring charges recorded in the year ended December 31, 2007 were comprised of termination benefits and severance costs recorded in the second and fourth quarters of 2007 associated with our strategic initiative to become a multifamily focused REIT.

Impairments

          For 2007, we recorded non-cash impairment charges totaling $46.6 million. We recorded an income tax benefit of $16.5 million related to the $43.3 million non-cash impairment charge recorded on our for-sale residential business.

          During the second quarter of 2007, we recorded a non-cash impairment charge of $2.5 million related to a retail asset that was sold in July 2007 for less than its carrying value.

          During the third quarter of 2007, we recorded a non-cash impairment charge of $43.3 million on our for-sale residential business as a result of the deterioration in the single family housing market, primarily in Gulf Shores, Alabama and Charlotte, North Carolina, and the turmoil in the mortgage markets. In addition, we recorded an impairment charge of $0.8 million during the third quarter of 2007, as a result of fire damage at two separate multifamily apartment communities. The fires resulted in the loss of a total of 20 units at the two properties.

Interest expense and debt cost amortization

          For the year ended December 31, 2007, the decrease in interest expense and debt cost amortization is a result of the pay-down of $409.0 million of collateralized mortgages associated with 37 multifamily properties with a portion of the proceeds received from the June 2007 joint venture transactions.

Loss on retirement of debt

     Loss on retirement of debt increased approximately $11.3 million during the year ended December 31, 2007 as compared to the same period in 2006. During the second quarter 2007, with proceeds from the office and retail joint venture transactions, we repaid $409.0 million of collateralized mortgages associated with 37 multifamily properties. These repayments resulted in a loss on retirement of debt during year ended December 31, 2007, comprised of approximately $29.2 million in prepayment penalties partially offset by the write-off of approximately $16.7 million of mark-to-market debt intangibles.

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Income taxes

          During 2007, we recorded an income tax benefit of $15.8 million primarily as a result of the income tax benefit associated with the $43.3 million non-cash impairment charge related to our for-sale residential business. This income tax benefit was partially offset by income tax expense associated with gains on sales of retail developments.

Gains on hedging activities

          Gains on hedging activities decreased $5.2 million during the year ended December 31, 2007 as compared to the same period in 2006. This decrease resulted from the settlement of $200 million forward starting swap during the first quarter of 2006 and settling a $175 million forward starting interest rate swap during the fourth quarter of 2006. Combined, we received a payment of $5.6 million in connection with these settlements in 2006.

Equity in earnings from unconsolidated entities

          Income from unconsolidated entities decreased $23.6 million for the year ended December 31, 2007 due primarily to the gain on the sale of our interest in 15 multifamily apartment communities which were part of the DRA Southwest Joint Venture recognized in December 2006. This decrease was partially offset by gains recognized during 2007 of $9.2 million from the sale of our 25% interest in Colonial Grand at Bayshore in March 2007, $6.6 million gain from the sale of our 15% interest in Las Olas Centre in July 2007 and $1.7 million from the sale of our 25% interest in Colonial Village at Hendersonville in September 2007.

Gains from sales of property

          Gains from sales of property for the year ended December 31, 2007 decreased $80.8 million for the year ended December 31, 2007 as compared to the same period in 2006 due to fewer asset sales in 2007. During 2006, we disposed of 16 wholly-owned multifamily apartment communities, seven wholly-owned office assets and six wholly-owned retail assets. During 2007, we sold 12 multifamily apartment communities, 15 retail assets (11 of which were sold for no gain) and our 90% interest in Village on the Parkway. In addition, we sold our interest in three retail development properties including the sale of 85% of Colonial Pinnacle Craft Farms I and the sale of 95% of each of Colonial Promenade Alabaster II and Colonial Pinnacle Tutwiler II during 2007.

Transaction costs

          Transaction costs were $11.0 million for the year ended December 31, 2007, as a result of the office and retail joint venture transactions that occurred during June 2007 as discussed above.

Dividends to preferred shareholders

          Dividends to preferred shareholders decreased $7.5 million for the year ended December 31, 2007, as compared to the same period in 2006 as a result of the redemption of the Series C Preferred Shares of Beneficial Interest on June 30, 2006 and the partial repurchase during 2006 and redemption in 2007 of the Series E Cumulative Redeemable Preferred Shares of Beneficial Interest during 2006 and 2007. In connection with the Series E Preferred Shares redemption in 2007, we wrote off $0.3 million of associated issuance costs.

Discontinued Operations

          Included in the overall results discussed above are amounts associated with properties that have been sold or were classified as held-for-sale as of December 31, 2007 (see Note 5 to our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K).

Operating Results – 2006 compared to 2005

Multifamily analysis

          For the year ended December 31, 2006 as compared to 2005, total multifamily revenues increased $37.4 million as a result of the properties acquired in the Cornerstone merger, the addition of 10 properties, partially offset by the disposition of 16 properties in 2006, new developments placed into service during 2006 and improved operations.

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          For the year ended December 31, 2006 as compared to 2005, total multifamily NOI increased $21.7 as a result of the Cornerstone merger, net acquisition and disposition activities, new developments placed into service and improved operations.

Commercial property analysis

          For the year ended December 31, 2006 as compared to 2005, rental revenues associated with our office and retail assets decreased $43.6 million and office and retail NOI decreased $31.2 million, compared to the same period in 2005. This decrease is attributable to the disposition of 12 wholly-owned retail assets and an additional six retail assets that were contributed to a joint venture in which we retained a 10% interest during 2005 and 2006.

Construction activities

          Revenues from construction activities were approximately $30.5 million for the year ended December 31, 2006. Expenses from construction activities were approximately $29.4 million for the year ended December 31, 2006. Our construction company had not begun providing services to third parties during the year ended December 31, 2005. These construction and development services were provided to the joint venture, CG at Canyon Creek, in which we own a 25% partnership interest. All revenues and expenses associated with our percent interest are eliminated in consolidation.

Non-property related revenues

          Non-property related revenues increased $2.7 million for the year ended December 31, 2006, as compared to the same period in 2005. The increase is primarily due to an increase in property management fees and leasing income as a result of additional third party management agreements.

Depreciation and amortization expenses

          Depreciation and amortization expense decreased $22.2 million for the year ended December 31, 2006 compared to the same period in 2005. The decrease is related to disposition activity since December 31, 2005 and reduced amortization expenses related to properties acquired in the Cornerstone merger in 2005.

General and administrative expenses

          General and administrative expenses increased approximately $1.6 million during the year ended December 31, 2006 as compared to the same period in 2005 primarily as a result of an increase in salaries and other incentives associated with our growth and an additional quarter of overhead costs in 2006 associated with the Cornerstone merger.

Management fee and other expenses

          Management fee and other expenses consist of property management and other services provided to third parties, including properties held in unconsolidated joint ventures in which we are a member. These expenses increased $2.7 million for the year ended December 31, 2006 as compared to the same period in 2005 primarily due to an increase in property management and leasing expenses as a result of additional third party management agreements.

Property management expenses

          Property management expenses consist of regional supervision and accounting costs related to property operations at our wholly-owned properties. These expenses remained flat in 2006 as compared to the same period in 2005.

Impairments

          During the year ended December 31, 2006, we recorded a total non-cash impairment charge of $1.6 million on one of our condominium conversion properties as a result of the softening in the condominium and single family housing markets during 2006.

Interest expense

          Interest expense decreased $3.8 million during the year ended December 31, 2006 as compared to the same period in 2005. The increase reflects the issuance of $275 million of senior notes on August 29, 2006, which was offset by principal reductions of debt during 2006 and the net reduction in our revolving credit facilities during the year.

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Interest income

          Interest income increased $3.3 million during the year ended December 31, 2006 as compared to the same period in 2005. The increase is a result of a $24.6 million increase in notes receivable, primarily resulting from subordinated financing provided to partially-owned joint ventures in 2006 compared to 2005.

Gains on hedging activities

          Gains on hedging activities increased $4.6 million during the year ended December 31, 2006 as compared to the same period in 2005. This increase is a result of changes in the fair value of an economic hedge totaling approximately $2.7 million and the gain recognized on the settlement of a forward starting interest rate swap of approximately $2.9 million, for which the originally hedged future debt issuance is probable of not occurring (see Note 12 — Derivative Instruments in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K).

Other

          Other income decreased during year ended December 31, 2006 as compared to the same period in 2005, as a result of $4.0 million of forfeited earnest money we received in 2005.

Gains from sales of property

          Gains from sales of property for the year decreased $87.2 million for the year ended December 31, 2006 as compared to the same period in 2005. The decrease is primarily attributable to larger gains on sales of properties to joint ventures during 2005, offset by an increase in gains on sales of land, undepreciated property, condominium units and for-sale residential sales.

Discontinued operations

          Included in the overall results discussed above are amounts associated with properties that have been sold or were classified as held-for-sale as of December 31, 2007 (see Note 5 to our Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K).

Preferred share issuance costs write-off

          Preferred share issuance costs write-off for the year ended December 31, 2006 included the write-off of issuance costs associated with the Series C and Series E preferred shares, which resulted from the redemption or repurchase of such shares during 2006 (see Note 14 — Equity Offerings in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K).

Summary of Critical Accounting Policies

          We believe our accounting policies are in conformity with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied resulting in a different presentation of our financial statements. We consider the following accounting policies to be critical to our reported operating results:

          Principles of Consolidation— We consolidate entities in which we have a controlling interest or entities where we are determined to be the primary beneficiary under FASB Interpretation No. 46R (“FIN 46R”), “Consolidation of Variable Interest Entities.” Under FIN 46R, variable interest entities (“VIEs”) are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. Additionally, Emerging Issues Task Force (“EITF”) Issue No. 04-5, Determining Whether a General Partner, or the General Partner as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights provides guidance in determining whether a general partner controls and, therefore, should consolidate a limited partnership. The application of FIN 46R and EITF No. 04-5 requires management to make significant estimates and judgments about our and our partners’ rights, obligations and economic interests in such entities. Where we have less than a controlling financial interest in an entity or we are not the primary beneficiary of the entity under FIN 46R, the entity is accounted for on the equity method of accounting.

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Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. A description of our investments accounted for using the equity method of accounting is included in Note 9 Investments in Partially-Owned Entities and Other Arrangements in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K. All significant intercompany accounts and transactions have been eliminated in consolidation.

          We recognize minority interest in our Consolidated Balance Sheets for partially-owned entities that we consolidate. The minority partners’ share of current operations is reflected in minority interest of limited partners in the Consolidated Statements of Income and Comprehensive Income.

          Land, Buildings, and Equipment—Land, buildings, and equipment is stated at the lower of cost, less accumulated depreciation, or fair value. We review our long-lived assets and certain intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted cash flows expected to be generated by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the asset’s fair value. Assets classified as held for sale are reported at the lower of their carrying amount or fair value less cost to sell. We determine fair value based on a probability weighted discounted future cash flow analysis.

          In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, land inventory and related for-sale residential projects under development are reviewed for potential write-downs when impairment indicators are present. SFAS No. 144 requires that in the event the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts, impairment charges are required to be recorded to the extent that the fair value of such assets is less than their carrying amounts. These estimates of cash flows are significantly impacted by estimates of sales price, selling velocity, sales incentives, construction costs, and other factors. Due to uncertainties in the estimation process, actual results could differ from such estimates. For those assets deemed to be impaired, the impairment to be recognized is to be measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Our determination of fair value is primarily based on a probability weighted discounted future cash flow analysis which incorporates available market information as well as other assumptions made by management.

          Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows:

	Useful Lives
Buildings	20 - 40 years
Furniture and fixtures	5 or 7 years
Equipment	3 or 5 years
Land improvements	10 or 15 years
Tenant improvements	Life of lease

          Repairs and maintenance costs are charged to expense as incurred. Replacements and improvements are capitalized and depreciated over the estimated remaining useful lives of the assets.

          Acquisition of Real Estate Assets— We account for our acquisitions of investments in real estate in accordance with Statement of Financial Accounting Standards No. 141, Business Combinations, which requires the fair value of the real estate acquired to be allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and value of other tenant relationships, based in each case on their fair values. We consider acquisitions of operating real estate assets to be “businesses” as that term is contemplated in Emerging Issues Task Force Issue No. 98-3, Determining Whether a Non-monetary Transaction Involves Receipt of Productive Assets or of a Business.

          We allocate purchase price to the fair value of the tangible assets of an acquired property (which includes the land and building) determined by valuing the property as if it were vacant. The “as-if-vacant” value is allocated to land and buildings based on management’s determination of the relative fair values of these assets. We also allocate value to tenant improvements based on the estimated costs of similar tenants with similar terms.

          Above-market and below-market in-place lease values for acquired properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancelable terms of the

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respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term and any fixed-rate renewal periods in the respective leases.

          The aggregate value of other intangible assets acquired are measured based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management may engage independent third-party appraisers to perform these valuations and those appraisals use commonly employed valuation techniques, such as discounted cash flow analyses. Factors considered in these analyses include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods depending on specific local market conditions and depending on the type of property acquired. Management also estimates costs to execute similar leases including leasing commissions, legal and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction.

          The total amount of other intangible assets acquired is further allocated to in-place leases, which includes other tenant relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement or management’s expectation for renewal), among other factors.

          We are actively pursuing acquisition opportunities and will not be successful in all cases. Costs incurred related to these acquisition opportunities are expensed when it is no longer probable that we will be successful in the acquisition.

          Undeveloped Land and Construction in Progress—Undeveloped land and construction in progress is stated at cost unless such assets are impaired pursuant to the provisions of SFAS No. 144, in which case such assets are recorded at fair value.

          Costs incurred during predevelopment are capitalized after we have identified a development site, determined that a project is feasible, and concluded that it is probable that the project will proceed. While we believe we will recover this capital through the successful development of such projects, it is possible that a write-off of unrecoverable amounts could occur. Once it is no longer probable that a development will be successful, the predevelopment costs that have been previously capitalized are expensed.

          The capitalization of costs during the development of assets (including interest, property taxes and other direct costs) begins when an active development commences and ends when the asset, or a portion of an asset, is delivered and is ready for its intended use. Cost capitalization during redevelopment of assets (including interest and other direct costs) begins when the asset is taken out of service for redevelopment and ends when the asset redevelopment is completed and the asset is placed in-service.

          Valuation of Receivables—We are subject to tenant defaults and bankruptcies at our office and retail properties that could affect the collection of outstanding receivables. In order to mitigate these risks, we perform credit review and analysis on all commercial tenants and significant leases before they are executed. We evaluate the collectability of outstanding receivables and record allowances as appropriate. Our policy is to record allowances for all outstanding invoices greater than 60 days past due at our office and retail properties. We had $1.4 million and $1.7 million in an allowance for doubtful accounts as of December 31, 2007 and 2006, respectively.

          Due to the short-term nature of the leases at our multifamily properties, generally six months to one year, our exposure to tenant defaults and bankruptcies is minimized. Our policy is to record allowances for all outstanding receivables greater than 30 days past due at our multifamily properties.

          Notes Receivable— Notes receivable consists primarily of promissory notes issued by third parties. We record our notes receivable at cost. We evaluate the collectability of both interest and principal for each of its notes to determine whether it is impaired. A note is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the existing contractual terms. When a note is considered to be impaired, the amount of the allowance is calculated by comparing the recorded investment to either the value determined by discounting the expected future cash flows at the note’s effective interest rate or to the fair value of the collateral if the note is collateral dependent. We had recorded accrued interest related to its outstanding notes receivable of $0.2 million and $5.2 million as of December 31, 2007 and 2006, respectively. As of December 31, 2007 and 2006, we had recorded a reserve of $0.9 million and

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$0.6 million, respectively, against our outstanding notes receivable and accrued interest. The weighted average interest rate on the notes receivable outstanding at December 31, 2007 and 2006 was approximately 8.1% and 11.8% respectively. Interest income is recognized on an accrual basis.

          Share-Based Compensation—The Trust currently sponsor share option plans and restricted share award plans (Refer to Note 13 – Share–based Compensation in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K). In December 2004, the FASB issued SFAS No. 123 (Revised), Share Based Payment, which replaced SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123 (R) requires compensation costs related to share-based payment transactions to be recognized in financial statements.  The Trust adopted SFAS No. 123 (R) effective January 1, 2006 using the modified prospective method. The Trust previously adopted SFAS No. 123 on January 1, 2003 using the prospective method. Under this method, the fair value of compensation expense was recorded for all share-based awards granted or modified after January 1, 2003. Accordingly, the adoption of SFAS No. 123 (R) did not have a material impact on our consolidated financial statements.

          Revenue Recognition— Sales and the associated gains or losses on real estate assets, condominium conversion projects and for-sale residential projects are recognized in accordance with the provisions of Statement of Financial Accounting Standard (“SFAS”) No. 66, “Accounting for Sales of Real Estate.” For condominium conversion projects, sales and the associated gains for individual condominium units are recognized upon the closing of the sale transactions, as all conditions for full profit recognition have been met (“Completed Contract Method”). Under SFAS No. 66, we use the relative sales value method to allocate costs and recognize profits from condominium conversion sales.

          For newly developed for-sale residential projects, we account for each project under either the Completed Contract Method or the Percentage of Completion Method based on a specific evaluation of the factors specified in SFAS No. 66. The factors used to determine the appropriate accounting method are the legal commitment of the purchaser in the real estate contract, whether the construction of the project is beyond a preliminary phase, sufficient units have been contracted to ensure the project will not revert to a rental project, the aggregate project sale proceeds and costs can be reasonably estimated and the buyer has made an adequate initial and continuing cash investment under the contract in accordance with SFAS No. 66. Under the percentage-of-completion method, revenues and the associated gains are recognized over the project construction period generally based on the percentage of total project costs incurred to estimated total project costs for each condominium unit under a binding real estate contract. As of December 31, 2007, no condominium projects are accounted for under the percentage-of-completion method.

          Estimated future warranty costs on condominium conversion and for-sale residential sales are charged to cost of sales in the period when the revenues from such sales are recognized. Such estimated warranty costs are approximately 0.5% of total revenue. As necessary, additional warranty costs are charged to costs of sales based on management’s estimate of the costs to remediate existing claims.

          Revenue from construction contracts is recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated total costs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Adjustments to estimated profits on contracts are recognized in the period in which such adjustments become known.

          Other income received from long-term contracts signed in the normal course of business, including property management and development fee income, is recognized when earned for services provided to third parties, including joint ventures in which we own a minority interest.

          We, as lessor, retain substantially all the risks and benefits of property ownership and account for our leases as operating leases. Rental income attributable to leases is recognized on a straight-line basis over the terms of the leases. Certain leases contain provisions for additional rent based on a percentage of tenant sales. Percentage rents are recognized in the period in which sales thresholds are met. Recoveries from tenants for taxes, insurance, and other property operating expenses are recognized in the period the applicable costs are incurred in accordance with the terms of the related lease.

          Segment Reporting—We have adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. SFAS No. 131 defines an operating segment as a component of an enterprise that engages in business activities that generate revenues and incur expenses, which operating results are reviewed by the chief operating decision maker in the determination of resource allocation and performance, and for which discrete financial information is available. We manage our business based on the performance of four separate operating portfolios: multifamily, office, retail and for-sale residential.

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          Investments in Joint Ventures – To the extent that we contribute assets to a joint venture, our investment in the joint venture is recorded at our cost basis in the assets that were contributed to the joint venture. To the extent that our cost basis is different from the basis reflected at the joint venture level, the basis difference is amortized over the life of the related assets and included in our share of equity in net income of the joint venture. In accordance with the provisions of SFAS No. 66 and Statement of Position 78-9, Accounting for Investments in Real Estate Ventures, paragraph 30, we recognize gains on the contribution of real estate to joint ventures, relating solely to the outside partner’s interest, to the extent the economic substance of the transaction is a sale. We continually evaluate our investments in joint ventures for other than temporary declines in market value. We record impairment charges based on these evaluations. We recorded an impairment on one for-sale residential investment during 2007 (see Note 9 to our Notes to Consolidated Financial Statements included in Item 8 on this Form 10-K).

          Recent Accounting Pronouncements – In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No.157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No.157 is effective for financial assets and liabilities on January 1, 2008. In February 2008, the FASB reached a conclusion to defer the implementation of the SFAS No.157 provisions relating to non-financial assets and liabilities until January 1, 2009. The FASB also reached a conclusion to amend SFAS No.157 to exclude SFAS No.13, Accounting for Leases, and its related interpretive accounting pronouncements. SFAS No.157 is not expected to materially affect how we determine fair value, but may result in certain additional disclosures.

          In November 2006, the FASB ratified EITF Issue No. 06-8, Applicability of the Assessment of a Buyer’s Continuing Investment under FASB Statement No. 66 for Sales of Condominiums. EITF No. 06-8 provided additional guidance on whether the seller of a condominium unit is required to evaluate the buyer’s continuing investment under SFAS No. 66 in order to recognize profit from the sale under the percentage of completion method. The EITF concluded that both the buyer’s initial and continuing investment must meet the criteria in SFAS No. 66 in order for condominium sale profits to be recognized under the percentage of completion method. Sales of condominiums not meeting the continuing investment test must be accounted for under the deposit method (a method consistent with the Completed Contract Method). EITF No. 06-8 is effective January 1, 2008. We account for condominium and for-sale residential sales using similar criteria to those stated in EITF No. 06-8. In addition, as of December 31, 2007, no condominium projects were accounted for under the percentage-of-completion method. The adoption of EITF No. 06-8 did not have a material impact on our consolidated financial statements.

          In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. The provisions of SFAS No. 159 are effective for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 did not have a material impact on our consolidated financial statements.

          In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51. SFAS No. 160 amends Accounting Research Bulletin 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. SFAS No. 160 also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest.  The provisions of SFAS No. 160 are effective for fiscal years beginning after November 15, 2008.  We are currently evaluating the impact of SFAS No. 160 on our consolidated financial statements.

          In December 2007, the FASB issued SFAS No. 141(R), Business Combinations, which changes how business acquisitions are accounted for and will impact financial statements both on the acquisition date and in subsequent periods.  SFAS No. 141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination.  Certain provisions of this standard will, among other things, impact the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration); exclude transaction costs from acquisition accounting; and change accounting practices for acquired contingencies, acquisition-related restructuring costs, and tax benefits.  This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  We are currently evaluating the impact of SFAS No. 141(R) on our consolidated financial statements.

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Liquidity and Capital Resources

          Our net cash provided by operating activities decreased from $171.8 million for the year ended December 31, 2006 to $98.8 million for the year ended December 31, 2007. This decrease is due primarily to the disposition of office and retail assets in during 2007.

          Net cash flows provided by investing activities increased from $135.4 million for the year ended December 31, 2006 to $162.9 million for the year ended December 31, 2007. This increase is primarily due to a net decrease in property acquisitions and dispositions during 2007.

          Net cash flows used in financing activities increased from $250.2 million for the year ended December 31, 2006 to $256.6 million for the year ended December 31, 2007. The increase was primarily due to the special distribution during the year ended December 31, 2007 associated with the office and retail joint venture transactions, and the redemption of the remaining outstanding preferred series E shares in 2007.

          Strategic Change

          Our strategy to change our asset mix to generate approximately 75% to 80% of our net operating income from multifamily properties involved the contribution of a majority of our wholly-owned office assets and retail assets into a series of joint ventures (see Note 2 to our Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K), as well as the outright sale of other retail assets.  Capital proceeds from these transactions were used to reduce mortgage debt and make a special distribution to the Trust’s common shareholders. Our Common unitholders also received a special distribution in connection with these transactions. These transactions did not have a material impact on our debt to equity ratios. We also anticipate maintaining our investment grade rating, and as such, do not expect capital availability to be materially impacted as a result of these transactions.

          Short-Term Liquidity Needs

          Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses directly associated with our portfolio of properties (including regular maintenance items), capital expenditures incurred to lease our space (e.g., tenant improvements and leasing commissions), interest expense and scheduled principal payments on our outstanding debt, and quarterly distributions that we pay to our common and preferred unitholders. In the past, we have primarily satisfied these requirements through cash generated from operations and borrowings under our unsecured credit facility. We believe that cash generated from operations and dispositions of assets and borrowings under our unsecured credit facility will be sufficient to meet our short-term liquidity requirements in 2008. However, factors described below and elsewhere herein may have a material adverse effect on our future cash flow.

          The majority of our revenue is derived from residents and tenants under existing leases primarily at our multifamily properties. Therefore, our operating cash flow is dependent upon the rents that we are able to charge to our tenants and residents, and the ability of these tenants and residents to make their rental payments. Additionally, our reliance on third-party management fees has increased significantly as a result of an increase in joint venture activities and the related third-party management agreements.

          The Trust 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 our taxable year ending December 31, 1993. If the Trust qualifies for taxation as a REIT, it generally will not be subject to Federal income tax to the extent it distributes at least 90% of its REIT taxable income to its shareholders. Our partnership agreement requires us to distribute at least quarterly 100% of our available cash (as defined in the partnership agreement) to holders of our partnership units. Consistent with our partnership agreement, we intend to continue to distribute quarterly an amount of our available cash sufficient to enable the Trust to pay quarterly dividends to its shareholders in an amount necessary to satisfy the requirements applicable to REITs under the Internal Revenue Code and to eliminate federal income and excise tax liability.

          On or after April 30, 2008, the Trust has the option to redeem its outstanding $125 million 1/8 percent Series D perpetual preferred shares.  If the Trust were to redeem all of the outstanding Series D preferred shares in 2008, the Trust would expect to record a non-cash charge of approximately $4.4 million related to the write-off of Series D preferred share issuance costs.  If the Trust were to exercise this option during 2008, the redemption will be funded through asset sales and our unsecured credit facility.

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          Long-Term Liquidity Needs

          Our long-term liquidity requirements consist primarily of funds necessary to pay the principal amount of our long-term debt as it matures, significant non-recurring capital expenditures that need to be made periodically at our properties, development projects that we undertake and costs associated with acquisitions of properties that we pursue. Historically, we have satisfied these requirements principally through the most advantageous source of capital at that time, which has included the incurrence of new debt through borrowings (through public offerings of unsecured debt and private incurrence of collateralized and unsecured debt), sales of common and preferred shares by the Trust (subject to the Trust’s ability to access the capital markets), capital raised through the disposition of assets, and joint venture capital transactions. We have filed registration statements to facilitate issuance of debt and equity securities on an as-needed basis subject to our ability to affect offerings on satisfactory terms based on prevailing conditions. While the current market conditions for public offerings of unsecured debt and equity are unfavorable, we believe these sources of capital will continue to be available in the future to fund our long-term capital needs. Given our current cash position, availability of our unsecured line of credit and projected asset sales, we do not anticipate accessing the public capital markets in 2008. However, factors described below and elsewhere herein may have a material adverse effect on our continued access to these capital sources.

          Our ability to incur additional debt is dependent upon a number of factors, including our credit ratings, the value of our unencumbered assets, our degree of leverage and borrowing restrictions imposed by our current lenders. We currently have investment grade ratings for prospective unsecured debt offerings from three major rating agencies. If we experienced a credit downgrade, we may be limited in our access to capital in the unsecured debt market, which we have historically utilized to fund investment activities, and the interest rate we are paying under our existing credit facility would increase.

          The Trust’s ability to raise funds through sales of common shares and preferred shares is dependent on, among other things, general market conditions for REITs, market perceptions about the Trust and the current trading price of the Trust’s shares. The Trust will continue to analyze which source of capital is most advantageous to us at any particular point in time, but the equity markets may not be consistently available on terms that are attractive.

          Over the last few years, we have maintained our asset recycling program, which allows us to maximize our investment returns through the sale of assets that have reached their maximum investment potential and reinvest the proceeds into opportunities with more growth potential. During 2007, we sold 12 multifamily apartment communities consisting of approximately 3,140 units and our 25% ownership interest in two multifamily apartment communities consisting of 740 units. In addition to the sale of these multifamily properties, during 2007, we sold our 15% ownership interest in two office assets consisting of 1.1 million square feet. We also sold 15 retail assets outright representing approximately 2.8 million square feet (excluding anchor-owned square footage), our 90% interest in a retail asset representing 0.4 million square feet, 85% of our interest in a retail asset representing 0.3 million square feet, and 95% of our interest in two retail assets representing 0.2 million square feet. The aggregate sales price of $608.5 million, including our pro-rata share of proceeds from partially-owned dispositions, was used to repay a portion of the borrowings under our unsecured credit facility, to repay mortgages associated with the properties, to fund general corporate purposes and to fund other investment opportunities. Our ability to generate cash from asset sales is limited by market conditions and certain rules applicable to REITs. Our ability to sell properties in the future to raise cash will be limited if market conditions make such sales unattractive. For-sale residential properties under development or acquired for development usually generate little or no cash flow until completion of development and sale of a significant number of homes or condominium units and may experience operating deficits after the date of completion and until such homes or condominium units are sold. As we enter 2008, we do not currently have visibility as to when these deteriorating market conditions will subside.

          As of December 31, 2007, we have an unsecured credit facility providing for total borrowings of up to $500.0 million (which borrowing capacity was increased to $675.0 million in January 2008) and a cash management line that provides for borrowings up to $40.0 million (collectively, the “unsecured credit facilities”). The unsecured credit facility bears interest at LIBOR plus a spread calculated based on our unsecured debt ratings from time to time. Based on our December 31, 2007 debt ratings, the spread is 75 basis points over LIBOR.

          On June 21, 2007, we repaid our then-outstanding $100 million unsecured term loan under the unsecured credit facility and amended the unsecured credit facility, to among other things,

• extend the maturity date from March 22, 2008 to June 21, 2012;

• amend certain financial covenants, including, the secured debt to total asset value ratio, the fixed charge coverage ratio, unencumbered leverage ratio and, in certain circumstances, the debt to total asset value ratio;

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• increase the “applicable margin” at each pricing level with respect to revolving loans that are LIBOR loans;

• increase the capitalization rate from 6.75% to 7.50% for multifamily properties, from 8.00% to 8.25% for retail properties and from 8.25% to 8.75% for office properties;

• include certain income, gain or loss in up to 15% of EBITDA used to calculate the fixed charge coverage ratio;

• increase the “L/C commitment amount” from $25 million to $30 million;

• increase the “swingline commitment” from to $40 million to $50 million;

• increase the additional amount of “revolving loan commitments” that CRLP may request from $150 million to $200 million; and

• eliminate our one-time right to extend the “revolving loan termination date” and the “term loan termination date” to March 22, 2009 upon satisfaction of certain conditions.

          The unsecured credit facility includes a competitive bid feature that allows us to convert up to $250 million under the Credit Facility to a fixed rate, for a fixed term not to exceed 90 days.

          The unsecured credit facility, which is primarily used to finance property acquisitions and developments, had an outstanding balance at December 31, 2007 of $39.3 million. There was an additional $12.3 million outstanding on the cash management line at December 31, 2007. The interest rate of this short-term borrowing facility, including the competitive bid balance, is 5.47% and 5.64% at December 31, 2007 and 2006, respectively.

          At December 31, 2007, our total outstanding debt balance was $1.6 billion. The outstanding balance includes fixed-rate debt of $1.6 billion, or 95.0% of the total debt balance, and floating-rate debt of $82.9 million, or 5.0% of the total debt balance. Our total market capitalization as of December 31, 2007 was $3.2 billion and our ratio of total outstanding indebtedness to market capitalization was 51.9%. The unsecured credit facility contains various covenants and events of default which could trigger early repayment obligations, including, but not limited to the following: nonpayment; violation or breach of certain covenants; failure to perform certain covenants beyond a cure period; certain financial ratios; and generally not paying CRLP’s debts as they become due. In addition, we have certain other loan agreements that contain restrictive covenants, which among other things require maintenance of various financial ratios. At December 31, 2007, we were in compliance with all of these covenants.

          Investing Activities

          During 2007, we acquired four multifamily apartment communities containing 1,084 units for an aggregate cost of $138.2 million, which consisted of $12.3 million of newly issued mortgage debt and $125.9 million of cash. We also acquired a 15% — 20% partnership interest in each of three multifamily apartment communities containing 775 units for an aggregate cost of $12.3 million, which consisted of $9.4 million of newly issued mortgage debt and $2.8 million of cash. We completed the development of one wholly-owned multifamily apartment community and one partially-owned multifamily apartment community for $42.9 million, which represents our portion of the cost for the two developments. Also, we completed the development of six commercial assets, consisting of three office assets, one wholly-owned and two partially-owned, totaling 0.4 million square feet and three retail assets, all wholly-owned, totaling 0.8 million square feet, including anchor-owned square feet, for an aggregate cost of $81.4 million. In addition, we completed the development of two for-sale residential assets containing 259 units for an aggregate cost of $42.1 million.

          We regularly incur significant expenditures in connection with the re-leasing of our office and retail space, principally in the form of tenant improvements and leasing commissions. The amounts of these expenditures can vary significantly, depending on the particular market and the negotiations with tenants. We also incur expenditures for certain recurring capital expenses. During 2007, we incurred approximately $8.4 million related to tenant improvements and leasing commissions, and approximately $34.2 million of recurring capital expenditures. We expect to pay for future re-leasing and recurring capital expenditures out of cash from operations.

          Distributions

          The regular quarterly distribution on our common units of partnership interest was $0.68 per unit per quarter for the first three quarters of 2007 and $0.50 per unit per quarter for the fourth quarter of 2007 or $2.54 per unit during 2007. Additionally in 2007, we paid a special distribution of $0.21per unit related to the joint venture transactions and July asset sales. We also pay regular quarterly distributions on our preferred units. The maintenance of these distributions is subject to various factors, including the discretion of the Board of Trustees of the Trust (acting in its capacity as our general partner), our ability to pay distributions under Delaware law, the availability of cash to make the necessary distribution payments and the effect of REIT distribution requirements, which require at least 90% of the Trust’s taxable income to be distributed to its shareholders.

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          Financing Transactions

          During July 2007, we repaid our outstanding $175 million 7.0% unsecured senior notes from proceeds received from asset sales.

          During July 2007, the DRA/CLP JV increased mortgage indebtedness on the properties it owns from $588.2 million to approximately $742.0 million. The additional proceeds, of approximately $153.8 million, were utilized to payoff partner loans and establish a capital reserve, with the remainder being distributed to the partners on a pro-rata basis. Our pro-rata share of the additional proceeds was approximately $18.6 million (see Note 2 to our Notes to Consolidated Financial Statements included in Item 8 on this Form 10-K).

          During July 2007, the OZRE JV increased mortgage indebtedness on the properties it owns from $187.2 million to approximately $284.0 million. The additional proceeds, of approximately $96.8 million, were utilized to payoff partner loans and establish a capital reserve, with the remainder being distributed to the partners on a pro-rata basis. Our pro-rata share of the additional proceeds was approximately $13.8 million (see Note 2 to our Notes to Consolidated Financial Statements included in Item 8 on this Form 10-K).

          During June 2007, we repaid $409.0 million of collateralized mortgages associated with 37 multifamily communities with proceeds from the joint venture transactions (see Note 2 and Note 9 to our Notes to Consolidated Financial Statements included in Item 8 on this Form 10-K). In conjunction with the repayment, we incurred $29.2 million of prepayment penalties. These penalties were offset by $16.7 million of write-offs related to the mark-to-market intangibles on the associated mortgage debt repaid. The weighted average interest rate of the mortgages repaid was 7.0%.

Credit Ratings

          Our current credit ratings are as follows:

Rating Agency	Rating	Last update
Standard & Poor’s	BBB- (1)	January 18, 2008
Moody’s	Baa3 (2)	September 27, 2007
Fitch	BBB- (1)	March 19, 2007

(1)	Ratings outlook is “stable”.
(2)	Ratings outlook is “negative”.

          In September 2007, Moody’s announced that it changed its outlook from stable to negative on our credit rating. Their negative outlook was predicated on the size of our development pipeline as a percentage of our asset base and our higher leverage level for out credit rating.

          Our credit ratings are investment grade. If we experience a credit downgrade, we may be limited in our access to capital in the unsecured debt market, which we have historically utilized to fund our investment activities. In addition, as previously discussed, our spread on our unsecured credit facility would increase.

Market Risk

          In the normal course of business, we are exposed to the effect of interest rate changes that could affect our results of operations and financial condition or cash flow. We limit these risks by following established risk management policies and procedures, including the use of derivative instruments to manage or hedge interest rate risk. The table below presents the principal amounts, weighted average interest rates, fair values and other terms required by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes at December 31, 2007.

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																						Estimated
																						Fair
	2008			2009			2010			2011			2012			Thereafter			Total			Value
Fixed Rate Debt	$	379		$	682		$	320,721		$	100,762		$	100,805		$	1,035,599		$	1,558,948		$	1,590,198
Average interest rate at December 31, 2007		5.6	%		5.6	%		5.3	%		4.8	%		6.9	%		5.9	%		5.8	%
Variable Debt	$	43,575		$	—		$	—		$	—		$	39,316		$	—		$	82,891		$	82,891
Average interest rate at December 31, 2007		6.1	%											5.4	%					5.8	%

          The table incorporates only those exposures that exist as of December 31, 2007. It does not consider those exposures or positions, which could arise after that date. Moreover, because firm commitments are not presented in the table above, the information presented therein has limited predictive value. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at that time, and interest rates.

          As of December 31, 2007, we had approximately $82.9 million of outstanding floating rate debt. We do not believe that the interest rate risk represented by our floating rate debt is material in relation to our $1.6 billion of outstanding total debt, our $3.2 billion of total assets and $3.2 billion total market capitalization as of December 31, 2007.

          If market rates of interest on our variable rate debt increase by 1%, the increase in annual interest expense on our variable rate debt would decrease annual future earnings and cash flows by approximately $0.8 million. If market rates of interest on our variable rate debt decrease by 1%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by approximately $0.8 million. This assumes that the amount outstanding under our variable rate debt remains approximately $82.9 million, the balance as of December 31, 2007.

          Our objective in using derivatives is to add stability to interest expense and to manage our exposure to interest rate movements or other identified risks.  To accomplish this objective, we primarily use interest rate swaps (including forward starting interest rate swaps) and caps as part of our cash flow hedging strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. During 2007, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt and forecasted issuances of debt. As of December 31, 2007, we had no outstanding interest rate swap agreements.

          At December 31, 2007, there were no derivatives included in other assets. At December 31, 2006, derivatives with a fair value of $0.7 million were included in other assets. The change in net unrealized gains/(losses) of ($0.5) million in 2007, $3.0 million in 2006 and $1.6 million in 2005 for derivatives designated as cash flow hedges is separately disclosed in the statements of changes in shareholders’ equity and comprehensive income. There were no derivatives that were not designated as hedges during 2007. The change in fair value of derivatives not designated as hedges of $2.7 million and ($0.1) million is included in other income (expense) in 2006 and 2005, respectively. There was no hedge ineffectiveness during 2007. Hedge ineffectiveness of ($0.1) million and $1.1 million on cash flow hedges due to index mismatches was recognized in other income during 2006 and 2005, respectively. As of December 31, 2007, all of our hedges are designated as cash flow hedges under SFAS No. 133.

          Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our hedged debt. The changes in accumulated other comprehensive income for such reclassifications to interest expense was $0.6 million, $0.5 million and $0.5 million during 2007, 2006 and 2005, respectively. We estimate a net impact to interest expense of approximately $0.6 million for amounts that will be reclassified from accumulated other comprehensive income in 2008.

          During May 2007, we settled a $100.0 million interest rate swap and received a payment of approximately $0.6 million. This interest rate swap was in place to convert a portion of the floating rate payments on our unsecured credit facility to a fixed rate. This derivative originally qualified for hedge accounting under SFAS No. 133. However, in May of 2007, due to our then-pending joint venture transactions (see Note 2 to our Notes to Consolidated Financial Statements included in Item 8 on this Form 10-K) and the expected resulting pay down of our term loan and unsecured credit facility, this derivative no longer qualified for hedge accounting.

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          During February 2006, we settled a $200.0 million forward starting interest rate swap and received a payment of approximately $4.3 million. This forward starting interest rate swap was in place to convert the floating rate payments on certain expected future debt obligations to a fixed rate. This derivative originally qualified for hedge accounting under SFAS No. 133. However, in December of 2005 as a result of a modification to the forecasted transaction, this derivative no longer qualified for hedge accounting. As a result, we began treating this derivative as an economic hedge during 2005. Changes in the fair value of this derivative were recognized in earnings in other income (expense) and totaled approximately $2.7 million for the period of time the derivative was active during 2006. The fair value of this derivative at the time it no longer qualified for hedge accounting was approximately $1.5 million, which will remain in accumulated other comprehensive income and be reclassified to interest expense over the applicable period of the associated debt, which is approximately 9 years at December 31, 2007.

          During June 2006, we entered into a forward starting interest rate swap agreement to hedge the interest rate risk associated with a forecasted debt issuance that occurred on August 28, 2006. This interest rate swap agreement had a notional amount of $200 million, a fixed interest rate of 5.689%, and a maturity date of November 15, 2016. This interest rate swap agreement was settled concurrent with our issuance of $275 million of debt in the senior notes offering completed August 28, 2006 (see Note 11 – Notes and Mortgages Payable in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K). The settlement resulted in a settlement payment of approximately $5.2 million by us. This amount will remain in other comprehensive income and be reclassified to interest expense over the remaining term of the associated debt, which is approximately 9 years at December 31, 2007. On August 15, 2006, we also entered into a $75 million treasury lock agreement to hedge the interest rate risk associated with the remaining $75 million of senior notes issued on August 28, 2006. This treasury lock agreement was settled on August 28, 2006 for a settlement payment of approximately $0.1 million which will also remain in other comprehensive income and be reclassified to interest expense over the remaining life of the associated debt.

          During November 2006, we settled a $175.0 million forward starting interest rate swap that was entered into in July of 2005 and received a payment of approximately $2.9 million. This forward starting interest rate swap was in place to convert the floating rate payments on certain expected future debt obligations to a fixed rate. In November 2006, we settled this forward starting swap agreement as a result of our determination that the forecasted debt issuance was no longer probable due to our strategic initiative efforts (see Note 2 – Strategic Initiative in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K). In December 2006, we made the determination that it was probable that the forecasted debt issuance would not occur. As a result, we reversed the $2.9 million in other comprehensive income to other income during December of 2006.

          Further, we have a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, we have not sustained a material loss from those instruments nor do we anticipate any material adverse effect on our net income or financial position in the future from the use of derivatives.

Contractual Obligations and Other Commercial Commitments

          The following tables summarize the material aspects of our future contractual obligations and commercial commitments as of December 31, 2007:

          Contractual Obligations

(in thousands)	Total		2008		2009		2010		2011		2012		Thereafter
Long-Term Debt Principal:
Consolidated	$	1,641,839	$	43,954	$	682	$	320,721	$	100,762	$	140,121	$	1,035,599
Partially-Owned Entities (1)		544,208		118,096		31,499		71,123		9,517		5,726		308,247
Long-Term Debt Interest:
Consolidated		557,024		93,742		92,630		78,689		72,154		67,236		152,573
Partially-Owned Entities (1)		159,472		29,096		23,793		21,649		19,154		18,825		46,955
Long-Term Debt Principal and Interest:
Consolidated		2,198,863		137,696		93,312		399,410		172,916		207,357		1,188,172
Partially-Owned Entities (1)		703,680		147,192		55,292		92,772		28,671		24,551		355,202
Total	$	2,902,543	$	284,888	$	148,604	$	492,182	$	201,587	$	231,908	$	1,543,374

(1) Represents our pro rata share of principal maturities (excluding net premiums and discounts) and interest.

