Item 1. Business.
As used herein, the term "Company" includes Colonial Properties Trust, an Alabama real estate investment trust, and one or more of its subsidiaries and other affiliates (including Colonial Properties Holding Company, Inc., Colonial Realty Limited Partnership, Colonial Properties Services Limited Partnership and Colonial Properties Services, Inc.) or, as the context may require, Colonial Properties Trust only or Colonial Realty Limited Partnership only.
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, including but not limited to anticipated timetables for acquisitions, developments and expansions, expected economic growth in geographic markets where CRLP owns or expects to own properties, and plans for continuing CRLP's diversified strategy. These statements involve risks and uncertainties that may cause actual results to be materially different from those anticipated. Prospective investors should specifically consider, in connection with these forward-looking statements, the various factors identified herein and in CRLP's filings with the SEC which could cause actual results to differ, including downturns in local or national economies, competitive factors, the availability of suitable properties for acquisition at favorable prices, and other risks inherent in the real estate business.
The Company is one of the largest owners, developers and operators of multifamily, retail and office properties in the Sunbelt region of the United States. It is a fully-integrated real estate company, whose activities include ownership of a diversified portfolio of 93 properties as of December 31, 1997, located in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee 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. The Company is a self-administered equity real estate investment trust (a "REIT") that, as of December 31, 1997, owns 43 multifamily apartment communities containing a total of 13,759 apartment units (the "Multifamily Properties"), 37 retail properties containing a total of approximately 10.6 million square feet of retail space (the "Retail Properties"), 13 office properties containing a total of approximately 1.9 million square feet of office space (the "Office Properties"), and certain parcels of land adjacent to or near five of these properties (the "Land"). (The Multifamily Properties, the Retail Properties, the Office Properties and the Land are referred to collectively as the "Properties"). As of December 31, 1997, the Multifamily Properties that had achieved stabilized occupancy, the Retail Properties, and the Office Properties were 93.8%, 93.3% and 95.5% leased, respectively.
The Company, through Colonial Properties Holding Company, Inc., a wholly owned subsidiary ("CPHC"), is the sole general partner of, and holds approximately 68% of the interests in, Colonial Realty Limited Partnership, a Delaware limited partnership (the "Operating Partnership"). (The Company intends to dissolve CPHC during the first half of 1998 and thereby become the direct general partner of the Operating Partnership.) The Operating Partnership owns all of the Properties (or interests therein). The Company conducts all of its business through CPHC, the Operating Partnership, and Colonial Properties Services Limited Partnership (the "Management Partnership"), which provides management services for the Properties, and Colonial Properties Services, Inc. (the "Management Corporation"), which provides management services for properties owned by third parties.
The Company's executive offices are located at 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama, 35203 and its telephone number is (205) 250-8700. The Company was formed in Maryland on July 9, 1993. On August 21, 1995, the Company reincorporated as an Alabama real estate investment trust under a new Alabama REIT statute.
Formation of the Company
The Company and the Operating Partnership were formed to succeed to substantially all of the interests of Colonial Properties, Inc., an Alabama corporation ("Colonial"), its affiliates and certain others in a diversified portfolio of multifamily, retail, and office properties located in Alabama, Florida, and Georgia and to the development, acquisition, management, leasing, and brokerage businesses of Colonial.
On September 29, 1993, (i) the Company consummated an initial public offering (the "IPO") of 8,480,000 of its common shares of beneficial interest, $.01 par value per share ("Common Shares"), (ii) the Operating Partnership assumed ownership of 36 Properties (or interests therein) held by Thomas H. Lowder, James K. Lowder, Robert E. Lowder, and their mother, Catherine Lowder (the "Lowder family"), and third-party partners of the Lowder family, and the operating businesses of Colonial, (iii) the Company transferred the net proceeds from the IPO through CPHC to the Operating Partnership, in exchange for 8,480,000 units of limited partnership interest in the Operating Partnership ("OP Units"), (iv) the Operating Partnership repaid approximately $150.2 million of indebtedness and prepayment penalties associated therewith secured by certain of the Properties, and (v) the Operating Partnership established a $35.0 million line of credit with SouthTrust Bank, which has since been increased to $200.0 million, to fund development activities and property acquisitions and for general corporate purposes (collectively, the "Formation Transactions"). On October 28, 1993, the underwriters of the IPO exercised an over-allotment option to purchase an additional 686,200 shares.