69

          Other Commercial Commitments

	Total Amounts
(in thousands)	Committed		2008		2009		2010		2011		2012	Thereafter
Standby Letters of Credit	$	7,242	$	7,242	$	—	$	—	$	—		$	—
Guarantees		34,550		21,400		8,650		3,500		—			1,000
Total Commercial Commitments	$	41,792	$	28,642	$	8,650	$	3,500	$	—		$	1,000

Commitments and Contingencies

          We are involved in a contract dispute with a general contractor in connection with construction costs and cost overruns with respect to certain of our for-sale projects, which are being developed in a joint venture in which we are a majority owner. The contractor is affiliated with our joint venture partner. In connection with the dispute, in January 2008, the contractor filed a lawsuit against CRLP alleging, among other things, breach of contract, enforcement of a lien against real property, misrepresentation, conversion, declaratory judgment and an accounting of costs, and is seeking $10.3 million in damages, plus consequential and punitive damages. Certain of the subcontractors and vendors and other parties involved in the projects, including purchasers of units, have also made claims for payment in the form of lien claims, general claims or lawsuits. We are continuing to evaluate our options, including possible claims against the contractor, and intend to vigorously defend ourselves against these claims. However, no prediction of the likelihood, or amount, of any resulting loss or recovery can be made at this time and no assurance can be given that the matter will be resolved favorably.

          In connection with certain retail developments, we have received funding from municipalities for infrastructure costs. In most cases, the municipalities issue bonds that are repaid primarily from sales tax revenues generated from the tenants at each respective development. We have guaranteed the shortfall, if any, of tax revenues to the debt service requirements on the bonds. The total amount outstanding on these bonds was approximately $11.3 million and $5.0 million at December 30, 2007 and December 31, 2006, respectively. At December 31, 2007 and December 31, 2006, no liability was recorded for these guarantees.

          In connection with the office and retail joint venture transactions, (see Note 2 – Strategic Initiative in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K), we assumed certain contingent obligations for a total of $15.7 million, of which $7.2 million remains outstanding as of December 31, 2007.

Guarantees and Other Arrangements

          During November 2006, we committed with our joint venture partner to guarantee up to $17.3 million of a $34.6 million construction loan obtained by the Colonial Promenade Smyrna Joint Venture (see Note 9 in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K). We and our joint venture partner each committed to provide 50% of the $17.3 million guarantee, as each partner has a 50% ownership interest in the joint venture. As of December 31, 2007, the Colonial Promenade Smyrna Joint Venture had drawn $27.7 million on the construction loan. At December 31, 2007, no liability was recorded for the guarantee.

          During February 2006, we committed to guarantee up to $4.0 million of a $27.4 million construction loan obtained by the Colonial Grand at Canyon Creek Joint Venture (see Note 9 in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K). As of December 31, 2007, the joint venture had drawn $25.1 million on the construction loan. At December 31, 2007, no liability was recorded for the guarantee.

          During September 2005, in connection with the acquisition of CRT with DRA, CRLP guaranteed approximately $50.0 million of third-party financing obtained by the DRA/CRT JV with respect to 10 of the CRT properties. During 2006, seven of the ten properties were sold. The DRA/CRT JV (see Note 9 in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K) is obligated to reimburse CRLP for any payments made under the guaranty before making distributions of cash flows or capital proceeds to the DRA/CRT JV partners. At December 31, 2007, no liability was recorded for the guarantee. As of December 2007, this guarantee had been reduced to $17.4 million as a result of the pay down of the associated secured debt from the sales of assets.

          During July 2005, in connection with our investment the Carter Regents Park joint venture (see Note 9 in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K) with Carter and Associates, we committed to

70

provide a construction loan to the joint venture of up to approximately $40 million at a rate of 8.25% per annum. As of December 31, 2007, $25.6 million had been drawn on the construction loan by the joint venture, and $14.4 million was available to be drawn. This amount is included in Notes Receivable on our Consolidated Balance Sheet.

          In connection with the formation of Highway 150 LLC (see Note 9 in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K) in 2002, we executed a guarantee, pursuant to which we would serve as a guarantor of $1.0 million of the debt related to the joint venture, which is collateralized by the Colonial Promenade Hoover retail property. Our maximum guarantee of $1.0 million may be requested by the lender, only after all of the rights and remedies available under the associated note and security agreements have been exercised and exhausted. At December 31, 2007, the total amount of debt of the joint venture was approximately $16.7 million and matures in December 2012. At December 31, 2007, no liability was recorded for the guarantee.

          In connection with the contribution of certain assets to CRLP, certain partners of CRLP have guaranteed indebtedness of CRLP totaling $26.5 million at December 31, 2007. The guarantees are held in order for the contributing partners to maintain their tax deferred status on the contributed assets. These individuals have not been indemnified by CRLP.

          During December 2007, in connection with our investment into the Colonial Promenade Alabaster II/Tutwiler II joint venture (see Note 9 in our Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K), we guaranteed the payment of interest by the joint venture on its $40 million mortgage. At December 31, 2007, no liability was recorded for the guarantee.

Off-Balance Sheet Arrangements

          At December 31, 2007, our pro-rata share of mortgage debt of unconsolidated joint ventures is $544.2 million. Under these unconsolidated joint venture non-recourse mortgage loans, we could, under certain circumstances, be responsible for portions of the mortgage indebtedness in connection with certain customary non-recourse carve-out provisions, such as environmental conditions, misuse of funds, and material misrepresentations. In addition, we have made certain guarantees in connection with our investment in unconsolidated joint ventures (see discussion above). We do not have any other off-balance sheet arrangements with any unconsolidated investments or joint ventures that we believe have or are reasonably likely to have a material effect on our financial condition, results of operations, liquidity or capital resources.

Outlook

          Management intends to continue pursuing developments and multifamily acquisitions that meet our criteria for property quality, market strength, and investment return. Management will continue to use our unsecured credit facility to provide short-term financing for acquisition, development, and re-development activities and plans to continue to replace significant borrowings under the unsecured credit facility with funds generated from the sale of properties and the sale of additional debt and equity securities and 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 us with the means to finance additional acquisitions, developments, and expansions.

          In addition to the issuance of equity and debt, management is investigating alternate financing methods and sources to raise future capital. Private placements, joint ventures, and non-traditional equity and debt offerings are some of the alternatives we are contemplating.

          Management anticipates that our net cash provided by operations and our existing cash balances will provide the necessary funds on a short- and long- term basis to cover our operating expenses, interest expense on outstanding indebtedness, recurring capital expenditures, and dividends to shareholders in accordance with Internal Revenue Code requirements applicable to REITs.

Inflation

          Leases at the multifamily properties generally provide for an initial term of six months to one year and allow for rent adjustments at the time of renewal. Leases at the office properties typically provide for rent adjustments and the pass-through of certain operating expenses during the term of the lease. Substantially all of the leases at the retail properties provide for the pass-through to tenants of certain operating costs, including real estate taxes, common area maintenance expenses, and insurance. All of these provisions permit us to increase rental rates or other charges to tenants in response to rising prices and, therefore, serve to minimize our exposure to the adverse effects of inflation.

71

          An increase in general price levels may immediately precede, or accompany, an increase in interest rates. At December 31, 2007, our exposure to rising interest rates was mitigated by the existing consolidated debt level of 51.9% of our total market capitalization and the high percentage of consolidated fixed rate debt (95.0%). As it relates to the short-term, an increase in interest expense resulting from increasing inflation is anticipated to be less than future increases in income before interest.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

          The information required by this item is incorporated by reference from “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk”.

Item 8. Financial Statements and Supplementary Data

          The following are filed as a part of this report:

               Financial Statements:

               Consolidated Balance Sheets as of December 31, 2007 and 2006

               Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2007, 2006 and 2005

               Consolidated Statements of Partners’ Equity for the years ended December 31, 2007, 2006 and 2005

               Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005

               Notes to Consolidated Financial Statements

          Report of Independent Registered Public Accounting Firm

72

COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)

December 31, 2007 and 2006
	2007			2006
ASSETS
Land, buildings, & equipment, net	$	2,431,064		$	3,601,865
Undeveloped land and construction in progress		531,410			434,196
Less: Accumulated Depreciation		(290,118	)		(420,359	)
Real estate assets held for sale, net		253,641			381,445
Net real estate assets		2,925,997			3,997,147
Cash and equivalents		92,841			87,647
Restricted cash		10,005			15,907
Accounts receivable, net		25,534			26,138
Prepaid expenses		8,845			61,269
Notes receivable		30,756			19,519
Deferred debt and lease costs		15,637			42,258
Investment in partially owned entities		69,682			92,892
Deferred tax asset		19,897			3,123
Other assets		30,443			85,874
Total Assets	$	3,229,637		$	4,431,774
LIABILITIES AND PARTNERS’ EQUITY
Notes and mortgages payable	$	1,575,921		$	2,165,884
Unsecured credit facility		39,316			185,000
Mortgages payable related to real estate held for sale		26,602			47,022
Total long-term liabilities		1,641,839			2,397,906
Accounts payable		68,858			75,185
Accrued interest		23,064			32,469
Accrued expenses		16,425			16,557
Other liabilities		11,966			26,546
Total liabilities		1,762,152			2,548,663
Limited partners’ redeemable units, at redemption value - 10,052,778 and 10,579,261 units outstanding at December 31, 2007 and 2006, respectively		227,494			495,956
Limited partners’ minority interest in consolidated partnerships		2,439			7,406
General partner -
Common equity - 47,216,549 and 46,144,909 units outstanding at December 31, 2007 and 2006, respectively		1,025,654			1,066,063
Preferred equity ($125,000 liquidation preference)		120,550			224,986
Limited partners’ preferred equity ($100,000 liquidation preference)		97,406			97,406
Accumulated other comprehensive income (loss)		(6,058	)		(8,706	)
Total partners’ equity		1,237,552			1,379,749
Total liabilities and partners’ equity	$	3,229,637		$	4,431,774

The accompanying notes are an integral part of these consolidated financial statements.

73

COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands, except share and per unit data)

	For the years ended
	December 31,			December 31,			December 31,
	2007			2006			2005
Revenue:
Base rent	$	299,708		$	342,995		$	309,750
Base rent from affiliates		1,153			2,547			2,486
Percentage rent		921			1,172			3,155
Tenant recoveries		11,742			22,628			30,213
Other property related revenue		30,193			27,858			—
Construction revenues		38,448			30,484			21,025
Other non-property related revenue		19,352			17,693			7,939
Total revenue		401,517			445,377			374,568
Operating expenses:
Property operating expenses		86,908			93,210			82,893
Taxes, licenses, and insurance		41,478			45,557			39,276
Construction expenses		34,546			29,411			—
Property management expenses		12,182			12,590			12,615
General and administrative expenses		27,160			21,098			19,549
Management fee and other expense		15,677			12,618			4,576
Restructuring charges		3,019			—			—
Depreciation		103,107			118,043			100,944
Amortization		10,596			17,535			39,978
Impairment charges		43,679			1,600			—
Total operating expenses		378,352			351,662			299,831
Income from operations		23,165			93,715			74,737
Other income (expense):
Interest expense		(90,390	)		(119,445	)		(116,587	)
Loss on retirement of debt		(9,120	)		(641	)
Interest income		7,590			7,753			4,397
Income (loss) from partially-owned unconsolidated entities		11,207			34,823			910
Gains on hedging activities		345			5,535			886
Gains from sales of property, net of income taxes of $6,548, $3,416 and $4,792 for 2007, 2006 and 2005, respectively		29,433			66,794			105,609
Transaction costs		(11,026	)		—			—
Income taxes		15,831			(189	)		(1,551	)
Other		—			—			4,000
Total other expense		(46,130	)		(5,370	)		(2,336	)
Income before minority interest and discontinued operations		(22,965	)		88,345			72,401
Minority interest of limited partners in consolidated partnerships		(1,335	)		766			(5,245	)
Income from continuing operations		(24,300	)		89,111			67,156
Income from discontinued operations		13,830			31,725			33,887
Gain on disposal of discontinued operations, net of income taxes of $1,839, $8,554 and $0 for 2007, 2006 and 2005, respectively		91,147			134,619			183,011
Minority interest of limited partners in discontinued operations		(3,989	)		(2,591	)		(585	)
Income from discontinued operations		100,988			163,754			216,313
Net income		76,688			252,865			283,469
Distributions to general partner preferred unitholders		(13,439	)		(20,903	)		(22,391	)
Distributions to limited partner preferred unitholders		(7,250	)		(7,250	)		(7,250	)
Preferred unit issuance costs write-off		(360	)		(2,128	)		—
Net income available to common unitholders		55,639			222,584			253,828
Net income available to common unitholders allocated to limited partners		(10,099	)		(42,135	)		(56,578	)
Net income available to common unitholders allocated general partner	$	45,540		$	180,449		$	197,250
Net income available to common unitholders per common unit — basic:
Income from continuing operations	$	(0.80	)	$	1.05		$	0.77
Income from discontinued operations		1.78			2.93			4.41
Net income available to common unitholders per common unit — basic	$	0.98		$	3.98		$	5.18
Net income available to common unitholders per common unit — diluted:
Income from continuing operations	$	(0.80	)	$	1.03		$	0.75
Income from discontinued operations		1.78			2.89			4.38
Net income available to common unitholders per common unit — diluted	$	0.98		$	3.92		$	5.13
Weighted average common units outstanding — basic		56,723			56,162			48,811
Weighted average common units outstanding — diluted		56,723			56,698			49,202
Net income	$	76,688		$	252,865		$	283,469
Other comprehensive income (loss):
Unrealized income (loss) on cash flow hedging activities		(535	)		(3,029	)		1,290
Change in additional minimum pension liability		—			239			(239	)
Change related to pension plan termination		2,615			—			—
Comprehensive income	$	78,768		$	250,075		$	284,520

The accompanying notes are an integral part of these consolidated financial statements.

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COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY
(amounts in thousands)

For the Years Ended December 31, 2007, 2006 and 2005
							Limited			Accumulated
	General Partner						Partners’			Other
	Common			Preferred			Preferred			Comprehensive
	Equity			Equity			Equity			Income (Loss)			Total
Balance, December 31, 2004		199,637			168,703			97,406			(1,966	)		463,780
Net income available to common unitholders before preferred unit distributions		253,828			22,391			7,250			—			283,469
Net income available to common unitholders allocated to limited partners		(56,578	)		—			—			—			(56,578	)
Cash contributions		57,233			—			—			—			57,233
Common units of beneficial interest issued in connection with the Cornerstone acquisition		462,347			—			—			—			462,347
Preferred units of beneficial interest issued in connection with the Cornerstone acquisition		—			132,747			—			—			132,747
Common units of beneficial interest issued in connection with the equity offering		187,415			—			—			—			187,415
Distributions		(131,569	)		(22,391	)		(7,250	)					(161,210	)
Change in fair value of hedging activity		—			—			—			1,290			1,290
Change in additional minimum pension liability		—			—			—			(239	)		(239	)
Adjustment of limited partner common equity to redemption value		31,270			—			—			—			31,270
Balance, December 31, 2005	$	1,003,583		$	301,450		$	97,406		$	(915	)	$	1,401,524
Net income available to common unitholders before preferred unit distributions		222,584			20,903			7,250			—			250,737
Net income available to common unitholders allocated to limited partners		(42,135	)		—			—			—			(42,135	)
Cash contributions		32,686			—			—			—			32,686
Redeemption of preferred units		—			(76,464	)		—			—			(76,464	)
Distributions		(153,264	)		(20,903	)		(7,250	)					(181,417	)
Unrealized loss on derivative financial instruments		—			—			—			(3,029	)		(3,029	)
Reclassification adjustments for amounts included in net income		—			—			—			(2,386	)		(2,386	)
Change in additional minimum pension liability		—			—			—			239			239
Adoption of SFAS No. 158		—			—			—			(2,615	)		(2,615	)
Adjustment of limited partner common equity to redemption value		2,609			—			—			—			2,609
Balance, December 31, 2006	$	1,066,063		$	224,986		$	97,406		$	(8,706	)	$	1,379,749
Net income available to common unitholders before preferred unit distributions		55,639			13,439			7,250			—			76,328
Net income available to common unitholders allocated to limited partners		(10,099	)		—			—			—			(10,099	)
Cash contributions		21,859			—			—			—			21,859
Redeemption of preferred units		—			(104,436	)		—			—			(104,436	)
Distributions		(144,960	)		(13,439	)		(7,250	)					(165,649	)
Special cash distribution		(11,999	)		—			—			—			(11,999	)
Special distribution of joint venture units		(229,410	)		—			—			—			(229,410	)
Unrealized loss on derivative financial instruments		—			—			—			(535	)		(535	)
Reclassification adjustments for amounts included in net income		—			—			—			568			568
Termination of pension plan		—			—			—			2,615			2,615
Adjustment of limited partner common equity to redemption value		278,561			—			—			—			278,561
Balance, December 31, 2007	$	1,025,654		$	120,550		$	97,406		$	(6,058	)	$	1,237,552

The accompanying notes are an integral part of these consolidated financial statements.

75

COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)

For the Years Ended December 31, 2007, 2006 and 2005
	2007			2006			2005
Cash flows from operating activities:
Net income		76,688		$	252,865		$	283,469
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		123,811			166,628			194,300
Loss (Income) from partially-owned unconsolidated entities		(11,207	)		(34,823	)		1,695
Distributions of income from partially-owned unconsolidated entities		13,207			9,370			3,942
Gains from sales of property		(128,287	)		(213,383	)		(295,648	)
Transaction costs		11,026			—			—
Loss on retirement of debt		12,521			—			—
Prepayment penalties		(29,207	)		—			—
Impairment charges		46,629			1,600			—
Other, net		(4,782	)		5,450			(2,540	)
Decrease (increase) in:
Restricted cash		5,902			(7,765	)		(5,809	)
Accounts receivable		(276	)		(1,341	)		(5,463	)
Prepaid expenses		10,943			(2,000	)		(4,861	)
Other assets		(12,700	)		(12,450	)		(25,332	)
Increase (decrease) in:
Accounts payable		(4,104	)		2,229			19,557
Accrued interest		(9,405	)		3,406			7,619
Accrued expenses and other		(1,921	)		2,010			(16,755	)
Net cash provided by operating activities		98,838			171,796			154,174
Cash flows from investing activities:
Acquisition of properties		(125,400	)		(350,306	)		(655,356	)
Development expenditures		(314,299	)		(309,923	)		(164,948	)
Development expenditures paid to an affiliate		(77,035	)		(59,165	)		(41,597	)
Tenant improvements		(5,960	)		(26,133	)		(27,373	)
Capital expenditures		(34,198	)		(36,509	)		(42,468	)
Issuance of notes receivable		(26,195	)		(40,549	)		(31,724	)
Repayments of notes receivable		56,708			17,179			403
Proceeds from sales of property, net of selling costs		650,735			865,918			1,053,043
Transaction costs		(11,026	)		—			—
Direct costs of Cornerstone Merger		—			—			(35,016	)
Distributions from partially owned entities		100,131			92,242			6,536
Capital contributions to partially owned entities		(43,142	)		(17,336	)		(61,810	)
Purchase of investments		(7,379	)		—			—
Net cash provided by (used in) investing activities		162,940			135,418			(310	)
Cash flows from financing activities:
Principal reductions of debt		(655,076	)		(260,594	)		(852,189	)
Proceeds from additional borrowings		818,748			274,011			662,263
Net change in revolving credit balances		(147,143	)		(24,656	)		(16,851	)
Distributions to common and preferred unitholders		(165,649	)		(181,417	)		(161,210	)
Proceeds from common unit issuance in connection with equity offering		—			—			187,415
Special cash distribution		(11,999	)		—			—
Redemption of preferred units		(105,157	)		(78,527	)		—
Cash contributions		21,859			32,686			57,233
Other financing activities, net		(12,167	)		(11,685	)		(10,635	)
Net cash used in financing activities		(256,584	)		(250,182	)		(133,974	)
Increase in cash and equivalents		5,194			57,032			19,890
Cash and equivalents, beginning of period		87,647			30,615			10,725
Cash and equivalents, end of period	$	92,841		$	87,647		$	30,615
Supplemental disclosures of cash flow information:
Cash paid during the year for interest, including amounts capitalized		127,271		$	141,839		$	130,737
Cash paid during the year for income taxes		5,799		$	17,513		$	5,155
Supplemental disclosure of non cash transactions:
Cash flow hedging activities	$	(535	)	$	(3,029	)	$	1,290

The accompanying notes are an integral part of these consolidated financial statements.

76

COLONIAL REALTY LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005

1. Organization and Basis of Presentation

          Colonial Realty Limited Partnership (“CRLP”), a Delaware limited partnership, is the operating partnership of Colonial Properties Trust (the “Trust”), an Alabama real estate investment trust (“REIT”) whose shares are listed on the New York Stock Exchange (“NYSE”). The Trust was originally formed as a Maryland REIT on July 9, 1993 and reorganized as an Alabama REIT under a new Alabama REIT statute on August 21, 1995. The Trust is a fully integrated, self-administered and self-managed REIT, which means that it is engaged in the acquisition, development, ownership, management and leasing of commercial real estate property. The Trust’s activities include ownership or partial ownership and operation of a portfolio of 200 properties as of December 31, 2007 (including 108 consolidated properties and 92 properties held through unconsolidated joint ventures), consisting of multifamily, office and retail properties located in Alabama, Arizona, California, Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Texas and Virginia. As of December 31, 2007, including properties in lease-up, the Trust owns interests in 122 multifamily apartment communities (including 102 wholly-owned consolidated properties and 20 properties partially-owned through unconsolidated joint ventures), 48 office properties (including two wholly-owned consolidated properties and 46 properties partially-owned through unconsolidated joint ventures) and 30 retail properties (including four consolidated properties and 26 properties partially-owned through unconsolidated joint ventures).

2. Strategic Initiative

          In November 2006, the Trust announced that it was accelerating its plan to become a multi-family focused REIT by reducing its ownership interests in its office and retail portfolios. To facilitate this plan, in June 2007, the Trust completed two joint venture transactions, one involving 26 properties and the other involving 11 properties. In addition, in July 2007, the Trust completed the outright sale of an additional 12 retail properties. Each of these transactions is discussed in more detail below.

          On June 15, 2007, the Trust completed its office joint venture transaction with DRA G&I Fund VI Real Estate Investment Trust, an entity advised by DRA Advisors LLC (“DRA”). The Trust sold to DRA its 69.8% interest in the newly formed joint venture (the “DRA/CLP JV”) that became the owner of 24 office properties and two retail properties that were previously wholly-owned by CRLP. Total sales proceeds from the sale of this 69.8% interest were approximately $379.0 million. CRLP retained a 15% minority interest in the DRA/CLP JV (see Note 9), as well as management and leasing responsibilities for the 26 properties. In addition to the approximate 69.8% interest purchased from the Trust, DRA purchased an aggregate of 2.6% of the interests in the DRA/CLP JV from our limited partners. As of December 31, 2007, DRA owned an approximate 72.4% interest in the DRA/CLP JV, a subsidiary of CRLP owned a 15% interest and certain of our limited partners that did not elect to sell their interests in the DRA/CLP JV owned the remaining approximate 12.6% interest. The purchase price paid by DRA for each limited liability company interest it acquired in the DRA/CLP JV was based on a portfolio value of approximately $1.13 billion, of which approximately $588.2 million was funded with mortgage indebtedness. The Trust recorded a net gain of approximately $211.8 million on the sale of its 69.8% interest to DRA. The Trust also deferred a gain of approximately $7.2 million as a result of certain obligations it assumed in the transaction. The Trust recognized approximately $3.0 million of this deferred gain as a result of a reduction of the related obligation during 2007. In connection with the office joint venture transaction, 85% of the DRA/CLP JV membership units were distributed to the Trust and all of our limited partners on a pro rata basis. We recorded this distribution at book value and, accordingly, no gain was recognized by CRLP related to this sale.

          On June 20, 2007, the Trust completed its retail joint venture transaction with OZRE Retail, LLC (“OZRE”). The Trust sold to OZRE its 69.8% interest in the newly formed joint venture (the “OZRE JV”) that became the owner of 11 retail properties that were previously wholly-owned by CRLP. Total sales proceeds from the sale of this 69.8% interest were approximately $115.0 million. CRLP retained a 15% minority interest in the OZRE JV (see Note 9), as well as management and leasing responsibilities for the 11 properties. In addition to the approximate 69.8% interest purchased from the Trust, OZRE purchased an aggregate of 2.7% of the interests in the OZRE JV from of our limited partners. As of December 31, 2007, OZRE owned an approximate 72.5% interest in the OZRE JV, a subsidiary of CRLP owned a 15% interest and certain of our limited partners that did not elect to sell their interests in the OZRE JV to OZRE owned the remaining approximate 12.5% interest. The purchase price paid by OZRE for each limited liability company interest it acquired in the OZRE JV was based on a portfolio value of approximately $360.0 million, of which approximately $187.2 million was funded with mortgage indebtedness. The Trust recorded a net gain of approximately $64.7 million on the sale of its 69.8% interest to OZRE. The Trust also deferred a gain of approximately $8.5 million as a result of certain obligations it assumed in the transaction. The Trust recognized approximately $5.5 million of this deferred gain as a result of a reduction of the related obligation during

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2007. In connection with the retail joint venture transaction, 85% of the OZRE JV membership units were distributed to the Trust and all of our limited partners on a pro rata basis. We recorded this distribution at book value and, accordingly, no gain was recognized by CRLP related to this sale.

          Additionally, in July 2007, the Trust completed its strategic initiative to become a multifamily REIT with the outright sale by CRLP of an additional 11 retail assets for an aggregate sales price of $129.0 million (the asset sales, together with the joint venture transactions completed in June 2007 are collectively referred to herein as the “Strategic Transactions”) (see Note 5). As a result of the sale of one of these assets for less than its carrying value, CRLP recorded an impairment charge of approximately $2.5 million during 2007, which is included in Income from discontinued operations in the Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2007. In addition, CRLP sold a retail property, of which it owned 90%, for a sales price of $74.4 million (see Note 5).

          As a result of the joint venture transactions discussed above, the Trust paid a special distribution of $10.75 per share on June 27, 2007. The remaining proceeds from these transactions were used to pay down a portion of CRLP’s outstanding indebtedness (see Note 11). During 2007, CRLP incurred approximately $29.2 million in prepayment penalties, which was partially offset by the write-off of approximately $16.7 million in debt intangibles. These amounts are included in Losses on retirement of debt in the Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2007.

          During 2007, CRLP incurred transaction costs of approximately $11.0 million in connection with the office and retail joint venture transactions, including employee incentives of approximately $0.5 million. These transaction costs were recorded as a part of the net gain recorded for the two joint venture transactions for the Trust. During 2007, CRLP also incurred approximately $3.0 million termination benefits and severance costs associated with its strategic initiative, which are classified as Restructuring charges in the Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2007, pursuant to Financial Accounting Standards Board (“FASB”) No. 146. Of the $3.0 million of restructuring charges, approximately $0.2 million was associated with our multifamily portfolio, $0.7 million with our office portfolio, $0.3 million with our retail portfolio and $0.3 million with our for-sale residential portfolio. The remainder of these costs was non-divisional charges. As of December 31, 2007, $1.2 million of these costs were accrued.

3. Summary of Significant Accounting Policies

          Basis of Presentation— The consolidated financial statements include CRLP, Colonial Properties Services Inc. (“CPSI”), Colonial Properties Services Limited Partnership (“CPSLP”), and CLNL Acquisition Sub, LLC (“CLNL”). CPSI is a taxable REIT subsidiary of the Trust that is not entitled to a dividend paid deduction and is subject to federal, state and local income taxes. CPSI provides property development, leasing and management for third-party owned properties and administrative services to CRLP. CRLP generally reimburses CPSI for payroll and other costs incurred in providing services to CRLP. All inter-company transactions are eliminated in the accompanying consolidated financial statements.

          CRLP consolidates entities in which it has a controlling interest or entities where it is determined to be the primary beneficiary under Financial Accounting Standards Board (“FASB”) Interpretation No. 46R (“FIN 46R”), “Consolidation of Variable Interest Entities.” Under FIN 46R, variable interest entities (“VIEs”) are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. Additionally, Emerging Issues Task Force (“EITF”) Issue No. 04-5, “Determining Whether a General Partner, or the General Partner as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights” provides guidance in determining whether a general partner controls and therefore should consolidate a limited partnership. The application of FIN 46R and EITF No. 04-5, requires management to make significant estimates and judgments about CRLP’s and its other partners’ rights, obligations and economic interests in such entities. For entities in which CRLP has less than a controlling financial interest or entities where it is not the primary beneficiary under FIN 46R, the entities are accounted for on the equity method of accounting. Accordingly, CRLP’s share of the net earnings or losses of these entities is included in consolidated net income. A description of CRLP’s investments accounted for on the equity method of accounting is included in Note 9. All significant intercompany accounts and transactions have been eliminated in consolidation.

          CRLP recognizes minority interest in its Consolidated Balance Sheets for partially-owned entities that CRLP consolidates. The minority partners’ share of current operations is reflected in minority interest of limited partners in the Consolidated Statements of Income and Comprehensive Income.

          Federal Income Tax Status— CRLP is a partnership for federal income tax purposes. As a partnership CRLP is not subject to federal income tax on its income. Instead, each of CRLP’s partners, including the Trust, is required to pay tax on such partner’s allocable share of income. The Trust, which is considered a corporation for federal income tax purposes, qualifies as a REIT 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

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requirements. If the Trust fails to qualify as a REIT in any taxable year, the Trust will be subject to federal income tax on its taxable income at regular corporate rates. The Trust may be subject to certain state and local taxes on its income and property.

          In addition, CRLP’s financial statements include the operations of a taxable REIT subsidiary, CPSI, which is not entitled to a dividends paid deduction and is subject to federal, state and local income taxes. CPSI provides property development, leasing and management services for third-party owned properties and administrative services to CRLP. CRLP generally reimburses CPSI for payroll and other costs incurred in providing services to CRLP. CPSI uses the liability method of accounting for income taxes. Deferred income tax assets and liabilities result from temporary differences. Temporary differences are differences between tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future periods. CPSI provides property development, construction services, leasing and management services for joint-venture and third-party owned properties and administrative services to CRLP and engages in for-sale development and conversion activity. CRLP generally reimburses CPSI for payroll and other costs incurred in providing services to CRLP. All inter-company transactions are eliminated in the accompanying Consolidated Financial Statements. CPSI’s consolidated provision (benefit) for income taxes was ($7.4) million, $12.2 million and $6.5 million for the year ended December 31, 2007, 2006 and 2005, respectively. CPSI’s effective income tax rate was 41.87%, 38.31% and 36.10% for the year ended December 31, 2007, 2006 and 2005, respectively. As of December 31, 2007, CPSI has a net deferred tax asset of approximately $19.9 million, which resulted primarily from the impairment charge related to the Trust’s for-sale residential properties. CPSI has assessed the recoverability of this asset and believes that, as of December 31, 2007, recovery is more likely than not, based upon future taxable income and the ability to carry back taxable losses to 2006 and 2007.

          In July 2006, the FASB released FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting and reporting for uncertainties in income tax law. This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. FIN 48 was effective for CRLP on January 1, 2007. The adoption did not have a material impact on CRLP’s consolidated financial statements. CRLP has concluded that there are no significant uncertain tax positions requiring disclosure, and there are no material amounts of unrecognized tax benefits.

          Tax years 2004 through 2006 are subject to examination by the federal and state taxing authorities. There are no significant income tax examinations currently in process.

          CRLP may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. When CRLP has received an assessment for interest and/or penalties, it has been classified in the financial statements as income tax expense.

          Land, Buildings, and Equipment—Land, buildings, and equipment is stated at the lower of cost, less accumulated depreciation, or fair value. CRLP reviews its long-lived assets and certain intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted cash flows expected to be generated by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the asset’s fair value. Assets classified as held for sale are reported at the lower of their carrying amount or fair value less cost to sell. CRLP determines fair value based on a probability weighted discounted future cash flow analysis.

          In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, land inventory and related for-sale residential projects under development are reviewed for potential write-downs when impairment indicators are present. SFAS No. 144 requires that in the event the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts, impairment charges are required to be recorded to the extent that the fair value of such assets is less than their carrying amounts. These estimates of cash flows are significantly impacted by estimates of sales price, selling velocity, sales incentives, construction costs, and other factors. Due to uncertainties in the estimation process, actual results could differ from such estimates. For those assets deemed to be impaired, the impairment to be recognized is to be measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. CRLP’s determination of fair value is primarily based on a probability weighted discounted future cash flow analysis which incorporates available market information as well as other assumptions made by management.

          During June 2007, CRLP recorded a $2.5 million impairment charge related to a retail asset that was sold in July 2007. As a result of the sale, this $2.5 million impairment charge is included in Discontinued Operations in CRLP’s Consolidated Statements of Income and Comprehensive Income. During September 2007, CRLP recorded an impairment

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charge of $43.3 million related to its for-sale residential business (see Note 6) and $0.8 million as a result of fire damage at two multifamily apartment communities. The fires resulted in the loss of a total of 20 units at the two properties.

          Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows:

	Useful Lives
Buildings	20 to 40 years
Furniture and fixtures	5 or 7 years
Equipment	3 or 5 years
Land improvements	10 or 15 years
Tenant improvements	Life of lease

          Repairs and maintenance are charged to expense as incurred. Replacements and improvements are capitalized and depreciated over the estimated remaining useful lives of the assets.

          Acquisition of Real Estate Assets— CRLP accounts for its acquisitions of investments in real estate in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations, which requires the fair value of the real estate acquired to be allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and value of other tenant relationships, based in each case on their fair values. CRLP considers acquisitions of operating real estate assets to be “businesses” as that term is contemplated in EITF Issue No. 98-3, Determining Whether a Non-monetary Transaction Involves Receipt of Productive Assets or of a Business.

          CRLP allocates purchase price to the fair value of the tangible assets of an acquired property (which includes the land and building) determined by valuing the property as if it were vacant. The “as-if-vacant” value is allocated to land and buildings based on management’s determination of the relative fair values of these assets. CRLP also allocates value to tenant improvements based on the estimated costs of similar tenants with similar terms.

          Above-market and below-market in-place lease values for acquired properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancelable terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term and any fixed-rate renewal periods in the respective leases.

          The aggregate value of other intangible assets acquired are measured based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management may engage independent third-party appraisers to perform these valuations and those appraisals use commonly employed valuation techniques, such as discounted cash flow analyses. Factors considered in these analyses include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. CRLP also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods depending on specific local market conditions and depending on the type of property acquired. Management also estimates costs to execute similar leases including leasing commissions, legal and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction.

          The total amount of other intangible assets acquired is further allocated to in-place leases, which includes other tenant relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and CRLP’s overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of CRLP’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement or management’s expectation for renewal), among other factors.

          The value of in-place leases and tenant relationships are amortized as a leasing cost expense over the initial term of the respective leases and any renewal periods. These intangible assets generally have a composite life of three to nine months for CRLP’s multifamily properties. In no event does the amortization period for intangible assets exceed the remaining

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depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles would be charged to expense.

          As of December 31, 2006, CRLP had $98.4 million of gross in-place lease intangible assets related to its office and retail properties and accumulated amortization for these in-place lease intangible assets was $66.2 million related these properties. The aggregate amortization expense for these in-place lease intangible assets was $6.5 million, $14.6 million and $50.5 million for 2007, 2006 and 2005, respectively. The unamortized portion of these in-place lease intangible assets was disposed of in the office and retail joint venture transactions that occurred during 2007.

          Additionally, as of December 31, 2006, CRLP had $4.7 million of net above (below) market lease intangibles related to its office and retail property properties. The above (below) market lease intangibles are amortized as a decrease or increase of rental revenue over the terms of the related leases. The aggregate amortization of these intangibles was $0.8 million, $1.6 million and $0.2 million for 2007, 2006 and 2005, respectively. The unamortized portion of these above (below) market lease intangibles was disposed of in the office and retail joint venture transactions that occurred during 2007.

          CRLP is actively pursuing acquisition opportunities and will not be successful in all cases. Costs incurred related to these acquisition opportunities are expensed when it is no longer probable that CRLP will be successful in the acquisition.

          Undeveloped Land and Construction in Progress—Undeveloped land and construction in progress is stated at cost unless such assets are impaired pursuant to the provisions of SFAS No. 144, in which case such assets are recorded at fair value.

          Costs incurred during predevelopment are capitalized after CRLP has identified a development site, determined that a project is feasible, and concluded that it is probable that the project will proceed. While CRLP believes it will recover this capital through the successful development of such projects, it is possible that a write-off of unrecoverable amounts could occur. Once it is no longer probable that a development will be successful, the predevelopment costs that have been previously capitalized are expensed.

          The capitalization of costs during the development of assets (including interest, property taxes and other direct costs) begins when an active development commences and ends when the asset, or a portion of an asset, is delivered and is ready for its intended use. Cost capitalization during redevelopment of assets (including interest and other direct costs) begins when the asset is taken out-of-service for redevelopment and ends when the asset redevelopment is completed and the asset is transferred back into service.

          Cash and Equivalents—CRLP includes highly liquid marketable securities and debt instruments purchased with a maturity of three months or less in cash equivalents. The majority of CRLP’s cash and equivalents are held at major commercial banks.

          CRLP has included in accounts payable book overdrafts representing outstanding checks in excess of funds on deposit of $22.3 million and $24.8 million as of December 31, 2007 and 2006, respectively.

          Restricted Cash—Restricted cash is comprised of cash balances which are legally restricted as to use and consists primarily of tenant deposits, deposits on for-sale residential lots and units, and cash in escrow for self insurance retention.

          Valuation of Receivables—CRLP is subject to tenant defaults and bankruptcies at its office and retail properties that could affect the collection of outstanding receivables. In order to mitigate these risks, CRLP performs credit review and analysis on all commercial tenants and significant leases before they are executed. CRLP evaluates the collectability of outstanding receivables and records allowances as appropriate. CRLP’s policy is to record allowances for all outstanding invoices greater than 60 days past due at its office and retail properties. CRLP had an allowance for doubtful accounts of $1.4 million and $1.7 million as of December 31, 2007 and 2006, respectively.

          Due to the short-term nature of the leases at its multifamily properties, generally six months to one year, CRLP’s exposure to tenant defaults and bankruptcies is minimized. CRLP’s policy is to record allowances for all outstanding receivables greater than 30 days past due at its multifamily properties.

          Notes Receivable— Notes receivable consists primarily of promissory notes issued by third parties. CRLP records notes receivable at cost. CRLP evaluates the collectability of both interest and principal for each of its notes to determine whether it is impaired. A note is considered to be impaired when, based on current information and events, it is probable that CRLP will be unable to collect all amounts due according to the existing contractual terms. When a note is considered to be impaired, the amount of the allowance is calculated by comparing the recorded investment to either the value determined by

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discounting the expected future cash flows at the note’s effective interest rate or to the fair value of the collateral if the note is collateral dependent. CRLP had recorded accrued interest related to its outstanding notes receivable of $0.2 million and $5.2 million as of December 31, 2007 and 2006, respectively. As of December 31, 2007 and 2006, CRLP had recorded a reserve of $0.9 million and $0.6 million, respectively, against its outstanding notes receivable and accrued interest. The weighted average interest rate on the notes receivable outstanding at December 31, 2007 and 2006 was approximately 8.1% and 11.8%, respectively. Interest income is recognized on an accrual basis.

          CRLP provided first mortgage financing to third parties totaling $17.5 million and $9.9 million in 2007 and 2006, respectively, and received principal payments of $7.3 million on these loans during 2007. CRLP provided subordinated financing to third parties of $8.6 million and $3.9 million in 2007 and 2006, respectively. CRLP provided subordinated financing to third parties for the acquisition and conversion of multi-family properties to condominium communities totaling $11.0 million in 2006. CRLP received principal payments of $49.5 million on these and other outstanding subordinated loans during 2007. As of December 31, 2007 and 2006, CRLP had outstanding notes receivable balances of $30.7 million and $61.2 million, respectively.

          Deferred Debt and Lease Costs—Deferred debt costs consist of loan fees and related expenses which are amortized on a straight-line basis, which approximates the effective interest method, over the terms of the related debt. Deferred lease costs include leasing charges, direct salaries and other costs incurred by CRLP to originate a lease, which are amortized on a straight-line basis over the terms of the related leases.

          Derivative Instruments—All derivative instruments are recognized on the balance sheet and measured at fair value. Derivatives that do not qualify for hedge treatment under SFAS No. 133 (subsequently amended by SFAS Nos. 137 and 138), Accounting for Derivative Instruments and Hedging Activities, must be recorded at fair value with gains or losses recognized in earnings in the period of change. CRLP enters into derivative financial instruments from time to time, but does not use them for trading or speculative purposes. Interest rate cap agreements and interest rate swap agreements are used to reduce the potential impact of increases in interest rates on variable-rate debt.

          CRLP formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking the hedge (see Note 12). This process includes specific identification of the hedging instrument and the hedge transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness in hedging the exposure to the hedged transaction’s variability in cash flows attributable to the hedged risk will be assessed. Both at the inception of the hedge and on an ongoing basis, CRLP assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows or fair values of hedged items. CRLP discontinues hedge accounting if a derivative is not determined to be highly effective as a hedge or has ceased to be a highly effective hedge.

          Share-Based Compensation—The Trust currently sponsors share option plans and restricted share award plans (Refer to Note 13). In December 2004, the FASB issued SFAS No. 123 (Revised), Share Based Payment, which replaced SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) requires compensation costs related to share-based payment transactions to be recognized in financial statements. The Trust adopted SFAS No. 123(R) effective January 1, 2006 using the modified prospective method. The Trust had previously adopted SFAS No. 123 on January 1, 2003 using the prospective method. Under this method, the fair value of compensation expense was recorded for all share-based awards granted or modified after January 1, 2003.

          Revenue Recognition— Sales and the associated gains or losses on real estate assets, condominium conversion projects and for-sale residential projects are recognized in accordance with the provisions of SFAS No. 66, “Accounting for Sales of Real Estate.” For condominium conversion projects, sales and the associated gains for individual condominium units are recognized upon the closing of the sale transactions, as all conditions for full profit recognition have been met (“Completed Contract Method”). Under SFAS No. 66, CRLP uses the relative sales value method to allocate costs and recognize profits from condominium conversion sales.

          For newly developed for-sale residential projects, CRLP accounts for each project under either the Completed Contract Method or the Percentage of Completion Method based on a specific evaluation of the factors specified in SFAS No. 66. The factors used to determine the appropriate accounting method are the legal commitment of the purchaser in the real estate contract, whether the construction of the project is beyond a preliminary phase, sufficient units have been contracted to ensure the project will not revert to a rental project, the aggregate project sale proceeds and costs can be reasonably estimated and the buyer has made an adequate initial and continuing cash investment under the contract in accordance with SFAS No. 66. Under the percentage-of-completion method, revenues and the associated gains are recognized over the project construction period generally based on the percentage of total project costs incurred to estimated total project

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costs for each unit under a binding real estate contract. As of December 31, 2007, no for-sale residential projects are accounted for under the percentage-of-completion method.

          Estimated future warranty costs on condominium conversion and for-sale residential sales are charged to cost of sales in the period when the revenues from such sales are recognized. Such estimated warranty costs are approximately 0.5% of total revenue. As necessary, additional warranty costs are charged to costs of sales based on management’s estimate of the costs to remediate existing claims.

          Revenue from construction contracts is recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated total costs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Adjustments to estimated profits on contracts are recognized in the period in which such adjustments become known.

          Other income received from long-term contracts signed in the normal course of business, including property management and development fee income, is recognized when earned for services provided to third parties.

          Net Income Per Unit—Basic net income per unit is computed by dividing the net income available to common unitholders by the weighted average number of common units outstanding during the period. Diluted net income per unit is computed by dividing the net income available to common unitholders by the weighted average number of common units outstanding during the period, the dilutive effect of restricted shares issued, and the assumed conversion of all potentially dilutive outstanding share options.

          Self Insurance Accruals— CRLP is self insured up to certain limits for general liability claims, workers’ compensation claims, property claims and health insurance claims. Amounts are accrued currently for the estimated cost of claims incurred, both reported and unreported.

          Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

          Segment Reporting—CRLP has adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. SFAS No. 131 defines an operating segment as a component of an enterprise that engages in business activities that generate revenues and incur expenses, which operating results are reviewed by the chief operating decision maker in the determination of resource allocation and performance, and for which discrete financial information is available. CRLP manages its business based on the performance of four separate operating portfolios: multifamily, office, retail and for-sale residential.

          Investments in Joint Ventures — To the extent that CRLP contributes assets to a joint venture, CRLP’s investment in the joint venture is recorded at CRLP’s cost basis in the assets that were contributed to the joint venture. To the extent that CRLP’s cost basis is different from the basis reflected at the joint venture level, the basis difference is amortized over the life of the related assets and included in CRLP’s share of equity in net income of the joint venture. In accordance with the previsions of SFAS No. 66 and Statement of Position 78-9, Accounting for Investments in Real Estate Ventures, paragraph 30, CRLP recognizes gains on the contribution of real estate to joint ventures, relating solely to the outside partner’s interest, to the extent the economic substance of the transaction is a sale. CRLP continually evaluates its investments in joint ventures for other than temporary declines in market value. CRLP recorded an impairment on one for-sale residential investment during 2007 (see Note 9).

         Recent Accounting Pronouncements — In September 2006, the FASB issued SFAS No. 157, Fair Value Measurement. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 is effective for CRLP’s financial assets and liabilities on January 1, 2008. In February 2008, the FASB reached a conclusion to defer the implementation of the SFAS No. 157 provisions relating to non-financial assets and liabilities until January 1, 2009. The FASB also reached a conclusion to amend SFAS No. 157 to exclude SFAS No. 13, Accounting for Leases, and its related interpretive accounting pronouncements. SFAS No. 157 is not expected to materially affect how CRLP determines fair value, but may result in certain additional disclosures.

          In November 2006, the FASB ratified EITF Issue No. 06-8 Applicability of the Assessment of a Buyer’s Continuing Investment under FASB Statement No. 66 for Sales of Condominiums. EITF No. 06-8 provided additional guidance on whether the seller of a condominium unit is required to evaluate the buyer’s continuing investment under SFAS No. 66 in order to

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recognize profit from the sale under the percentage of completion method. The EITF concluded that both the buyer’s initial and continuing investment must meet the criteria in SFAS No. 66 in order for condominium sale profits to be recognized under the percentage of completion method. Sales of condominiums not meeting the continuing investment test must be accounted for under the deposit method (a method consistent with the Completed Contract Method). EITF No. 06-8 is effective January 1, 2008. As discussed above, CRLP accounts for condominium and for-sale residential sales using similar criteria to those stated in EITF No. 06-8. In addition, as of December 31, 2007, no condominium projects were accounted for under the percentage-of-completion method. The adoption of EITF No. 06-8 did not have a material impact on CRLP’s consolidated financial statements.

          In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. The provisions of SFAS No. 159 are effective for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 did not have a material impact on CRLP’s consolidated financial statements.

          In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51. SFAS No. 160 amends Accounting Research Bulletin 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. SFAS No. 160 also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. The provisions of SFAS No. 160 are effective for fiscal years beginning after November 15, 2008. CRLP is currently evaluating the impact of SFAS No. 160 on its consolidated financial statements.

          In December 2007, the FASB issued SFAS No. 141(R), Business Combinations, which changes how business acquisitions are accounted for and will impact financial statements both on the acquisition date and in subsequent periods. SFAS No. 141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard will, among other things, impact the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration); exclude transaction costs from acquisition accounting; and change accounting practices for acquired contingencies, acquisition-related restructuring costs, and tax benefits. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. CRLP is currently evaluating the impact of SFAS No. 141(R) on its consolidated financial statements.

4. Merger with Cornerstone Realty Income Trust

          On April 1, 2005, the Trust completed the merger with Cornerstone Realty Income Trust, Inc. (“Cornerstone”), a Virginia corporation, pursuant to an Agreement and Plan of Merger, dated as of October 25, 2004, as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated January 24, 2005 (the “Merger Agreement”). As a result of the merger, the Trust succeeded by operation of law to all of the assets and liabilities of Cornerstone prior to the merger, which consisted of 86 apartment communities with 22,981 apartment homes, a third party property management business, apartment land under development and ownership in four real estate joint ventures.

     Under the terms of the Merger Agreement, Cornerstone shareholders had the right to elect to receive either:

• a number of Trust common shares equal to the common share conversion rate, which was calculated as 0.2581; or

• a number of Trust 7 5/8% Series E preferred depositary shares, $25.00 liquidation preference per depositary share, equal to the preferred depositary share conversion rate, which was calculated as 0.4194;

for each outstanding common share of Cornerstone, subject to the restriction that the Colonial Series E preferred depositary shares issued would not exceed approximately 25% of the total merger consideration. The final conversion ratios of the common and preferred depositary shares were determined based on the average market price of the Trust’s common shares over a five day trading period preceding the effective time of the merger and fractional shares were paid in cash. Cornerstone shareholders who made no effective election received Trust common shares. In connection with the merger, the Trust issued 11,277,358 Colonial common shares, 5,326,349 Colonial Series E preferred depositary shares and 578,358 CRLP common

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units to former shareholders of Cornerstone. The shares of the Trust issued to the Cornerstone shareholders were registered with the Securities and Exchange Commission on a Registration Statement on Form S-4 (File No. 333-121675).

     The aggregate consideration paid for the merger was as follows:

	(in thousands)
Issuance of 11,277,358 Trust common shares to Cornerstone shareholders	$	462,347
Issuance of 5,326,349 Trust Series E preferred depositary shares to Cornerstone shareholders		132,747
Issuance of 578,358 CRLP common units		23,788
Fees and other expenses related to the merger		35,016
Total purchase price		653,898
Assumption of Cornerstone’s notes and mortgages payable at book value		836,985
Adjustment to record Cornerstone’s notes and mortgages at fair value		50,880	(1)
Assumption of Cornerstone’s accounts payable and other liabilities at fair value		34,380
Total purchase price and assumed liabilities	$	1,576,143

(1) The fair value adjustment of $50.9 million to account for the difference between the fixed rates and market rates for the Cornerstone borrowings include $26.8 million for prepayment penalties on debt retired during 2005.

     CRLP allocated the purchase price between net tangible and intangible assets utilizing the assistance of a third party valuation firm.  When allocating the purchase price to acquired properties, the costs were allocated to the estimated intangible value of in place leases, customer relationships and above or below market leases, and to the estimated fair value of furniture and fixtures, land and buildings on a value determined by assuming the property is vacant by applying methods similar to those used by independent appraisers of income-producing property.  Depreciation and amortization is computed on a straight-line basis over the remaining useful lives of the related assets.  Buildings and furniture and fixtures have an average estimated useful life of 33 years and 3 years, respectively.  The value of in place leases and above or below market leases was amortized over the estimated average remaining life of leases in place at the time of the merger.  In place lease terms generally range from 3 to 7 months.  The value of customer relationships was amortized over 9 months. CRLP used an estimated remaining average lease life of 5 months to amortize the value of in place leases recorded in conjunction with the merger. In connection with the merger, CRLP incurred $16.1 million of termination, severance and settlement of share-based compensation costs.

     The following table summarizes the estimated fair value of the assets acquired and liabilities assumed on April 1, 2005:

	(in thousands)
Buildings	$	1,246,019
Furniture and fixtures		14,613
Fair value of depreciable real estate assets		1,260,632
Land		230,768
Undeveloped land and construction in progress		3,995
In place lease value		45,658
Customer relationships		5,068
Other assets, including cash (excluding in-place lease values )		21,121
Investments in partially owned entities		8,901
Total purchase price	$	1,576,143

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     The merger resulted in the following non-cash changes to CRLP’s Consolidated Balance Sheet during the year ended December 31, 2005:

	(in thousands)
Real estate assets acquired	$	1,460,380
Assumption of notes and mortgages		836,985
Operating assets acquired		21,121
Operating liabilities acquired		34,380
Fair value of adjustments on notes and mortgages		50,880
Investments in partially owned entities acquired		8,901
Intangible assets acquired		50,726
Issuance of common shares of beneficial interest		462,347
Issuance of preferred shares of beneficial interest		132,747
Issuance of common units of operating partnership		23,788
Cash flow hedging activities		812

     The following unaudited pro forma financial information for the year ended December 31, 2005, gives affect to the merger with Cornerstone as if it had occurred at the beginning of the periods presented. The pro forma information for the year ended December 31, 2005 includes three months of pro forma results and nine months of actual results. The pro forma results are based on historical data and are not intended to be indicative of the results of future operations.

	***** Pro Forma (Unaudited) *****
	Twelve Months
	Ended December 31,
In thousands, except per unit data	2005(1)
Total revenue		$ 528,224
Net income available to common unitholders		$ 240,393
Net income per common unit — dilutive		$      5.86

(1) One time merger costs of $9.1 million expensed by Cornerstone have been excluded from the pro forma net income to common unitholders for the year ended December 31, 2005.

5. Property Acquisitions and Dispositions

     Property Acquisitions

     During 2007, CRLP acquired four multifamily apartment communities containing 1,084 units for an aggregate cost of approximately $138.2 million, which consisted of $12.3 million of newly issued mortgage debt and $125.9 million of cash. Also, during 2007, CRLP acquired a partnership interest in three multifamily apartment communities containing 775 units for an aggregate cost of approximately $12.3 million, which consisted of $9.5 million of newly issued mortgage debt and $2.8 million of cash. During 2006, CRLP acquired ten multifamily apartment communities containing 3,676 units and an additional 50,000 square feet of condominium interest in an office asset for an aggregate cost of approximately $350.3 million in 2006. Also during 2006, CRLP also acquired a partnership interest in four multifamily apartment communities containing 1,216 units for an aggregate cost of approximately $19.0 million. In 2005, in addition to the Cornerstone acquisition, CRLP acquired six multifamily apartment communities, eight office assets and one retail asset for an aggregate cost of $537.7 million. During 2005, CRLP also acquired a partnership interest in four multifamily apartment communities containing 1,374 units, and a partnership interest in 26 office asset containing 11.7 million square feet for an aggregate cost of approximately $400 million. CRLP funded these acquisitions with cash proceeds from its dispositions of assets, public offerings of debt and equity (see Notes 11 and 14), advances on bank lines of credit, and cash from operations.

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     The consolidated operating properties acquired during 2007, 2006 and 2005 are listed below:

		Effective
	Location	Acquisition Date	Units/Square Feet
			(unaudited)
Multifamily Properties:
Colonial Grand at Old Town Scottsdale North	Phoenix, AZ	January 31, 2007		208
Colonial Grand at Old Town Scottsdale South	Phoenix, AZ	January 31, 2007		264
Colonial Grand at Inverness Commons	Phoenix, AZ	March 1, 2007		300
Merritt at Godley Station	Savannah, GA	May 1, 2007		312
Colonial Village at Willow Creek	Dallas, TX	May 31, 2006		478
Colonial Grand at McDaniel Farm	Atlanta, GA	May 31, 2006		424
Colonial Village at Shoal Creek	Dallas, TX	June 1, 2006		408
Colonial Village at Chancellor Park	Charlotte, NC	June 30, 2006		340
Colonial Grand at Scottsdale	Phoenix, AZ	July 31, 2006		180
Colonial Grand at Pleasant Hill	Atlanta, GA	August 31, 2006		502
Colonial Grand at Shiloh	Atlanta, GA	September 8, 2006		498
Colonial Village at Oakend	Dallas, TX	September 28, 2006		426
Colonial Grand at University Center	Charlotte, NC	November 1, 2006		156
Colonial Grand at Cypress Cove	Charleston, SC	December 28, 2006		264
Colonial Grand at Bear Creek	Fort Worth, TX	August 18, 2005		436
Colonial Grand at Barrett Creek	Atlanta, GA	August 31, 2005		332
Colonial Grand at Bellevue	Nashville, TN	November 29, 2005		349
Colonial Grand at Crabtree Valley	Raleigh, NC	November 29, 2005		210
Colonial Grand at Mallard Lake	Charlotte, NC	November 29, 2005		302
Colonial Grand at Shelby Farms	Memphis, TN	November 29, 2005		296
Office Properties:
Colonial Place I & II	Tampa, FL	January 31, 2005		371,000
Research Park Office Center IV	Huntsville, AL	February 1, 2005		59,900
Colonial Center at Bayside	Tampa, FL	April 15, 2005		213,800
Colonial Bank Centre	Miami, FL	April 27, 2005		235,500
Research Park Plaza III & IV	Austin, TX	June 30, 2005		357,700
Esplanade	Charlotte, NC	July 14, 2005		201,900
Colonial Center Heathrow 1001	Orlando, FL	July 20, 2005		192,200
The Peachtree (1)	Atlanta, GA	August 31, 2005		310,900
Retail Properties:
Colonial Promenade Portofino	Houston, TX	January 13, 2005		372,500

1) In January 2006, CRLP acquired an additional 50,000 square feet of condominium interests in The Peachtree.

     Results of operations of these properties, subsequent to their respective acquisition dates, are included in the consolidated financial statements of CRLP. The cash paid to acquire these properties is included in the consolidated statements of cash flows. CRLP has accounted for its acquisitions in 2007, 2006 and 2005 accordance with SFAS 141. The value of the acquired tenant improvements and leasing commissions for the office and retail assets acquired are amortized over the remaining terms of the in-place leases (see Note 3). The property acquisitions during 2007, 2006 and 2005 are comprised of the following:

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				(in thousands)
	2007			2006			2005
Assets purchased:
Land, buildings, and equipment	$	144,229		$	348,545		$	625,616
Other assets		522			3,796			43,054
		144,751			352,341			668,670
Notes and mortgages assumed		(18,944	)		—			(5,415	)
Other liabilities assumed or recorded		(407	)		(2,035	)		(7,899	)
Cash paid	$	125,400		$	350,306		$	655,356

     In addition to the acquisition of the operating properties mentioned above, CRLP acquired certain parcels of land to be utilized for future development opportunities.

     The following unaudited pro forma financial information for the years ended December 31, 2007, 2006 and 2005, give effect to the above operating property acquisitions as if they had occurred at the beginning of the periods presented. The information for the year ended December 31, 2007 includes pro forma results for the months during the year prior to the acquisition date and actual results from the date of acquisition through the end of the year. The pro forma results are not intended to be indicative of the results of future operations.

	***** Pro Forma (Unaudited) *****
	Year		Year		Year
	Ended December 31,		Ended December 31,		Ended December 31,
In thousands, except per unit data	2007		2006		2005
Total revenue	$	403,331	$	478,486	$	422,024
Net income available to common unitholders	$	345,045	$	182,204	$	199,805
Net income per common unit — dilutive	$	7.34	$	3.96	$	5.19

     Property Dispositions – Continuing Operations

     During 2007, 2006 and 2005, CRLP sold various consolidated parcels of land located adjacent to its existing properties for an aggregate sales price of $15.2 million, $25.9 million and $25.1 million, respectively, which were used to repay a portion of the borrowings under CRLP’s unsecured credit facility and to support its investment activities.

     During 2007, in addition to the joint venture transactions discussed in Note 9, CRLP sold a majority interest in three development properties representing a total of 786,500 square feet, including anchor-owned square footage. The aggregate gain on the sale of CRLP’s interests was approximately $12.5 million, net of income tax and minority interest, and is included in Gains from Sales of Property in CRLP’s Consolidated Statements of Income and Comprehensive Income (see Note 6 - - Commercial Developments). Also during 2007, CRLP sold a wholly-owned retail asset containing 131,300 square feet. Because CRLP retained management and leasing responsibilities for this property, the gain on the sale of approximately $11.1 million is included in continuing operations.

     During 2006, CRLP sold an 85% interest in an office complex representing approximately 0.9 million square feet to a joint venture formed by CRLP and unrelated parties for approximately $140.6 million. CRLP continues to manage the properties and accounts for its 15% interest in this joint venture as an equity investment. The gain on the sale of CRLP’s 85% interest is included in Gains from Sales of Property in CRLP’s Consolidated Statements of Income and Comprehensive Income. CRLP also sold a wholly-owned office property containing 76,000 square feet for a total sales price of $13.7 million and two wholly-owned retail properties representing approximately 1.0 million square feet for a total sales price of approximately $90.0 million. Because CRLP retained management and leasing responsibilities for these three properties, the gains on the sales are included in continuing operations.

     Also during 2006, CRLP sold its interests in 20 multifamily apartment communities representing approximately 4,985 units, including 16 that were part of the DRA Southwest Partnership, and its interests in six office assets representing 2.1 million square feet, all of which were part of the DRA/CRT joint venture. CRLP’s interests in these properties were sold

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for approximately $155.1 million. The gains from the sales of these interests are included in Income (Loss) from Partially-Owned Entities in CRLP’s Consolidated Statements of Income and Comprehensive Income (see Note 9).

     Also during 2006, CRLP sold 90% of its interest in four retail properties representing approximately 0.7 million square feet to a joint venture formed by CRLP and unrelated parties for approximately $114.6 million. CRLP continues to manage the properties and accounted for its 10% interest in this joint venture as an equity investment. The remaining 10% interest was sold in December 2006 for approximately $7.3 million. The gain on the sale of CRLP’s 90% interest is included in Gains from Sales of Property in CRLP’s Consolidated Statements of Income and Comprehensive Income and the gain from the sale of the remaining 10% interest is included in Income (Loss) from Partially-Owned Entities in CRLP’s Consolidated Statements of Income and Comprehensive Income (see Note 9).

     During 2005, CRLP sold 90% of its interest in six retail properties representing approximately 3.7 million square feet to a joint venture formed by CRLP and unrelated parties for approximately $325.8 million. CRLP continues to manage the properties and accounts for its 10% interest in this joint venture as an equity investment. The gain on the sale of CRLP’s 90% interest is included in Gains from Sales of Property in CRLP’s Consolidated Statements of Income and Comprehensive Income (see Note 9).

     Also during 2005, CRLP disposed of its 15% interests in two multifamily apartment communities representing 901 units and its 10% interest in a third multifamily apartment community representing 326 units for a total sales price of $12.1 million. The gains from the sales of these interests are included in Income (Loss) from Partially-Owned Entities in CRLP’s Consolidated Statements of Income and Comprehensive Income (see Note 9).

     Property Dispositions – Discontinued Operations

     During 2007, CRLP disposed of 12 consolidated multifamily apartment communities representing 3,140 units and 15 consolidated retail assets representing 3.3 million square feet, including anchor-owned square footage. The multifamily and retail assets were sold for a total sales price of $479.2 million, which was used to repay a portion of the borrowings under CRLP’s unsecured credit facility and fund future investments.

     During 2006, CRLP disposed of 16 consolidated multifamily apartment communities representing 5,608 units and two consolidated office assets representing 0.5 million square feet. The multifamily and office properties were sold for a total sales price of $445.4 million, which was used to repay a portion of the borrowings under CRLP’s unsecured credit facility and fund future investments.

     During 2005, CRLP disposed of 23 consolidated multifamily apartment communities representing 6,865 units and four consolidated retail properties representing 2.9 million square feet. The multifamily and retail properties were sold for a total sales price of $636.7 million, which was used to repay a portion of the borrowings under CRLP’s unsecured credit facility and fund future investments.

     In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, net income (loss) and gain (loss) on disposition of operating properties sold through December 31, 2007, in which CRLP does not maintain continuing involvement, are reflected in its consolidated statements of income on a comparative basis as discontinued operations for the years ended December 31, 2007, 2006 and 2005. Following is a listing of the properties CRLP disposed of in 2007, 2006 and 2005 that are classified as discontinued operations:

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			Units/Square
Property	Location	Date	Feet
			(unaudited)
Multifamily
Beacon Hill	Charlotte, NC	January 2007		349
Clarion Crossing	Raleigh, NC	January 2007		260
Colonial Grand at Enclave	Atlanta, GA	January 2007		200
Colonial Village at Poplar Place	Atlanta, GA	January 2007		324
Colonial Village at Regency Place	Raleigh, NC	January 2007		180
Colonial Village at Spring Lake	Atlanta, GA	January 2007		188
Colonial Village at Timothy Woods	Athens, GA	January 2007		204
Colonial Grand at Promenade	Montgomery, AL	February 2007		384
Mayflower Seaside	Virginia Beach, VA	June 2007		265
Cape Landing	Myrtle Beach, SC	June 2007		288
Colonial Grand at Natchez Trace	Jackson, MS	June 2007		328
Colonial Grand at The Reservoir	Jackson, MS	June 2007		170
Stonebrook	Atlanta, GA	July 2007		188
The Timbers	Raleigh, NC	January 2006		176
Summerwalk	Charlotte, NC	January 2006		160
Colonial Grand at Whitemarsh	Savannah, GA	January 2006		352
Colonial Village at Stone Brook	Atlanta, GA	January 2006		188
Colonial Village at Remington Place	Raleigh, NC	January 2006		136
Colonial Village at Paces Glen	Charlotte, NC	January 2006		172
Colonial Village at Caledon Woods	Greenville, SC	January 2006		350
The Trestles	Raleigh, NC	March 2006		280
The Meadows I, II & III	Asheville, NC	March 2006		392
Copper Crossing	Fort Worth, TX	March 2006		400
Colonial Village at Estrada	Dallas, TX	March 2006		248
Arbor Trace	Norfolk, VA	April 2006		148
Colonial Village at Haverhill	San Antonio, TX	October 2006		322
Colonial Grand at Galleria	Birmingham, AL	December 2006		1,080
Colonial Grand at Riverchase	Birmingham, AL	December 2006		468
Colonial Village at Research Park	Huntsville, AL	December 2006		736
Colonial Village at Ashley Plantation	Bluffton, SC	March 2005		414
Colonial Village at Gainesville	Gainesville, FL	March 2005		560
Colonial Grand at Galleria Woods	Birmingham, AL	March 2005		244
Colonial Village at TownPark	Sarasota, FL	March 2005		272
Colonial Village at Walton Way	Augusta, GA	March 2005		256
Colonial Grand at Wesleyan	Macon, GA	March 2005		328
Colonial Village at Lake Mary	Orlando, FL	May 2005		504
Bridgetown Bay	Charlotte, NC	May 2005		120
Devonshire	Dallas, TX	May 2005		144
Dunwoody Springs	Atlanta, GA	May 2005		350
Caryle Club	Atlanta, GA	May 2005		243
Aspen Hills	Dallas, TX	May 2005		240
Ashley Run	Atlanta, GA	June 2005		348
Arbors on Forest Ridge	Fort Worth, TX	October 2005		210
Cutters Point	Dallas, TX	October 2005		196
Eagle Crest	Dallas, TX	October 2005		484
Sierra Ridge	San Antonio, TX	October 2005		230
Timberglen	Dallas, TX	October 2005		304
Toscana	Dallas, TX	October 2005		192
Silverbrook	Fort Worth, TX	October 2005		642
The Meridian	Austin, TX	October 2005		200
The Landing	Raleigh, NC	December 2005		200
Office
Colonial Center at Mansell Overlook	Atlanta, GA	September 2007		188,478
Colonial Bank Centre	Miami, FL	September 2006		235,500
Interstate Park	Montgomery, AL	November 2006		227,000

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			Units/Square
Property	Location	Date	Feet
			(unaudited)
Retail (1)
Rivermont Shopping Center	Chattanooga, TN	February 2007		73,481
Colonial Shoppes Yadkinville	Yadkinville, NC	March 2007		90,917
Colonial Shoppes Wekiva	Orlando, FL	May 2007		208,568
Village on the Parkway	Dallas, TX	July 2007		381,166
Britt David Shopping Center	Columbus, GA	July 2007		102,564
Colonial Mall Decatur	Huntsville, AL	July 2007		576,098
Colonial Mall Lakeshore	Gainesville, GA	July 2007		518,290
Colonial Mall Staunton	Staunton, VA	July 2007		423,967
Colonial Mayberry Mall	Mount Airy, NC	July 2007		206,940
Colonial Promenade Montgomery	Montgomery, AL	July 2007		209,114
Colonial Promenade Montgomery North	Montgomery, AL	July 2007		209,912
Colonial Shoppes Bellwood	Montgomery, AL	July 2007		88,482
Colonial Shoppes McGehee Place	Montgomery, AL	July 2007		98,255
Colonial Shoppes Quaker Village	Greensboro, NC	July 2007		102,223
Olde Town Shopping Center	Montgomery, AL	July 2007		38,660
Colonial Mall Gadsden	Gadsden, AL	March 2005		516,989
Colonial Mall Temple	Temple, TX	April 2005		555,411
Colonial Mall Macon	Macon, GA	July 2005		1,446,368
Colonial Mall Burlington	Burlington, NC	July 2005		415,194

(1) Square footage includes anchor-owned square footage.

     Additionally, CRLP classifies real estate assets as held for sale, only after CRLP has received approval by its internal investment committee, has commenced an active program to sell the assets, and in the opinion of CRLP’s management it is probable the asset will sell within the next 12 months. At December 31, 2007, CRLP had classified 16 multifamily assets containing 4,284 units and one office asset containing 37,000 square feet as held for sale. At December 31, 2006, CRLP had classified nine multifamily assets containing 2,203 units and 15 retail assets, containing 3.4 million square feet, as held for sale. These real estate assets are reflected in the accompanying consolidated balance sheets at $228.5 million and $286.0 million at December 31, 2007 and 2006, respectively, which represents the lower of depreciated cost or fair value less costs to sell. Depreciation expense not recorded for the year ended December 31, 2007 related to assets classified as held for sale at December 31, 2007 was $1.1 million. There was no amortization expense suspended for the year ended December 31, 2007. There was no depreciation or amortization expense suspended for the years ended December 31, 2006 or 2005 related to assets classified as held for sale at December 31, 2007.

     In some cases, CRLP uses disposition proceeds to fund investment activities through tax-deferred exchanges under Section 1031 of the Internal Revenue Code.  Certain of the proceeds described above were received into temporary cash accounts pending the fulfillment of Section 1031 exchange requirements. Subsequently, the funds were utilized to repay a portion of the borrowings under CRLP’s unsecured credit facility or for financing of other investment activities.

     In accordance with SFAS No. 144, the operating results of properties (excluding condominium conversion properties not previously operated) designated as held for sale, are included in discontinued operations in the Consolidated Statements of Income and Comprehensive Income for all periods presented. Also under the provisions of SFAS No. 144, the reserves, if any, to write down the carrying value of the real estate assets designated and classified as held for sale are also included in discontinued operations (excluding condominium conversion properties not previously operated). Additionally, under SFAS No. 144, any impairment losses on assets held for continuing use are included in continuing operations.

     Below is a summary of the operations of the properties sold during 2007, 2006 and 2005 and properties classified as held for sale as of December 31, 2007, that are classified as discontinued operations:

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	(amounts in thousands)
	Year Ended December 31,
	2007			2006			2005
Property revenues:
Base rent	$	53,721		$	120,024		$	151,107
Tenant recoveries		3,382			7,607			11,684
Other revenue		5,815			11,222			19,869
Total revenues		62,918			138,853			182,660
Property operating and maintenance expense		26,241			55,637			74,183
Impairment		2,950			—			—
Depreciation		10,938			30,847			34,986
Amortization		63			5,198			17,880
Total operating expenses		40,192			91,682			127,049
Interest expense		(5,501	)		(14,918	)		(21,605	)
Interest income		8			34			67
Other		(3,403	)		(562	)		(186	)
Income from discontinued operations before net gain on disposition of discontinued operations		13,830			31,725			33,887
Net gain on disposition of discontinued operations		91,147			134,619			183,011
Minority interest to limited partners		(3,989	)		(2,591	)		(585	)
Income from discontinued operations	$	100,988		$	163,754		$	216,313

6. For-Sale Activities and Impairment

     During 2007, 2006 and 2005, CRLP, through CPSI, sold 262, 607 and 328 condominium units, respectively, at its condominium conversion properties. During 2007, CRLP, through CPSI, also sold 14 residential lots and 101 condominium units at its for-sale residential development properties. During 2006, CRLP, through CPSI, sold five residential lots and 49 condominium units at its for-sale residential development properties. During 2005, CRLP did not have for-sale residential development properties. During 2007, 2006 and 2005, gains from sales of property on the Consolidated Statements of Income and Comprehensive Income included $13.2 million ($10.6 million net of income taxes), $33.9 million ($24.1 million net of income taxes) and $13.3 million ($9.7 million net of income taxes), respectively, from these condominium conversion and for-sale residential sales. A summary of revenues and costs of condominium conversion and for-sale residential sales for 2007, 2006 and 2005 are as follows:

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				Years Ended
				December 31,
(amounts in thousands)	2007			2006			2005
Condominium conversion revenues	$	51,073		$	117,732		$	79,322
Condominium conversion costs		(40,972	)		(86,614	)		(65,976	)
Gains on condominium conversion sales, before minority interest and income taxes		10,101			31,118			13,346
For-sale residential revenues		26,153			12,513			—
For-sale residential costs		(23,016	)		(9,683	)		—
Gains on for-sale residential sales, before minority interest and income taxes		3,137			2,830			—
Minority interest		250			(1,967	)		(5,245	)
Provision for income taxes		(2,630	)		(9,825	)		(3,660	)
Gains on condominium conversion and for-sale residential sales, net of minority interest and income taxes	$	10,858		$	22,156		$	4,441
Impairment, net of tax	$	(26,800	)	$	(960	)		—

     The net gains on condominium unit sales are classified in discontinued operations if the related condominium property was previously operated by CRLP as an apartment community. For 2007 and 2006, gains on condominium unit sales, net of income taxes, of $9.3 million and $21.9 million, respectively, are included in discontinued operations. There were no condominium unit sales included in discontinued operations in 2005. Condominium conversion properties are reflected in the accompanying Consolidated Balance Sheets as part of real estate assets held for sale, and totaled $2.9 million and $76.2 million as of December 31, 2007 and 2006, respectively. For-sale residential projects actively under development of $96.0 million (net of a $42.1 million non-cash impairment charge related to wholly-owned for-sale properties) and $98.3 million as of December 31, 2007 and 2006, respectively, are reflected as construction in progress in the accompanying Consolidated Balance Sheets. Completed for-sale residential projects of approximately $22.2 million and $19.2 million are reflected in real estate assets held for sale as of December 31, 2007 and 2006, respectively.

     During December 2006, CRLP, through CPSI, sold an option to purchase land for a total sales price of $3.2 million. CRLP recognized a gain, net of income taxes, of $1.5 million on the sale, which is included in Gains from sales of property in CRLP’s Consolidated Statements of Income and Comprehensive Income.

     For cash flow statement purposes, CRLP classifies capital expenditures for newly developed for-sale residential communities and for other condominium conversion communities in investing activities. Likewise, the proceeds from the sales of condominium units and other residential sales are also included in investing activities.

     Impairment

     During 2007, there was a softening in the condominium and single family housing markets due to increasing mortgage financing rates, the decline in the availability of sub-prime lending and other types of mortgages, increasing supplies of such assets, an increase in construction costs, and higher insurance costs, resulting in lower sales prices and reduced sales velocity. In addition, pricing in the single family housing market declined, primarily due to a lack of demand related to the reasons discussed above and certain units that were under contract did not close because buyers elected not to consummate the purchase of the units. As a result, CRLP recorded a non-cash impairment charge of $43.3 million ($26.8 million net of income tax) to reduce the carrying value of certain of its for-sale residential developments to their estimated fair market value. An increase in construction costs (partially related to the dispute and litigation with a general contractor – see Note 19) during development was also factored into the impairment charge. CRLP utilized a probability weighted discounted future cash flow analysis which incorporates available market information and other assumptions made by management. The impairment charge is primarily related to the for-sale residential projects located in Gulf Shores, Alabama (Cypress Village project and Grander condominium development) and one condominium project in downtown Charlotte, North Carolina (The Enclave).

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     CRLP calculated the fair values of its for-sale residential projects evaluated for impairment under SFAS No. 144 based on current market conditions and assumptions made by management, which may differ materially from actual results if market conditions continue to deteriorate or improve. If market conditions do not improve or if there is further market deterioration, it may impact the number of projects CRLP can sell, the timing of the sales and/or the prices at which CRLP can sell them. If CRLP is unable to sell projects, it may incur additional impairment charges on projects previously impaired as well as on projects not currently impaired but for which indicators of impairment may exist, which would decrease the value of CRLP’s assets as reflected on our balance sheet and adversely affect our partners’ equity. There can be no assurances of the amount or pace of future for-sale residential sales and closings, particularly given current market conditions.

     Commercial Developments

     During December 2007, CRLP sold 95% of its interest in Colonial Promenade Alabaster II and two build-to-suit outparcels at Colonial Pinnacle Tutwiler II (hhgregg & Haverty’s) to a joint venture between CRLP and Watson LLC. The retail assets include 418,500 square feet, including anchor-owned square-footage, and are located in Birmingham, Alabama. CRLP’s interest was sold for approximately $48.1 million. CRLP recognized a gain of approximately $8.3 million after tax and minority interest on the sale. CRLP’s 5% investment in the partnership is comprised of $0.5 million in contributed property and $2.0 million of newly issued mortgage debt. The proceeds from the sale will be used to fund future developments and for other general corporate purposes.

     During July 2007, CRLP sold 85% of its interest in Colonial Pinnacle Craft Farms I, a retail shopping center development located in Gulf Shores, Alabama. The retail shopping center development includes 368,000 square feet, including anchor-owned square-footage. CRLP sold its 85% interest for approximately $45.7 million and recognized a gain of approximately $4.2 million, after income tax, from the sale. The proceeds from the sale are expected to be used to fund developments and for other general corporate purposes.

     During December 2006, CRLP sold Colonial Pinnacle Tutwiler Farm located in Birmingham, Alabama. The retail shopping center includes 450,000 square feet, including anchor-owned square footage. CRLP sold the development for approximately $54.4 million and recognized a gain of approximately $20.5 million from the sale. The proceeds from the sale were used to fund other investment activities.

7. Land, Buildings and Equipment

     Land, buildings, and equipment consist of the following at December 31, 2007 and 2006:

			(in thousands)
	Useful Lives		2007			2006
Buildings		20 to 40 years	$	1,821,988		$	2,709,886
Furniture and fixtures	5 or 7 years			81,818			84,137
Equipment	3 or 5 years			26,024			31,038
Land improvements	10 or 15 years			159,622			182,307
Tenant improvements	Life of lease			41,234			155,626
				2,130,686			3,162,994
Accumulated depreciation				(290,118	)		(420,359	)
				1,840,568			2,742,635
Real estate assets held for sale, net				253,641			381,445
Land				300,378			438,871
			$	2,394,587		$	3,562,951

8. Undeveloped Land and Construction in Progress

     During 2007, CRLP completed the construction of a wholly-owned multifamily development, adding 422 apartment homes to the portfolio. This development, Colonial Grand at Round Rock located in Austin, Texas, had a total cost of approximately $35.0 million. CRLP also completed the development of Colonial Grand at Canyon Creek, a multifamily apartment community in which CRLP owns a 25% interest. CRLP’s portion of the total cost of the project totaled $7.9 million.

     During 2007, CRLP completed the development of six commercial assets adding 429,000 square feet of office space and 436,000 square feet of retail space, excluding anchor-owned square footage, to the portfolio. These office developments,

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Colonial Center Brookwood located in Birmingham, Alabama, Northrop Grumman located in Huntsville, Alabama and Colonial Center TownPark 300 located in Orlando, Florida had an aggregate total cost of approximately $81.4 million. These retail assets, Colonial Pinnacle Tutwiler Farm II and Colonial Promenade Alabaster II located in Birmingham, Alabama and Colonial Pinnacle Craft Farms I located in Gulf Shores, Alabama had an aggregate total cost of $79.7 million. All three of the completed retail assets were sold during 2007 (see Note 6).

     During 2007, CRLP completed the construction of Regatta at James Island, a 212-unit condominium development located in Charleston, South Carolina. Total project cost for this for-sale residential development was approximately $25.7 million. CRLP also completed the development of Southgate on Fairview (formerly Colonial Traditions at South Park), a 47-unit condominium project located in Charlotte, North Carolina. Total project cost for this for-sale residential development was approximately $16.4 million.

     During 2006, CRLP completed the construction of a multifamily development, adding 238 apartment homes to the portfolio. This development, located in Austin, Texas, had a total cost of $24.1 million. Additionally, CRLP completed the construction of Colonial Pinnacle Tutwiler Farm, located in Birmingham, Alabama, and Colonial Pinnacle Turkey Creek, in which CRLP owns a 50% interest, located in Knoxville, Tennessee. These assets had a total cost of $72.5 million. Colonial Pinnacle Tutwiler Farm was sold during the fourth quarter of 2006.

     CRLP’s ongoing development projects and parcels of land available for expansion and construction are in various stages of the development cycle. Undeveloped land and construction in progress is comprised of the following at December 31, 2007:

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	Total						Costs
	Units/				Estimated		Capitalized
	Square		Estimated		Total Costs		to Date
	Feet (1)		Completion		(in thousands)		(in thousands)
Multifamily Projects:
Current:
Colonial Grand at Ayrsley		368		2008	$	34,900	$	26,560
Colonial Grand at Ashton Oaks		362		2009		34,300		5,718
Colonial Grand at Huntersville		250		2008		25,900		22,088
Colonial Grand at Onion Creek (formerly Double Creek)		300		2008		31,800		14,132
Colonial Grand at Shelby Farms II		154		2008		13,100		12,301
Colonial Village at Godley Lake		288		2008		26,200		10,235
Colonial Village at Matthews Commons		216		2008		21,100		2,904
Enclave (2)(3)		84		2008		26,200		19,456
Future:
Colonial Grand at Azure		188		2009		26,400		6,855
Colonial Grand at Cityway (formerly Ridell Ranch)		376		2010		34,300		4,490
Colonial Grand at Desert Vista		380		2009		52,000		15,621
Colonial Grand at Hampton Preserve		486		2010		60,800		11,660
Colonial Grand at Randal Park (4)		600		2009		76,700		10,668
Colonial Grand at South End		344		2010		52,100		10,148
Colonial Grand at Sweetwater		195		2009		24,200		6,333
Colonial Grand at Thunderbird		244		2009		29,500		7,666
Colonial Grand at Wakefield		365		2009		36,800		4,402
Commercial
Current:
Office Projects:
Colonial Center TownPark 400 (4)		176,000		2008		30,400		16,513
Metropolitan (4)		153,000		2008		35,200		26,800
Retail Projects:
Colonial Promenade Fultondale (5)		100,400		2008		7,136		2,657
Colonial Promenade Tannehill		474,000		2008		50,700		21,653
Metropolitan (4)		189,000		2008		53,700		25,900
Future:
Retail Projects:
Colonial Pinnacle Craft Farms II		75,000		2011		11,100		1,415
Colonial Promenade Huntsville		220,000		2010		17,600		8,556
For Sale Projects:
Lots:
Colonial Traditions at Gulf Shores (3)(6)		—		2012		22,800		21,576
Cypress Village (lots) (3)		236		2014		20,884		17,986
Spanish Oaks (lots)(7)		200		2011		16,896		14,044
Residential:
Grander (3)		26		2010		11,374		8,171
Cypress Village II (townhomes)(3)		96		2014		26,600		21,539
Metropolitan (4)		101		2009		41,200		12,700
Other Projects and Undeveloped Land
For-Sale Land and Predevelopment								73,587
Heathrow Land and Infrastructure								14,101
TownPark Land and Infrastructure								4,191
Land & Other								48,784
Total Consolidated Construction in Progress							$	531,410

Footnotes on the following page

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(1)	Square footage for the retail assets excludes anchor-owned square-footage.
(2)	Enclave, formerly a for-sale residential project, is now being developed as a multifamily apartment community.
(3)	During the three months ended September 30, 2007, CRLP recorded a $43.3 million non-cash impairment charge ($26.8 million net of income tax) associated with these projects as a result of the deterioration in the single family housing market. Estimated Total Costs and Capitalized Costs to Date are net of the $43.3 million impairment charge.
(4)	These projects are part of mixed-use developments.
(5)	Estimated Total Costs and Costs Capitalized to Date are net of $17.2 million, which represents the portion of the development placed into service during 2007. Total square feet is net of 261,000 square feet which represents the portion of the project placed into service during 2007.
(6)	This project will include the sale of undeveloped parcels.
(7)	Estimated Total Costs and Costs Capitalized to Date are net of $0.7 million, which represents portion of units/lots sold during 2007.

          Interest capitalized on construction in progress during 2007, 2006 and 2005 was $27.1 million, $17.1 million and $9.6 million, respectively.

9. Investment in Partially-Owned Entities and Other Arrangements

          Investments in Consolidated Partially-Owned Entities

          During July 2007, CRLP disposed of its 90% interest in Village on the Parkway, a 380,500 square foot retail asset located in Dallas, Texas. CRLP sold the property for approximately $74.4 million and recognized a gain of approximately $15.7 million from the sale. CRLP recorded minority interest of approximately $4.1 million on this sale. The proceeds from the sale were used to fund developments and for other general corporate purposes.

          During March 2006, CRLP disposed of its majority interest in Colonnade Properties, LLC for approximately $2.5 million. There was no gain or loss recognized on the disposition. At December 31, 2006, CRLP had a $3.1 million outstanding note receivable from Colonnade Properties, LLC, which was repaid during 2007.