The Company owns substantially all of the economic interests in the Management Corporation, but in order to permit the Company to qualify as a REIT, voting control of the Management Corporation is held by the Lowder family.
Recent Developments
Since the IPO, the Company has significantly expanded its portfolio of Properties and its operating businesses. Acquisitions by the Company of new properties represent a total investment of over $1.0 billion. The Company has also completed the expansion of six multifamily properties since the IPO, adding a total of 1,088 units to its multifamily portfolio. The Company currently has 11 active expansion and development projects in progress for Multifamily Properties (including additional phases of six existing Multifamily Properties). The Company has also disposed of six Multifamily Properties representing 2,464 apartment units and one Office Property representing 25,000 square feet of office space.
The following is a summary of the Company's acquisition, disposition, and development activity in 1997.
Acquisition and Disposition Activity
The Company acquired nine retail shopping centers, including one in Alabama, two in Georgia, one in Florida, three in North Carolina, one in Virginia and one in Tennessee containing approximately 1.1 million leasable square feet for a total purchase price of $70.0 million. The Company also acquired seven regional malls, including one in Alabama, three in Georgia, two in North Carolina and one in Virginia containing approximately 3.2 million leasable square feet for a total purchase price of $180.6 million.
The Company acquired five Multifamily Properties, including one in Alabama, one in Florida, one in Georgia, one in Mississippi and one in South Carolina containing 1,434 units for a total purchase price of $82.7 million. In connection with a regional mall acquisition in Alabama, the Company disposed of, in an exchange transaction, two multifamily properties located in Florida containing 368 apartment units and having a net book value of $14.0 million. In connection with the acquisitions of three malls in Georgia, the Company sold to a third party four multifamily properties in Alabama containing a total of 2,096 apartment units for a total sale price of $54.8 million, which resulted in a net gain of $2.6 million. The purchaser of the multifamily properties paid the sale price by assuming an existing mortgage of $10 million and paying the remainder in cash.
The Company also acquired four Office Properties, including three in Alabama and one in Georgia containing 1.0 million square feet of office space for a total purchase price of $97.1 million. In connection with an office acquisition in Alabama, the Company disposed of, in an exchange transaction, a 25,000 square foot office building located in Alabama having a net book value of $2.0 million.
The acquisition agreements for three of the properties acquired in 1997 provide for the Company to make additional payments to the sellers if certain lease-up conditions are satisfied. The Company expects to make additional payments to the sellers of approximately $8.3 million in 1998 pursuant to these provisions.
Also in 1997, the Company purchased a 62.5% interest that it did already own in two multi-tenant office buildings at an office park in Birmingham. The purchase of these outside interests made the Company the sole owner of the two buildings, which total 93,000 square feet. At the same time, the Company sold its 25 percent interest in a 129,000 square foot building in the same office complex. The Company also purchased a 50% interest in a 168,000 square foot office building in Birmingham, increasing the Company's ownership to 100%.
Development Activity
During 1997 the Company constructed 1,172 new apartment units in seven multifamily communities (two of which were completed during the year) and acquired land on which it intends to develop additional multifamily communities during 1998. The aggregate cost of this multifamily development activity was $50.5 million. As of December 31, 1997, the Company had 1,170 apartment units in eleven multifamily communities under development and expansion. Management anticipates that four of the multifamily projects will be completed during the first half of 1998 and four others will be completed during the second half of the year. The remaining multifamily projects are expected to be completed during the first half of 1999. Management expects to invest approximately $64.2 million over these periods to complete these projects.