          Investments in Unconsolidated Partially-Owned Entities

          Investments in unconsolidated partially-owned entities at December 31, 2007 and 2006 consisted of the following:

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				(in thousands)
	Percent			December 31,			December 31,
	Owned			2007			2006
Multifamily:
Arbors at Windsor Lake, Columbia, SC		10.00	%	$	569		$	614
Auberry at Twin Creeks, Dallas, TX		15.00	%		702			—
Belterra, Ft. Worth, TX		10.00	%		708			944
Carter Regents Park, Atlanta, GA		40.00	% (1)		5,282			6,231
CG at Canyon Creek, Austin, TX (Development)		25.00	%		1,226			1,416
CG at Huntcliff, Atlanta, GA		20.00	%		2,138			2,327
CG at Lake Forest, Dallas, TX (Development)		20.00	%		1,003			—
CG at Research Park, Raleigh, NC		20.00	%		1,197			1,247
CG at Traditions, Gulf Shores, AL (Development)		35.00	%		1,591			—
CMS / Colonial Joint Venture I		15.00	%		435			498
CMS / Colonial Joint Venture II		15.00	% (2)		(419	)		(252	)
CMS Florida		25.00	% (3)		(338	)		1,072
CMS Tennessee		25.00	% (4)		258			1,234
CV at Matthews, Charlotte, NC		25.00	%		1,004			1,059
DRA Alabama		10.00	%		2,260			2,311
DRA CV at Cary, Raleigh, NC		20.00	%		2,026			—
DRA Cunningham, Austin, TX		20.00	%		969			1,053
DRA Southwest Partnership		23.00	% (5)		—			495
DRA The Grove at Riverchase, Birmingham, AL		20.00	%		1,409			1,552
Fairmont at Fossil Creek, Fort Worth, TX		15.00	%		567			—
Heritage at Deerwood, Jacksonville, FL		47.00	% (6)		—			4,765
Merritt at Godley Station, Savannah, GA		35.00	% (7)		—			3,169
Park Crossing, Fairfield, CA		10.00	%		797			1,000
Stone Ridge, Columbia, SC		10.00	%		451			492
Total Multifamily					23,835			31,227
Office:
600 Building Partnership, Birmingham, AL		33.33	%		76			50
Colonial Center Mansell JV		15.00	%		1,377			2,513
DRA / CRT JV		15.00	% (8)		23,365			38,069
DRA / CLP JV		15.00	% (9)		(6,603	)		—
Huntville TIC; Huntsville, AL		40.00	% (10)		7,922			—
Total Office					26,137			40,632
Retail:
Colonial Promenade Madison, Huntsville, AL		25.00	%		2,258			2,308
Colonial Promenade Smyrna, Smyrna, TN (Development)		50.00	%		2,297			2,393
GPT / Colonial Retail JV		10.00	% (11)		(5,021	)		(3,068	)
Highway 150, LLC, Birmingham, AL		10.00	%		64			70
OZRE JV		15.00	% (12)		(6,204	)		—
Parkway Place Limited Partnership, Huntsville, AL		45.00	%		10,342			11,012
Colonial Promenade Craft Farms, Gulf Shores, AL		15.00	%		1,300			—
Parkside Drive LLC I, Knoxville, TN		50.00	%		6,898			7,178
Parkside Drive LLC II, Knoxville, TN (Development)		50.00	%		6,270			—
Colonial Promenade Alabaster II/Tutwiler II, Birmingham, AL		5.00	%		(107	)		—
					18,097			19,893
Other:
Heathrow, Orlando, FL		50.00	%		1,585			1,106
Colonial / Polar-BEK Management Company, Birmingham, AL		50.00	%		28			34
					1,613			1,140
				$	69,682		$	92,892

Footnotes on following page

98

(1)	Carter Regents Park includes a $1.2 million non-cash impairment charge that was recorded during the year ended December 31, 2007. This impairment is included in Impairment in CRLP’s Consolidated Statements of Income and Comprehensive Income.
(2)	The CMS/Colonial Joint Venture II holds one property in which CRLP has a 15% partnership interest. CRLP sold its 5% partnership interest in the other property in May 2007.
(3)	CRLP sold its interest in Colonial Grand at Bayshore during January 2007.
(4)	CRLP sold its interest in Colonial Village at Hendersonville during September 2007.
(5)	The DRA Southwest Partnership, comprised of 15 multifamily properties totaling 3,957 units, sold the properties held in the joint venture on December 21, 2006.
(6)	CRLP sold its interest in Heritage at Deerwood during March 2007.
(7)	CRLP acquired the remaining 65% interest in Merritt at Godley Station during May 2007.
(8)	As of December 31, 2007, the DRA/CRT JV included 18 properties located in Ft. Lauderdale, Jacksonville and Orlando, Florida; Atlanta, Georgia; Rockville, Maryland; Charlotte, North Carolina; Memphis, Tennessee and Houston, Texas. CRLP sold its interest in Saint Petersburg Centre and Las Olas Centre during 2007.
(9)	As of December 31, 2007, the DRA/CLP JV included 16 office properties and two retail properties located in Birmingham, Alabama; Orlando and Tampa, Florida; Atlanta, Georgia; Charlotte, North Carolina and Austin, Texas. Amount includes the value of CRLP’s investment of approximately $29.2 million, offset by the excess basis difference on the transaction of approximately $35.8 million, which is being amortized over the life of the properties.
(10)	In November 2007, CRLP and its partner, DRA, disposed of their interest in nine office properties totaling 1.7 million square feet located in Huntsville, Alabama, that were originally acquired from CRLP in June 2007 in connection with the office joint venture transaction. As part of the transaction, CRLP acquired a 40% interest (of which 30% is held by CPSI) in three TIC investments of the same nine office properties for a total acquisition price of $88.7 million, which included the issuance of $43.0 million of third-party secured financing and $30.4 million of ground lease financing. The value of CRLP’s investment is offset by the excess basis difference on the transaction of approximately $12.0 million, which is being amortized over the life of the properties. CRLP continues to manage the nine properties and intends to sell CPSI’s 30% ownership position in each of these TIC investments to approximately 10% over the next 12 months through offerings sponsored by Bluerock Real Estate, LLC to unrelated TIC investors and to retain CRLP’s 10% ownership interest.
(11)	Amount includes the value of CRLP’s investment of approximately $4.4 million, offset by the excess basis difference on the transaction of approximately $9.4 million, which is being amortized over the life of the properties.
(12)	As of December 31, 2007, the OZRE JV included 11 retail properties located in Birmingham, Alabama; Jacksonville, Orlando, Punta Gorda and Tampa, Florida; Athens, Georgia and Houston, Texas. Amount includes the value of CRLP’s investment of approximately $11.1 million, offset by the excess basis difference on the transaction of approximately $17.3 million, which is being amortized over the life of the properties.

          During January 2007, CRLP sold its 25% ownership interest in Colonial Grand at Bayshore, a 376-unit multifamily apartment community located in Sarasota, Florida, for $15.0 million. The proceeds were used to repay a collateralized mortgage loan and a portion of the borrowings under CRLP’s unsecured credit facility.

          During February 2007, CRLP acquired a 15% interest in Fairmont at Fossil Creek, a 240-unit multifamily apartment community located in Fort Worth, Texas. CRLP’s investment in the partnership was approximately $3.2 million, which consisted of $2.6 million of newly issued mortgage debt and $0.6 million of cash. The cash portion of this investment was funded from borrowings under CRLP’s unsecured credit facility.

          During February 2007, the DRA/CRT JV sold St. Petersburg Center, a 675,000 square foot office asset located in Tampa, Florida. The asset was sold for $14.0 million, which represents CRLP’s 15% interest in the sales proceeds. CRLP used the proceeds from the sale to repay a collateralized mortgage loan.

          During February 2007, CRLP acquired a 15% interest in Auberry at Twin Creeks, a 216-unit multifamily apartment community located in Dallas, Texas. CRLP’s investment in the partnership was approximately $3.1 million, which consisted of $2.6 million of newly issued mortgage debt and $0.5 million of cash. The cash portion of this investment was funded from borrowings under CRLP’s unsecured credit facility.

          During February 2007, CRLP entered into a joint venture agreement with a 65% partner to complete the development of Colonial Grand at Traditions, a 324-unit multifamily project located in Gulf Shores, Alabama. CRLP will act as the general contractor for this project and will earn development / general contractor fees which will be recognized as earned according to the terms of the construction and development agreement. CRLP’s initial investment in this joint venture was $3.0 million in cash and CRLP has guaranteed up to $3.5 million of the construction loan that the joint venture will use to complete the project. In addition, if this property is ultimately sold to a third party, CRLP will receive distributions of 50% of the gains upon the sale of the property.

          During May 2007, CRLP acquired a 20% interest in Colonial Village at Cary, a 319-unit multifamily apartment community located in Raleigh, North Carolina. CRLP’s investment in the partnership was approximately $6.0 million, which consisted of $4.3 million of newly issued mortgage debt and $1.7 million of cash. The cash portion of this investment was funded from borrowings under CRLP’s unsecured credit facility.

99

          During May 2007, CRLP acquired the remaining 65% interest in Merritt at Godley Station from our joint venture partner. CRLP’s additional investment in the property was approximately $20.9 million, which consisted of the assumption of $12.3 million of existing mortgage debt and $8.6 million of cash. The cash portion of this investment was funded by proceeds from asset sales and borrowings under CRLP’s unsecured credit facility.

          During June 2007, the Trust completed its office joint venture transaction with DRA. The Trust sold to DRA its 69.8% interest in the newly formed joint venture that became the owner of 24 office properties and two retail properties that were previously wholly-owned by CRLP. CRLP retained a 15% minority interest in the DRA/CLP JV, as well as the management and leasing responsibilities for the 26 properties owned by the DRA/CLP JV. As of December 31, 2007, DRA owned approximately 72.4%, a subsidiary of CRLP owned 15% and certain limited partners of CRLP own the remaining approximate 12.6% of the DRA/CLP JV interests (see Note 2).

          During June 2007, the Trust completed its retail joint venture transaction with OZRE. The Trust sold to OZRE its 69.8% interest in the newly formed joint venture that became the owner of 11 retail properties that were previously wholly-owned by CRLP. CRLP retained a 15% minority interest in the OZRE JV as well as the management and leasing responsibilities for the 11 properties owned by the OZRE JV. As of December 31, 2007, OZRE owned approximately 72.5%, a subsidiary of CRLP owned 15% and certain limited partners of CRLP own the remaining approximate 12.5% of the OZRE JV interests (see Note 2).

          During July 2007, CRLP sold 85% of its interest in Colonial Pinnacle Craft Farms I to a joint venture partner. The retail asset includes 243,000 square feet, excluding anchor-owned square footage, and is located in Gulf Shores, Alabama (see Note 6).

          During July 2007, the DRA/CRT joint venture disposed of Las Olas Centre, a 469,200 square foot office asset located in Fort Lauderdale, Florida. CRLP sold its 15% interest in the property for approximately $34.6 million and recognized a gain of approximately $6.6 million from the sale. The proceeds from the sale were used to repay the associated mortgage on the asset and to fund investment activity.

          During September 2007, the CMS-Tennessee joint venture disposed of Colonial Village at Hendersonville, a 364-unit multifamily apartment community located in Nashville, Tennessee. CRLP sold its 25% interest in the property for approximately $6.8 million and recognized a gain of approximately $1.7 million from the sale. The proceeds from the sale were used to fund ongoing developments and for other general corporate purposes.

          During November 2007, the DRA/CLP JV disposed of nine office properties containing 1.7 million square feet located in Huntsville, Alabama for net proceeds of approximately $209 million (CRLP’s 15% interest in these assets totaled approximately $31.4 million). As part of the transaction, CRLP acquired a 40% interest (of which 30% is held by CPSI) in three separate tenancy in common (“TIC”) investments of the same nine office properties for a total acquisition price of $88.7 million, which included the issuance of $43.0 million of third-party financing and $30.4 million of ground lease financing. CRLP continues to manage the nine properties and intends to sell CPSI’s 30% ownership in each of these TIC investments and to retain CRLP’s 10% ownership interest during 2008 through offerings sponsored by Bluerock Real Estate, LLC (the 60% partner) to unrelated TIC investors and to retain CRLP’s 10% ownership interest.

          During December 2007, CRLP sold 95% of its interest in Colonial Promenade Alabaster II and two build-to-suit outparcels at Colonial Pinnacle Tutwiler II to a joint venture partner. The retail developments are located in Birmingham, Alabama (see Note 6).

          During December 2007, CRLP entered into a 50% / 50% joint venture agreement for the development of Turkey Creek Phase III, a 170,000 square foot development located in Knoxville, Tennessee. CRLP’s initial investment in this joint venture to acquire the land was approximately $6.0 million. The development of this property will be funded with a construction loan obtained by the joint venture.

          During December 2007, CRLP entered into a 20% joint venture with McDowell Properties to develop Colonial Grand at Lake Forest, a 529-unit multifamily apartment community located in Dallas, Texas. CRLP will act as the general contractor for this project and will earn development / general contractor fees which will be recognized as earned according to the terms of the construction and development agreement. CRLP’s initial equity investment was approximately $1.3 million. The total cost of the development is expected to be approximately $62 million and will be funded primarily through a construction loan.

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          During January 2006, CRLP acquired a 20% partnership interest in Colonial Grand at Huntcliff, a 358-unit multifamily apartment community located in Atlanta, Georgia. CRLP’s 20% investment in the partnership was $8.0 million, which consisted of $5.2 million of newly issued mortgage debt and $2.8 million of cash. The cash portion of this investment was funded from borrowings under CRLP’s unsecured credit facility.

          During March 2006, CRLP acquired a 25% partnership interest in Colonial Village at Matthews, a 370-unit multifamily apartment community located in Charlotte, North Carolina. CRLP’s 25% investment in the partnership was $4.9 million, which consisted of the assumption of $3.7 million of newly issued mortgage debt and $1.2 million of cash. The cash portion of this investment was funded from borrowings under CRLP’s unsecured credit facility.

          During March 2006, CRLP entered into a joint venture agreement with a 75% partner for the completion of the Canyon Creek multifamily development project, including the ultimate sale of this property to a third party. CRLP will act as the general contractor for this project and will earn development / general contractor fees which will be recognized as earned according to the terms of the construction and development agreement. CRLP’s initial investment in this joint venture was $1.5 million in cash and CRLP has guaranteed up to $4.0 million of the construction loan that the joint venture will use to complete the project. In addition, CRLP will receive distributions of 50% of the gains upon the sale of the property.

          During March 2006, CRLP completed the sale of a 90% interest in four shopping centers valued in the transaction at approximately $127.3 million to a joint venture partner. CRLP maintained a 10% interest in the properties, and the responsibility of leasing and managing the assets in the joint venture, which represent 0.7 million square feet of retail shopping space. The shopping centers include Colonial Promenade Boulevard Square in Pembroke Pines, Florida; Colonial Shoppes Pines Plaza in Pembroke Pines, Florida; Colonial Shoppes College Parkway in Fort Myers, Florida; and Colonial Promenade Deerfield in Deerfield Beach, Florida. As a part of the sale, CRLP’s joint venture partner assumed 90% of the outstanding collateralized debt of $74.7 million. The proceeds from the sale were used to repay a portion of the borrowings under CRLP’s unsecured credit facility.

          During March 2006, CRLP sold its 15% interest in four multifamily assets including Colonial Grand at Barrington, a 176-unit apartment community located in Macon, Georgia; Colonial Grand at Inverness Lakes, a 312-unit apartment community located in Mobile, Alabama; Colonial Village at Hillwood, a 160-unit apartment community located in Montgomery, Alabama; and Colonial Village at Stockbridge, a 240-unit apartment community located in Atlanta, Georgia. CRLP’s interest in these assets was sold for a total sales price of $6.0 million and the proceeds were used to repay a portion of the borrowings under CRLP’s unsecured credit facility.

          During April 2006, the DRA/CRT JV sold two office properties, including Paragon Place, a 145,000 square foot building located in Richmond, Virginia and Cigna Plaza, a 127,000 square foot building located in Dallas, Texas. On June 1, 2006, the DRA/CRT joint venture sold one office property, Gwinnett Center, a 263,000 square foot building located in Atlanta, Georgia. CRLP’s interest in these three assets was sold for a total sales price of approximately $11.2 million. The proceeds were used to repay associated collateralized loans of the joint venture.

          During May 2006, CRLP sold its 20% interest in Rancho Viejo, a 266-unit multifamily apartment community located in Phoenix, Arizona which was a property in the DRA Southwest Partnership. CRLP’s interest in this asset was sold for a total sales price of $3.5 million and the proceeds were used to repay an associated collateralized loan and the remaining proceeds were distributed to CRLP and were used to repay a portion of the borrowings under CRLP’s unsecured credit facility.

          During June 2006, CRLP completed a combination joint venture, sale and long-term management and leasing assignment with UBS Wealth Management (UBS) for Colonial Center at Mansell Overlook located in Atlanta, Georgia. Colonial Center at Mansell Overlook consists of four 6-story, Class-A office buildings, five low-rise buildings and two street-front boutique retail shops. The suburban office park is 98% leased and totals approximately 877,000 square feet with three sites available for future office and retail development. CRLP will retain a 15% interest in the joint venture arrangement with UBS for the four 6-story, Class-A office buildings, two retail centers and three development parcels. UBS will assume 100% ownership of the five low-rise buildings. CRLP will maintain operational management and leasing of the office assets through a long-term management and leasing contract. Net proceeds to CRLP totaled approximately $140.6 million, of which $16.5 million was used to pay off a collateralized loan, $74.7 million was reinvested in additional property acquisitions and the remaining $51.2 million was used to reduce CRLP’s outstanding unsecured credit facility.

          During July 2006, the DRA/CRT JV sold Charlotte Vanguard, a 527,500 square foot office asset located in Charlotte, North Carolina. During September 2006, the DRA/CRT JV sold Tallahassee Center, an 836,400 square foot office asset located in Tallahassee, Florida. CRLP’s interest in these two assets was sold for a total sales price of approximately $23.6 million. The proceeds were used to repay associated collateralized loans of the joint venture.

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          During September 2006, CRLP purchased a 10% interest in Belterra, a 288-unit multifamily apartment community located in Fort Worth, Texas. CRLP’s 10% investment in the partnership was $2.7 million, which consisted of $2.0 million of newly issued mortgage debt and $0.7 million of cash. The cash portion of this investment was funded from borrowings under CRLP’s unsecured credit facility.

          During November 2006, CRLP purchased a 10% interest in Park Crossing, a 200-unit multifamily apartment community located in Fairfield, California. CRLP’s investment in the partnership was approximately $3.4 million, which consisted of $2.6 million of newly issued mortgage debt and $0.8 million of cash. The cash portion of this investment was funded from borrowings under CRLP’s unsecured credit facility.

          During December 2006, CRLP sold 15 multifamily assets in which it had an approximate 23% interest through DRA Southwest Partnership. The total sales price was approximately $468.0 million and CRLP’ portion of the sales price was approximately $108.0 million. Proceeds from the sale were used to pay off CRLP’s portion of the existing mortgage debt of $53.6 million associated with these properties and the remaining proceeds of $54.4 million were used to reduce CRLP’s unsecured credit facility.

          During December 2006, the DRA/CRT JV sold Tollway Crossing, a 152,200 square foot office asset located in Dallas, Texas. CRLP’s interest in this asset was sold for a total sales price of approximately $2.9 million. The proceeds were used to repay associated collateralized loans of the joint venture.

          During December 2006, CRLP sold its remaining 10% interest in the Cornfeld/South Florida joint venture for a total sales price of $7.4 million. The proceeds from the sale were used to fund investment activities. The properties sold in the transaction include Colonial Promenade Boulevard Square in Pembroke Pines, Florida; Colonial Shoppes Pines Plaza in Pembroke Pines, Florida; Colonial Shoppes College Parkway in Fort Myers, Florida; and Colonial Promenade Deerfield in Deerfield Beach, Florida, which represent 0.7 million square feet of retail shopping space.

          Combined financial information for CRLP’s investments in unconsolidated partially-owned entities since the date of CRLP’s acquisitions is as follows:

	As of December 31,
(in thousands)	2007		2006
Balance Sheet
Assets
Land, building, & equipment, net	$	3,713,743	$	2,414,827
Construction in progress		106,098		80,347
Other assets		342,894		273,159
Total assets	$	4,162,735	$	2,768,333
Liabilities and Partners’ Equity
Notes payable (1)	$	3,224,146	$	2,115,048
Other liabilities		115,345		48,517
Partners’ Equity		823,244		604,768
Total liabilities and partners’ capital	$	4,162,735	$	2,768,333

Statement of Operations

(for the years ended)	2007			2006			2005
Revenues	$	425,115		$	380,280		$	168,108
Operating expenses		(174,278	)		(155,845	)		(70,155	)
Interest expense		(154,896	)		(143,862	)		(55,886	)
Depreciation, amortization and other		(68,927	)		87,613			(49,711	)
Net income	$	27,014		$	168,186		$	(7,644	)

(1) CRLP’s pro rata portion of indebtedness, as calculated based on ownership percentage, at December 31, 2007 and 2006 was $544.2 million and $367.2 million, respectively.

          The following table summarizes balance sheet financial data of significant unconsolidated partially-owned entities in which CRLP had ownership interests as of December 31, 2007 and 2006 (dollar amounts in thousands):

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	Total Assets				Total Debt				Total Equity
	2007		2006		2007		2006		2007		2006
DRA/CRT	$	1,248,807	$	1,542,311	$	993,264	$	1,163,968	$	202,162	$	316,002
DRA/CLP		973,861		—		741,907		—		194,210		—
OZRE		362,734		—		284,000		—		74,012		—
	$	2,585,402	$	1,542,311	$	2,019,171	$	1,163,968	$	470,384	$	316,002

          The following table summarizes income statement financial data of significant unconsolidated partially-owned entities in which CRLP had ownership interests for the year ended December 31, 2007 and 2006 (dollar amounts in thousands):

	Total Revenues						Net Income									Share of Net Income (1)
	2007		2006		2005		2007			2006			2005			2007			2006			2005
DRA/CRT	$	179,049	$	215,676	$	54,613	$	14,398		$(	41,909	)	$	(12,015	)	$	2,941		$	(6,286	)	$	(1,802	)
DRA/CLP		72,824		—		—		(1,682	)		—			—			975			—			—
OZRE		18,532		—		—		(4,928	)		—			—			(232	)		—			—
	$	270,405	$	215,676	$	54,613	$	7,788		$(	41,909	)	$	(12,015	)	$	3,684		$	(6,286	)	$	(1,802	)

(1) Includes amortization of excess basis differences and management fee eliminations.

10. Segment Information

          CRLP manages its business based on the performance of four operating portfolios: multifamily, office, retail and for-sale residential. As a result of the impairment charge recorded during 2007 related to CRLP’s for-sale residential projects, CRLP’s for-sale residential operating portfolio met the quantitative threshold to be considered a reportable portfolio. The results of operations and assets of the for-sale residential portfolio were previously included in other income (expense) and in unallocated corporate assets, respectively, due to the insignificance of this operating portfolio in prior periods. Each portfolio has a separate management team that is responsible for acquiring, developing, managing and leasing properties within such portfolio. The pro-rata portion of the revenues, net operating income (“NOI”), and assets of the partially-owned unconsolidated entities that CRLP has entered into are included in the applicable portfolio information. Additionally, the revenues and NOI of properties sold that are classified as discontinued operations are also included in the applicable portfolio information. In reconciling the portfolio information presented below to total revenues, income from continuing operations, and total assets, investments in partially-owned unconsolidated entities are eliminated as equity investments and their related activity are reflected in the consolidated financial statements as investments accounted for under the equity method, and discontinued operations are reported separately. Management evaluates the performance of its multifamily, office and retail portfolios and allocates resources to them based on portfolio NOI. Portfolio NOI is defined as total property revenues, including unconsolidated partnerships and joint ventures, less total property operating expenses (such items as repairs and maintenance, payroll, utilities, property taxes, insurance and advertising). Management evaluates the performance of its for-sale residential business based on net gains / losses. Presented below is portfolio information, for the multifamily, office and retail portfolios, including the reconciliation of total portfolio revenues to total revenues and total portfolio NOI to income from continuing operations for the years ended December 31, 2007, 2006 and 2005, and total portfolio assets to total assets as of December 31, 2007 and December 31, 2006. Additionally, CRLP’s net gains / losses on for-sale residential projects for the years ended December 31, 2007, 2006 and 2005 are presented below:

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	For the Year Ended December 31,
(in thousands)	2007			2006			2005
Revenues:
Segment Revenues:
Multifamily	$	307,942		$	320,519		$	279,744
Office		98,746			172,381			133,368
Retail		70,668			110,291			159,460
Total Segment Revenues		477,356			603,191			572,572
Partially-owned unconsolidated entities — Mfam		(10,287	)		(18,906	)		(15,526	)
Partially-owned unconsolidated entities — Off		(41,397	)		(33,736	)		(8,376	)
Partially-owned unconsolidated entities — Rtl		(19,037	)		(14,497	)		(6,430	)
Construction revenues		38,448			30,484			—
Other non-property related revenue		19,352			17,693			7,939
Discontinued operations property revenues		(62,918	)		(138,852	)		(175,611	)
Total Consolidated Revenues		401,517			445,377			374,568
NOI:
Segment NOI:
Multifamily		183,106			190,838			166,972
Office		63,565			112,616			90,275
Retail		48,742			79,321			112,103
Total Segment NOI		295,413			382,775			369,350
Partially-owned unconsolidated entities — Mfam		(4,991	)		(10,813	)		(8,729	)
Partially-owned unconsolidated entities — Off		(24,114	)		(19,533	)		(4,561	)
Partially-owned unconsolidated entities — Rtl		(13,051	)		(9,897	)		(4,494	)
Other non-property related revenue		19,352			17,693			7,939
Discontinued operations property NOI		(33,727	)		(83,215	)		(108,475	)
Impairment — discontinued ops (1)		(2,950	)		—			—
Impairments — continuing ops (2)		(43,679	)		(1,600	)		—
Construction NOI		3,902			1,073			—
Property management expenses		(12,182	)		(12,590	)		(12,615	)
General and administrative expenses		(27,160	)		(21,098	)		(19,549	)
Management fee and other expenses		(15,677	)		(12,618	)		(4,576	)
Restructuring charge		(3,019	)		—			—
Depreciation		(103,107	)		(118,043	)		(100,944	)
Amortization		(10,596	)		(17,535	)		(39,979	)
Other		(1,249	)		(884	)		1,370
Income from operations		23,165			93,715			74,737
Total other income (expense), net (3)		(46,130	)		(5,370	)		(2,336	)
Income before minority interest and discontinued operations	$	(22,965	)	$	88,345		$	72,401

	December 31,		December 31,
(in thousands)	2007		2006
Assets
Segment Assets
Multifamily	$	2,449,558	$	2,539,367
Office		82,630		799,089
Retail		149,933		663,216
For-Sale Residential		211,729		140,350
Total Segment Assets		2,893,850		4,142,022
Unallocated corporate assets (4)		335,787		289,752
	$	3,229,637	$	4,431,774

(1)	Of the $3.0 million impairment charge presented in discontinued operations, $2.5 million is related to a retail asset sold during the third quarter of 2007, and $0.45 million is a result of fire damage sustained during the third quarter of 2007 at a multifamily apartment community, which was classified as Held for Sale on CRLP’s Consolidated Balance Sheet at December 31, 2007.
(2)	Of the $43.7 million impairment charge presented in continuing operations, $43.3 million is a non-cash impairment charge ($26.8 million net of income tax) recorded during the third quarter of 2007 related to CRLP’s for-sale residential business as a result of the deterioration in the single family housing market and dislocation in the mortgage markets, and $0.35 million is a result of fire damage sustained during the third quarter of 2007 at a multifamily apartment community.
(3)	For-sale residential activities including net gain on sales and income tax expense (benefit) are included in other income. (See table below for additional details on for-sale residential activities and also Note 6 related to for-sale activities).
(4)	Includes CRLP’s investment in partially-owned entities of $69,682 and $92,892 as of December 31, 2007 and 2006, respectively.

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For-Sale Residential

	For the Year Ended December 31,
(in thousands)	2007			2006			2005
Gains on for-sale residential sales	$	3,137		$	2,830		$	—
Impairment		(43,300	)		(1,600	)		—
Income tax benefit (expense)		15,398			(1,404	)		—
Income (loss) from for-sale residential sales	$	(24,765	)	$	(174	)	$	—

11. Notes and Mortgages Payable

          Notes and mortgages payable at December 31, 2007 and 2006 consist of the following:

	(in thousands)
	2007		2006
Unsecured credit facility	$	39,316	$	185,000
Mortgages and other notes:
2.00% to 6.00%		714,197		801,991
6.01% to 7.50%		843,326		1,288,307
7.51% to 9.00%		45,000		122,608
	$	1,641,839	$	2,397,906

          As of December 31, 2007, CRLP, with the Trust as guarantor, has a $500.0 million unsecured revolving credit facility (the “Credit Facility”) with Wachovia Bank, National Association (“Wachovia”), as Agent for the lenders, Bank of America, N.A. as Syndication Agent, Wells Fargo Bank, National Association, Citicorp North America, Inc. and Regions Bank, as Co-Documentation Agents, and U.S. Bank National Association and PNC Bank, National Association (“PNC Bank”), as Co-Senior Managing Agents and other lenders named therein. During June 2007, the Trust, through CRLP, amended the Credit Facility and repaid its outstanding $100 million unsecured term loan. The amended Credit Facility has a maturity date of June 2012. In addition, CRLP has a $40.0 million cash management line provided by Wachovia. Any amounts outstanding under the cash management line mature on March 22, 2008.

          Base rate loans and revolving loans are available under the Credit Facility. The Credit Facility also include a competitive bid feature that allows CRLP to convert up to $250.0 million under the Credit Facility to a fixed rate and for a fixed term not to exceed 90 days. Generally, base rate loans bear interest at Wachovia’s designated base rate, plus a base rate margin ranging up to 0.25% based on CRLP’s unsecured debt ratings from time to time. Revolving loans bear interest at LIBOR plus a margin ranging from 0.50% to 1.15% based on CRLP’s unsecured debt ratings from time to time. Competitive bid loans bear interest at LIBOR plus a margin, as specified by the participating lenders. Term loans are available under the term loan facility and bear interest at LIBOR plus a margin ranging from 0.55% to 1.35% based on CRLP’s unsecured debt ratings from time to time.

          The Credit Facility is primarily used by CRLP to finance property acquisitions and developments and had an outstanding balance at December 31, 2007 of $39.3 million. There was $12.3 million outstanding on the cash management line at December 31, 2007. The interest rate of the Credit Facility, including the competitive bid balance, is 5.47% and 5.64% at December 31, 2007 and 2006, respectively.

          During July 2007, CRLP repaid its outstanding $175 million 7.0% unsecured senior notes from proceeds received from asset sales.

          During July 2007, the DRA/CLP JV increased mortgage indebtedness on the properties it owns from approximately $588.2 million to approximately $742.0 million. The additional proceeds, of approximately $153.8 million, were utilized to payoff partner loans and establish a capital reserve, with the remainder being distributed to the partners on a pro-rata basis. As a result, CRLP received a distribution of approximately $18.6 million (see Note 2).

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          During July 2007, the OZRE JV increased mortgage indebtedness on the properties it owns from approximately $187.2 million to approximately $284.0 million. The additional proceeds, of approximately $96.8 million, were utilized to payoff partner loans and establish a capital reserve, with the remainder being distributed to the partners on a pro-rata basis. As a result, CRLP received a distribution of approximately $13.8 million (see Note 2).

          During June 2007, CRLP repaid $409.0 million of collateralized mortgages associated with 37 multifamily communities with proceeds from asset sales. In conjunction with the repayment, CRLP incurred $29.2 million of prepayment penalties. These penalties were offset by $16.7 million of write-offs related to the mark-to-market intangibles on the associated mortgage debt repaid. The weighted average interest rate of the mortgages repaid was 7.0%.

          During August 2006, CRLP completed a $275 million senior notes offering of 6.05% unsecured notes due September 1, 2016. Interest on the notes is payable semi-annually on the first day of every September and March, beginning March 1, 2007. The net proceeds of approximately $271.7 million, after discount and issuance costs, were used to reduce a portion of the outstanding balance under the Credit Facility.

          During July 2006, CRLP repaid its $65.0 million 8.05% unsecured senior notes, which matured on that date. The notes were repaid with borrowings from CRLP’s unsecured credit facility.

          At December 31, 2007, CRLP had $1.6 billion in unsecured indebtedness including balances outstanding on its Credit Facility and certain other notes payable. The remainder of CRLP’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 approximately $119.5 million at December 31, 2007.

          The aggregate maturities of notes and mortgages payable, including CRLP’s Credit Facility at December 31, 2007, were as follows:

	(in thousands)
2008	$	43,954
2009		682
2010		320,721
2011		100,762
2012		140,121
Thereafter		1,035,599
	$	1,641,839

          Based on borrowing rates available to CRLP for notes and mortgages payable with similar terms, the estimated fair value of its notes and mortgages payable at December 31, 2007 and 2006 was approximately $1.7 billion and $2.4 billion, respectively.

          The Credit Facility and certain other loan documents contain various covenants and events of default which could trigger early repayment obligations, including, but not limited to the following: nonpayment, violation or breach of certain covenants; failure to perform certain covenants beyond a cure period; certain financial ratios; and generally not paying CRLP’s debts as they become due. At December 31, 2007, CRLP was in compliance with these covenants.

12. Derivative Instruments

          SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by SFAS No. 133, CRLP records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

          For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of

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the derivative is recognized directly in earnings. CRLP assesses the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative hedging instrument with the changes in fair value or cash flows of the designated hedged item or transaction. For derivatives not designated as hedges, changes in fair value are recognized in earnings.

          CRLP’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements or other identified risks. To accomplish this objective, CRLP primarily uses interest rate swaps (including forward starting interest rate swaps) and caps as part of its cash flow hedging strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. During 2007, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt and forecasted issuances of debt. As of December 31, 2007, CRLP had no outstanding interest rate swap agreements.

          At December 31, 2007, there were no derivatives included in other assets. At December 31, 2006, derivatives with a fair value of $0.7 million were included in other assets. The change in net unrealized gains/(losses) of ($0.5) million in 2007, $3.0 million in 2006 and $1.6 million in 2005 for derivatives designated as cash flow hedges is separately disclosed in the statements of changes in shareholders’ equity and comprehensive income. At December 31, 2007, there were no derivatives that were not designated as hedges. The change in fair value of derivatives not designated as hedges of $2.7 million and ($0.1) million is included in other income (expense) in 2006 and 2005, respectively. There was no hedge ineffectiveness during 2007. Hedge ineffectiveness of ($0.1) million and $1.1 million on cash flow hedges due to index mismatches was recognized in other income during 2006 and 2005, respectively. As of December 31, 2007, all of CRLP’s hedges are designated as cash flow hedges under SFAS No. 133.

          Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on CRLP’s hedged debt. The changes in accumulated other comprehensive income for such reclassifications to interest expense was $0.6 million, $0.5 million and $0.5 million during 2007, 2006 and 2005, respectively. CRLP estimates a net impact to interest expense of approximately $0.6 million for amounts that will be reclassified from accumulated other comprehensive income in 2008.

          During May 2007, CRLP settled a $100.0 million interest rate swap and received a payment of approximately $0.6 million. This interest rate swap was in place to convert a portion of the floating rate payments on CRLP’s Credit Facility to a fixed rate. This derivative originally qualified for hedge accounting under SFAS No. 133. However, in May of 2007, due to CRLP’s then-pending joint venture transactions (see Note 2) and the expected resulting pay down of CRLP’s term loan and Credit Facility, this derivative no longer qualified for hedge accounting which resulted in a gain of approximately $0.4 million.

          During February 2006, CRLP settled a $200.0 million forward starting interest rate swap and received a payment of approximately $4.3 million. This forward starting interest rate swap was in place to convert the floating rate payments on certain expected future debt obligations to a fixed rate. This derivative originally qualified for hedge accounting under SFAS No. 133. However, in December of 2005 as a result of a modification to the forecasted transaction, this derivative no longer qualified for hedge accounting. As a result, CRLP began treating this derivative as an economic hedge during 2005. Changes in the fair value of this derivative were recognized in earnings in other income (expense) and totaled approximately $2.7 million for the period of time the derivative was active during 2006. The fair value of this derivative at the time it no longer qualified for hedge accounting was approximately $1.5 million, which will remain in accumulated other comprehensive income and be reclassified to interest expense over the applicable period of the associated debt, which is approximately nine years at December 31, 2007.

          During June 2006, CRLP entered into a forward starting interest rate swap agreement to hedge the interest rate risk associated with a forecasted debt issuance that occurred on August 28, 2006. This interest rate swap agreement had a notional amount of $200 million, a fixed interest rate of 5.689%, and a maturity date of November 15, 2016. This interest rate swap agreement was settled concurrent with CRLP’s issuance of $275 million of debt in the senior notes offering completed August 28, 2006 (see Note 11). The settlement resulted in a settlement payment of approximately $5.2 million by CRLP. This amount will remain in other comprehensive income and be reclassified to interest expense over the remaining term of the associated debt, which is approximately nine years at December 31, 2007. On August 15, 2006, CRLP also entered into a $75 million treasury lock agreement to hedge the interest rate risk associated with the remaining $75 million of senior notes issued on August 28, 2006. This treasury lock agreement was settled on August 28, 2006 for a settlement payment of approximately $0.1 million which will also remain in other comprehensive income and be reclassified to interest expense over the remaining life of the associated debt.

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          During November 2006, CRLP settled a $175.0 million forward starting interest rate swap and received a payment of approximately $2.9 million. This forward starting interest rate swap was in place to convert the floating rate payments on certain expected future debt obligations to a fixed rate. In November of 2006, CRLP settled this forward starting swap agreement as a result of its determination that the forecasted debt issuance was no longer probable due to CRLP’s strategic shift (see Note 2). In December 2006, CRLP made the determination that it was probable that the forecasted debt issuance would not occur. As a result, CRLP reversed the $2.9 million in other comprehensive income to other income during December of 2006.

          Further, CRLP has a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, CRLP has not sustained a material loss from those instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives.

13. Capital Structure

          At December 31, 2007, the Trust controlled CRLP as the sole general partner and as the holder of 82.5% of the common units of CRLP. The limited partners of CRLP who hold redeemable or common units, are those persons (including certain officers and trustees) who, at the time of the initial public offering, elected to hold all or a portion of their interest in the form of units rather than receiving common shares of the Trust, or individuals from whom CRLP acquired certain properties, who elected to receive units in exchange for the properties. Redeemable units represent the number of outstanding limited partnership units as of the date of the applicable balance sheet, valued at the closing market value of the Trust’s common shares. Each redeemable unit may be redeemed by the holder thereof for either one common share or cash equal to the fair market value thereof at the time of such redemption, at the option of the Trust.

          The rollforward of redeemable units at redemption value for the year ended December 31, 2007 is as follows:

	(in thousands)
Redemption value, December 31, 2006	$	495,956
Net income available to common unitholders allocated to limited partners		10,099
Adjustment of limited partner common equity to redemption value (1)		(278,561	)
Redemption value, December 31, 2007	$	227,494

(1) This amount includes the impact of the $10.63 special distribution related to the June 2007 joint venture transactions disclosed in Note 2.

          In 1999, CRLP issued $100 million of Series B Cumulative Redeemable Perpetual Preferred Units (“Series B preferred units”) in a private placement, that are exchangeable for Series B preferred shares of the Trust, net of offering costs of $2.6 million. On February 18, 2004, CRLP modified the terms of the $100.0 million 8.875% Preferred Units. Under the modified terms, the Preferred Units bear a distribution rate of 7.25% and are redeemable at the option of CRLP, in whole or in part, after February 24, 2009, at the cost of the original capital contribution plus the cumulative priority return, whether or not declared. The terms of the Preferred Units were further modified on March 14, 2005 to extend the redemption date from February 24, 2009 to August 24, 2009. The Preferred Units are exchangeable for 7.25% Series B Preferred Shares of the Trust, in whole or in part at anytime on or after January 1, 2014, at the option of the holders.

          The Board of Trustees of the Trust manages CRLP by directing the affairs of CRLP. The Trust’s interests in CRLP entitle it to share in cash distributions from, and in the profits and losses of, CRLP in proportion to the Trust’s percentage interest therein and entitle the Trust to vote on all matters requiring a vote of the limited partners.

14. Cash Contributions

          In April 2007, the Board of Trustees of the Trust authorized the redemption of, and in May 2007 the Trust redeemed all of its remaining outstanding 4,190,414 Series E Depositary Shares for a total cost of $104.8 million. In connection with the redemption of the remaining outstanding Series E Depositary Shares, the Board of Trustees of the Trust, as general partner of CRLP, also authorized the redemption of all outstanding Series E Preferred Units, all of which were held by the Trust as general partner of CRLP. In connection with this redemption, CRLP wrote off $0.3 million of associated issuance costs. The redemption price was $25.00 per Series E Depositary Share plus accrued and unpaid dividends for the period from April 1,

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2007 through and including the redemption date, for an aggregate redemption price per Series E Depositary Share of $25.3175. Each Depositary Share represented 1/100 of a 7.62% Series E Cumulative Redeemable Preferred Share of the Trust.

          In June 2007, in connection with the office and retail joint venture transactions, all common equity partners of CRLP were distributed units in the DRA/CLP JV and the OZRE JV based on 85% of their ownership interest in CRLP. CRLP recorded this distribution at book value, which reduced common unit equity by approximately $229.4 million during 2007 (see Note 2). Additionally, in connection with these transactions, all common equity partners received a special cash distribution of $0.21 per unit, or $12.0 million in the aggregate.

          In September 2005, the Trust issued 4,500,000 of its common shares at $43.75 per share, or an aggregate offering price of approximately $196.9 million, in a public offering in which Merrill Lynch & Co. and Wachovia Securities acted as joint book-running managers. The Trust contributed the proceeds of this offering to CRLP in exchange for 4,500,000 common units of limited partnership interest. Net proceeds to CRLP totaled $187.3 million after payment of underwriting fees and issuance costs. CRLP used approximately $145.5 million of the net proceeds to repay the outstanding balance on its bridge loans (see Note 11), and used the remaining proceeds (which were temporarily used to pay down the outstanding balances under the Credit Facilities), together with additional borrowings under CRLP’s Credit Facilities, to fund its $49.0 million equity investment in its joint venture with DRA/CRT joint venture.

          In April 2005, in connection with the Cornerstone acquisition (see Note 4), the Trust issued 5,326,349 Series E Cumulative Redeemable Preferred Shares of Beneficial Interest. The depositary shares may be called by the Trust at any time and have a liquidation preference of $25.00 per depositary share. Each Colonial Series E preferred depositary share will represent 1/100th of a newly created 7.62% Series E Cumulative Redeemable Preferred Share of Beneficial Interest, liquidation preference $2,500 per share, of the Trust. In February 2006, the Trust announced its Board of Trustees’ authorization of the repurchase of up to $65 million of the Trust’s Series E Depositary Shares, each representing 1/100 of a share of its 7.62% Series E Cumulative Redeemable Preferred Shares. In connection with the repurchase of the Series E Preferred Shares, the Board of Trustees of the Trust, as general partner of CRLP, also authorized the repurchase of a corresponding amount of Series E Preferred Units, all of which are held by the Trust, as general partner of CRLP. This repurchase program was effective immediately and extended through January 27, 2007. Under the repurchase program, the Trust was authorized to make purchases in the open market or in privately negotiated transactions from time to time, subject to market conditions, applicable legal requirements and other factors. The repurchase program does not obligate the Trust to repurchase any specific number of shares, and repurchases pursuant to the program may be suspended or resumed at any time or from time to time without further notice or announcement. During the year ended December 31, 2006, the Trust repurchased 1,135,935 million Series E Depositary Shares for a total cost of approximately $28.5 million. CRLP wrote off approximately $0.3 million of issuance costs associated with this redemption, in accordance with the SEC’s clarification of EITF Abstracts, Topic No. D-42 The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock.