During 1997 the Company also completed its 422,000 square foot expansion of its regional mall in Macon, Georgia and completed a 239,000 square foot expansion of a community shopping center in Montgomery, Alabama. The aggregate cost of this retail development activity was $28.6 million.
The table below provides an overview of the Company's acquisition and development activity during 1997:
Multifamily Property Acquisitions
Colonial Village at Trussville--On April 1, 1997, the Company acquired Colonial Village at Trussville, a 376-unit multifamily community in Birmingham, Alabama. The $20.5 million purchase price was financed through the issuance of 57,072 OP Units, valued at $1.6 million, and an advance on the Company's unsecured line of credit. Colonial Village at Trussville was constructed in 1996 and 1997. The development consists of 20 two- and three-story buildings and a separate clubhouse on approximately 28 acres of land. Amenities include two swimming pools and a wading pool, a car care center, a fitness center, tennis courts, a playground, and leasable garages. The community was in lease-up at December 31, 1997. Colonial Village at Trussville was purchased from a partnership whose partners included a trustee of the Company.
Colonial Village at Timothy Woods--On July 11, 1997, the Company acquired Colonial Village at Timothy Woods, a 204-unit multifamily community in Athens, Georgia. The purchase price of $12.8 million was financed through the issuance of 27,275 OP Units, valued at $800,000, and an advance on the Company's unsecured line of credit. The community was developed in 1996 and was 89% leased at December 31, 1997. Amenities include a swimming pool, a fitness center, car wash, garages, and two tennis courts. Colonial Village at Timothy Woods was purchased from a corporation whose shareholders included two trustees of the Company.
Colonial Village at Oakleigh--On July 14, 1997, the Company acquired Colonial Village at Oakleigh, a 176-unit multifamily community in Pensacola, Florida. The purchase price of $10.5 million was financed through the issuance of 35,522 OP Units, valued at $1.0 million, and an advance on the Company's unsecured line of credit. The community was developed in 1997 and was 95% leased at December 31, 1997. Amenities include a swimming pool, a fitness center, car wash, garages and covered parking, and alarm systems.
Colonial Grand at Natchez Trace--On August 29, 1997, the Company acquired Colonial Grand at Natchez Trace, a 328-unit multifamily community in Jackson, Mississippi. The community was constructed in three phases between 1995 and 1997, and was 99% leased at December 31, 1997. The purchase price of $17.6 million was financed through the assumption of two mortgages totaling $11.0 million with a weighted average interest rate of 8.09%, and an advance on the Company's unsecured line of credit. Amenities include a swimming pool, a clubhouse with an exercise room, and three lighted tennis courts.
Colonial Village at Caledon Wood--On October 31, 1997, the Company acquired Colonial Village at Caledon Wood, a 350-unit multifamily community in Greenville, South Carolina. The 25-acre community was developed in 1995 and 1996, and was 86% leased at December 31, 1997. The purchase price of $21.3 million was financed through an advance on the Company's unsecured line of credit. Amenities include two swimming pools, two clubhouses with recreation rooms, a fitness center, and lighted tennis courts.
The Company intends to continue to pursue acquisitions in the Sunbelt region of the United States that meet the Company's acquisition criteria for property quality, market strength, and investment return.
Completed Multifamily Expansion and Development Activity
Colonial Grand at Heathrow--The Company completed construction on a 312-unit development located in Heathrow (Orlando), Florida. The Company acquired the land (30 acres) in December 1994 at a cost of $2.2 million. The development is located adjacent to Heathrow International Business Center and Heathrow Country Club. The apartment community offers a variety of amenities, including a clubhouse with conference and computer rooms, an exercise center, tennis and basketball courts, a swimming pool, and laundry facilities. Project development costs, including land acquisition costs, totaled $20.5 million and were funded through advances on the Company's line of credit. The Company completed construction in the first quarter of 1997 and completed lease-up during the third quarter of 1997.