          In April 2003, the Trust issued $125.0 million or 5,000,000 depositary shares, each representing 1/10 of a share of 8.125% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest. The depositary shares may be called by the Trust on or after April 30, 2008 and have a liquidation preference of $25.00 per depositary share. The depositary shares have no stated maturity, sinking fund or mandatory redemption and are not convertible into any other securities of the Trust.

          In June 2001, the Trust issued 2,000,000 preferred shares of beneficial interest (Series C Preferred Shares). The Series C Preferred Shares pay a quarterly dividend at 9.25% per annum and may be called by the Trust on or after June 19, 2006. The Series C Preferred Shares have no stated maturity, sinking fund or mandatory redemption and are not convertible into any other securities of the Trust. The Series C Preferred Shares have a liquidation preference of $25.00 per share. The net proceeds of the offering were approximately $48.1 million and were used to repay outstanding balances under the Credit Facility. In April 2006, the Board of Trustees of the Trust authorized the redemption of the Trust’s 9.25% Series C Cumulative Redeemable Preferred Shares. In connection with the redemption of the Series C Preferred Shares, the Board of Trustees of the Trust, as general partner of CRLP, also authorized the redemption of all outstanding Series C Preferred Units by CRLP, all of which were help by the Trust as general partner of CRLP. The redemption, for an aggregate redemption price of approximately $50.0 million, occurred on June 30, 2006. The Trust wrote off approximately $1.9 million of issuance costs associated with this redemption during 2006.

15. Share-based Compensation

          Effective January 1, 2006, the Trust accounts for share-based compensation using the fair value method prescribed in SFAS No. 123(R) (see Note 3). For share-based compensation granted from January 1, 2003 to December 31, 2005, the Trust accounted for share-based compensation under the fair value method prescribed by SFAS No. 123. Other than the required modification under SFAS No. 123(R) to use an estimated forfeiture rate for award terminations and forfeitures, and the provisions related to retirement eligible employees, the adoption of SFAS No. 123(R) did not have an impact on the Trust’s

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accounting for share-based compensation. In prior years, the Trust used a policy of recognizing the effect of award forfeitures as they occurred. Under SFAS No. 123(R), such award forfeitures are recognized based on an estimate of the number of awards expected to be forfeited during the estimated service period. The cumulative impact of this modification on awards granted prior to January 1, 2006 was $0.2 million and was reflected as a reduction of compensation expense in the year ended December 31, 2006.

Incentive Share Plans

          The Trust has in place a Third Amended and Restated Employee Share Option and Restricted Share Plan (the “Employee Plan”) designed to attract, retain, and motivate executive officers of the Trust and other key employees. The Employee Plan authorizes the issuance of up to approximately 5,700,000 common shares (as increased from time to time to equal 10% of the number of common shares and Operating Partnership units outstanding) pursuant to options or restricted shares granted or issued under this plan, provided that no more than 750,000 restricted shares may be issued. In connection with the grant of options under the Employee Plan, the Executive Compensation Committee of the Board of Trustees of the Trust determines the option exercise period and any vesting requirements. All options granted to date have a term of ten years and may be exercised in equal installments based on a one or five year vesting schedule. The value of outstanding restricted shares is being charged to compensation expense based on a one to five year vesting schedule.

          In April 1997, the Trust also adopted a Non-Employee Trustee Share Plan (the “Trustee Plan”). The Trustee Plan permits non-employee trustees of the Trust to elect to receive common shares in lieu of all or a portion of their annual trustee retainers, board meeting fees and committee meeting fees. The Trustee Plan authorizes the issuance of 50,000 common shares under the Plan.

          Compensation costs for share options have been valued on the grant date using the Black-Scholes option-pricing method. The weighted average assumptions used in the Black-Scholes option pricing model were as follows:

	For the Year Ending
	December 31,
	2007			2006			2005
Dividend yield		5.76	%		5.76	%		6.53	%
Expected volatility		19.42	%		21.01	%		21.38	%
Risk-free interest rate		4.64	%		5.11	%		4.52	%
Expected option term (years)		7.2			7.5			7.5

          The expected dividend yield reflects the Trust’s current historical yield, which is expected to approximate the future yield. Expected volatility was based on the historical volatility of the Trust’s common shares. The risk-free interest rate for the expected life of the options was based on the implied yields on the U.S Treasury yield curve. The weighted average expected option term was based on the Trust’s historical data for prior period share option exercises and forfeiture activity.

          During the year ended December 31, 2007, the Trust granted share options to purchase 116,242 shares of the Trust’s common shares to Trust employees and trustees. For the years ended December 31, 2007, 2006 and 2005, the Trust recognized compensation expense related to share options of $0.7 million, $0.8 million and $0.4 million, respectively. Upon the exercise of share options, the Trust issues common shares from authorized but unissued common shares.

          The following table presents a summary of share option activity under all plans for the year ended December 31, 2007:

	Options Outstanding
				Weighted Average
	Shares			Exercise Price (1)
Options outstanding, beginning of period		1,637,265		$	23.40
Granted		116,242			39.33
Exercised		(131,359	)		22.34
Forfeited		(27,218	)		22.56
Options outstanding, end of period		1,594,930		$	24.65

(1) In connection with the special distribution paid by the Trust related to the recapitalization during 2007 (see Note 2), the exercise price of all of the Trust’s then outstanding options has been reduced by $10.63 per share for all periods presented as required under the terms of the Trust’s option plans.

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          The weighted average grant date fair value of options granted in 2007, 2006 and 2005 was $5.13, $5.70 and $3.71, respectively. The total intrinsic value of options exercised during 2007, 2006 and 2005 was $2.9 million, $4.1 million and $1.2 million, respectively.

          As of December 31, 2007, the Trust had approximately 1.6 million share options outstanding with a weighted average exercise price of $24.65, a weighted average remaining contractual life of 4.7 years, and an aggregate intrinsic value of $2.9 million. The total number of exercisable options at December 31, 2007 was approximately 1.3 million. As of December 31, 2007, the weighted average exercise price of exercisable options was $22.83 and the weighted average remaining contractual life was 3.9 years for these exercisable options. The intrinsic value for these exercisable options at December 31, 2007 was $2.9 million. At December 31, 2007, there was $0.8 million of unrecognized compensation cost related to unvested share options, which is expected to be recognized over a weighted average period of 1.0 year.

          The following table presents the change in deferred compensation related to restricted share awards:

	(amounts in thousands)
Balance, December 31, 2006	$	8,537
Amortization of deferred compensation		(4,010	)
Issuance of restricted shares		3,822
Balance, December 31, 2007	$	8,349

          The following table presents the change in nonvested restricted share awards:

				Weighted Average
	For the Year Ended			Grant Date
	December 31, 2007			Fair Value
Nonvested Restricted Shares, December 31, 2006		272,144		$	43.39
Granted		223,753			40.44
Vested		(67,305	)		39.94
Cancelled/Forfeited		(8,983	)		43.19
Nonvested Restricted Shares, December 31, 2007		419,609		$	41.35

          The weighted average grant date fair value of restricted share awards for 2007, 2006 and 2005 was $40.44, $46.39 and $36.95, respectively. For the years ended December 31, 2007, 2006 and 2005, the Trust recognized compensation expense related to restricted share awards of $3.9 million, $3.0 million and $1.9 million, respectively. For the years ended December 31, 2007, 2006 and 2005, the Trust capitalized $5.4 million, $0.9 million and $0.7 million, respectively, for restricted share awards granted in connection with certain real estate developments. The total intrinsic value for restricted share awards that vested during 2007, 2006 and 2005 was $3.2 million, $3.2 million and $1.3 million, respectively. At December 31, 2007, the unrecognized compensation cost related to nonvested restricted share awards is $8.3 million, which is expected to be recognized over a weighted average period of 2.3 years.

Adoption of Incentive Program

          On April 26, 2006, the Executive Compensation Committee of the Board of Trustees of the Trust adopted a new incentive program in which seven executive officers of the Trust participate. The program provides for the following one-time awards:

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• the grant of a specified number of restricted shares, totaling approximately $6.3 million which vest at the end of the five-year service period beginning on April 26, 2006 (the “Vesting Period”), and/or

• an opportunity to earn a performance bonus, based on absolute and relative total shareholder return over a three-year period beginning January 1, 2006 and ending December 31, 2008 (the “Performance Period”).

          A participant’s restricted shares will be forfeited if the participant’s employment is terminated prior to the end of the Vesting Period. The compensation expense and deferred compensation related to these restricted shares is included in the restricted share disclosures above.

          A participant’s right to receive a performance payment will be forfeited if the participant’s employment is terminated prior to the end of the Performance Period, unless termination of employment results from the participant’s death or disability, in which case the participant (or the participant’s beneficiary) will earn a pro-rata portion of the applicable award. Performance payments, if earned, will be paid in cash, common shares, or a combination of the two. Each performance award has specified threshold, target and maximum payout amounts. The payout amounts range from $500,000 to $6,000,000 per participant. The performance awards were valued with a binomial model by a third party valuation firm. The performance awards, which had a fair value on the grant date of $5.4 million ($4.9 million net of estimated forfeitures), were valued as equity awards tied to a market condition. For the years ended December 31, 2007 and 2006, the Trust recognized $1.9 million and $1.3 million, respectively, of compensation expense attributable to the performance based share awards. The unrecognized expense associated with these grants was $1.8 million as of December 31, 2007.

          The Trust’s share-based awards have historically provided for immediate vesting upon retirement, death or disability of the participant. The Trust had previously recognized the compensation expense related to such share-based awards made to retirement eligible individuals using the nominal vesting approach. The nominal vesting approach requires recognition of the compensation expense over the stated vesting period. SFAS No. 123(R) clarified the accounting for share-based awards made to retirement eligible individuals. SFAS No. 123(R) explicitly provides that the vesting period for a grant made to a retirement eligible employee is considered non-substantive if the award provides for immediate vesting upon retirement, and should be ignored when determining the period over which the award should be expensed. Effective January 1, 2006, concurrent with the adoption of SFAS No. 123(R), the Trust began expensing share-based compensation granted after January 1, 2006 over the period between grant date and retirement eligibility or immediately if the employee is retirement eligible as of the date of grant. Effective July 26, 2006, the Trust amended its share based compensation plans to remove any retirement eligible vesting provisions for future grants.

          The Trust recognized $0.4 million of compensation expense, $0.1 million for share option awards and $0.3 million for restricted share awards, for the year ended December 31, 2006 related to grants to retirement eligible employees that would not have been recognized under the nominal vesting approach. If the Trust had historically accounted for share-based awards made to retirement eligible individuals under the requirements of SFAS No. 123(R), the compensation expense recognized would have been increased by $1.2 million for the year ended December 31, 2005.

Employee Share Purchase Plan

          The Trust maintains an Employee Share Purchase Plan (the “Purchase Plan”). The Purchase Plan permits eligible employees of the Trust, through payroll deductions, to purchase common shares at market price. The Purchase Plan has no limit on the number of common shares that may be issued under the plan. The Trust issued 3,725 and 2,652 common shares pursuant to the Purchase Plan during 2007 and 2006, respectively.

16. Employee Benefits

          Noncontributory Defined Benefit Pension Plan

          Employees of CRLP hired prior to January 1, 2002 participate in a noncontributory defined benefit pension plan designed to cover substantially all employees. Pension expense includes service and interest costs adjusted by actual earnings on plan assets and amortization of prior service cost and the transition amount. The benefits provided by this plan are based on years of service and the employee’s final average compensation. CRLP’s policy is to fund the minimum required contribution under ERISA and the Internal Revenue Code. CRLP uses a December 31 measurement date for its plan.

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          During 2007, the Board of Trustees of the Trust approved the termination of its noncontributory defined benefit pension plan. CRLP recorded a charge of $2.3 million in connection with this termination, including a one-time pension bonus of approximately $1.4 million. As of December 31, 2007, the termination of the pension plan was substantially complete. The remaining settlement payments of $0.7 million are expected to be paid in 2008 upon final determination from the IRS.

          The table below presents a summary of pension plan status as of December 31, 2007 and 2006, as it relates to the employees of CRLP.

	(in thousands)
	2007			2006
Change in benefit obligation
Benefit obligation at beginning of year	$	15,662		$	14,876
Service cost		253			1,171
Interest cost		758			815
Curtailment (gain) loss		(4,087	)		—
Settlment (gain) loss		(380	)		—
Benefits paid		(134	)		(120	)
Settlement payments		(13,949	)		—
Actuarial (gain) loss		2,592			(1,080	)
Benefit obligation at end of year	$	715		$	15,662
Change in plan assets
Fair value of plan assets at beginning of year	$	10,317		$	8,731
Actual return on plan assets		718			892
Employer contributions		3,100			814
Benefits paid		(134	)		(120	)
Settlement payments		(13,949	)		—
Fair value of plan assets at end of year	$	52		$	10,317
Funded status	$	(663	)	$	(5,345	)

          Amounts recognized in the consolidated balance sheet as of December 31, 2007 consist of:

Amounts recognized in the consolidated balance sheets

	(in thousands)
	2007			2006
Other liabilities	$	(663	)	$	(5,345	)

Amounts recognized in accumulated other comprehensive income

	2007		2006
Net (gain) loss	$	—	$	2,581
Prior service cost		—		34
Net amount recognized	$	—	$	2,615

          CRLP’s accumulated benefit obligations as of December 31, 2007 and 2006 are as follows:

(in thousands)	2007		2006
Accumulated benefit obligation	$	715	$	12,078

          Components of CRLP’s net periodic benefit cost for 2007 and 2006 are as follows:

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Components of Net Periodic Benefit Cost

	(in thousands)
	2007			2006
Service cost	$	253		$	1,170
Interest cost		758			815
Expected return on plan assets		(611	)		(735	)
Amortization of prior service cost		1			8
Amortization of net (gain) loss		22			215
Curtailment (gain) loss		33			—
Settlement (gain) loss		549			—
Net periodic benefit cost	$	1,005		$	1,473

          Additional supplemental disclosures required by SFAS No. 158 are as follows:

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income

	(in thousands)
	2007			2006
Net (gain) loss	$	(2,581	)	$	2,581
Prior service cost		(33	)		34
Amortization of prior service cost		(1	)		—
Total recognized in other comprehensive income	$	(2,615	)	$	2,615
Total recognized in net periodic benefit cost and
other comprehensive income	$	(1,610	)	$	4,088

Estimated amortization from accumulated other comprehensive income into net periodic pension cost over the next twelve months

	(in thousands)
Amortization of net (gain) loss	$	—	$	86
Amortization of prior service cost	$	—	$	5

          The weighted-average assumptions used to determine benefit obligations and net costs are as follows:

	2007			2006
Weighted-average assumptions used to determine benefit obligations at December 31
Discount rate		5.00	%		5.75	%
Rate of compensation increase		n/a			3.00	%
Weighted-average assumptions used to determine net cost for years ended December 31
Discount rate		5.00	%		5.50	%
Expected long-term rate of return on plan assets		5.00	%		8.00	%
Rate of compensation increase		3.00	%		3.00	%

          CRLP’s pension plan weighted-average asset allocations at December 31, 2007 and 2006, by asset category are as follows:

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	Percentage of Plan Assets at
	December 31
Asset Category	2007			2006
Equity Securities		n/a			57	%
Debt Securities		n/a			29	%
Real estate		n/a			4	%
Other		100	%		10	%
Total		100	%		100	%

          CRLP’s investment policy targets to achieve a long-term return on plan assets of at least 8.0%. In order to achieve these targets, CRLP primarily utilizes a diversified grouping of growth and value funds with moderate risk exposure. CRLP reviews the pension plan’s investment policy on a periodic basis and may adjust the investment strategy, as needed, in order to achieve the long-term objectives of the plan.

          The following table presents the cash flow activity of the pension plan during the years ending December 31, 2007 and 2006:

	(in thousands)
	Employer
Contributions
2006	$	814
2007	$	3,100
Expected 2008	$	663
Benefit payments (including termination settlement payments)
2007	$	14,084

          The following table presents the expected future benefit payments to the pension plan:

Estimated Future Benefit Payments (in thousands)
2008 (final settlement payment)	$	715
Thereafter		—

          401(k) Plan

          CRLP maintains a 401(k) plan covering substantially all eligible employees. At December 31, 2007, this plan provided, with certain restrictions, that employees may contribute a portion of their earnings with CRLP matching one-half of such contributions up to 6%, solely at its discretion. Contributions by CRLP were approximately $1.0 million, $0.8 million and $0.5 million for the years ended December 31, 2007, 2006 and 2005, respectively. As of January 1, 2008, this plan provides, with certain restrictions, that employees may contribute a portion of their earnings with CRLP matching 100% of such contributions up to 4% and 50% percent on contributions between 4% and 6%, solely at its discretion.

17. Income Taxes

          CRLP’s consolidated financial statements include the operations of its taxable REIT subsidiary, CPSI, which is subject to federal, state and local income taxes. CPSI provides property development, leasing and management services for third-party owned properties and administrative services to CRLP. In addition, CRLP performs all of its for-sale residential and condominium conversion activities through CPSI. CRLP generally reimburses CPSI for payroll and other costs incurred in providing services to CRLP. All inter-company transactions are eliminated in the accompanying consolidated financial statements. The components of income tax expense, significant deferred tax assets and liabilities and a reconciliation of CPSI’s income tax expense to the statutory federal rate are reflected in the tables below.

          Income tax expense of CPSI for the years ended December 31, 2007 and 2006 is comprised of the following:

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	(in thousands)
	2007			2006
Current tax expense:
Federal	$	7,929		$	13,242
State		1,401			2,040
		9,330			15,282
Deferred tax benefit:
Federal		(14,187	)		(2,641	)
State		(2,587	)		(482	)
		(16,774	)		(3,123	)
Total income tax expense (benefit)		(7,444	)		12,159
Income tax expense — discontinued operations		(1,839	)		(8,554	)
Income tax expense (benefit) — continuing operations	$	(9,283	)	$	3,605

          In 2007 and 2006, income tax expense resulting from condominium conversion unit sales was allocated to discontinued operations (see Note 4).

          For the year ended December 31, 2005, the impact of CPSI’s income taxes and their related tax attributes were not material to the accompanying consolidated financial statements.

          The components of CPSI’s deferred income tax assets and liabilities at December 31, 2007 and 2006 were as follows:

	(in thousands)
	2007			2006
Deferred tax assets:
Real estate asset basis differences	$	128		$	68
Impairments		17,466			622
Deferred revenue		1,795			1,792
Allowance for doubtful accounts		321			243
Accrued liabilities		458			398
	$	20,168		$	3,123
Deferred tax liabilities:
Real estate asset basis differences		(271	)		—
		(271	)		—
Net deferred tax assets	$	19,897		$	3,123

          As of December 31, 2007, CPSI had a deferred tax asset of approximately $20.1 million, which resulted primarily from the impairment charge related to CRLP’s for-sale residential properties. CPSI has assessed the recoverability of this asset and believes that, as of December 31, 2007, recovery is more likely than not based upon future taxable income and the ability to carry back taxable losses to 2006 and 2007.

          Reconciliations of the 2007 and 2006 effective tax rates of CPSI to the federal statutory rate are detailed below. As shown above, a portion of the 2007 and 2006 income tax expense was allocated to discontinued operations.

	2007			2006
Federal tax rate		35.00	%		35.00	%
State income tax, net of federal income tax benefit		4.09	%		3.19	%
Other		2.78	%		0.12	%
CPSI provision for income taxes		41.87	%		38.31	%

          For the year ended December 31, 2007, other expenses included estimated state franchise and other taxes. Franchise taxes are associated with new margin-based taxes in Texas and Tennessee that are effective in 2007.

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18. Leasing Operations

          CRLP is in the business of leasing and managing multifamily, office, and retail property. For properties owned by CRLP, minimum rentals due in future periods under noncancelable operating leases extending beyond one year at December 31, 2007, are as follows:

	(in thousands)
2008	$	12,564
2009		13,494
2010		13,504
2011		13,106
2012		10,630
Thereafter		60,941
	$	124,239

          The noncancelable leases are with tenants engaged in retail and office operations in Alabama, Georgia and Florida. 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, 2007 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 CRLP’s land, buildings, and equipment represent property leased under the above and other short-term leasing arrangements.

          Rental income from continuing operations for 2007, 2006 and 2005 includes percentage rent of $0.9 million, $1.2 million and $3.2 million, respectively. This rental income was earned when certain retail tenants attained sales volumes specified in their respective lease agreements.

19. Commitments, Contingencies, Guarantees and Other Arrangements

          Commitments and Contingencies

          CRLP is involved in a contract dispute with a general contractor in connection with construction costs and cost overruns with respect to certain of its for-sale projects, which are being developed in a joint venture in which CRLP is a majority owner. The contractor is affiliated with CRLP’s joint venture partner. In connection with the dispute, in January 2008, the contractor filed a lawsuit against CRLP alleging, among other things, breach of contract, enforcement of a lien against real property, misrepresentation, conversion, declaratory judgment and an accounting of costs, and is seeking $10.3 million in damages, plus consequential and punitive damages. Certain of the subcontractors, vendors and other parties involved in the projects, including purchasers of units, have also made claims for payment in the form of lien claims, general claims or lawsuits. CRLP is continuing to evaluate its options, including possible claims against the contractor, and intends to vigorously defend itself against these claims. However, no prediction of the likelihood, or amount, of any resulting loss or recovery can be made at this time and no assurance can be given that the matter will be resolved favorably.

          In connection with certain retail developments, CRLP has received funding from municipalities for infrastructure costs. In most cases, the municipalities issue bonds that are repaid primarily from sales tax revenues generated from the tenants at each respective development. CRLP has guaranteed the shortfall, if any, of tax revenues to the debt service requirements on the bonds. The total amount outstanding on these bonds was approximately $11.3 million and $5.0 million at December 31, 2007 and December 31, 2006, respectively. At December 31, 2007 and December 31, 2006, no liability was recorded for these guarantees.

          In connection with the office and retail joint venture transactions, as discussed above, CRLP assumed certain contingent obligations for a total of $15.7 million, of which $7.2 million remains outstanding as of December 31, 2007.

          CRLP is a party to various legal proceedings incidental to its business. In the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect the financial position or results of operations or cash flows of CRLP.

          Guarantees and Other Arrangements

          During November 2006, CRLP committed with its joint venture partner to guarantee up to $17.3 million of a $34.6 million construction loan obtained by the Colonial Promenade Smyrna Joint Venture. CRLP and its joint venture partner each

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committed to provide 50% of the $17.3 million guarantee, as each partner has a 50% ownership interest in the joint venture. As of December 31, 2007, the Colonial Promenade Smyrna Joint Venture had drawn $27.7 million on the construction loan. At December 31, 2007, no liability was recorded for the guarantee.

          During February 2006, CRLP committed to guarantee up to $4.0 million of a $27.4 million construction loan obtained by the Colonial Grand at Canyon Creek Joint Venture. As of December 31, 2007, the joint venture had drawn $25.1 million on the construction loan. At December 31, 2007, no liability was recorded for the guarantee.

          During September 2005, in connection with the acquisition of CRT with DRA, CRLP guaranteed approximately $50.0 million of third-party financing obtained by the DRA/CRT joint venture with respect to 10 of the CRT properties. During 2006, seven of the ten properties were sold. The DRA/CRT joint venture is obligated to reimburse CRLP for any payments made under the guaranty before making distributions of cash flows or capital proceeds to the DRA/CRT joint venture partners. At December 31, 2007, no liability was recorded for the guarantee. As of December 2007, this guarantee had been reduced to $17.4 million as a result of the pay down of the associated secured debt from the sales of assets.

          During July 2005, in connection with CRLP’s investment into a joint venture with Carter and Associates, CRLP committed to provide a construction loan to the joint venture of up to approximately $40 million at a rate of 8.25% per annum. As of December 31, 2007, $25.6 million had been drawn on the construction loan by the joint venture, and $14.4 million was available to be drawn.

          In connection with the formation of Highway 150 LLC in 2002, CRLP executed a guarantee, pursuant to which CRLP serves as a guarantor of $1.0 million of the debt related to the joint venture, which is collateralized by the Colonial Promenade Hoover retail property. CRLP’s maximum guarantee of $1.0 million may be requested by the lender, only after all of the rights and remedies available under the associated note and security agreements have been exercised and exhausted. At December 31, 2007, the total amount of debt of the joint venture was approximately $16.7 million and matures in December 2012. At December 31, 2007, no liability was recorded for the guarantee.

          In connection with the contribution of certain assets to CRLP, certain partners of CRLP have guaranteed indebtedness of CRLP totaling $26.5 million at December 31, 2007. The guarantees are held in order for the contributing partners to maintain their tax deferred status on the contributed assets. These individuals have not been indemnified by CRLP.

          During December 2007, in connection with CRLP’s investment into the Colonial Promenade Alabaster II/Tutwiler II joint venture, CRLP guaranteed the payment of interest by the joint venture on its $40 million mortgage. At December 31, 2007, no liability was recorded for the guarantee.

20. Related Party Transactions

          CRLP has used an affiliated construction company to manage and oversee certain of its development, re-development and expansion projects. The affiliated construction company utilized by CRLP is headquartered in Alabama and has completed numerous projects within the Sunbelt region of the United States. Through the use of market survey data and in-house development expertise, CRLP negotiates the fees and contract prices of each development, re-development or expansion project with the affiliated construction company in compliance with CRLP’s approved “Policy on Hiring Architects, Contractors, Engineers, and Consultants”. The policy was developed to allow the selection of certain preferred vendors who have demonstrated an ability to consistently deliver a quality product at a fair price and in a timely manner. Additionally, the affiliated construction company outsources all significant subcontractor work through a competitive bid process. Upon approval by the Management Committee, the Management Committee presents each project to the independent members of the Executive Committee of the Board of Trustees for final approval. In each of the following transactions, the independent members of the Executive Committee approved such transactions unanimously.

          CRLP paid $77.0 million, $59.2 million and $41.6 million for property construction costs to Brasfield & Gorrie LLC, a construction company partially-owned by Mr. M. Miller Gorrie (a trustee of the Trust) during the years ended December 31, 2007, 2006 and 2005, respectively. Of these amounts, $67.0 million, $53.1 million and $36.6 million was then paid to unaffiliated subcontractors for the construction of these development projects during 2007, 2006 and 2005, respectively. CRLP had $6.5 million, $9.6 million and $8.0 million in outstanding construction invoices or retainage payable to this construction company at December 31, 2007, 2006 and 2005, respectively.

          CRLP leased space to certain entities in which Mr. M. Miller Gorrie has an interest and received market rent from this entity of approximately $0.3 million during 2007. CRLP leased space to certain entities in which Mr. Thomas H. Lowder, Mr. James K. Lowder, and Mr. M. Miller Gorrie have an interest and received market rent from these entities of approximately $2.5 million during the years ended December 31, 2006 and 2005.

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          Colonial Insurance Agency, an entity owned by Mr. Thomas H. Lowder and Mr. James K. Lowder, has provided insurance risk management, administration and brokerage services for CRLP. The aggregate amounts paid by CRLP to Colonial Insurance Agency for these services during the years ended December 31, 2007, 2006 and 2005 were $0.6 million, $0.5 million and $0.5 million, respectively. As a part of this service, CRLP placed insurance coverage with unaffiliated insurance carriers through a competitive bidding process. The premiums paid to these unaffiliated insurance carriers totaled $7.8 million, $4.8 million and $8.3 million during 2007, 2006 and 2005, respectively.

          In connection with the closing of CRLP’s acquisition of Cornerstone via merger on April 1, 2005, the Trust appointed Glade Knight, who formally served as the Chairman and Chief Executive Officer of Cornerstone, as a trustee of the Trust. Mr. Knight was subsequently elected to serve as a trustee of the Trust at the 2005 annual meeting of the Trust’s shareholders. On April 1, 2005, following the Cornerstone merger, Mr. Knight elected to cash out the options under a non-statutory share option agreement between Cornerstone and Mr. Knight, which was assumed by the Trust in the Cornerstone merger, and the Trust paid Mr. Knight approximately $3.1 million (plus an applicable tax gross up payment) in connection therewith. In connection with the Cornerstone merger, CRLP also assumed Cornerstone’s obligations under Mr. Knight’s change in control agreement. Shortly after the Cornerstone merger, CRLP paid to Mr. Knight approximately $5.5 million (which includes an applicable tax gross up payment) in respect of Mr. Knight’s change in control agreement assumed by the Trust and Mr. Knight’s employment agreement with Cornerstone, which terminated in connection with the closing of the Cornerstone merger.

21. Subsequent Events

          Property Acquisitions

          On January 16, 2008, CRLP acquired the remaining 75% interest in a 270-unit multifamily apartment community, Colonial Village at Matthews, located in Charlotte, North Carolina. CRLP acquired its initial 25% interest in March 2006. The remaining 75% interest was acquired for a total price of $24.5 million, consisting of $14.7 million of newly issued mortgage debt and $9.8 million of cash which was funded through proceeds from asset sales.

          Property Dispositions

          Multifamily Communities

          On January 24, 2008, CRLP disposed of its 15% interest in Fairmont at Fossil Creek, a 240-unit multifamily apartment community located in Fort Worth, Texas. CRLP’s interest in this asset was sold for a total sales price of $3.2 million and the proceeds will be used to fund future development activity and other general corporate purposes.

          On January 24, 2008, CRLP disposed of its 15% interest in Auberry at Twin Creeks, a 216-unit multifamily apartment community located in Dallas, Texas. CRLP’s interest in this asset was sold for a total sales price of $3.2 million and the proceeds will be used to fund future development activity and other general corporate purposes.

          On January 31, 2008, CRLP disposed of its 10% interest in Arbors at Windsor Lake, a 228-unit multifamily apartment community located in Columbia, South Carolina. CRLP’s interest in this asset was sold for a total sales price of $1.4 million and the proceeds from the sale of this community will be used to fund future development activity and other general corporate purposes.

          Office Property

          On February 1, 2008, CRLP disposed of 250 Commerce Center, a 37,000 square foot office asset located in Montgomery, Alabama. CRLP sold this asset for approximately $3.1 million, and the proceeds from the sale of this asset will be used to fund future development activity and other general corporate purposes.

          Financing Activities

          On January 8, 2008, CRLP, together with the Trust, added $175 million of additional borrowing capacity through the accordion feature included in CRLP’s existing $500 million unsecured revolving credit facility dated as of March 22, 2005, as amended, among CRLP, CLP, Wachovia Bank, National Association, as administrative agent, Bank of America, N.A., as syndication agent, and the other lenders named therein.

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          Distribution

          During January 2008, the Board of Trustees of the Trust declared a cash distribution on the CRLP common units in the amount of $0.50 per partnership unit, totaling an aggregate of approximately $28.6 million. The distribution was made to partners of record as of February 11, 2008, and was paid on February 19, 2008.

22. Quarterly Financial Information (Unaudited)

          The following is a summary of the unaudited quarterly financial information for the years ended December 31, 2007 and 2006. The information provided herein has been reclassified in accordance with SFAS No. 144 for all periods presented.

2007
(in thousands, except per unit data)
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
Revenues	$	120,188		$	114,527		$	84,306		$	82,496
Income (loss) from continuing operations		3,894			(15,693	)		(18,535	)		6,034
Income from discontinued operations		41,545			40,276			15,196			3,971
Net income		45,439			24,583			(3,339	)		10,005
Preferred dividends		(6,303	)		(5,683	)		(4,352	)		(4,351	)
Preferred share issuance costs write-off		—			(330	)		(29	)		(1	)
Net income available to common unitholders		39,136			18,570			(7,720	)		5,653
Net income per unit:
Basic	$	0.69		$	0.33			($0.14	)	$	0.10
Diluted	$	0.69		$	0.33			($0.14	)	$	0.10
Weighted average common units outstanding:
Basic		56,543			56,706			56,793			56,849
Diluted		56,543			56,706			56,793			57,273

2006
(in thousands, except per unit data)
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
Revenues	$	112,645		$	109,577		$	109,535		$	113,620
Income (loss) from continuing operations		1,101			28,664			(7,275	)		66,621
Income from discontinued operations		13,794			15,947			31,804			102,209
Net income		14,895			44,611			24,529			168,830
Preferred dividends		(7,912	)		(7,518	)		(6,363	)		(6,360	)
Preferred share issuance costs write-off		(159	)		(1,924	)		(45	)		—
Net income available to common unitholders		6,824			35,169			18,121			162,469
Net income per unit:
Basic	$	0.12		$	0.63		$	0.32		$	2.87
Diluted	$	0.12		$	0.62		$	0.32		$	2.85
Weighted average common units outstanding:
Basic		55,844			56,117			56,286			56,394
Diluted		55,844			56,590			56,286			56,960

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Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Colonial Properties Trust
 and Partners of Colonial Realty Limited Partnership:

     In our opinion, the consolidated financial statements listed in the accompanying index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of Colonial Realty Limited Partnership at December 31, 2007 and 2006, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A of this Form 10-K. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

     A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Birmingham, Alabama
February 29, 2008

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

          Not applicable.

Item 9A. Controls and Procedures.

          Evaluation of Disclosure Controls and Procedure

          As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer of the Trust, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15 of the rules promulgated under the Securities and Exchange Act of 1934, as amended. Based on this evaluation, our Chief Executive Officer and the Chief Financial Officer of the Trust concluded that the design and operation of these disclosure controls and procedures were effective as of the end of the period covered by this report.

          Changes in Internal Control Over Financial Reporting

          There were no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15) that occurred during the quarter ended December 31, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

          Management’s Report on Internal Control Over Financial Reporting

          Management of the Trust is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended. CRLP’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

          Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

          In connection with the preparation of CRLP’s annual financial statements, management has undertaken an assessment of the effectiveness of CRLP’s internal control over financial reporting as of December 31, 2007. The assessment was based upon the framework described in “Integrated Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Management’s assessment included an evaluation of the design of internal control over financial reporting and testing of the operational effectiveness of internal control over financial reporting. We have reviewed the results of the assessment with the Audit Committee of our Board of Trustees of the Trust.

          Based on our assessment under the criteria set forth in COSO, management has concluded that, as of December 31, 2007, CRLP maintained effective internal control over financial reporting.

          The effectiveness of CRLP’s internal control over financial reporting as of December 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Item 9B. Other Information.

          None.

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PART III

Item 10. Trustees, Executive Officers and Corporate Governance.

          We are managed by the Trust, the general partner of CRLP. The information required by this item with respect to trustees, the audit committee and the audit committee financial expert of the Trust is hereby incorporated by reference from the material appearing in the Trust’s definitive proxy statement for the annual meeting of shareholders held in 2008 (the “Proxy Statement”) under the caption “Election of Trustees – Nominees for Election” and “Information Regarding Trustees and Corporate Governance – Committees of the Board of Trustees — Audit Committee”. Information required by this item with respect executive officers is provided in Item 1 of this Form 10-K Information required by this item with respect to the availability of the Trust’s code of ethics is provided in Item 1 of this Form 10-K. See “Available Information”.

          We intend to disclose any amendment to, or waiver from, our code of ethics on our website within four business days following the date of the amendment or waiver.

Item 11. Executive Compensation.

          The information required by this item is hereby incorporated by reference from the material appearing in the Proxy Statement under the captions “Compensation Discussion and Analysis”, “Compensation of Trustees and Executive Officers”, “Compensation of Non-Employee Trustees”, “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information regarding the beneficial ownership of units as of February 20, 2008 for:

          (1) each person known by CRLP to be the beneficial owner of more than five percent of the CRLP’s outstanding units,

          (2) each trustee of the Trust and each named executive officer and

          (3) the trustees and executive officers of the Trust as a group.

          Each person named in the table has sole voting and investment power with respect to all units shown as beneficially owned by such person, except as otherwise set forth in the notes to the table. References in the table to “units” are to units of limited partnership interest in CRLP. Unless otherwise provided in the table, the address of each beneficial owner is Colonial Plaza, Suite 750, 2101 Sixth Avenue North, Birmingham, Alabama 35203.

Name and Business Address	Number of			Percent of
of Beneficial Owner	Units			Units (1)
Colonial Properties Trust		47,292,433			82.6	%
Thomas H. Lowder		2,431,819	(2)		4.2	%
James K. Lowder		2,431,885	(3)		4.2	%
2000 Interstate Parkway Suite 400 Montgomery, Alabama 36104
Carl F. Bailey		17,595			*
M. Miller Gorrie		266,523	(4)		*
William M. Johnson		398,200	(5)		*
Glade M. Knight		—			*
Herbert A. Meisler		544,529	(6)		1.0	%
Claude B. Nielsen		5,865			*
Harold W. Ripps		1,925,975			3.4	%
Donald T. Senterfitt		—			*
John W. Spiegel		—			*
C. Reynolds Thompson, III		17,595			*
Weston M. Andress		—			*
Robert A. Jackson		17,595			*
Charles A. McGehee		17,595			*
Paul F. Earle		17,595			*
All executive officers and trustees as a group (18 persons)		6,403,312	(7)		11.2	%

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*	Less than 1%
(1)	The number of units outstanding as of February 20, 2008 was 57,285,211.
(2)	Includes 75,421 units owned by Thomas H. Lowder 2006 Two-Year Trust, 89,285 units owned by Thomas Lowder Investments, LLC, 1,707,054 units owned by Colonial Commercial Investments, Inc. (“CCI”), 130 units held in trust for the benefit of Thomas Lowder’s children and 559,929 units owned directly by Thomas H. Lowder. Units owned by CCI are reported twice in this table, once as beneficially owned by Thomas H. Lowder and again as beneficially owned by James K. Lowder.
(3)	Includes 108,021 units owned by James K. Lowder 2006 Two-Year Trust, 89,285 units owned by James Lowder Investments, LLC, 1,707,054 units owned by CCI, 195 units held in trust for the benefit of James K. Lowder’s children and 527,330 units directly owned by James K. Lowder.
(4)	Includes 157,140 units owned by MJE, LLC, and 109,383 units directly owned by Mr. Gorrie.
(5)	Includes 338,200 units owned by Mr. Johnson and 60,000 units directly owned by WMJ & PBJ Foundation.
(6)	Includes 471,872 units owned by Meisler Enterprises L.P., a limited partnership of which Mr. Meisler and his wife are sole partners, and 72,657 units directly owned by Mr. Meisler.
(7)	Units held by CCI have been counted only once for this purpose.

          The following table summarizes information, as of December 31, 2007, relating to the Trust’s equity compensation plans pursuant to which options to purchase common shares and restricted common shares may be granted from time to time.

							Number of securities remaining
	Number of securities to be			Weighted-average			available for future issuance
	issued upon exercise of			exercise price of			under equity compensation plans
	outstanding options, warrants			outstanding options,			(excluding securities reflected in
Plan Category	and rights (a)			warrants and rights (b)			column (a))
Equity compensation plans approved by security holders (1)		1,835,777	(2)	$	23.83	(3)		2,284,567
Equity compensation plans not approved by security holders		—			—			—
Total		1,835,777		$	23.83			2,284,567

(1)	These plans include the Trust’s Third Amended and Restated Employee Share Option and Restricted Share Plan, as amended in 1998 and 2006, the Trust’s Non-Employee Trustee Share Plan, as amended in 1997, and the Trust’s Trustee Share Option Plan, as amended in 1997.
(2)	Includes 419,609 restricted shares of the Trust that had not vested as of December 31, 2007.
(3)	Weighted-average exercise price of outstanding options has been adjusted for the special distribution paid by the Trust in June 2007 (see Note 2 to our Notes to Consolidated Financial Statements included in Item 8 of this 10-K). In connection with the special distribution, the exercise price of all of the Trust’s then outstanding options was reduced by $10.63 per share as required under the terms of the Trust’s option plans. Weighted-average exercise price of outstanding options also excludes value of outstanding restricted shares of the Trust.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

          The information required by this item is hereby incorporated by reference from the material appearing in the Trust’s Proxy Statement under the captions “Certain Relationships and Related Transactions” and “Information Regarding Trustees and Corporate Governance – Committees of the Board of Trustees Assessment of Independence”.

Item 14. Principal Accountant Fees and Services.

          The information required by this item is hereby incorporated by reference from the material appearing in the Trust’s Proxy Statement under the captions “Ratification of Appointment of Independent Registered Public Accounting Firm — Summary of Audit Fees” and “Ratification of Appointment of Independent Registered Public Accounting Firm — Pre-Approval Policy for Services by Auditor”.

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Part IV

Item 15. Exhibits and Financial Statement Schedules

15(a)(1) Financial Statements

The following financial statements of CRLP are included in Part II, Item 8 of this report:

Consolidated Balance Sheets as of December 31, 2007 and 2006

Consolidated Statements of Income and Comprehensive Income for the years ended December 31,
2007, 2006 and 2005

Consolidated Statements of Partners’ Equity for the years ended December 31, 2007, 2006 and 2005

Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

15(a)(2) Financial Statement Schedules

     Financial statement schedules for the Company are listed on the financial statement schedule index at the end of this report.

     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.

15(a)(3) Exhibits

Exhibit No.	Exhibit	Reference
2.1	Agreement and Plan of Merger by and among the Trust, CLNL Acquisition Sub LLC and Cornerstone Realty Income Trust, Inc.	Incorporated by reference to Exhibit 2.1 to the Trust’s Current Report on Form 8-K filed with the SEC on October 28, 2004
2.2	Form of Plan of Merger merging Cornerstone Realty Income Trust, Inc. into CLNL Acquisition Sub LLC	Incorporated by reference to Exhibit B to Exhibit 2.2 to the Trust’s Current Report on Form 8-K filed with the SEC on January 25, 2005
2.3	Amendment No. 1 to Agreement and Plan of Merger by and among the Trust, CLNL Acquisition Sub LLC and Cornerstone Realty Income Trust, Inc.	Incorporated by reference to Exhibit 2.2 to the Trust’s Current Report on Form 8-K filed with the SEC on January 25, 2005
2.4	Acquisition and Contribution Agreement and Joint Escrow Instructions dated September 16, 2005 by and among Marelda Retail Development LLC and CRLP, and amendments thereto	Incorporated by reference to Exhibit 2.1 to CRLP’s Current Report on Form 8-K filed with the SEC on November 30, 2005
2.5	Acquisition and Contribution Agreement and Joint Escrow Instructions dated September 16, 2005 by and among Marelda Retail Development LLC and Colonial Realty Limited Partnership, and amendments thereto	Incorporated by reference to Exhibit 2.2 to CRLP’s Current Report on Form 8-K filed with the SEC on November 30, 2005

125

Exhibit No.	Exhibit	Reference
2.6	Membership Interests Purchase Agreement (Office Joint Venture), dated as of April 25, 2007, between DRA G&I Fund VI Real Estate Investment Trust and Colonial Properties Trust	Incorporated by reference to Exhibit 2.1 to the Trust’s Current Report on Form 8-K filed with the SEC on May 1, 2007
2.7	Membership Interests Purchase Agreement (Retail Joint Venture), dated as of April 25, 2007, between OZRE Retail, LLC and Colonial Properties Trust	Incorporated by reference to Exhibit 2.2 to the Trust’s Current Report on Form 8-K filed with the SEC on May 1, 2007
2.8	First Amendment to Membership Interests Purchase Agreement (Retail Joint Venture), dated as of June 15, 2007, between OZRE Retail LLC and Colonial Properties Trust	Incorporated by reference to Exhibit 2.3 to the Trust’s Current Report on Form 8-K filed with the SEC on June 21, 2007
3.1	Declaration of Trust of Company, as amended	Incorporated by reference to Exhibit 3.1 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
3.2	Bylaws of the Trust, as amended	Incorporated by reference to Exhibit 3.1 to the Trust’s Current Report on Form 8-K filed with the SEC on April 30, 2007
4.1	Indenture dated as of July 22, 1996, by and between CRLP and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company)	Incorporated by reference to Exhibit 4.1 to the CRLP’s Annual Report on Form 10-K/A filed with the SEC on October 10, 2003
4.2	First Supplemental Indenture dated as of December 31, 1998, by and between CRLP and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company)	Incorporated by reference to Exhibit 10.13.1 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1998 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
4.3	Rights Agreement dated as of November 2, 1998 between Colonial Properties Trust and BankBoston, N.A.	Incorporated by reference to Exhibit 10.14 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1998 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
4.4	First Amendment to Rights Agreement, dated as of August 29, 2005, between the Trust and EquiServe Trust Company, N.A., as successor to BankBoston, N.A., as Rights Agent	Incorporated by reference to Exhibit 4.2 to the Trust’s Current Report on Form 8-K filed with the SEC on September 1, 2005
4.5	Deposit Agreement for Series D depository shares by and among the Trust and Equiserve Trust Company, N.A. and Equiserve, Inc.	Incorporated by reference to Exhibit 4.4 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 2003
4.6	Form of Deposit Agreement for Series E depository shares by and among the Trust and Equiserve Trust Company, N.A. and Equiserve, Inc.	Incorporated by reference to Exhibit 4.1 to the Trust’s Registration Statement on Form 8-A filed with the SEC on February 7, 2005

126

Exhibit No.	Exhibit	Reference
10.1	Third Amended and Restated Agreement of Limited Partnership of CRLP, as amended	Incorporated by reference to Exhibit 10.1 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
10.2	Registration Rights and Lock-Up Agreement dated September 29, 1993, among the Trust and the persons named therein	Incorporated by reference to Exhibit 10.2 to the Trust’s Registration Statement on Form S-11/A, No. 33-65954, filed with the SEC on September 21, 1993
10.3	Registration Rights and Lock-Up Agreement dated March 25, 1997, among the Trust and the persons named therein	Incorporated by reference to Exhibit 10.2.2 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1997 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.4	Registration Rights and Lock-Up Agreement dated November 4, 1994, among the Trust and the persons named therein	Incorporated by reference to Exhibit 10.2.3 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1997 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.5	Supplemental Registration Rights and Lock-Up Agreement dated August 20, 1997, among the Trust and the persons named therein	Incorporated by reference to Exhibit 10.2.4 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1997 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.6	Supplemental Registration Rights and Lock-Up Agreement dated November 1, 1997, among the Trust, CRLP and B&G Properties Company LLP	Incorporated by reference to Exhibit 10.2.5 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1997 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.7	Supplemental Registration Rights and Lock-Up Agreement dated July 1, 1997, among the Trust, CRLP and Colonial Commercial Investments, Inc.	Incorporated by reference to Exhibit 10.2.6 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1997 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)

127

Exhibit No.	Exhibit	Reference
10.8	Supplemental Registration Rights and Lock-Up Agreement dated July 1, 1996, among the Trust and the persons named therein	Incorporated by reference to Exhibit 10.2.7 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1997 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.9	Registration Rights Agreement dated February 23, 1999, among the Trust, Belcrest Realty Corporation, and Belair Real Estate Corporation	Incorporated by reference to Exhibit 10.2.8 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1998 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.10	Registration Rights and Lock-Up Agreement dated July 1, 1998, among the Trust and the persons named therein	Incorporated by reference to Exhibit 10.2.9 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1998
10.11	Registration Rights and Lock-Up Agreement dated July 31, 1997, among the Trust and the persons named therein	Incorporated by reference to Exhibit 10.2.10 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1998 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.12	Supplemental Registration Rights and Lock-Up Agreement dated November 18, 1998, among the Trust, CRLP and Colonial Commercial Investments, Inc.	Incorporated by reference to Exhibit 10.2.11 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1998 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.13	Registration Rights and Lock-Up Agreement dated December 29, 1994, among the Trust and the persons named therein	Incorporated by reference to Exhibit 10.2.12 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1998 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.14	Registration Rights and Lock-Up Agreement dated April 30, 1999, among the Trust, CRLP and MJE, L.L.C.	Incorporated by reference to Exhibit 10.2.13 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1999 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.15	Second Amended and Restated Employee Share Option and Restricted Share Plan †	Incorporated by reference to Exhibit 10.18 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 2003

128

Exhibit No.	Exhibit	Reference
10.15.1	Form of Employee Share Option and Restricted Share Plan Agreement — 2 Year Vesting †	Incorporated by reference to Exhibit 10.18.1 to the Trust’s Quarterly Report on Form 10-Q for the period ending September 30, 2004
10.15.2	Form of Employee Share Option and Restricted Shares Plan Agreement — 3 Year Vesting †	Incorporated by reference to Exhibit 10.18.2 to the Trust’s Quarterly Report on Form 10-Q for the period ending September 30, 2004
10.15.3	Form of Employee Share Option and Restricted Shares Plan Agreement — 5 Year Vesting †	Incorporated by reference to Exhibit 10.18.3 to the Trust’s Quarterly Report on Form 10-Q for the period ending September 30, 2004
10.15.4	Form of Employee Share Option and Restricted Shares Plan Agreement — 8 Year Vesting †	Incorporated by reference to Exhibit 10.18.4 to the Trust’s Quarterly Report on Form 10-Q for the period ending September 30, 2004
10.15.5	Amended and Restated Trustee Restricted Share Agreement — 1 Year Vesting †	Incorporated by reference to Exhibit 10.18.5 to the Trust’s Quarterly Report on Form 10-Q for the period ending September 30, 2004
10.15.6	Amended and Restated Trustee Non-Incentive Share Option Agreement †	Incorporated by reference to Exhibit 10.18.6 to the Trust’s Quarterly Report on Form 10-Q for the period ending September 30, 2004
10.16	Non-employee Trustee Share Option Plan †	Incorporated by reference to the Trust’s Registration Statement on Form S-8, No. 333-27203, filed with the SEC on May 15, 1997
10.17	Non-employee Trustee Share Plan †	Incorporated by reference to the Trust’s Registration Statement on Form S-8, No. 333-27205, filed with the SEC on May 15, 1997
10.18	Employee Share Purchase Plan †	Incorporated by reference to Exhibit 10.21 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 2003
10.18.1	Amendment to Employee Share Purchase Plan †	Incorporated by reference to Exhibit 10.21.1 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 2006
10.19	Annual Incentive Plan †	Incorporated by reference to Exhibit 10.16 to the Trust’s Registration Statement on Form S-11/A, No. 33-65954, filed with the SEC on September 3, 1993
10.20	Executive Unit Purchase Program - Program Summary †	Incorporated by reference to Exhibit 10.15 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1999 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.21	Non-employee Trustee Option Agreement †	Incorporated by reference to Exhibit 10.5 to the Trust’s Registration Statement on Form S-11/A, No. 33-65954, filed with the SEC on September 3, 1993
10.22	Employment Agreement between the Trust and Thomas H. Lowder †	Incorporated by reference to Exhibit 10.6 to the Trust’s Registration Statement on Form S-11/A, No. 33-65954, filed with the SEC on September 21, 1993

129

Exhibit No.	Exhibit	Reference
10.22.1	Non-Competition Agreement, dated May 4, 2007, among Colonial Realty Limited Partnership, Colonial Properties Trust and Thomas H. Lowder †	Incorporated by reference to Exhibit 10.1 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007
10.23	Retirement Agreement between the Trust and Howard B. Nelson, Jr. †	Incorporated by reference to Exhibit 10.26 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 2003
10.24	Officers and Trustees Indemnification Agreement †	Incorporated by reference to Exhibit 10.7 to the Trust’s Registration Statement on Form S-11/A, No. 33-65954, filed with the SEC on September 21, 1993
10.25	Partnership Agreement of CPSLP	Incorporated by reference to Exhibit 10.8 to the Trust’s Registration Statement on Form S-11/A, No. 33-65954, filed September 21, 1993
10.25.1	First Amendment to Partnership Agreement of CPSLP	Incorporated by reference to Exhibit 10.28.1 to the Trust’s Annual Report on Form 10-K for the period ended December 31, 2005
10.26	Articles of Incorporation of Colonial Real Estate Services, Inc., predecessor of CPSI, as amended	Incorporated by reference to Exhibit 10.9 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1994 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.27	Bylaws of predecessor of Colonial Real Estate Services, Inc., predecessor of CPSI	Incorporated by reference to Exhibit 10.10 to the Trust’s Registration Statement on Form S-11/A, No. 33-65954, filed September 3, 1993
10.28	Credit Agreement dated as of March 22, 2005, by and among CRLP, as Borrower, Colonial Properties Trust, as Guarantor, Wachovia Bank, as Agent for the Lenders, and the Lenders named therein	Incorporated by reference to Exhibit 10.38 to the Trust’s Current Report on Form 8-K filed with the SEC on March 25, 2005
10.28.1	First Amendment to Credit Agreement, dated June 2, 2006, among CRLP, the Trust, Wachovia Bank, National Association as Agent for the Lenders and the Lenders named therein	Incorporated by reference to Exhibit 10.2 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
10.28.2	Second Amendment to Credit Agreement, dated June 21, 2007, among CRLP, the Trust, Wachovia Bank, National Association as Agent for the Lenders and the Lenders named therein	Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed with the SEC on July 24, 2007
10.29	Contribution Agreement, dated April 1, 2005	Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed with the SEC on April 7, 2005

130

Exhibit No.	Exhibit	Reference
10.30	Bridge Credit Agreement dated October 28, 2004, by and among CRLP, as Borrower, and the Trust, as Guarantor, SouthTrust Bank, as Agent for Lenders, and the Lenders names therein	Incorporated by reference to Exhibit 10.37 to the Trust’s Current Report on Form 8-K filed with the SEC on November 3, 2004
10.31	Facility and Guaranty Agreement among the Trust, CRLP, Bank One, N.A. and the Lenders named therein dated as of December 17, 1999	Incorporated by reference to Exhibit 10.34 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 2003
10.32	Form of Promissory Note under Facility and Guarantee Agreement dated as of December 17, 1999 among the Trust, CRLP, Bank One, N.A. and certain lenders	Incorporated by reference to Exhibit 10.16 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1999 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.33	Form of Reimbursement Agreement dated January 25, 2000 by Employee Unit Purchase Plan participants in favor of CRLP	Incorporated by reference to Exhibit 10.17 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 1999 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.34	Employment Agreement dated October 1, 2001 between Cornerstone and Glade M. Knight †	Incorporated by reference to Exhibit 10.6 to Cornerstone’s Form 10-K filed April 1, 2002
10.35	First Amendment to Employment Agreement dated September 21, 2004 between Cornerstone and Glade M. Knight †	Incorporated by reference to Exhibit 10.3 to Cornerstone’s Annual Report on Form 10-K filed with the SEC on March 16, 2005
10.36	Amendment No 2 to Employment Agreement dated February 8, 2005 between Cornerstone and Glade M. Knight †	Incorporated by reference to Exhibit 10.1 to Cornerstone’s Current Report on Form 8-K filed with the SEC on February 9, 2005
10.37	Stock Option Agreement dated July 23, 1999 between Cornerstone and Glade M. Knight †	Incorporated by reference to Exhibit 10.50 to Cornerstone’s Annual Report on Form 10-K filed with the SEC on March 27, 2000 (which document may be found and reviewed in the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549, in the files therein relating to the Trust, whose file number is 1-12358)
10.38	Amendment No. 1 to Stock Option Agreement dated February 8, 2005 between Cornerstone and Glade M. Knight †	Incorporated by reference to Exhibit 10.7 to Cornerstone’s Current Report on Form 8-K filed with the SEC on February 9, 2005
10.39	Change in Control Agreement dated August 1, 2000 between Cornerstone and Glade M. Knight †	Incorporated by reference to Exhibit 10.48 to Cornerstone’s Annual Report on Form 10-K filed with the SEC on April 2, 2001
10.40	Amendment No. 1 to Change in Control Agreement dated February 8, 2005 between Cornerstone and Glade M. Knight †	Incorporated by reference to Exhibit 10.3 to Cornerstone’s Current Report on Form 8-K filed with the SEC on February 9, 2005

131

Exhibit No.	Exhibit	Reference
10.41	Cornerstone 1992 Incentive Plan Amended and Restated Effective July 1, 2002 †	Incorporated by reference to Exhibit 10.2 to Cornerstone’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2002)
10.42	First Amendment to Cornerstone 1992 Incentive Plan Amended and Restated Effective July 1, 2002 †	Incorporated by reference to Exhibit 10.2 to Cornerstone’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2004
10.43	Agreement Evidencing Waiver of Performance Bonus dated February 25, 2005 between Cornerstone and Glade M. Knight †	Incorporated by reference to Exhibit 10.64 to Cornerstone’s Annual Report on Form 10-K filed with the SEC on March 16, 2005
10.44	Form of Stock Option Agreement between Glade M. Knight and Cornerstone †	Incorporated by reference to Exhibit 10.13 to the Trust’s Current Report on Form 8-K filed with the SEC on April 7, 2005
10.45	Cornerstone Realty Income Trust, Inc. 1992 Non-Employee Directors Stock Option Plan, as amended †	Incorporated by reference to Exhibit 99.1 in Cornerstone Realty Income Trust, Inc.’s Registration Statement on Form S-8 filed with the SEC on April 9, 1997 (File No. 333-24875)
10.46	Form of Restricted Share Agreement (20% per year vesting) †	Incorporated by reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed with the SEC on May 3, 2005
10.47	Form of Restricted Share Agreement (50%/25%/25% vesting) †	Incorporated by reference to Exhibit 10.2 to the Trust’s Current Report on Form 8-K filed with the SEC on May 3, 2005
10.48	Form of Restricted Share Agreement (33 1/3% per year vesting) †	Incorporated by reference to Exhibit 10.3 to the Trust’s Current Report on Form 8-K filed with the SEC on May 3, 2005
10.49	Form of Restricted Share Agreement (60%/40% vesting) †	Incorporated by reference to Exhibit 10.4 to the Trust’s Current Report on Form 8-K filed with the SEC on May 3, 2005
10.50	Form of Restricted Share Agreement (eighth anniversary vesting) †	Incorporated by reference to Exhibit 10.5 to the Trust’s Current Report on Form 8-K filed with the SEC on May 3, 2005
10.51	Form of Share Option Agreement (20% per year vesting) †	Incorporated by reference to Exhibit 10.6 to the Trust’s Current Report on Form 8-K filed with the SEC on May 3, 2005
10.52	Amended and Restated Limited Liability Company Agreement of CRTP OP LLC, dated as of September 27, 2005, between DRA CRT Acquisition Corp and Colonial Office JV LLC	Incorporated by reference to Exhibit 10.3 to the Trust’s Quarterly Report on Form 10-Q for the period ended September 30, 2005
10.53	Trustee Compensation Policy for 2006†	Incorporated by reference to Exhibit 10.22.1 to the Trust’s Annual Report on Form 10-K for the period ending December 31, 2005
10.54	Trustee Compensation Policy for 2007 †	Incorporated by reference to Exhibit 10.3 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007
10.55	Summary of 2006 Incentive Plan †	Incorporated by reference to Exhibit 10.1 to the Trust’s Quarterly Report on Form 10-Q for the period ended March 30, 2006

132

Exhibit No.	Exhibit	Reference
10.56	Summary of 2007 Annual Incentive Plan†	Incorporated by reference to Exhibit 10.2 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007
10.57	Colonial Properties Trust Third Amended and Restated Employee Share Option and Restricted Share Plan, as amended †	Incorporated by reference to Exhibit 10.1 to the Trust’s Quarterly Report on Form 10-Q for the period ended June 30, 2006
10.58	Form of Colonial Properties Trust Third Amended and Restated Employee Share Option and Restricted Share Plan Restricted Share Agreement †	Incorporated by reference to Exhibit 10.2 to the Trust’s Quarterly Report on Form 10-Q for the period ended June 30, 2006
10.59	Form of Colonial Properties Trust Third Amended and Restated Employee Share Option and Restricted Share Plan Performance Share Agreement †	Incorporated by reference to Exhibit 10.3 to the Trust’s Quarterly Report on Form 10-Q for the period ended June 30, 2006
10.60	Form of Restricted Share Agreement †	Incorporated by reference to Exhibit 10.4 to the Trust’s Quarterly Report on Form 10-Q for the period ended June 30, 2006
10.61	Form of Share Option Agreement †	Incorporated by reference to Exhibit 10.5 to the Trust’s Quarterly Report on Form 10-Q for the period ended June 30, 2006
10.62	Summary of Incentive Program †	Incorporated by reference to Exhibit 10.5 to the Trust’s Quarterly Report on Form 10-Q for the period ended June 30, 2006
12.1	Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Share Distributions	Filed herewith
21.1	List of Subsidiaries	Filed herewith
23.1	Consent of PricewaterhouseCoopers LLP	Filed herewith
23.2	Consent of Weiser LLP	Filed herewith
23.3	Consent of PricewaterhouseCoopers LLP	Filed herewith
31.1	CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.2	CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

† Denotes a management contract or compensatory plan, contract or arrangement.

15(b) Exhibits

The list of Exhibits filed with this report is set forth in response to Item 15(a)(3). The required exhibit index has been filed with the exhibits.

15(c) Financial Statements

The Company files as part of this report the financial statement schedules listed on the financial statement schedule index at the end of this report.

133

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 February 29, 2008.

COLONIAL REALTY LIMITED PARTNERSHIP

a Delaware limited partnership

By: Colonial Properties Trust, its general partner

By:  /s/ C. Reynolds Thompson, III   C. Reynolds Thompson, III
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 in the capacities with Colonial Properties Trust indicated on February 29, 2008.

Signature
/s/ C. Reynolds Thompson, III C. Reynolds Thompson, III	Chief Executive Officer  (Principal Executive Officer)
/s/ Weston M. Andress Weston M. Andress	President and Chief Financial Officer  (Principal Financial Officer)
/s/ John E. Tomlinson John E. Tomlinson	Executive Vice President  and Chief Accounting Officer (Principal Accounting Officer)
/s/ Thomas H. Lowder Thomas H. Lowder	Chairman of the Board
/s/ Carl F. Bailey Carl F. Bailey	Trustee
/s/ M. Miller Gorrie M. Miller Gorrie	Trustee
/s/ William M. Johnson William M. Johnson	Trustee
/s/ Glade M. Knight Glade M. Knight	Trustee
/s/ James K. Lowder James K. Lowder	Trustee
/s/ Herbert A. Meisler Herbert A. Meisler	Trustee
/s/ Claude B. Nielsen Claude B. Nielsen	Trustee
/s/ Harold W. Ripps Harold W. Ripps	Trustee
/s/ Donald T. Senterfitt Donald T. Senterfitt	Trustee
/s/ John W. Spiegel John W. Spiegel	Trustee

134

Colonial Realty Limited Partnership
Index to Financial Statement Schedules

S-1	Consolidated Financial Statements of DRA/CLP Office LLC and Subsidiaries for the Period from June 13, 2007 (Date of Inception) through December 31, 2007, and Report of Independent Registered Public Accounting Firm
S-2	Consolidated Financial Statements of OZ/CLP Retail LLC and Subsidiaries for the Period from June 15, 2007 (Date of Inception) through December 31, 2007, and Report of Independent Registered Public Accounting Firm
S-3	Schedule III – Real Estate and Accumulated Depreciation

135

Appendix S-1

DRA/CLP Office LLC
and Subsidiaries

Consolidated Financial Statements

For the Period from June 13, 2007

(Inception) to December 31, 2007

DRA/CLP OFFICE LLC and Subsidiaries

Contents
Consolidated Financial Statements
For the Period June 13, 2007 (Inception) to December 31, 2007

	Page(s)
Report of Independent Registered Public Accounting Firm		1
Audited Consolidated Financial Statements:
Consolidated Balance Sheet		2
Consolidated Statement of Operations		3
Consolidated Statement of Changes in Temporary Equity and Equity		4
Consolidated Statement of Cash Flows		5
Notes to Consolidated Financial Statements		6-14

Report of Independent Registered Public Accounting Firm

To the Members

of DRA/CLP Office LLC

We have audited the accompanying consolidated balance sheet of DRA/CLP Office LLC and Subsidiaries (the “Company”) as of December 31, 2007, and the related consolidated statements of operations, changes in temporary equity and equity, and cash flows for the period June 13, 2007 (Inception) to December 31, 2007. 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 audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and also, in accordance with generally accepted auditing standards established by the Auditing Standards Board (United States). 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of DRA/CLP Office LLC and Subsidiaries as of December 31, 2007, and the results of its operations and its cash flows for the period June 13, 2007 (Inception) to December 31, 2007 in conformity with U.S. generally accepted accounting principles.

/s/  Weiser LLP

New York, NY

February 26, 2008

1

DRA/CLP Office LLC and Subsidiaries

Consolidated Balance Sheet
December 31, 2007
(in thousands)

Assets
Real estate investments
Land	$	80,779
Land improvements		97,538
Buildings and improvements		637,813
Tenant improvements		56,328
		872,458
Accumulated depreciation and amortization		15,885
Operating properties-net		856,573
Land held for sale		2,250
Total real estate		858,823
Cash and cash equivalents		39,516
Tenant receivables, net of allowance for doubtful accounts of $367		2,839
Prepaid expenses and other assets		888
In-place leases, net of accumulated amortization of $4,630		37,520
Deferred costs, net of accumulated amortization of $3,154		31,585
Deferred rent receivable, net of allowance for doubtful accounts of $145		2,690
Total assets	$	973,861
Liabilities
Mortgage payable	$	741,907
Acquired net below market leases, net of accumulated amortization of $1,177		16,096
Accounts payable, accrued expenses and other liabilities		4,058
Payable to members		4,937
Interest payable		3,584
Accrued real estate taxes payable		2,022
Advance rents and security deposits		7,047
Total liabilities		779,651
Commitment and contingencies — Note 8
Temporary Equity
Redeemable common units (Redemption value of $32,215) - Colonial		32,215
Redeemable common units (Redemption value of $26,600) - Rollover LP’s		26,600
		58,815
Equity - Nonredeemable common units		135,395
Total liabilities, temporary equity and equity	$	973,861

The accompanying notes are an integral part of these consoldiated financial statements.

2

DRA/CLP Office LLC and Subsidiaries

Consolidated Statement of Operations
For the Period From June 13, 2007 (Inception) to December 31, 2007
(in thousands)

Revenues
Rent	$	54,106
Tenant escalations		6,296
Other		2,410
Total revenues		62,812
Property operating expenses
General operating expenses		8,290
Management fees paid to affiliate		2,384
Repairs and maintenance		5,114
Taxes, licenses and insurance		8,258
General and administrative		1,424
Depreciation and amortization		23,670
Total property operating expenses		49,140
Income from operations		13,672
Other income (expense)
Interest expense		(22,662	)
Interest income		743
Total other income (expense)		(21,919	)
Loss from continuing operations		(8,247	)
Income from discontinued operations		6,565
Net loss	$	(1,682	)

The accompanying notes are an integral part of these consoldiated financial statements.

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DRA/CLP Office LLC and Subsidiaries

Consolidated Statement of Changes in Temporary Equity and Equity
For the Period from June 13, 2007 (Inception) to December 31, 2007
(in thousands)

	Equity
	G&I VI
	Investment			Temporary Equity
	DRA/CLP			Colonial Office
	Office, LLC			Holdings, LLC			Rollover LP’s			Total
Balance — Beginning of Period	$	—		$	—		$	—		$	—
Issuance of redeemable common units for real estate		—			81,446			68,589			150,035
Cash proceeds from issuance of nonredeemable common units		392,938			—			—			—
Distributions		(251,175	)		(52,062	)		(43,844	)		(95,906	)
Net loss		(1,217	)		(252	)		(213	)		(465	)
Change in redemption value of redeemable common units		(5,151	)		3,083			2,068			5,151
Balance — December 31, 2007	$	135,395		$	32,215		$	26,600		$	58,815

The accompanying notes are an integral part of these consoldiated financial statements.

4

DRA/CLP Office LLC and Subsidiaries

Consolidated Statement of Cash Flows
For the Period from June 13, 2007 (Inception) to December 31, 2007
(in thousands)

Cash flows from operating activities
Net loss	$	(1,682	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		23,670
Amortization of above and below market leases		(1,177	)
Deferred rent receivable		(3,082	)
Bad debt expense		367
Increase (decrease) in cash attributable to changes in operating assets and liabilities, net of effects of purchase of real estate portfolio
Tenant and other receivables		(3,206	)
Prepaid expenses and other assets		411
Accounts payable, accrued expenses and other liabilities		1,221
Interest payable		3,584
Accrued real estate taxes payable		(2,851	)
Advanced rents and security deposits		(2,053	)
Net cash provided by operating activities		15,202
Cash flows from investing activities
Cash paid in acquisition, net of cash acquired		(972,086	)
Capital expenditures		(6,967	)
Net proceeds from disposition of real estate		218,942
Leasing costs paid		(1,772	)
Net cash used in investing activities		(761,883	)
Cash flows from financing activities
Proceeds from mortgage notes payable		741,907
Repayment of loans from members		(15,005	)
Proceeds from loans from members		15,005
Proceeds from issuance of nonredeemable common units		392,938
Distributions paid to equity member		(251,175	)
Distributions paid to temporary equity members		(95,906	)
Deferred loan costs paid		(1,567	)
Net cash provided by financing activities		786,197
Net increase in cash and cash equivalents		39,516
Cash and cash equivalents at beginning of year		—
Cash and cash equivalents at end of year	$	39,516
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest	$	19,299
Supplemental information of non-cash investing and financing activities:
Issuance of redeemable common units for real estate	$	150,035

The accompanying notes are an integral part of these consoldiated financial statements.

5

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007

1.   Organization

On June 15, 2007, Colonial Properties Trust (“CLP”) completed a joint venture transaction with DRA G&I Fund VI Real Estate Investment Trust, which is the sole member of G&I VI Investment DRA/CLP Office LLC (“G&I VI or “DRA”), a member of DRA/CLP Office LLC (the “Company”). CLP had previously entered into a Membership Interests Purchase Agreement, dated as of April 25, 2007 (the “Office Purchase Agreement”), to sell to DRA the CLP’s 69.8% limited liability company interest in the Company, a newly formed joint venture among DRA, Colonial Realty Limited Partnership (“CRLP”), an affiliate of CLP, and the limited partners of CRLP. The Company became the owner of 24 office properties consisting of 59 buildings and two retail properties that were previously owned by CRLP. The properties are owned by limited liability companies (the “subsidiaries”), which are owned directly or indirectly by the Company. Pursuant to the Office Purchase Agreement, CRLP retained a 15% interest in the Company, as well as management and leasing responsibilities for the 26 properties owned by the Company. The Company portfolio is composed of 6.9 million square feet of Class A suburban and urban office buildings and two adjoining retail centers located in suburban and urban office markets in Alabama, Florida, Georgia, North Carolina and Texas. In addition to the approximate 69.8% interest purchased from CLP, DRA purchased an aggregate of 2.6% of the limited liability company interests in the Company from limited partners of CRLP. At December 31, 2007, DRA holds approximately 72.4% of the limited liability company interests of the Company; Colonial Office Holdings LLC, a subsidiary of CRLP, holds 15% of the limited liability company interests in the Company (and serves as the “Manager” of the Company); and certain limited partners of CRLP (“Rollover LP’s”), that did not elect to sell their interests in the Company to DRA, hold the remaining approximately 12.6% of the limited liability company interests in the Company.

As of December 31, 2007, the Company owned 15 office properties consisting of 40 office buildings and two retail centers totaling approximately 5.2 million square feet located in suburban and urban office markets in Alabama, Florida, Georgia, North Carolina and Texas.

Operating Agreement — The Company will distribute cash flow from operations for each fiscal quarter first to the holders of common units pro rata, in accordance with their respective percentage interests until the “9% Preferred Return Account” (as defined in the Amended Operating Agreement) of each such holder shall have been reduced to zero, and thereafter, 15% to the Manager and 85% to the holders of common units (including the Manager), pro rata among such holders of common units in accordance with their respective percentage interests. Capital proceeds from a merger, consolidation or sale of all or substantially all of the properties, and from other refinancings and asset sales, and proceeds in liquidation shall be distributed to holders of common units pro rata in accordance with their respective percentage interests. All distributions are subject to any payments required to be made by the Company in respect of any partner loans made by the Manager or DRA. In addition, the Manager is not required to make any distribution of cash to the members if such distribution would cause a default under a loan agreement to which the Company is a party.

2.   Summary of Significant Accounting Policies

Principles of Consolidation — The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated in consolidation.

Investments in Real Estate — Rental property and improvements are included in real estate investments and are stated at cost. Expenditures for ordinary maintenance and repairs are expensed to operations as they are incurred. Significant improvements, which improve or extend the useful life of the assets, are capitalized.

Depreciation and Amortization — The Company computes depreciation on its land improvements and buildings and improvements using the straight-line method based on estimated useful lives, which generally range from 3 to 59 years. Tenant improvements are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date). The values of above market leases are amortized as a reduction of rental income over the remaining non-cancelable term of the lease.

6

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007 — (Continued)

The values of below market leases are amortized as an increase to rental income over the initial term and any fixed-rate renewal period of the associated lease. The value associated with in-place leases and tenant relationships is amortized as a leasing cost over the initial term of the respective leases and any probability-weighted renewal periods. The initial term and any probability-weighted renewal periods have a current weighted average composite life of 7.1 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangibles will be written off.

Deferred Costs — Deferred leasing costs consist of legal fees and brokerage costs incurred to initiate and renew operating leases and leasing costs acquired at inception and are amortized on a straight-line basis over the related lease term. Deferred financing costs represent commitment fees, legal and other third party costs associated with obtaining commitments for financing that are integral to the closing of such financing. These costs are amortized over the terms of the respective loan agreements. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Deferred costs consist of the following:

	2007
	(In thousands)
Financing costs	$	1,567
Leasing costs		33,172
		34,739
Less accumulated amortization		3,154
	$	31,585

Future amortization of acquired leasing costs for each of the next five years and thereafter is estimated as follows:

For The Year Ended December 31,
2008	$	5,765
2009		5,464
2010		5,132
2011		3,685
2012		2,385
Thereafter		6,185
	$	28,616

Impairment and Disposal of Long-Lived Assets — The Company follows SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” In accordance with SFAS 144, the results of operations of real estate held for sale and real estate sold during the year are presented in discontinued operations. The Company no longer records depreciation and amortization on assets held for sale. The Company assesses impairment of long-lived assets whenever changes or events indicate that the carrying value may not be recoverable. The Company assesses impairment of operating properties based on the operating cash flows of the properties. In performing its assessment, the Company makes assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. For the period from June 13, 2007 (inception) to December 31, 2007, no impairment charges were recorded.

Revenue Recognition — Rental revenue is recognized on a straight-line basis over the term of the lease. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is included in deferred rent receivable on the accompanying balance sheet. The Company establishes, on a current basis, an allowance for

7

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007 — (Continued)

future potential tenant credit losses which may occur against this account. The deferred rent receivable reflected on the balance sheet is net of such allowance.

In addition to base rent, tenants also generally will pay their pro rata share of increases in real estate taxes and operating expenses for the building over a base year. In certain leases, in lieu of paying additional rent based upon increases in building operating expenses, the tenant will pay additional rent based upon increases in the consumer price index over the index value in effect during a base year. In addition, certain leases contain fixed percentage increases over the base rent to cover escalations.

Tenant Receivables and Allowances for Doubtful Accounts — Tenant receivables consists of receivables from tenants for rent and other charges, recorded according to the terms of their leases. The Company maintains an allowance for doubtful accounts for estimated losses due to the inability of its tenants to make required payments for rents and other rental services. In assessing the recoverability of these receivables, the Company makes assumptions regarding the financial condition of the tenants based primarily on past payment trends and certain financial information that tenants submit to the Company. As of December 31, 2007, allowance for doubtful accounts amounted to approximately $0.4 million. The Company may or may not require collateral for tenant receivables.

Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

As of December 31, 2007, the Company maintained approximately $41.6 million with one financial institution which exceeds FDIC insured limits. The Company mitigates its risk by banking with a major financial institution.

Income Taxes — No provision or benefit for income taxes has been included in the consolidated financial statements because such taxable income or loss passes through to, and is reportable by, the members of the Company.

Fair Value of Financial Instruments — The Company believes the carrying amount of its temporary investments, tenant receivables, accounts payable, accrued expenses and other liabilities is a reasonable estimate of fair value of these instruments. Based on the estimated market interest rates of approximately 5.75 percent, the fair value of the Company’s mortgage payable is approximately $736.2 million as of December 31, 2007.

Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. These estimates are based on historical experience and various other factors that are believed to be reasonable under the circumstances. However, actual results could differ from the Company’s estimates under different assumptions or conditions. On an ongoing basis, the Company evaluates the reasonableness of its estimates.

Redeemable Common Units — In accordance with EITF Topic D-98, “SEC Staff Announcement Regarding the Classification and Measurement of Redeemable Securities,” the Company has elected to recognize changes in the redemption value of the Redeemable Common Units immediately as they occur and to adjust the carrying value to equal the redemption value at the end of each reporting period. The accrued changes are reflected in the Consolidated Statement of Changes in Temporary Equity and Equity as Changes in Redemption Value of Redeemable Common Units.

Recent Accounting Pronouncements — In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 is effective for financial assets and liabilities on January 1, 2008. In February 2008, the FASB reached a conclusion to defer the implementation of the SFAS 157 provisions relating to non-financial assets and liabilities until January 1, 2009. The FASB also reached a conclusion to amend SFAS 157 to exclude SFAS 13 “Accounting for Leases” and its related

8

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007 — (Continued)

interpretive accounting pronouncements. SFAS 157 is not expected to materially affect how the Company determines fair value, but may result in certain additional disclosures.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. The provisions of SFAS No. 159 are effective for fiscal years beginning after November 15, 2007. SFAS No. 159 is not expected to have a material impact on the Company’s consolidated financial statements.

3.   Business Combination

On June 15, 2007, the Company effectively purchased a portfolio of properties comprised of 24 office properties and two retail properties located in suburban and urban office markets in Alabama, Florida, Georgia, North Carolina and Texas. The legal structure of the transaction is described in Note 1. The operations of these properties have been included in these consolidated financial statements since that date. The acquisitions are being accounted for under the purchase method of accounting. The purchase price of approximately $1.1 billion (net of cash acquired of approximately $14.4 million) was allocated to the net assets acquired based upon the estimated fair values at the date of acquisition and also the sale of assets held for sale, which provided relevant market data. The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

	(In thousands)
Property, plant and equipment	$	871,458
Acquired intangibles		57,087
Prepaid expenses and other assets		1,299
Assets held for sale		209,087
Accrued real estate taxes and other liabilities		(7,710	)
Advance rents		(6,843	)
Tenant security deposits and other liabilities		(2,257	)
Total purchase price, net of cash acquired	$	1,122,121

The purchase price of approximately $1.1 billion consists of:

(1)  Cash of approximately $972 million arising from the issuance of nonredeemable common units and proceeds from mortgage payable.

(2) Redeemable common units issued with a fair value of approximately $150 million.

The Company allocated the purchase price to acquired tangible and intangible assets, including land, buildings, tenant improvements, above and below market leases, acquired in-place leases, other assets and assumed liabilities in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations”. The allocation to intangible assets is based upon various factors including the above or below market component of in-place leases, the value of in-place leases and the value of customer relationships, if any. The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using an interest rate that reflects the risks associated with the lease) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current fair market rates over the remaining term of the lease. The aggregate value of in-place leases acquired is measured based on the difference between (i) the property values with existing in-place leases adjusted to market rental rates, and (ii) the property valued as if vacant. The allocation of the purchase price to tangible assets (buildings and land) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. Factors considered by management include an estimate of carrying costs

9

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007 — (Continued)

during the expected lease-up periods considering current market conditions and costs to execute similar leases. Differing assumptions and methods could have resulted in different estimates of fair value and thus, a different purchase price allocation and corresponding increase or decrease in depreciation and amortization expense.

4.   Intangibles

For the period ended December 31, 2007, the Company recognized a net increase of approximately $1.2 million in rental revenue for the amortization of above and below market leases. The amortization for the above market leases and below market leases were $1.5 million and ($2.7) million, respectively, for the period ended December 31, 2007. The Company recognized approximately $4.6 million of amortization of in-place leases for the period ended December 31, 2007.

Future amortization of acquired in-place leases and above (below) market leases for each of the next five years and thereafter is estimated as follows:

	In-place		Above (Below)
For The Year Ended December 31,	Leases		Market Leases
	(In thousands)
2008	$	8,016	$	(1,574	)
2009		8,117		(1,770	)
2010		7,602		(2,319	)
2011		4,423		(2,428	)
2012		2,141		(1,997	)
Thereafter		7,221		(6,008	)
	$	37,520	$	(16,096	)

5.   Mortgage Payable

The Company has a non-recourse loan with an amount of approximately $742 million outstanding at December 31, 2007 payable to Wells Fargo Bank, N.A. (“Wells”). This loan was made in two advances (i) an advance in the amount of approximately $588 million on June 13, 2007, (ii) an advance in the amount of approximately $154 million on July 17, 2007. The loan is interest only and bears monthly interest at a fixed rate of 5.61%. The loan matures on July 1, 2014, and is collateralized by certain properties and is guaranteed up to $15 million by DRA. The loan requires that the Company maintain a certain debt service coverage ratio and loan to value ratio. The Company was in compliance with these covenants during the period ended December 31, 2007. Interest expense in the amount of approximately $22.5 million was incurred during the period ended December 31, 2007.

10

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007 — (Continued)

6.   Discontinued Operations

Discontinued operations for the period ended December 31, 2007 are summarized as follows:

	2007
	(In thousands)
Rental revenue	$	10,115
General operating expenses		(1,274	)
Taxes, licenses and insurance		(642	)
Management fees paid to affiliates		(410	)
Repairs and maintenance		(783	)
General and administrative		(221	)
Interest expense		(220	)
Income from discontinued operations	$	6,565

In November 2007, the Company sold nine properties consisting of 19 buildings with a total square feet of 1.7 million located in Huntsville, Alabama. The buildings were sold for a total net price of approximately $209 million. The Company did not recognize a gain or loss from the sale of these buildings because the sale of these buildings provided relevant data to the Company that resulted in a modified allocation of the purchase price to those buildings.

7.   Leases

The Company’s operations consist principally of owning and leasing office space. Terms of the leases generally range from 5 to 10 years. The Company principally pays all operating expenses, including real estate taxes and insurance. Substantially all of the Company’s leases are subject to rent escalations based on changes in the Consumer Price Index, fixed rental increases or increases in real estate taxes and certain operating expenses. A substantial number of leases contain options that allow leases to renew for varying periods. The Company’s leases are operating leases and expire at various dates through 2029. The future minimum fixed base rentals under these noncancelable leases are approximately as follows:

For The Year Ended December 31,	(In thousands)
2008	$	90,050
2009		81,142
2010		72,080
2011		60,380
2012		37,062
Thereafter		84,742
	$	425,456

8.   Commitments and Contingencies

The Company is a party to various legal proceedings incidental to its business. In the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect the financial position or results of operations or cash flows of the Company.

Property Lockout Period

Other than with respect to the Huntsville, Alabama properties, unless the Manager and DRA unanimously agree, the Company will not during the three-year period following June 15, 2007, the effective date of the

11

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007 — (Continued)

Amended Operating Agreement (referred to herein as the “Lockout Period”), sell or otherwise transfer or dispose of, directly or indirectly, any property.

Tax Protection

Certain events or actions by the Company following June 15, 2007, the effective date of the Amended Operating Agreement, could cause Rollover LPs to recognize for Federal income tax purposes part or all of such Rollover LPs’ gain that is intended to be deferred at the time of the transactions. The Amended Operating Agreement provides for limited “tax protection” benefits for Rollover LPs.

During the period ending seven years and one month following June 15, 2007, the effective date of the Amended Operating Agreement (the “Tax Protection Period”), the Company may not, directly or indirectly, (i) take any action, including a sale or disposition of all or any portion of its interest in any of the properties (the “Protected Properties”), if any Rollover LP would be required to recognize gain for Federal income tax purposes pursuant to Section 704(c) of the Internal Revenue Code with respect to the Protected Properties as a result thereof, or (ii) undertake a merger, consolidation or other combination of the Company or any of its subsidiaries with or into any other entity, a transfer of all or substantially all of the assets of the Company, a reclassification, recapitalization or change of the outstanding equity interests of the Company or a conversion of the Company into another form of entity, unless the Company pays to each Rollover LP its “Tax Damages Amount.” The “Tax Damages Amount” to be paid to the Rollover LPs is an amount generally equal to the sum of (A) the built-in gain attributable to the Protected Property recognized by the affected Rollover LP, multiplied by the maximum combined federal and applicable state and local income tax rates for the taxable year in which the disposition occurs and applicable to the character of the resulting gain, plus (B) a “gross-up” amount equal to the taxes (calculated at the rates described in the Amended Operating Agreement which, generally, are the rates that the Rollover LP will be subject to at the time of a recognition event) payable by a Rollover LP as the result of the receipt of such payment.

In connection with the sale of the Huntsville, Alabama assets, previously discussed, the Company accrued tax protection payments of approximately $4.4 million which was paid to the Rollover LP’s subsequent to year-end and is included in Payable to members at December 31, 2007.

9.   Redeemable Common Units

Rollover LP Put Rights

At any time after expiration of the Lockout Period, each Rollover LP or any group of Rollover LP’s holding in the aggregate a number of the Company common units greater than or equal to the lesser of (x) 526,150 common units or 75% of the remaining common units held by the Rollover LP’s, will have the right to require the Company to buy all, but not fewer than all, of its common units during an Annual Redemption Period (as defined in the Amended Operating Agreement) for a purchase price equal to the “Redemption Value.” The “Redemption Value” of the Rollover LP common units will equal the product of (x) the percentage interest represented by such common units times (y) an amount equal to (i) the aggregate fair market value of the properties, plus (ii) the net current assets of the Company, minus (iii) the fair value of the indebtedness of the Company and its subsidiaries, minus (iv) the aggregate liquidation preference of any preferred Company units then outstanding, minus (v) an amount equal to 1.0% of the amount in clause (i) as an estimate of sales costs in connection with the sale of such properties. The Rollover LP’s common units subject to the put rights are referred to as Redeemable common units and are shown in the accompanying consolidated balance sheet as Temporary Equity-Redeemable common units at its redemption value. The redemption value at December 31, 2007 is $26.6 million, which resulted in an increase in redemption value of approximately $2.1 million during the period ended December 31, 2007.