Colonial Grand at Bayshore--The Company completed construction on a 212-unit development located in Bradenton, Florida. The community offers a variety of amenities, including a clubhouse, an exercise center, a swimming pool overlooking a five-acre lake, tennis and basketball courts, a children's playground, tenant garages, and storage units. Project costs, including land acquisition costs, totaled $11.6 million and were funded through advances on the Company's line of credit. The Company completed construction in the second quarter of 1997 and completed lease-up during the third quarter of 1997.
Continuing Multifamily Expansion and Development Activity
Colonial Village at River Hills--The Company completed construction on a 276-unit expansion of Colonial Village at River Hills located in Tampa, Florida. The community amenities include a clubhouse, a swimming pool, an exercise center, an air-conditioned racquetball court, tennis courts, and laundry facilities. Project development costs, including land acquisition costs, totaled $14.9 million and were funded through advances on the Company's line of credit. The Company completed construction in the fourth quarter of 1997 and expects to complete lease-up during the second quarter of 1998.
Colonial Village at Inverness--The Company completed construction on an 84-unit expansion of Colonial Village at Inverness located in Birmingham, Alabama. Project development costs, including land acquisition costs, totaled $6.7 million and were funded through advances on the Company's line of credit. The Company completed construction in the fourth quarter of 1997 and expects to complete lease-up in the first quarter of 1998.
Colonial Grand at Bayshore II--The Company completed construction on a 164-unit expansion to this development located in Bradenton, Florida. The Company acquired the land (12.5 acres) at a cost of $1.0 million pursuant to an option acquired at the time the Company purchased the land for the existing Colonial Grand at Bayshore development in November 1995. This expansion phase offers the same amenities as the existing community. Project development costs, including land acquisition costs, totaled $9.3 million and were funded through advances on the Company's line of credit. The Company completed construction in the fourth quarter of 1997 and expects to complete lease-up during the second quarter of 1998.
Colonial Grand at Wesleyan--The Company completed construction on a 240-unit development located in Macon, Georgia. The Company acquired the land (49.8 acres) at a cost of $1.4 million, which was determined pursuant to an option acquired at the time of the Company's IPO in September 1993. The new community offers a variety of amenities, including a clubhouse, an exercise center, a swimming pool, tennis courts, and storage units for rent. Project development costs, including land acquisition costs, totaled $13.5 million and were funded through advances on the Company's line of credit. The Company completed construction in the fourth quarter of 1997 and expects to complete lease-up during the second quarter of 1998.
Colonial Grand at Hunter's Creek--The Company continued construction on a 496-unit development located in Orlando, Florida. The Company acquired the land (36 acres) at a cost of $4.0 million. The new apartment community will offer a variety of amenities, including a swimming pool and spa, an exercise room, enclosed garages, tennis courts, and a car wash. Project development costs, including land acquisition costs, are expected to total $33.3 million and will be funded through advances on the Company's line of credit. The Company expects to complete construction in the second quarter of 1998 and to complete lease-up during the first quarter of 1999.
New Multifamily Expansion and Development Activity
Colonial Grand at Inverness Lakes II--The Company began construction on a 132-unit expansion of Colonial Grand at Inverness Lakes located in Mobile, Alabama during the third quarter of 1997. Project development costs, including land acquisition costs, are expected to total $8.0 million and will be funded through advances on the Company's line of credit. The Company expects to complete construction in the third quarter of 1998 and to complete lease-up during the third quarter of 1999.
Colonial Grand at Edgewater II--The Company began construction on a 192-unit expansion of Colonial Grand at Edgewater in Huntsville, Alabama during the third quarter of 1997. Project development costs, including land acquisition costs, are expected to total $11.5 million and will be funded through advances on the Company's line of credit. The Company expects to complete construction in the fourth quarter of 1998 and to complete lease-up during the third quarter of 1999.
Colonial Grand at Wesleyan II--The Company began construction on an 88-unit expansion of Colonial Grand at Wesleyan located in Macon, Georgia during the third quarter of 1997. Project development costs, including land acquisition costs, are expected to total $6.2 million and will be funded through advances on the Company's line of credit. The Company expects to complete construction in the fourth quarter of 1998 and to complete lease-up during the fourth quarter of 1998.