The fair market value of the properties for the second Annual Redemption Period will be internally generated by the Manager based on net operating income of the properties for the preceding fiscal year and using, for all revenue generating properties, the methodology applied in the appraisals that were obtained by DRA in connection with the transactions, and for non-revenue generating properties, the carrying value of such properties on the books

12

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007 — (Continued)

of the Company. From and after the third Annual Redemption Period, the fair market value of the properties will be based on the most recent independent appraisal obtained by DRA (which shall not be older than 15 months).

Rollover LP Redemption in Kind

At any time after the seventh anniversary of the date of the Amended Operating Agreement, any Rollover LP or a group of Rollover LPs holding in the aggregate a number of common units greater than or equal to the lesser of (x) the number of common units with an aggregate purchase price of $5,000,000 under the Purchase Agreements, or (y) 75% of the remaining common units held by Rollover LPs, may require the Company to redeem all, but not less than all, of such Rollover LPs’ common units in exchange for one or more properties owned by the Company for at least two years (or common units in entities the sole assets of which are such properties).

Colonial Office Holdings Put Right

At any time after expiration of the Lockout Period, Colonial Office Holdings will have the right to require the Company to purchase all (but not less than all) of its common units. The purchase price will equal the fair market value of Office Holdings’ common units, which is an amount equal to the percentage interest represented by such Common Units, times (i) the aggregate fair market value of the Properties, plus (ii) the net current assets of the Company, minus (iii) the principal amount of the indebtedness of the Company and its subsidiaries, minus (iv) the aggregate liquidation preference of any preferred common units then outstanding. The fair market value of the Properties will be determined in accordance with the Valuation Method, as defined in the Operating Agreement. The Company may sell properties of DRA’s choice in order to satisfy its obligations to Office Holdings under the Office Holdings put option. Office Holdings will make any required payments of Tax Damages Amounts to the Rollover LPs arising as a result of the sale of one or more Properties in connection with the exercise of Office Holdings’ put option.

Colonial Office Holdings’ common units subject to the put rights are referred to as Redeemable common units and are shown in the accompanying consolidated balance sheet as Temporary Equity-Redeemable common units at its redemption value. The redemption value at December 31, 2007 is $32.2 million, which resulted in an increase in redemption value of approximately $3.1 million during the period ended December 31, 2007.

10.   Related Party Transactions

The Company’s properties are managed by Colonial Properties Services, Inc. (the “Property Manager”), a subsidiary of CRLP. During the term of the management agreements, the Company will pay to the Property Manager a management fee equal to 4% of Gross Receipts as defined by the management agreements and reimbursement for payroll, payroll related benefits and administrative expenses. Management fees incurred by the Company for the period ending December 31, 2007 were approximately, $2.8 million. For the period ending December 31, 2007, the Company reimbursed the Property Manager approximately $2.1 million for payroll, payroll related benefits and administrative costs, and the Company has accrued payroll of approximately $0.2 million.

For the period ended December 31, 2007, the Company paid leasing commissions to the Property Manager of approximately $2.3 million.

For the period ended December 31, 2007, the Company incurred approximately $0.5 million in disposition fees associated with the properties sold in November payable to the Property Manager. These fees are included in Payable to members as of December 31, 2007.

In June 2007, G&I VI and CRLP provided member loans to the Company of approximately $12.4 million and $2.6 million, respectively for closing costs and initial working capital. These loans, which were repaid in July 2007, accrued interest at the rate of 10% per annum. Interest expense in the amount of approximately $0.1 million was incurred during the period ended December 31, 2007 related to those member loans.

13

DRA/CLP OFFICE LLC and Subsidiaries

Notes to Consolidated Financial Statements

For the Period June 13, 2007 (Inception) to December 31, 2007 — (Continued)

As discussed in Note 6, the Company disposed of its interest in nine office properties totaling 1.7 million square feet located in Huntsville, AL. As part of the transaction, CLP acquired a 40 percent interest in three tenancies in common (TIC) investments of the same nine office properties.

The Company leased space to the Property Manager and its affiliates. For the period from June 13, 2007 (inception) to December 31, 2007, market rent and other income received from the entities total approximately $0.9 million.

The Company entered into a lease renewal and expansion agreement between the Company and the Property Manager during the same period. Tenant Improvement costs of $0.7 million were incurred by the Company for the period ended December 31, 2007 as required by the terms of the lease agreement.

The Company leased space to an entity in which a trustee of CLP has an interest. The Company received market rent from this entity for approximately $0.3 million during the period June 13, 2007 (inception) to December 31, 2007.

11.   Subsequent Events

In December 2007, the Company entered into a sales contract to sell approximately two acres of land in Orlando, Florida to an existing retail tenant who is currently leasing the land. The sales price is $2.25 million and is expected to close during 2008. No gain or loss is anticipated on this sale.

In February 2008, the Company paid distributions to the Members totaling approximately $6.7 million.

14

Appendix S-2

OZ/CLP Retail LLC and Subsidiaries

Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

Report of Independent Registered Public Accounting Firm

To the Members of OZ/CLP Retail LLC:

     In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, members’ equity and temporary equity and cash flows present fairly, in all material respects, the financial position of OZ/CLP Retail LLC and its subsidiaries (the “Company”) at December 31, 2007, and the results of their operations and their cash flows for the period from June 15, 2007 (inception) to December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. 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 audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Birmingham, Alabama
February 29, 2008

1

OZ/CLP Retail LLC and Subsidiaries

Consolidated Balance Sheet
December 31, 2007 (in thousands)

Assets
Land, buildings, and equipment, net	$	333,067
Cash and cash equivalents		3,915
Restricted cash		1,882
Accounts receivable, net		1,348
Deferred lease costs, net		8,160
Deferred mortgage costs, net		872
In place leases, net		21,452
Acquired above market leases, net		7,101
Other assets		700
Total assets	$	378,497
Liabilities, Temporary Equity and Members’ Equity
Mortgages payable	$	284,000
Accounts payable and accrued expenses		1,763
Accrued interest		1,245
Acquired below market leases, net		16,249
Tenant deposits		442
Unearned rent		1,172
Total liabilities		304,871
Commitment and contingencies (Note 7)
Temporary Equity — Redeemable common units
Redeemable common units (Redemption value of $9,849)		9,849
Equity — Nonredeemable common units		63,777
Total liabilities, temporary equity and members’ equity	$	378,497

The accompanying notes are an integral part of these consolidated financial statements.

2

OZ/CLP Retail LLC and Subsidiaries

Consolidated Statement of Operations
For the Period from June 15, 2007 (inception) to December 31, 2007
(in thousands)

Revenues
Rent	$	14,681
Percentage rent		18
Tenant recoveries		3,591
Other		405
Total revenues		18,695
Property operating expenses
General operating expenses		655
Management fees paid to affiliate		699
Repairs and maintenance		1,245
Taxes, licenses and insurance		2,112
General and administrative		436
Depreciation		5,861
Amortization		3,236
Total property operating expenses		14,244
Income from operations		4,451
Other income (expense)
Interest expense		(9,817	)
Interest income		52
Total other expense		(9,765	)
Net loss	$	(5,314	)

The accompanying notes are an integral part of these consolidated financial statements.

3

OZ/CLP Retail LLC and Subsidiaries

Consolidated Statement of Members’ Equity and Temporary Equity
For the Period from June 15, 2007 (inception) to December 31, 2007
(in thousands)

										Temporary
	Equity									Equity
	OZRE			Colonial Retail						Rollover
	Retail LLC			Holdings, LLC			Total			LP’s
Balance — Beginning of Period	$	—		$	—		$	—		$	—
Issuance of redeemable common units		—			—			—			21,617
Issuance of nonredeemable common units		125,248			25,917			151,165			—
Distributions		(68,025	)		(14,076	)		(82,101	)		(11,741	)
Net loss		(3,852	)		(797	)		(4,649	)		(665	)
Change in redemption value of redeemable common units		(528	)		(110	)		(638	)		638
Balance — December 31, 2007	$	52,843		$	10,934		$	63,777		$	9,849

The accompanying notes are an integral part of these consolidated financial statements.

4

OZ/CLP Retail LLC and Subsidiaries

Consolidated Statement of Cash Flows
For the Period from June 15, 2007 (inception) to December 31, 2007
(in thousands)

Cash flows from operating activities
Net loss	$	(5,314	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		8,652
Bad debt expense		123
Changes in operating assets and liabilities
Accounts receivable		(574	)
Other assets		(469	)
Accounts payable and accrued expenses		(631	)
Accrued interest		1,245
Tenant deposits		(110	)
Unearned rent		(10	)
Net cash provided by operating activities		2,912
Cash flows from investing activities
Cash paid in acquisition, net of cash acquired		(311,219	)
Restricted cash		(1,882	)
Capital expenditures		(276	)
Leasing costs paid		(86	)
Net cash used in investing activities		(313,463	)
Cash flows from financing activities
Borrowing of long-term debt		284,000
Repayment of loans of members		(4,952	)
Proceeds from loans of members		4,952
Proceeds from issuance of nonredeemable common units		125,248
Distributions paid to equity members		(82,101	)
Distributions paid to temporary equity members		(11,741	)
Deferred loan costs		(940	)
Net cash provided by financing activities		314,466
Increase in cash		3,915
Cash
Beginning of period		—
End of period	$	3,915
Supplemental disclosure of cash flow information
Cash paid during the year for interest	$	8,503
Supplemental information of non-cash investing and financing activities
Issuance of redeemable common units for real estate	$	47,534

The accompanying notes are an integral part of these consolidated financial statements.

5

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

1. Organization and Basis of Presentation

     On June 20, 2007, Colonial Properties Trust (“CLP”) completed a joint venture transaction with OZRE Retail LLC. CLP had previously entered into a Membership Interests Purchase Agreement, dated as of April 25, 2007 (the “Retail Purchase Agreement”), to sell to OZRE Retail LLC CLP’s 69.8% limited liability company interest in OZ/CLP Retail LLC (the “Company”), a newly formed joint venture among OZRE Retail LLC (“OZRE”), Colonial Realty Limited Partnership (“CRLP”), an affiliate of CLP, and the limited partners of CRLP. The Company became the owner of 11 retail properties previously owned by CRLP. The properties are owned by limited liability companies (the “subsidiaries”) which are owned directly or indirectly by the Company. Pursuant to the Retail Purchase Agreement, CRLP retained a 15% minority interest in the Company, as well as management and leasing responsibilities for the 11 properties owned by the Company. The Company portfolio is composed of 2.7 million square feet of retail properties located in Alabama, Florida, Georgia, and Texas. In addition to the approximate 69.8% interest purchased from CLP, OZRE purchased an aggregate of 2.7% of the limited liability company interests in the Company from limited partners of CRLP. At December 31, 2007, OZRE now holds approximately 72.5% of the limited liability company interests of the Company; Colonial Retail Holdings LLC (“Retail Holdings”), a subsidiary of CRLP, holds 15% of the limited liability company interests in the Company (and serves as the “Manager” of the Company); and certain limited partners of CRLP (“Rollover LP’s”), that did not elect to sell their interests in the Company to OZRE, hold the remaining approximately 12.5% of the limited liability company interests in the Company.

     As of December 31, 2007, the Company owned 11 properties totaling approximately 2.7 million square feet located in Alabama, Florida, Georgia, and Texas.

     Operating Agreement — The Company will distribute cash flow from operations for each fiscal quarter first to the holders of any outstanding preferred company units (if any preferred company units are outstanding at the time of such distribution; as of December 31, 2007, there are no preferred company units outstanding), second to the holders of common company units, pro rata, in accordance with their respective percentage interests until the “8% Preferred Return Account” (as defined in the Amended Operating Agreement) of each such holder shall have been reduced to zero, and thereafter; 15% to the Manager (the “Promote Payment”) and 85% to the holders of common company units (including the Manager), pro rata among such holders of common company units in accordance with their respective percentage interests. In the event that members of the Company have a positive balance in their “8% Preferred Return Account” after the final distribution of cash flow following any fiscal year of the Company and the Manager shall have received a Promote Payment with respect to such fiscal year, then within 15 days after such distribution of cash flow, the Manager shall pay to the members pro rata in accordance with their respective percentage interests the lesser of: (i) the aggregate amount of the Promote Payment received by Manager with respect to such preceding fiscal year or (ii) the aggregate amount of the members’ positive balances in their respective 8% Preferred Return Accounts. The actual amount (if any) received by each such member shall reduce the positive balance in their respective 8% Preferred Return Account.

     Subject to the provisions of any agreement to which the Company is a party, net capital proceeds from a merger, consolidation or sale of all or substantially all of the properties, from re-financings and other asset sales, and proceeds in liquidation shall be distributed first to the holders of any outstanding preferred company units and thereafter to the holders of common company units, pro rata in accordance with their respective percentage interests. All distributions are subject to any loan or similar agreements to which the Company is a party, and repayment of any Partner Loans made by Retail Holdings. In addition, the Manager is not required to make any distribution of cash to the members if such distribution would cause a default under a loan agreement to which the Company is party.

6

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

2. Summary of Significant Accounting Policies

     Principles of Consolidation — The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

     Land, Buildings and Equipment — Land, buildings, and equipment is stated at the lower of cost, less accumulated depreciation, or fair value. The Company reviews its long-lived assets and certain intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future net cash flows expected to be generated by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the asset’s fair value. Assets to be disposed of are reported at the lower of their carrying amount or fair value less cost to sell. The Company computes depreciation on its operating properties using the straight-line method based on estimated useful lives, which generally range from 3 to 48 years. Tenant improvements are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date). Repairs and maintenance are charged to expense as incurred. Replacements and improvements are capitalized and depreciated over the estimated remaining useful lives of the assets. The Company recognizes sales of real estate properties only upon the closing of a transaction. Payments received from purchasers prior to closing are recorded as deposits. Profit on real estate sold is recognized using the full accrual method upon closing when the collectibility of the sales price is reasonably assured and the Company is not obligated to perform significant activities after the sale. Profit may be deferred in whole or part until the sale meets the requirements of profit recognition on sales of real estate under SFAS No. 66, Accounting for Sales of Real Estate. Further, the profit is limited by the amount of cash received for which the Company has no commitment to reinvest pursuant to the partial sale provisions found in paragraph 30 of Statement of Position (SOP) 78-9, Accounting for Investments in Real Estate Ventures. There were no sales transactions for the period from June 15, 2007 (inception) to December 31, 2007. Land, buildings and equipment consist of the following as of December 31, 2007:

Land	$	58,173
Buildings and improvements		256,248
Land improvements		24,507
		338,928
Accumulated depreciation		(5,861	)
	$	333,067

     Depreciation expense for the period from June 15, 2007 (inception) to December 31, 2007 was $5.9 million.

     Acquisition of Real Estate Assets — The Company accounts for its acquisitions or investments in real estate in accordance with SFAS No. 141, Business Combinations, which requires the fair value of the real estate acquired to be allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and value of other tenant relationships, based in each case on their fair values. The Company considers acquisitions of operating real estate assets to be “businesses” as that term is contemplated in Emerging Issues Task Force Issue No. 98-3, Determining Whether a Non-Monetary Transaction Involves Receipt of Productive Assets or of a Business.

     The Company allocates purchase price to the fair value of the tangible assets of an acquired property (which includes the land and building) determined by valuing the property as if it were vacant. The “as-if-vacant” value is allocated to land and buildings based on management’s determination of the relative fair values of these assets. The

7

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

Company also allocates value to tenant improvements based on the estimated costs of similar tenants with similar terms.

     Above-market and below-market in-place lease values for acquired properties are recorded based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancelable terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term and any fixed-rate renewal periods in the respective leases. These above (below) market lease intangibles have a weighted-average composite life of 9.5 years as of December 31, 2007.

     The value associated with in-place leases and tenant relationships is amortized as a leasing cost over the initial term of the respective leases and any probability-weighted renewal periods. The initial term and any probability-weighted renewal periods have a current weighted average composite life of 6.4 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangibles will be written off.

     The aggregate value of other intangible assets acquired are measured based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. The Company may engage independent third-party appraisers to perform these valuations and those appraisals use commonly employed valuation techniques, such as discounted cash flow analyses. Factors considered in these analyses include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods depending on specific local market conditions and depending on the type of property acquired. Management also estimates costs to execute similar leases including leasing commissions, legal and other related expenses to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction.

     The total amount of other intangible assets acquired is further allocated to in-place leases, which includes other tenant relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of the Company’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement or management’s expectation for renewal), among other factors.

     The values of in-place leases and tenant relationships are amortized as a leasing cost expense over the initial term of the respective leases and any renewal periods. In no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles would be charged to expense. Amortization expense for in-place lease intangible assets for the period from June 15, 2007 (inception) to December 31, 2007 was approximately $2.5 million.

8

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

     The Company may pursue acquisition opportunities and will not be successful in all cases. Costs incurred related to these acquisition opportunities are expensed when it is no longer probable that the Company will be successful in the acquisition.

     Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

As of December 31, 2007, the Company maintained approximately $3.9 million with one financial institution which exceeds the FDIC insured limits.

     Restricted Cash — Restricted cash is comprised of cash balances which are legally restricted as to use and consists of escrowed funds for future capital improvements.

     Accounts Receivable and Allowance for Doubtful Accounts — Accounts receivable consist of receivables from tenants for rent and other charges, recorded according to the terms of their leases. The Company maintains an allowance for doubtful accounts for estimated losses due to the inability of its tenants to make required payments for rents and other rental services. In assessing the recoverability of these receivables, the Company makes assumptions regarding the financial condition of the tenants based primarily on past payment trends and certain financial information that tenants submit to the Company. As of December 31, 2007, allowance for doubtful accounts amounted to approximately $105,000. The Company may or may not require collateral for tenant receivables.

     Deferred Lease Costs and Mortgage Costs — Deferred leasing costs and leasing costs acquired at inception consist of legal fees and brokerage costs incurred to initiate and renew operating leases and are amortized on a straight-line basis over the related lease term. Deferred financing costs represent commitment fees, legal and other third party costs associated with obtaining commitments for financing which result in a closing of such financing. These costs are amortized on a straight-line basis over the terms of the respective loan agreements, which approximates the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Deferred costs as of December 31, 2007 consist of the following:

	2007
	(in thousands)
Financing Costs	$	940
Leasing Costs		8,924
		9,864
Less Accumulated Amortization		832
	$	9,032

     Impairment and Disposal of Long-Lived Assets — The Company follows SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” In accordance with SFAS 144, the results of operations of real estate held for sale and real estate sold during the year are presented in discontinued operations. The Company no longer records depreciation and amortization on assets held for sale. The Company assesses impairment of long-lived assets whenever changes or events indicate that the carrying value may not be recoverable. The Company assesses impairment of operating properties based on the operating cash flows of the properties. In performing its assessment, the Company makes assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. For the period from June 15, 2007 (inception) to December 31, 2007, no impairment charges were recorded.

     Revenue Recognition — Rental revenue is recognized on a straight-line basis over the term of the lease. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is included in Other assets on the accompanying balance sheet with a balance of approximately $336,000 at December 31, 2007. The

9

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

Company establishes, on a current basis, an allowance for future potential tenant credit losses which may occur against this account. As of December 31, 2007, the allowance was approximately $18,000.

     In addition to base rent, tenants also generally will pay their pro rata share in real estate taxes and operating expenses for the building. In certain leases, in lieu of paying additional rent based upon building operating expenses, the tenant will pay additional rent based upon increases in the consumer price index over the index value in effect during a base year. In addition, certain leases contain fixed percentage increases over the base rent to cover escalations.

     Income Taxes — No provision or benefit for income taxes has been included in the consolidated financial statements because such taxable income or loss passes through to, and is reportable by, the members of the Company.

     Fair Value of Financial Instruments — The Company believes the carrying amount of its temporary investments, tenant receivables, accounts payable and other liabilities is a reasonable estimate of fair value of these instruments. Based on estimated market interest rates of approximately 6.5% at December 31, 2007, the fair value of the Company’s mortgage payable is approximately $281.2 million as of December 31, 2007.

     Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. These estimates are based on historical experience and various other factors that are believed to be reasonable under the circumstances. However, actual results could differ from the Company’s estimates under different assumptions or conditions. On an ongoing basis, the Company evaluates the reasonableness of its estimates.

     Redeemable Common Units — In accordance with EITF Topic Summary D-98, Classification and Measurement of Redeemable Securities, the Company has elected to recognize changes in the redemption value of the Redeemable Common Units immediately as they occur and to adjust the carrying value to equal the redemption value at the end of each reporting period. The accrued changes are reflected in the Consolidated Statement of Members’ Equity and Temporary Equity as Changes in Redemption Value of Redeemable Common Units.

     Recent Accounting Pronouncements — In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 is effective for financial assets and liabilities on January 1, 2008. In February 2008, the FASB reached a conclusion to defer the implementation of the SFAS 157 provisions relating to non-financial assets and liabilities until January 1, 2009. The FASB also reached a conclusion to amend SFAS 157 to exclude SFAS 13 Accounting for Leases and its related interpretive accounting pronouncements. The FASB has proposed a deferral of the provisions of SFAS 157 relating to nonfinancial assets and liabilities that would delay implementation until January 1, 2009. SFAS 157 is not expected to materially affect how the Company determines fair value, but may result in certain additional disclosures.

     In February 2007, the FASB issued SFAS No.159, The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. The provisions of SFAS No. 159 are effective for fiscal years beginning after November 15, 2007. The adoption of SFAS No.159 is not expected to have a material impact on the Company’s consolidated financial statements.

10

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

3. Business Combination

     On June 20, 2007, the Company purchased a portfolio of properties comprised of 11 retail properties in Alabama, Florida, Georgia, and Texas. The operations of these properties have been included in the consolidated financial statements since that date. The acquisitions are being accounted for under the purchase method of accounting. The purchase price of approximately $358.8 million (net of cash acquired of approximately $3.0 million) was allocated to the net assets acquired based upon the estimated fair values at the date of acquisition. The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. The Company closed the allocation period as of December 31, 2007. The final allocation is as follows:

	(in thousands)
Accounts receivable	$	897
Property, plant and equipment		338,652
Acquired intangibles		23,101
Prepaid and other assets		231
Accrued expenses and accounts payable		(2,394	)
Unearned rent		(1,182	)
Tenant deposits and other liabilities		(552	)
Total purchase price, net of cash acquired	$	358,753

     The Company allocated the purchase price to acquired tangible and intangible assets, including land, buildings, tenant improvements, above and below market leases, acquired in-place leases, other assets and assumed liabilities in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations. The allocation to intangible assets is based upon various factors including the above or below market component of in-place leases, the value of in-place leases and the value of customer relationships, if any. The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using an interest rate which reflects the risks associated with the lease) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current fair market rates over the remaining term of the lease. The allocation of the purchase price to tangible assets is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. Factors considered by management include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. Differing assumptions and methods could have resulted in different estimates of fair value and thus, a different purchase price allocation and corresponding increase or decrease in depreciation and amortization expense.

4. Intangibles

     For the period from June 15, 2007 (inception) to December 31, 2007, the Company recognized a net increase of approximately $0.5 million in rental revenue for the amortization of above and below market leases. The Company recognized approximately $2.5 million of amortization of in-place leases for the period from June 15, 2007 (inception) to December 31, 2007.

     Future amortization of acquired in-place leases and above (below) market leases for each of the next five years and thereafter is estimated as follows:

11

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

(in thousands)
	In-Place		Above (Below)
For the Year Ended December 31,	Lease		Market Leases
2008	$	4,347	$	(1,007	)
2009		3,887		(1,027	)
2010		3,193		(974	)
2011		2,248		(1,046	)
2012		1,599		(977	)
Thereafter		6,178		(4,117	)
	$	21,452	$	(9,148	)

5. Mortgage Payable

     The Company has a non-recourse loan with an amount of approximately $284 million outstanding on December 31, 2007 payable to Key Bank Real Estate Capital (“Key Bank”). This loan was made in two advances (i) an advance in the amount of approximately $187.2 million on June 15, 2007, (ii) an advance in the amount of approximately $96.8 million on July 23, 2007. The loan is interest only and bears monthly interest at a fixed rate of 6.312%. The loan matures on August 6, 2014 and is collateralized by certain properties. Interest expense in the amount of $9.7 million was incurred during the period from June 15, 2007 (inception) to December 31, 2007.

6. Leases

     The Company’s operations consist principally of owning and leasing retail space. Terms of the leases generally range from 5 to 10 years. The Company principally pays all operating expenses, including real estate taxes and insurance. Substantially all of the Company’s leases are subject to rent escalations based on changes in the Consumer Price Index, fixed rental increases or increases in real estate taxes and certain operating expenses. A substantial number of leases contain options that allow leases to renew for varying periods. The Company’s leases are operating leases and expire at various dates through 2024. The future minimum fixed base rentals under these noncancelable leases are approximately as follows:

	(in thousands)
For the Year Ended December 31,
2008	$	25,473
2009		24,117
2010		21,327
2011		16,657
2012		13,771
Thereafter		61,397
	$	162,742

7. Commitments and Contingencies

     The Company is a party to various legal proceedings incidental to its business. In the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect the financial position or results of operations or cash flows of the Company.

12

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

Property Lockout Period

     Unless CRLP and OZRE unanimously agree, the Company will not during the three-year period following the effective date of the Amended Operating Agreement (referred to herein as the “Lockout Period”) sell or otherwise transfer or dispose of, directly or indirectly, any Property.

Tax Protection

     Certain events or actions by the Company could cause Rollover LPs to recognize for federal income tax purposes part or all of such Rollover LPs’ gain that was deferred at the time of the transactions. The Amended Operating Agreement provides for limited “tax protection” benefits for Rollover LPs, subject to those exceptions described below in the sections entitled “Rollover LP Put Rights,” and “Rollover LP Redemption in Kind.”

During the period ending seven years and one month following the effective date of the Amended Operating Agreement (the “Tax Protection Period”), the Company may not, directly or indirectly, (i) take any action, including a sale or disposition of all or any portion of its interest in certain designated Properties (the “Protected Properties”) if any Rollover LP would be required to recognize gain for federal income tax purposes pursuant to Section 704(c) of the Code with respect to the Protected Properties as a result thereof, or (ii) undertake a merger, consolidation or other combination of the Company or any of its subsidiaries with or into any other entity, a transfer of all or substantially all of the assets of the Company, a reclassification, recapitalization or change of the outstanding equity interests of the Company or a conversion of the Company into another form of entity, unless the Company pays to each Rollover LP its “Tax Damages Amount.” The “Tax Damages Amount” to be paid to the Rollover LPs is an amount generally equal to the sum of (A) the built-in gain (i.e., generally, the gain Rollover LPs would recognize on a sale at the time of the Transaction) attributable to the Protected Property recognized by the affected Rollover LP, multiplied by the maximum combined federal and applicable state and local income tax rates for the taxable year in which the disposition occurs and applicable to the character of the resulting gain, plus (B) a “gross-up” amount equal to the taxes (calculated at the rates described in the Amended Operating Agreement which, generally, are the rates that the Rollover LP will be subject to at the time of a recognition event) payable by a Rollover LP as the result of the receipt of such payment.

8. Redeemable Common Units

Rollover LP Put Rights

     Each Rollover LP will have the right to require the Company to buy some or all, but not less than 1,000 (or the remainder, if such Rollover LP has less than 1,000), of its common Company Units during an Annual Redemption Period (as defined in the Amended Operating Agreement) for a purchase price equal to the “Redemption Value.” The “Redemption Value” of Rollover LP company units will equal, during the first Annual Redemption Period, such Rollover LP’s capital account (determined in accordance with Section 704(c) of the Code), and for every Annual Redemption Period thereafter, the fair market value of such common company units, which shall be equal to the product of (x) the percentage interest represented by such company units times (y) an amount equal to (i) the aggregate fair market value of the Properties, plus (ii) the net current assets of the Company, minus (iii) the principal amount of the indebtedness of the Company and its subsidiaries, minus (iv) the aggregate liquidation preference of any preferred company units then outstanding, minus (v) an amount equal to 1.0% of the amount in clause (y) as an estimate of sales cost in connection with the sale of such properties. The fair market value of the Properties during any Annual Redemption Period from and after the second Annual Redemption Period will be based on an independent appraisal obtained by the Manager (which shall not be older than 15 months). The Rollover LP’s common units subject to the put rights are referred to as Redeemable common units and are shown in the accompanying consolidated balance sheet as Temporary Equity-Redeemable common units at its redemption value. The redemption value at December 31, 2007 is $9.8 million, which resulted in an increase in redemption value of approximately $0.6 million during the period from June 15, 2007 (inception) to December 31, 2007.

13

OZ/CLP Retail LLC and Subsidiaries
Notes to Consolidated Financial Statements
For the Period from June 15, 2007 (inception) to December 31, 2007

Rollover LP Redemption in Kind

     At any time after the seven years and one month following the effective date of the Amended Operating Agreement, if the Company proposes the sale of all or substantially all of the Properties in one or a series of related transactions, the Manager will provide the Rollover LPs written notice of proposed sale (an “Asset Sale Notice”). Any Rollover LP or a group of Rollover LPs holding in the aggregate a number of company units greater than or equal to the number of common company units with an aggregate purchase price of $3 million under the Purchase Agreements may require the Company to redeem all, but not less than all, of such Rollover LPs’ Company Units in exchange for one or more Properties owned by the Company for at least two years (or at the option of such Rollover LPs, in membership interests in entities the sole assets of which are Properties) (a “Property Redemption”). If such Rollover LP or group of Rollover LPs do not notify the Manager in writing of their decision to request a Property Redemption within 15 days of the date of the asset sale notice, then such Rollover LPs shall be considered not to have elected to participate in a property redemption. The redemption price for the company units being redeemed (the “Cash Amount”) shall equal the fair market value of the company units being redeemed, which shall be an amount equal to the percentage interest represented by such company units, multiplied by (i) the aggregate fair market value of the properties, plus (ii) the net current assets of the Company, minus (iii) the principal amount of the indebtedness of the Company and its subsidiaries, minus (iv) the aggregate liquidated preference of any company units then outstanding, minus (v) an amount equal to 1.0% of the amount in clause (i) as an estimate of sales cost in connection with the sale of such properties. The fair market value of the properties in clause (i) shall be the fair market value determined in accordance with the valuation method described under “Rollover LP Put Rights” above.

9. Related Party Transactions

     The Company’s properties are managed by Colonial Properties Services, Inc. (the “Property Manager”), an affiliate of CRLP. During the term of the management agreements, the Company will pay to the Property Manager a management fee equal to 4% of gross receipts as defined by the management agreements and reimbursement for payroll, payroll related benefits and administrative expenses. Management fees incurred by the Company for the period from June 15, 2007 (inception) to December 31, 2007 were approximately, $0.7 million. For the period from June 15, 2007 (inception) to December 31, 2007, the Company reimbursed the Property Manager approximately $0.4 million for payroll, payroll related benefits and administrative costs, and the Company has accrued payroll of approximately $28,000.

     The Company received payments from the Manager of approximately $0.2 million related to a master lease agreement for tenant space at one of the properties.

     In June 2007, CRLP provided a member loan to the Company of approximately $5 million for closing costs and initial working capital. This loan accrued interest at the rate of 8% per annum and was repaid in July 2007. Interest expense in the amount of approximately $36,000 was incurred during the period from June 15, 2007 (inception) to December 31, 2007.

10. Subsequent Events

     In February 2008, the Company paid distributions to the members totaling approximately $1.3 million.

14

Appendix S-3

SCHEDULE III
COLONIAL REALTY LIMITED PARTNERSHIP
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2007

			Initial Cost to Company						Gross Amount at Which Carried at Close of Period
							Cost Capitalized													Date Acquired/
					Buildings and		Subsequent to				Buildings and				Accumulated			Date		Placed in		Depreciable
Description	Encumbrances (1)		Land		Improvements		Acquisition		Land		Improvements		Total (2)		Depreciation			Completed		Service		Lives-Years
Multifamily:
Ashley Park (3)	$	—	$	3,702,098	$	15,332,923	$	246,990	$	3,702,098	$	15,579,913	$	19,282,011	$	(2,782,393	)		1988		2005	3-40 Years
Autumn Hill		—		7,146,496		24,811,026		1,911,754		7,146,496		26,722,780		33,869,277		(3,025,122	)		1970		2005	3-40 Years
Autumn Park I & II		—		4,407,166		35,387,619		359,888		4,407,166		35,747,506		40,154,672		(2,842,664	)		2001/04		2005	3-40 Years
Brookfield (3)		—		1,541,108		6,022,656		629,170		1,541,108		6,651,826		8,192,934		(1,006,715	)		1984		2005	3-40 Years
Colonial Grand at Arringdon		—		3,016,358		23,295,172		921,009		3,016,358		24,216,181		27,232,539		(3,390,655	)		2003		2004	3-40 Years
Colonial Grand at Barrett Creek		—		3,320,000		27,237,381		392,741		3,320,000		27,630,121		30,950,121		(2,538,115	)		1999		2005	3-40 Years
Colonial Grand at Bear Creek		—		4,360,000		32,029,388		898,307		4,360,000		32,927,695		37,287,695		(3,106,841	)		1998		2005	3-40 Years
Colonial Grand at Bellevue		—		3,490,000		31,544,370		1,635,268		3,490,986		33,178,652		36,669,638		(2,730,420	)		1996		2005	3-40 Years
Colonial Grand at Berkeley Lake		—		1,800,000		16,551,734		419,500		1,800,000		16,971,234		18,771,234		(2,319,063	)		1998		2004	3-40 Years
Colonial Grand at Beverly Crest		—		2,400,000		20,718,143		1,139,539		2,400,000		21,857,682		24,257,682		(2,727,792	)		1996		2004	3-40 Years
Colonial Grand at Crabtree Valley		—		2,100,000		15,272,196		835,344		2,100,000		16,107,540		18,207,540		(1,311,307	)		1997		2005	3-40 Years
Colonial Grand at Cypress Cove		—		3,960,000		24,721,680		1,348,123		3,960,000		26,069,803		30,029,803		(1,023,927	)		2001		2006	3-40 Years
Colonial Grand at Edgewater I		—		1,540,000		12,671,606		15,683,120		2,602,325		27,292,400		29,894,726		(10,895,586	)		1990		1994	3-40 Years
Colonial Grand at Godley Station I		18,482,376		1,594,008		27,057,678		—		1,594,008		27,057,678		28,651,686		(666,448	)		2001		2006	3-40 Years
Colonial Grand at Hammocks		—		3,437,247		26,514,000		1,416,098		3,437,247		27,930,098		31,367,345		(2,797,944	)		1997		2005	3-40 Years
Colonial Grand at Heather Glen		—		3,800,000		—		35,345,604		4,134,235		35,011,370		39,145,604		(9,963,181	)		2000		1998	3-40 Years
Colonial Grand at Heathrow		—		2,560,661		17,612,990		1,680,518		2,560,661		19,293,508		21,854,169		(7,420,418	)		1997		1994/97	3-40 Years
Colonial Grand at Hunter’s Creek (3)		—		1,869,657		—		33,553,897		5,308,112		30,115,442		35,423,554		(12,545,659	)		1996		1996	3-40 Years
Colonial Grand at Inverness Commons		—		6,976,500		33,892,731		497,124		6,976,500		34,389,855		41,366,355		(1,086,070	)		2001		2006	3-40 Years
Colonial Grand at Lakewood Ranch		—		2,320,442		—		24,055,763		2,359,875		24,016,331		26,376,205		(7,120,443	)		1999		1997	3-40 Years
Colonial Grand at Legacy Park		—		2,212,005		23,076,117		697,826		2,212,005		23,773,943		25,985,948		(2,140,575	)		2001		2005	3-40 Years
Colonial Grand at Liberty Park		—		2,296,019		—		25,833,158		2,296,019		25,833,158		28,129,177		(7,927,836	)		2000		1998	3-40 Years
Colonial Grand at Madison		—		1,689,400		—		22,261,108		1,831,550		22,118,958		23,950,508		(6,957,196	)		2000		1998	3-40 Years
Colonial Grand at Mallard Creek		—		2,911,443		1,277,575		16,501,917		3,320,438		17,370,497		20,690,935		(1,759,533	)		2005		2003	3-40 Years
Colonial Grand at Mallard Lake		—		3,020,000		24,070,350		1,522,481		3,020,000		25,592,831		28,612,831		(2,110,638	)		1998		2005	3-40 Years
Colonial Grand at McDaniel Farm		—		4,240,000		36,239,339		1,000,834		4,240,000		37,240,173		41,480,173		(2,349,516	)		1997		2006	3-40 Years
Colonial Grand at McGinnis Ferry		—		5,000,114		34,600,386		844,256		5,000,114		35,444,642		40,444,756		(4,209,569	)		1997		2004	3-40 Years
Colonial Grand at Mount Vernon		—		2,130,000		24,943,402		581,620		2,130,000		25,525,022		27,655,022		(3,450,272	)		1997		2004	3-40 Years
Colonial Grand at OldTown Scottsdale North		—		4,837,040		5,271,474		23,649,976		4,837,040		28,921,450		33,758,490		(1,030,296	)		2001		2006	3-40 Years
Colonial Grand at OldTown Scottsdale South		—		6,139,320		6,558,703		30,076,261		6,139,320		36,634,964		42,774,284		(1,296,675	)		2001		2006	3-40 Years
Colonial Grand at Patterson Place		—		2,016,000		19,060,725		760,249		2,016,000		19,820,974		21,836,974		(2,472,995	)		1997		2004	3-40 Years
Colonial Grand at Pleasant Hill		—		6,024,000		38,454,690		702,032		6,024,000		39,156,722		45,180,722		(2,039,716	)		1996		2006	3-40 Years
Colonial Grand at Quarterdeck		—		9,123,452		12,297,699		897,101		9,123,452		13,194,800		22,318,252		(1,555,356	)		1987		2005	3-40 Years
Colonial Grand at River Oaks		—		2,160,000		17,424,336		1,507,593		2,160,000		18,931,929		21,091,929		(2,636,945	)		1992		2004	3-40 Years
Colonial Grand at River Plantation		—		2,320,000		19,669,298		1,129,953		2,320,000		20,799,251		23,119,251		(2,893,553	)		1994		2004	3-40 Years
Colonial Grand at Round Rock		—		2,647,588		—		32,568,075		2,647,588		32,568,075		35,215,663		(2,269,169	)		1997		2004	3-40 Years
Colonial Grand at Scottsdale		—		3,780,000		25,444,988		378,347		3,780,000		25,823,335		29,603,335		(1,453,694	)		1999		2006	3-40 Years
Colonial Grand at Seven Oaks		—		3,439,125		19,943,544		1,235,442		3,439,125		21,178,986		24,618,111		(3,339,790	)		2004		2004	3-40 Years
Colonial Grand at Shelby Farms I (3)		—		2,960,000		21,897,855		438,375		1,947,000		23,349,230		25,296,230		(1,898,248	)		1998		2005	3-40 Years
Colonial Grand at Shiloh		—		5,976,000		43,556,770		712,157		5,976,000		44,268,927		50,244,927		(2,317,250	)		2002		2006	3-40 Years
Colonial Grand at Silverado		—		2,375,425		17,744,643		658,153		2,375,425		18,402,796		20,778,221		(2,235,580	)		2005		2003	3-40 Years
Colonial Grand at Silverado Reserve		—		2,392,000		—		22,101,569		2,692,104		21,801,464		24,493,569		(1,557,577	)		2005		2003	3-40 Years
Colonial Grand at Sugarloaf		—		2,500,000		21,811,418		1,122,890		2,500,000		22,934,308		25,434,308		(3,078,608	)		2002		2004	3-40 Years
Colonial Grand at Town Park (Lake Mary)		—		2,647,374		—		36,266,482		3,110,118		35,803,737		38,913,856		(10,105,423	)		2005		2004	3-40 Years
Colonial Grand at Town Park Reserve		—		867,929		—		9,027,524		957,784		8,937,669		9,895,453		(1,154,460	)		2004		2004	3-40 Years
Colonial Grand at Trinity Commons		16,725,000		5,333,807		35,815,269		833,009		5,333,807		36,648,278		41,982,085		(3,164,444	)		2000/02		2005	3-40 Years
Colonial Grand at University Center		—		1,872,000		12,166,656		410,316		1,872,000		12,576,972		14,448,972		(578,845	)		2005		2006	3-40 Years
Colonial Grand at Valley Ranch		—		2,805,241		38,037,251		1,445,474		2,805,241		39,482,724		42,287,965		(3,476,217	)		1997		2005	3-40 Years
Colonial Grand at Wilmington (3)		12,275,983		3,344,408		30,554,367		1,144,530		3,344,408		31,698,897		35,043,305		(2,710,441	)		1998/2002		2005	3-40 Years
Colonial Village at Ashford Place		—		537,600		5,839,838		1,092,632		537,600		6,932,470		7,470,070		(2,317,563	)		1983		1996	3-40 Years
Colonial Village at Bear Creek (3)		—		1,028,887		4,357,339		381,210		1,028,887		4,738,549		5,767,436		(674,091	)		1984		2005	3-40 Years
Colonial Village at Bedford (3)		—		2,403,988		8,732,353		642,278		2,403,988		9,374,632		11,778,620		(1,079,903	)		1983		2005	3-40 Years
Colonial Village at Canyon Hills		—		2,345,191		11,274,917		692,756		2,345,191		11,967,673		14,312,864		(1,271,168	)		1996		2005	3-40 Years
Colonial Village at Chancellor Park		—		4,080,000		23,213,840		893,876		4,080,000		24,107,716		28,187,716		(1,350,733	)		1999		2006	3-40 Years
Colonial Village at Charleston Place (3)		—		1,124,924		7,367,718		660,214		1,124,924		8,027,932		9,152,856		(1,201,583	)		1986		2005	3-40 Years
Colonial Village at Chase Gayton		—		3,270,754		26,910,024		1,200,000		3,270,754		28,110,024		31,380,778		(4,069,510	)		1984		2005	3-40 Years
Colonial Village at Deerfield		—		2,032,054		14,584,057		716,822		2,032,054		15,300,880		17,332,934		(1,635,277	)		1985		2005	3-40 Years
Colonial Village at Grapevine		—		6,221,164		24,463,050		1,387,512		6,221,164		25,850,561		32,071,726		(2,699,108	)		1985/86		2005	3-40 Years
Colonial Village at Greenbrier		—		2,620,216		25,498,161		770,920		2,620,216		26,269,081		28,889,297		(2,262,456	)		1980		2005	3-40 Years
Colonial Village at Greentree		—		1,920,436		10,288,950		743,781		1,878,186		11,074,981		12,953,168		(1,145,722	)		1984		2005	3-40 Years
Colonial Village at Greystone (3)		—		3,155,483		28,875,949		397,304		3,155,483		29,273,253		32,428,736		(2,445,197	)		1998/2000		2005	3-40 Years
Colonial Village at Hampton Glen		—		3,428,098		17,966,469		1,360,268		3,428,098		19,326,737		22,754,835		(2,506,284	)		1986		2005	3-40 Years
Colonial Village at Hampton Pointe		—		8,875,840		15,359,217		789,343		8,875,840		16,148,559		25,024,399		(2,018,204	)		1986		2005	3-40 Years
Colonial Village at Harbour Club		—		3,209,585		20,094,356		903,664		3,209,585		20,998,020		24,207,605		(2,437,387	)		1988		2005	3-40 Years

S-1

SCHEDULE III
COLONIAL REALTY LIMITED PARTNERSHIP
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2007

			Initial Cost to Company						Gross Amount at Which Carried at Close of Period
							Cost Capitalized													Date Acquired/
					Buildings and		Subsequent to				Buildings and				Accumulated			Date		Placed in		Depreciable
Description	Encumbrances (1)		Land		Improvements		Acquisition		Land		Improvements		Total (2)		Depreciation			Completed		Service		Lives-Years
Colonial Village at Highland Hills		—		1,981,613		17,112,176		165,375		1,981,613		17,277,551		19,259,164		(2,507,313	)		1987		2005	3-40 Years
Colonial Village at Huntington		—		1,315,930		7,605,360		862,515		1,315,930		8,467,875		9,783,805		(861,915	)		1986		2005	3-40 Years
Colonial Village at Huntleigh Woods		—		745,600		4,908,990		1,592,491		730,688		6,516,393		7,247,081		(2,598,622	)		1978		1994	3-40 Years
Colonial Village at Inverness		—		2,349,487		16,279,416		13,216,355		2,936,991		28,908,268		31,845,258		(12,846,054	)		1986/87/90/97		1986/87/90/97	3-40 Years
Colonial Village at Main Park		—		1,208,434		10,235,978		613,897		1,208,434		10,849,875		12,058,310		(1,271,104	)		1984		2005	3-40 Years
Colonial Village at Marsh Cove		—		2,023,460		11,095,073		1,035,352		2,023,460		12,130,425		14,153,885		(1,572,246	)		1983		2005	3-40 Years
Colonial Village at Meadow Creek		—		1,548,280		11,293,190		1,025,461		1,548,280		12,318,651		13,866,931		(1,624,939	)		1984		2005	3-40 Years
Colonial Village at Mill Creek (3)		—		2,153,567		9,331,910		491,007		2,153,567		9,822,917		11,976,484		(1,776,338	)		1984		2005	3-40 Years
Colonial Village at North Arlington		—		2,439,102		10,804,027		707,209		2,439,102		11,511,236		13,950,338		(1,419,633	)		1985		2005	3-40 Years
Colonial Village at Oakbend		—		5,100,000		26,260,164		711,143		5,100,000		26,971,307		32,071,307		(1,339,064	)		1997		2006	3-40 Years
Colonial Village at Pear Ridge (3)		—		3,329,377		11,311,073		361,012		3,329,377		11,672,085		15,001,461		(1,167,830	)		1988		2005	3-40 Years
Colonial Village at Pinnacle Ridge		—		1,212,917		8,499,638		444,970		1,212,917		8,944,608		10,157,525		(1,189,072	)		1951/85		2005	3-40 Years
Colonial Village at Quarry Oaks		—		5,063,500		27,767,505		1,526,219		5,063,500		29,293,724		34,357,224		(3,356,661	)		1996		2003	3-40 Years
Colonial Village at Shoal Creek		—		4,080,000		29,214,707		1,051,935		4,080,000		30,266,642		34,346,642		(1,881,154	)		1996		2006	3-40 Years
Colonial Village at Sierra Vista		—		2,320,000		11,370,600		963,447		2,308,949		12,345,098		14,654,047		(1,706,981	)		1999		2004	3-40 Years
Colonial Village at South Tryon		—		1,510,535		14,696,088		507,336		1,510,535		15,203,425		16,713,960		(1,289,812	)		2002		2005	3-40 Years
Colonial Village at Stone Point (3)		—		1,417,658		9,291,464		538,876		1,417,658		9,830,340		11,247,998		(1,367,086	)		1986		2005	3-40 Years
Colonial Village at Timber Crest (3)		14,325,000		2,284,812		19,010,168		713,581		2,284,812		19,723,749		22,008,561		(1,665,678	)		2000		2005	3-40 Years
Colonial Village at Tradewinds		—		5,220,717		22,479,977		819,800		5,220,717		23,299,777		28,520,494		(2,295,706	)		1988		2005	3-40 Years
Colonial Village at Trussville		—		1,504,000		18,800,253		2,338,818		1,510,409		21,132,662		22,643,071		(7,879,104	)		1996/97		1997	3-40 Years
Colonial Village at Twin Lakes		—		4,966,922		29,925,363		338,605		5,624,063		29,606,827		35,230,890		(3,812,377	)		2005		2001	3-40 Years
Colonial Village at Vista Ridge		—		2,003,172		11,186,878		693,197		2,003,172		11,880,075		13,883,247		(1,406,961	)		1985		2005	3-40 Years
Colonial Village at Waterford		—		3,321,325		26,345,195		1,018,163		3,321,325		27,363,359		30,684,684		(3,094,726	)		1989		2005	3-40 Years
Colonial Village at Waters Edge		—		888,386		13,215,381		775,088		888,386		13,990,469		14,878,855		(2,241,474	)		1985		2005	3-40 Years
Colonial Village at West End		—		2,436,588		14,800,444		1,271,793		2,436,588		16,072,237		18,508,825		(1,946,556	)		1987		2005	3-40 Years
Colonial Village at Westchase		—		10,418,496		10,348,047		1,003,606		10,418,496		11,351,653		21,770,149		(2,058,061	)		1985		2005	3-40 Years
Colonial Village at Willow Creek		—		4,780,000		34,143,179		775,795		4,780,000		34,918,974		39,698,974		(2,239,695	)		1996		2006	3-40 Years
Colonial Village at Windsor Place		—		1,274,885		15,017,745		1,042,408		1,274,885		16,060,153		17,335,038		(2,035,235	)		1985		2005	3-40 Years
Cottonwood Crossing (3)		—		922,398		6,127,804		427,979		922,398		6,555,783		7,478,182		(924,713	)		1985		2005	3-40 Years
Glen Eagles I & II		—		2,028,204		17,424,915		511,360		2,028,204		17,936,275		19,964,480		(1,986,020	)		1990/2000		2005	3-40 Years
Heatherwood		—		3,550,362		23,731,531		2,832,004		3,550,362		26,563,536		30,113,898		(3,008,209	)		1980		2005	3-40 Years
Murano at Delray Beach (4)		—		2,730,000		20,209,175		—		2,730,000		20,209,175		22,939,175		(564,970	)		2002		2005	3-40 Years
Paces Cove (3)		—		1,509,933		11,127,122		387,078		1,509,933		11,514,199		13,024,132		(1,601,210	)		1982		2005	3-40 Years
Parkside at Woodlake		—		2,781,279		17,694,376		519,943		2,781,279		18,214,319		20,995,598		(1,799,741	)		1996		2005	3-40 Years
Portofino at Jensen Beach (4)		—		3,540,000		16,690,792		—		3,540,000		16,690,792		20,230,792		(463,306	)		2002		2005	3-40 Years
Remington Hills		—		2,520,011		22,451,151		811,964		2,520,011		23,263,114		25,783,126		(2,485,813	)		1984		2005	3-40 Years
Summer Tree		—		2,319,541		5,975,472		472,402		2,319,541		6,447,874		8,767,414		(1,092,093	)		1980		2005	3-40 Years
Trolley Square East & West		—		4,743,279		14,416,319		3,782,130		4,743,279		18,198,449		22,941,727		(2,101,909	)		1964/65		2005	3-40 Years
Office:
250 Commerce Street (3)		—		25,000		200,200		2,799,129		25,000		2,999,329		3,024,329		(2,740,715	)		1904/81		1980	3-40 Years
Colonial Center Brookwood Village		—		1,285,379		—		38,827,460		—		40,112,839		40,112,839		(284,020	)		2007		2007	3-40 Years
Retail:
Colonial Brookwood Village		—		6,851,321		24,435,002		70,471,449		8,171,373		93,586,399		101,757,772		(31,639,553	)		1973/91/00		1997	3-40 Years
Colonial Promenade Fultondale		—		1,424,390		15,303,065		2,657,226		1,424,390		17,960,291		19,384,680		—			2007		2007	3-40 Years
Colonial Promenade Winter Haven		—		2,880,025		3,928,903		6,496,737		4,045,045		9,260,620		13,305,665		(2,458,491	)		1986		1995	3-40 Years
For-Sale Residential:
Central Park (3)		—		1,437,374		—		9,279,163		1,437,374		9,279,163		10,716,537		—			2007		2005		N/A
Cypress Village (5)		—		27,878,809		—		12,361,548		27,878,809		12,361,548		40,240,357		—			N/A		2006		N/A
Grander (5)		—		4,000,000		—		3,915,613		4,000,000		3,915,613		7,915,613		—			N/A		2006		N/A
Southgate at Fairview (3)		—		1,993,941		—		9,482,581		1,993,941		9,482,581		11,476,522		—			2007		2005		N/A
Spanish Oaks (5)		—		4,950,000		—		9,132,873		4,950,000		9,132,873		14,082,873		—			N/A		2006		N/A
Active Development Projects:
Colonial Center TownPark 400		—		3,301,914		—		13,298,957		3,301,914		13,298,957		16,600,871		—			N/A		1999		N/A
Colonial Grand at Ashton Oaks		—		3,659,400		—		2,058,600		3,659,400		2,058,600		5,718,000		—			N/A		2007		N/A
Colonial Grand at Ayrsley		—		4,261,351		—		22,298,649		4,261,351		22,298,649		26,560,000		—			N/A		2006		N/A
Colonial Grand at Azure		—		6,016,000		—		839,000		6,016,000		839,000		6,855,000		—			N/A		2007		N/A
Colonial Grand at Cityway (formerly Ridell Ranch)		—		3,656,250		—		833,750		3,656,250		833,750		4,490,000		—			N/A		2006		N/A
Colonial Grand at Desert Vista		—		12,000,000		—		3,621,000		12,000,000		3,621,000		15,621,000		—			N/A		2007		N/A
Colonial Grand at Hampton Preserve		—		10,500,000		—		1,160,000		10,500,000		1,160,000		11,660,000		—			N/A		2007		N/A
Colonial Grand at Huntersville		—		3,593,366		—		18,494,634		3,593,366		18,494,634		22,088,000		—			N/A		2006		N/A
Colonial Grand at Onion Creek (formerly Double Creek)		—		3,505,449		—		10,626,551		3,505,449		10,626,551		14,132,000		—			N/A		2005		N/A
Colonial Grand at Randal Park		—		7,200,000		—		3,468,000		7,200,000		3,468,000		10,668,000		—			N/A		2006		N/A
Colonial Grand at Shelby Farms II (3)		—		10,113,000		—		2,188,000		10,113,000		2,188,000		12,301,000		—			N/A		2006		N/A
Colonial Grand at South End		—		9,382,091		—		765,910		9,382,091		765,910		10,148,000		—			N/A		2007		N/A

S-2

SCHEDULE III
COLONIAL REALTY LIMITED PARTNERSHIP
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2007

			Initial Cost to Company							Gross Amount at Which Carried at Close of Period
							Cost Capitalized														Date Acquired/
					Buildings and		Subsequent to					Buildings and				Accumulated			Date		Placed in		Depreciable
Description	Encumbrances (1)		Land		Improvements		Acquisition			Land		Improvements		Total (2)		Depreciation			Completed		Service		Lives-Years
Colonial Grand at Sweetwater		—		5,238,000		—		1,095,000			5,238,000		1,095,000		6,333,000		—			N/A		2006		N/A
Colonial Grand at Thunderbird		—		6,500,500		—		1,165,500			6,500,500		1,165,500		7,666,000		—			N/A		2007		N/A
Colonial Grand at Wakefield		—		3,573,196		—		828,804			3,573,196		828,804		4,402,000		—			N/A		2007		N/A
Colonial Pinnacle Tannehill		—		19,097,386		—		2,555,821			19,097,386		2,555,821		21,653,207		—			N/A		2006		N/A
Colonial Pinnacle Tutwiler Farm		—		4,682,430		—		1,292,006			4,682,430		1,292,006		5,974,436		—			N/A		2005		N/A
Colonial Promenade Craft Farms II		—		1,207,040		—		251,615			1,207,040		251,615		1,458,655		—			N/A		2007		N/A
Colonial Promenade Huntsville		—		8,047,720		—		507,972			8,047,720		507,972		8,555,692		—			N/A		2007		N/A
Colonial Village at Godley Lake		—		1,053,307		—		9,181,693			1,053,307		9,181,693		10,235,000		—			N/A		2007		N/A
Colonial Village at Matthews Commons		—		2,026,288		—		877,712			2,026,288		877,712		2,904,000		—			N/A		2007		N/A
Craft Farms Mixed Use		—		4,400,000		—		2,932,002			4,400,000		2,932,002		7,332,002		—			N/A		2004		N/A
Enclave (formerly The Renwick) (5)		—		4,074,823		—		17,784,872			4,074,823		17,784,872		21,859,695		—			N/A		2005		N/A
Metropolitan Midtown		—		4,500,000		—		62,976,358			4,522,908		62,953,450		67,476,358		—			N/A		2006		N/A
Woodlands — Craft Farms Residential		—		15,300,000		—		13,006,265			15,300,000		13,006,265		28,306,265		—			N/A		2004		N/A
Other Miscellaneous Projects		—		—		—		10,861,507			—		10,861,507		10,861,507		—			N/A		N/A		N/A
Condominium Conversion Properties:
Azur at Metrowest (3)		—		3,421,000		22,592,957		(24,223,190	)		220,000		1,570,767		1,790,767		—			1997		2003	3-40 Years
Capri at Hunter’s Creek (3)		—		8,781,859		10,914,351		(18,558,556	)		85,005		1,052,649		1,137,654		—			1999		1998	3-40 Years
Unimproved Land:
Breland Land		—		9,842,761				25,502			9,842,761		25,502		9,868,263		—			N/A		2005		N/A
Canal Place and Infrastructure		—		10,951,968		—		5,058,136			10,951,968		5,058,136		16,010,104		—			N/A		2005		N/A
Colonial Center Town Park 500		—		2,903,795		—		1,201,230			2,903,795		1,201,230		4,105,025		—			N/A		1999		N/A
Colonial Promenade Burnt Store		—		615,380		—		—			615,380		—		615,380		—			N/A		1994		N/A
Heathrow Land and Infrastructure		—		12,250,568		—		1,964,345			12,560,568		1,654,345		14,214,913		—			N/A		2002		N/A
Lakewood Ranch		—		479,900		—		788,249			479,900		788,249		1,268,149		—			N/A		1999		N/A
Randal Park		—		33,686,904		—		11,693,502			33,686,904		11,693,502		45,380,406		—			N/A		2006		N/A
Town Park Land and Infrastructure				6,600,000		—		2,456,799			6,600,000		2,456,799		9,056,799		—			N/A		1999		N/A
Corporate Assets:		—		—		—		18,335,313			—		18,335,313		18,335,313		(9,551,327	)		N/A		N/A	3-7 Years
	$	61,808,359	$	615,349,307	$	1,850,989,511	$	787,396,644		$	611,433,179	$	2,642,302,283	$	3,253,735,462	$	(327,738,853	)

S-3

NOTES TO SCHEDULE III
COLONIAL REALTY LIMITED PARTNERSHIP
December 31, 2007

(1)	See description of mortgage notes payable in Note 11 of Notes to Consolidated Financial Statements.
(2)	The aggregate cost for Federal Income Tax purposes was approximately $1.8 billion at December 31, 2007.
(3)	Amounts include real estate assets classified as held for sale at December 31, 2007.
(4)	During 2007, the Company is leasing the remaining units at these previously classified condominium conversions.
(5)	These projects are net of an impairment charge of approximately $43 millon which was recorded during 2007.
(6)	The following is a reconciliation of real estate to balances reported at the beginning of the year:

Reconciliation of Real Estate

	2007			2006			2005
Real estate investments:
Balance at beginning of year	$	4,492,418,562		$	4,554,093,225		$	3,091,323,963
Acquisitions of new property		147,800,000			349,888,353			2,150,264,089
Improvements and development		342,843,440	(a)		470,553,525			254,999,732
Dispositions of property		(1,729,326,540	)		(882,116,541	)		(942,494,559	)
Balance at end of year	$	3,253,735,462		$	4,492,418,562		$	4,554,093,225

Reconciliation of Accumulated Depreciation

	2007			2006			2005
Accumulated depreciation:
Balance at beginning of year	$	495,268,312		$	463,109,242		$	505,988,402
Depreciation		114,044,627			148,887,070			135,929,433
Depreciation of disposition of property		(281,574,086	)		(116,728,000	)		(178,808,593	)
Balance at end of year	$	327,738,853		$	495,268,312		$	463,109,242

(a) This amount is net of an impairment charge of approximately $43 million which was recorded during 2007.

S-4

Colonial Realty Limited Partnership

Index to Exhibits

12.1	Ratio of Earnings to Fixed Charges
21.1	List of Subsidiaries
23.1	Consent of PricewaterhouseCoopers LLP
23.2	Consent of Weiser LLP
23.3	Consent of PricewaterhouseCoopers LLP
31.1	CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

136

EX-12.1

Exhibit 12.1

COLONIAL REALTY LIMITED PARTNERSHIP

Ratio of Earnings to Fixed Charges

(all dollar amounts in thousands)

	For the Years Ended December 31,
	2007			2006			2005			2004			2003
Earnings:
Pre-tax income (loss) before adjustment for minority interest in consolidated subsidiaries or income, loss from equity investees, extraordinary gain or loss, or gains on sale of properties	$	(79,436	)	$	(13,083	)	$	(36,567	)	$	4,448		$	11,267
Amortization of interest capitalized		2,700			2,400			1,800			1,700			1,500
Interest capitalized		(27,105	)		(17,063	)		(6,907	)		(5,576	)		(8,064	)
Distributed income of equity investees		13,207			9,370			3,588			2,148			2,073
Fixed charges		122,996			151,425			90,310			76,243			76,889
Total earnings	$	32,362		$	133,049		$	52,224		$	78,963		$	83,665
Fixed Charges:
Interest expense		89,105			127,778			79,136			67,556			65,265
Capitalized interest		27,105			17,063			6,907			5,576			8,064
Debt costs amortization		6,786			6,584			4,267			3,111			3,560
Total Fixed Charges	$	122,996		$	151,425		$	90,310		$	76,243		$	76,889
Ratio of Earnings to Fixed Charges		(a	)		(a	)		(a	)		1.0			1.1

a) For the twelve months ended December 31, 2007, 2006 and 2005, the aggregate amount of fixed charges exceeded our earnings by approximately $90.6, $18.4 million and $38.1 million, respectively, which is the amount of additional earnings that would have been required to achieve a ratio of earnings to fixed charges of 1.0x for such period. The deficiency of the ratio of earnings to fixed charges for the twelve months ended December 31, 2007 is primarily due to the assets sold as a part of the joint venture transactions related to our strategic initiative and to the $43.3 million non-cash impairment charge related to CRLP’s for-sale residential business. The deficiency of the ratio of earnings to fixed charges for the twelve months ended December 31, 2006 is primarily due to the classification of operations for assets held for sale and sold as discontinued operations. The deficiency of the ratio of earnings to fixed charges for the twelve months ended December 31, 2005, is primarily due to the classification of operations for assets held for sale and sold as discontinued operations and amortization of intangible assets acquired in the Cornerstone merger.

The ratios of earnings to fixed charges were computed by dividing earnings by fixed charges. For this purpose, earnings consist of pre-tax income from continuing operations before adjustment for minority interest in consolidated subsidiaries or income or loss from equity investees, gains on sale of properties, distributed income of equity investees, fixed charges and amortization of capitalized interest excluding interest costs capitalized. Fixed charges consist of interest expense (including interest costs capitalized) and amortization of debt issuance costs.

EX-21.1

List of Subsidiaries	Exhibit 21.1
Colonial Realty Limited Partnership

				Jurisdiction of
Name				Formation
1.	Colonial Realty Limited Partnership (CRLP)			Delaware
	A.	Colonial Properties Services Limited Partnership		Delaware
	B.	Colonial Properties Services, Inc. (CPSI)		Alabama
		1.	Heathrow 4, LLC	Delaware
		2.	Heathrow Oakmonte, LLC	Delaware
		3.	The Colonnade/CLP Management LLC	Delaware
		4.	Colonial CPSI Colonnade LLC	Delaware
		5.	Colonial Construction Services L.L.C.	Delaware
		6.	CPSI Mizner, LLC	Delaware
		7.	Montecito Mizner, LLC	Delaware
		8.	CPSI James Island, LLC	Delaware
		9.	Montecito James Island, LLC	Delaware
		10.	CPSI Huntsville TIC Investor I LLC	Delaware
		11.	CPSI Huntsville TIC Investor II LLC	Delaware
		12.	CPSI Huntsville TIC Investor III LLC	Delaware
		13.	Walkers Chapel Road, LLC	Alabama
		14.	Highway 31 Alabaster, LLC	Alabama
		15.	Highway 31 Alabaster Two, LLC	Alabama
		16.	First Ward MB, LLC	Georgia
		17.	First Ward Residential, LLC	North Carolina
		18.	Forty Seven Canal Place, LLC	Alabama
		19.	ACG — CPSI Canyon Creek LP	Delaware
		20.	Lanesboro at Heathrow LLC	Florida
		21.	Sam Ridley, LLC	Delaware
		22.	Midtown Redevelopment Partners, LLC	North Carolina
		23.	Monterey at Lakewood Ranch, LLC	Delaware
		24.	CPSI-Winter Haven, LLC	Delaware
		25.	Regents Park, LLC	Georgia
		26.	Regents Park Phase II, LLC	Georgia
		27.	1755 Central Park Road Condominiums, LLC	Delaware
		28.	The Azur at Metrowest, LLC	Delaware
		29.	Capri at Hunter’s Creek Condominuims, LLC	Delaware
		30.	CPSI — UCO LLC	Alabama
		31.	CPSI-UCO Spanish Oaks, LLC	Alabama
		32.	CPSI-UCO Grander, LLC	Alabama
		33.	CPSI-UCO Cypress Village I, LLC	Alabama
		34.	CPSI_UCO Cypress Village II, LLC	Alabama
		35.	CPSI-UCO Cypress Village III, LLC	Alabama
	C.	Parkway Place Limited Partnership		Alabama
	D.	Colonial Commercial Contracting LLC		Delaware
	E.	CRLP/CMS, L.L.C.		Delaware
		1.	Mountian Brook, LLC	Alabama
		2.	CMS/Colonial Multifamily Hickory Point JV LLC	Delaware
	F.	CRLP/CMS II, L.L.C.		Delaware
		1.	Rocky Ridge, LLC	Alabama
	G.	Heathrow E, LLC		Delaware

List of Subsidiaries	Exhibit 21.1
Colonial Realty Limited Partnership

				Jurisdiction of
Name				Formation
	H.	Heathrow F, LLC		Delaware
	I.	Heathrow 3, LLC		Delaware
	J.	Heathrow G, LLC		Delaware
	K.	Heathrow 6, LLC		Delaware
	L.	Heathrow I, LLC		Delaware
	M.	Highway 150, LLC		Alabama
	N.	600 Building Partners		Alabama
	O.	Colonial/Polar BEK Management Company		Alabama
	P.	G & I III Madison, LLC		Delaware
	Q.	G & I III Meadows, LLC		Delaware
	R.	G & I III Colony Woods, LLC		Delaware
	S.	G & I IV Cunningham LP		Delaware
	T.	Parkside Drive LLC		Tennessee
	U.	CRLP VOP, LLC		Delaware
		1.	VOP Beltline Limited Partnership	Delaware
	V.	CP D’Iberville JV LLC		Alabama
		1.	Colonial/DPL JV LLC	Alabama
	W.	CMS Palma Sola Associates Limited Partnership		Florida
	X.	CMS Brentwood, LLC		Delaware
	Y.	TA-Colonial Traditions LLC		Delaware
	Z.	The Colonnade/CLP LLC		Delaware
	AA.	CRLP Durham, LP		Delaware
	BB.	CRLP Roswell, LP		Delaware
	CC.	G & I V Riverchase LLC		Delaware
	DD.	Walkers Chapel Road Two, LLC		Alabama
	EE.	ACG-CRLP Crescent Matthews LLC		Delaware
	FF.	Belterra Investors LLC		Delaware
	GG.	Park Crossing Associates LLC		Delaware
	HH.	Colonial 100/200 Owner, LLC		Delaware
		1.	A-Colonial 100/200 Owner, LLC	Delaware
	II.	Colonial 300/500 Owner, LLC		Delaware
		1.	A- Colonial 300/500 Owner, LLC	Delaware
	JJ.	Colonial Retail Owner, LLC		Delaware
		1.	A - Colonial Retail Owner, LLC	Delaware
	KK.	Colonial Retail Development, LLC		Delaware
		1.	A-Colonial Retail Development Owner, LLC	Delaware
	LL.	Colonial North Development, LLC		Delaware
		1.	A - Colonial North Development Owner, LLC	Delaware
	MM.	Colonial East Development, LLC		Delaware
		1.	A- Colonial East Development Owner, LLC	Delaware
	NN.	CPSI St. Andrews, LLC		Delaware
		1.	Montecito St. Andrews, LLC	Delaware
	OO.	Auberry Investors LLC		Delaware
	PP.	McDowell — CRLP McKinney JV, LLC		Delaware
	QQ.	Fairmont Investors LLC		Delaware
	RR.	G & I IV Harrison Grande LP		Delaware

List of Subsidiaries	Exhibit 21.1
Colonial Realty Limited Partnership

				Jurisdiction of
Name				Formation
	SS.	Parkside Drive Farragut, LLC		Tennessee
	TT.	Highway 11/31 LLC		Delaware
	UU.	Langley-Colonial LLC		Alabama
	VV.	CRLP Huntsville TIC Investor I LLC		Delaware
	WW.	CRLP Huntsville TIC Investor II LLC		Delaware
	XX.	CRLP Huntsville TIC Investor III LLC		Delaware
	YY.	CRLP Crescent Lane LLC		Delaware
	ZZ.	BR Cummings Research Place Development, LLC		Delaware
	AAA.	CMS/Colonial Multifamily Canyon Creek JV, LP		Delaware
	BBB.	CLNL Acquisition Sub LLC		Delaware
		1.	Apple REIT II Limited Partnership	Virginia
		2.	Apple REIT III Limited Partnership	Virginia
		3.	Apple REIT IV Limited Partnership	Virginia
		4.	Apple REIT Limited Partnership	Virginia
		5.	Apple REIT V Limited Partnership	Virginia
		6.	Apple REIT VI Limited Partnership	Virginia
		7.	Apple REIT VII Limited Partnership	Virginia
		8.	Apple-CRIT Limited LLC	Delaware
		9.	Apple-CRIT General LLC	Delaware
		10.	Autumn Park Apartments, LLC	North Carolina
		11.	CAC II Limited Partnership	Virginia
		12.	CAC II Special General LLC	Delaware
		13.	CAC II Special Limited LLC	Delaware
		14.	CAC III Limited Partnership	Virginia
		15.	CAC III Special General LLC	Delaware
		16.	CAC III Special Limited LLC	Delaware
		17.	CAC IV Limited Partnership	Virginia
		18.	CAC IV Special General LLC	Delaware
		19.	CAC IV Special Limited LLC	Delaware
		20.	CAC Limited Partnership	Virginia
		21.	CAC Special General LLC	Delaware
		22.	CAC Special Limited LLC	Delaware
		23.	CAC V Limited Partnership	Virginia
		24.	CAC V Special General LLC	Delaware
		25.	CAC V Special Limited LLC	Delaware
		26.	CAC VI Limited Partnership	Virginia
		27.	CAC VI Special General LLC	Virginia
		28.	CAC VI Special Limited LLC	Delaware
		29.	CAC VII Limited Partnership	Virginia
		30.	CAC VII Special General LLC	Delaware
		31.	CAC VII Special Limited LLC	Delaware
		32.	Cornerstone Acquisition Company LLC	Delaware
		33.	Cornerstone Merger Sub, LLC	Delaware
		34.	Cornerstone NC Operating Limited Partnership	Virginia
		35.	CRIT — Dunwoody LLC	Delaware
		36.	CRIT — NC Three LLC	Delaware

List of Subsidiaries	Exhibit 21.1
Colonial Realty Limited Partnership

			Jurisdiction of
Name			Formation
	37.	CRIT — NC Two LLC	Delaware
	38.	CRIT — SC LP LLC	Delaware
	39.	CRIT General LLC	Delaware
	40.	CRIT Special II LLC	Delaware
	41.	CRIT Special III LLC	Delaware
	42.	CRIT Special IV LLC	Delaware
	43.	CRIT Special LLC	Delaware
	44.	CRIT-Cape Landing LLC	Delaware
	45.	CRIT-Cornerstone Limited Partnership	Virginia
	46.	CRIT-Enclave at Poplar Place, LLC	Virginia
	47.	CRIT-Glen Eagles, LLC	Virginia
	48.	CRIT-Landings, LLC	Virginia
	49.	CRIT-Legacy LLC	Delaware
	50.	CRIT-Meadows, LLC	Virginia
	51.	CRIT-Mill Creek, LLC	Virginia
	52.	CRIT-NC Four LLC	Delaware
	53.	CRIT-NC V, LLC	Delaware
	54.	CRIT-Poplar Place, LLC	Virginia
	55.	CRIT-SC GP LLC	Delaware
	56.	CRIT-SPE I LLC	Delaware
	57.	CRIT-VA II LLC	Delaware
	58.	CRIT-VA III LLC	Delaware
	59.	CRIT-VA IV LLC	Delaware
	60.	CRIT-VA LLC	Delaware
	61.	CRIT-VA V LLC	Delaware
	62.	CRIT-VA VI LLC	Delaware
	63.	Deposit Waiver LLC	Delaware
	64.	Greentree LLC	Georgia
	65.	Legacy Park Apartments, LLC	North Carolina
	66.	Marsh Cove Apartments LLC	Georgia
	67.	Merritt at Godley Station, LLC	Georgia
	68.	Merry Land Property Management, LLC	Delaware
	69.	ML Apartments I LLC	Delaware
	70.	ML Apartments II LLC	Delaware
	71.	ML Apartments III LLC	Delaware
	72.	ML Apartments IV LLC	Delaware
	73.	ML Hammocks at Long Point, L.L.C.	Georgia
	74.	ML Huntington, L.L.C.	Georgia
	75.	ML James Island Apartments, L.P.	Georgia
	76.	ML Whitemarsh LLC	Georgia
	77.	ML Windsor Place, L.L.C.	Georgia
	78.	Quarterdeck Apartments LLC	Georgia
	79.	St. Andrews Place Apartments, LLC	North Carolina
	80.	St. Andrews Place II, LLC	North Carolina
	81.	Timber Crest Apartments, LLC	North Carolina
	82.	Trinity Commons Apartments, LLC	North Carolina

List of Subsidiaries	Exhibit 21.1
Colonial Realty Limited Partnership

				Jurisdiction of
Name				Formation
		83.	Trinity Commons II, LLC	North Carolina
		84.	Waters Edge Apartments LLC	Georgia
		85.	CRIT Holdings, L.P.	Virginia
		86.	CRIT-NC, LLC	Virginia
		87.	APA II, LLC	North Carolina
		88.	Master SC Apartments L.P.	Delaware
		89.	SAP IV Arbors NF GP L.L.C.	Delaware
		90.	SAP IV SR NF GP L.C.C.	Delaware
		91.	Arbors at Windsor Lakes Apartments NF L.P.	Delaware
		92.	SR Apartments NF L.P.	Delaware
		93.	Merritt at Godley Station II, LLC	Georgia
		94.	Colonial Special LLC	Delaware
		95.	Colonial II Special LLC	Delaware
		96.	Colonial IV Special LLC	Delaware
		97.	Colonial V Special LLC	Delaware
		98.	Colonial VII Special LLC	Delaware
		99.	Colonial Apple-CRIT LLC	Delaware
	CCC.	Colonial Retail JV LLC		Delaware
		1.	Marelda Retail Development LLC	Delaware
		2.	Marelda Bel Air Mall LLC	Delaware
		3.	Marelda Greenville Mall LLC	Delaware
		4.	Marelda Glynn Place Mall LLC	Delaware
		5.	Marelda Valdosta Mall LLC	Delaware
		6.	Marelda University Village Mall LLC	Delaware
		7.	Marelda Myrtle Beach Mall LLC	Delaware
		8.	Marelda TRS LLC	Delaware
	DDD.	Colonial Office JV LLC		Delaware
		1.	CRTP OP LLC	Delaware
		2.	DRA CRT LP Germantown Center LLC	Delaware
		3.	DRA CRT GP Germantown Center LLC	Delaware
		4.	DRA CRT Germantown Center L.P.	Delaware
		5.	CR Decoverly LLC	Maryland
		6.	CR Decoverly 15200 LLLP	Maryland
		7.	DRA CRT Decoverly 15200 LLC	Delaware
		8.	DRA CRT LP Greensboro Land LLC	Delaware
		9.	DRA CRT GP Greensboro Land LLC	Delaware
		10.	DRA CRT Greensboro Land LLC	Delaware
		11.	CRT BFC GP LLC	Florida
		12.	CRT BFC Ltd.	Delaware
		13.	CRT CTA GP LLC	Delaware
		14.	CTA Partners LP	Delaware
		15.	CRT Decoverly LLC	Maryland
		16.	CR Decoverly 9501 LLLP	Maryland
		17.	CRT Post Oak Inc.	Delaware
		18.	CRT Post Oak LP	Delaware
		19.	Mez DRA CRT LP Post Oak LLC	Delaware

List of Subsidiaries	Exhibit 21.1
Colonial Realty Limited Partnership

			Jurisdiction of
Name			Formation
	20.	DRA CRT GP Post Oak LLC	Delaware
	21.	CRT BMWCX Ltd.	Florida
	22.	CRT BM GP LLC	Delaware
	23.	CRT Baymeadows Ltd.	Florida
	24.	CRT WC GP LLC	Delaware
	25.	CRT Westchase LP	Delaware
	26.	CRT Las Olas GP LLC	Delaware
	27.	CRT Las Olas LP	Delaware
	28.	CRT ELO GP LLC	Delaware
	29.	ELO Associates II Ltd.	Florida
	30.	CRT McGinnis Park LLC	Florida
	31.	McGinnis Park Ltd.	Florida
	32.	CRT/McGinnis Office LLC	Florida
	33.	CRT/McGinnis Office Ltd.	Florida
	34.	CRT/McGinnis Undeveloped LLC	Florida
	35.	CRT/McGinnis Developed LLC	Florida
	36.	Mez DRA CRT LLC	Delaware
	37.	DRA CRT Lake Mary Center LLC	Delaware
	38.	DRA CRT Perimeter Center LLC	Delaware
	39.	DRA CRT Chamblee Center LLC	Delaware
	40.	DRA CRT GP Charlotte University Center LLC	Delaware
	41.	DRA CRT LP Charlotte University Center LLC	Delaware
	42.	DRA CRT Charlotte University Center LP	Delaware
	43.	CRT MK Oak Park LP	Delaware
	44.	CRT Signature Place GP LLC	Delaware
	45.	CRT Signature Place LP	Delaware
	46.	CRT Ravinia MZ LLC	Delaware
	47.	CRT Ravinia LLC	Delaware
	48.	DRA CRT Baymeadows Center LLC	Delaware
	49.	DRA CRT Alabama Land LLC	Delaware
	50.	DRA CRT JTB Center LLC	Delaware
	51.	DRA CRT Orlando University Center LLC	Delaware
	52.	DRA CRT Greenville Park Land LLC	Delaware
	53.	DRA ACP LLC	Delaware
	54.	DRA CRT Orlando Central Center LLC	Delaware
	55.	DRA CRT Orlando Central Land LLC	Delaware
	56.	DRA CRT TRS Corp.	Delaware
	57.	CRT Decoverly 9509 LLC	Maryland
	58.	DRA CRT Post Oak LP	Delaware
	59.	CRT Realty Services Inc.	Florida
	60.	ACP Fitness Center LLC	Georgia
	61.	TRC Holdings LLC	Georgia
	62.	DRA CRT St. Petersburg Center LLC	Delaware
	63.	DRA CRT Landstar LLC	Delaware
	64.	DRA CRT St. Petersburg Land LLC	Delaware
	65.	DRA CRT Kogerama Land LLC	Delaware

List of Subsidiaries	Exhibit 21.1
Colonial Realty Limited Partnership

				Jurisdiction of
Name				Formation
		66.	CRT WPB Cityplace LLC	Florida
		67.	CRT WPB Cityplace Ltd.	Florida
	EEE.	Colonial Office Holdings LLC		Delaware
		1.	DRA/CLP Office LLC	Delaware
		2.	DRA/CLP 600 Townpark Office Orlando LLC	Delaware
		3.	DRA/CLP 901 Maitland Orlando LLC	Delaware
		4.	DRA/CLP Bayside Tampa LLC	Delaware
		5.	DRA/CLP Blue Lake Birmingham LLC	Delaware
		6.	DRA/CLP Colonnade Office Birmingham LLC	Delaware
		7.	DRA/CLP Colonnade Retail Birmingham LLC	Delaware
		8.	DRA/CLP Concourse Center Tampa LLC	Delaware
		9.	DRA/CLP CP Tampa LLC	Delaware
		10.	DRA/CLP Downtown Plaza Birmingham LLC	Delaware
		11.	DRA/CLP DRS Building Huntsville LLC	Delaware
		12.	DRA/CLP Esplanade Charlotte GP LLC	Delaware
		13.	DRA/CLP Esplanade LP	Delaware
		14.	DRA/CLP Heathrow Orlando LLC	Delaware
		15.	DRA/CLP Heathrow Orlando 1000 LLC	Delaware
		16.	DRA/CLP Independence Plaza Birmingham LLC	Delaware
		17.	DRA/CLP International Park Birmingham LLC	Delaware
		18.	DRA/CLP Lakeside Huntsville LLC	Delaware
		19.	DRA/CLP NG BTS Huntsville LLC	Delaware
		20.	DRA/CLP The Peachtree Atlanta LLC	Delaware
		21.	DRA/CLP Peachtree Parking LLC	Delaware
		22.	DRA/CLP Perimeter Corporate Park Huntsville LLC	Delaware
		23.	DRA/CLP Progress Center Huntsville LLC	Delaware
		24.	DRA/CLP Regions Center Huntsville LLC	Delaware
		25.	DRA/CLP Research Office Center Huntsville LLC	Delaware
		26.	DRA/CLP Research Park Huntsville LLC	Delaware
		27.	DRA/CLP Research Park Plaza Austin GP LLC	Delaware
		28.	DRA/CLP Research Park Plaza Austin LP	Delaware
		29.	DRA/CLP Research Place Huntsville LLC	Delaware
		30.	DRA/CLP Riverchase Center Birmingham LLC	Delaware
		31.	DRA/CLP Townpark Office Orlando LLC	Delaware
		32.	DRA/CLP Townpark Retail Orlando LLC	Delaware
	FFF.	Colonial Retail Holdings LLC		Delaware
		1.	OZ/CLP Retail LLC	Delaware
		2.	OZ/CLP Alabaster LLC	Delaware
		3.	OZ/CLP Beechwood LLC	Delaware
		4.	OZ/CLP Burnt Store LLC	Delaware
		5.	OZ/CLP Clay LLC	Delaware
		6.	OZ/CLP Hunter’s Creek LLC	Delaware
		7.	OZ/CLP Kingwood Commons LP	Delaware
		8.	OZ/CLP Lakewood LLC	Delaware
		9.	OZ/CLP Northdale LLC	Delaware
		10.	OZ/CLP Portofino LP	Delaware

List of Subsidiaries	Exhibit 21.1
Colonial Realty Limited Partnership

			Jurisdiction of
Name			Formation
	11.	OZ/CLP Trussville I LLC	Delaware
	12.	OZ/CLP Trussville II LLC	Delaware

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (File No. 333-126086) of Colonial Realty Limited Partnership of our report dated February 29, 2008 relating to the consolidated financial statements, financial statement schedule, and the effectiveness of internal control over financial reporting of Colonial Realty Limited Partnership, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Birmingham, Alabama
February 29, 2008

  EX-23.2 5 g12008exv23w2.htm EX-23.2 CONSENT OF WEISER LLP

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the inclusion of our report dated February 26, 2008, relating to our audit of the consolidated financial statements of DRA/CLP Office LLC and Subsidiaries included in the 2007 annual report of Colonial Realty Limited Partnership on Form 10-K.

/s/ Weiser LLP

New York, New York
February 28, 2008

EX-23.2

EX-23.2 CONSENT OF WEISER LLP

EX-23.3

Exhibit 23.3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to incorporation by reference in the Registration Statement on Form S-3 (File No. 333-126086) of Colonial Realty Limited Partnership of our report dated February 29, 2008, relating to the consolidated financial statements of OZ/CLP Retail LLC and Subsidiaries, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Birmingham, Alabama
February 29, 2008

EX-31.1

Exhibit 31.1

CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT

I, C. Reynolds Thompson, III, certify that:

1.	I have reviewed this annual report on Form 10-K of Colonial Realty Limited Partnership;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 29, 2008

By:	/s/ C. Reynolds Thompson, III
	C. Reynolds Thompson, III
	Chief Executive Officer of Colonial Properties
	Trust, the general partner of Colonial Realty
	Limited Partnership

EX-31.2

Exhibit 31.2

CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT

I, Weston M. Andress, certify that:

1.	I have reviewed this annual report on Form 10-K of Colonial Realty Limited Partnership;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 29, 2008

By:	/s/ Weston M. Andress Weston M. Andress
	President and Chief Financial Officer of Colonial
	Properties Trust, the general partner of Colonial
	Realty Limited Partnership

EX-32.1

Exhibit 32.1

WRITTEN STATEMENT OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Executive Officer of Colonial Properties Trust, the general partner of Colonial Realty Limited Partnership, hereby certifies that, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to his knowledge on the date hereof:

(a)	The Form 10-K of Colonial Realty Limited Partnership for the period ended December 31, 2007 filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(b)	Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Colonial Realty Limited Partnership.

Date: February 29, 2008

By:	/s/ C. Reynolds Thompson, III
	C. Reynolds Thompson, III
	Chief Executive Officer of Colonial Properties
	Trust, the general partner of Colonial Realty
	Limited Partnership

EX-32.2

Exhibit 32.2

WRITTEN STATEMENT OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Financial Officer of Colonial Properties Trust, the general partner of Colonial Realty Limited Partnership, hereby certifies that, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to his knowledge on the date hereof:

(a)	The Form 10-K of Colonial Realty Limited Partnership for the period ended December 31, 2007 filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(b)	Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Colonial Realty Limited Partnership.

Date: February 29, 2008

By:	/s/ Weston M. Andress Weston M. Andress
	President and Chief Financial Officer of Colonial
	Properties Trust, the general partner of Colonial
	Realty Limited Partnership