Colonial Village at Citrus Park--The Company began construction on a 176-unit development located in Tampa, Florida during the fourth quarter of 1997. The new apartment community will offer a variety of amenities, including a swimming pool, fitness center, resident business center, garages, covered parking and a gated entry. Project development costs, including land acquisition costs, are expected to total $12.3 million and will be funded through advances on the Company's line of credit. The Company expects to complete construction in the first quarter of 1999 and to complete lease-up during the second quarter of 1999.
Colonial Grand at Lakewood Ranch--The Company began construction on a 288-unit development located in Sarasota, Florida during the fourth quarter of 1997. The new apartments will feature numerous luxuries that include crown molding, tiled floors, chair railings, intrusion alarms, fireplaces and screened patios on all first floor units. Amenities will include a swimming pool, fitness center, tennis courts and a gated entry. Project development costs, including land acquisition costs, are expected to total $20.3 million and will be funded through advances on the Company's line of credit. The Company expects to complete construction in the second quarter of 1999 and to complete lease-up during the second quarter of 2000.
Colonial Grand at Cypress Crossing-- The Company began construction on a 250-unit development located in Orlando, Florida during the fourth quarter of 1997. The new apartment community will offer a variety of amenities, including a swimming pool, fitness center, resident business center, garages, covered parking and a gated entry. Project development costs, including land acquisition costs, are expected to total $20.0 million and will be funded through advances on the Company's line of credit. The Company expects to complete construction in the first quarter of 1999 and to complete lease-up during the fourth quarter of 1999.
Retail Property Acquisitions
Beechwood Shopping Center--On March 24, 1997, the Company acquired Beechwood Shopping Center, a 336,000 square foot community shopping center in Athens, Georgia. The purchase price of $22.2 million was financed through the assumption of debt totaling $11.9 million and an advance on the Company's unsecured line of credit. The center includes a 34,000 square foot Harris-Teeter, a 29,000 square foot Rhodes Furniture, a 10,000 square foot CVS/Pharmacy, and 39,000 square feet occupied by the U.S. Post Office. The center, which was built in 1963 and renovated in 1992, was 98% leased at December 31, 1997.
Heatherbrooke Center--Also on March 24, 1997, the Company acquired Heatherbrooke Center, a 28,000 square foot community shopping center in Birmingham, Alabama. The $3.0 million purchase price of the center was financed through the issuance of 16,303 OP Units, valued at $0.5 million, and an advance on the Company's unsecured line of credit. AMI-Brookwood Medical Center occupies 18,000 square feet in the center. Heatherbrooke Center was built in 1984 and was 100% leased at December 31, 1997.
Brookwood Village--On May 13, 1997, the Company acquired Brookwood Village, a 694,000 square foot regional mall and convenience center in Birmingham, Alabama, for a purchase price of $32.5 million. The mall includes a 232,000 square foot Rich's and a 106,000 square foot McRae's. The mall was constructed in 1973, renovated in 1991 and was 86% leased at December 31, 1997. The Company funded the acquisition through the exchange of two multifamily properties in Florida and an advance on the Company's unsecured line of credit.
Lakewood Plaza--On October 14, 1997, the Company acquired Lakewood Plaza, a 195,000 square foot community shopping center located in southwest Jacksonville, Florida, for a purchase price of $14.4 million. The center includes a 48,000 square foot Winn Dixie and a 10,000 square foot Beall's Department Store. The center was refurbished in 1995 and was 89% leased at December 31, 1997. The purchase price was funded through the issuance of 74,709 OP Units, valued at $2.1 million, and an advance on the Company's unsecured line of credit. The acquisition agreement provides for the Company to make an additional payment to the seller if certain lease-up conditions are satisfied. The Company expects to make an additional payment of approximately $400,000 during 1998 pursuant to this provision.
Georgia Malls Portfolio--On November 4, 1997, the Company acquired three enclosed shopping malls in Georgia (including Glynn Place Mall in Brunswick, Georgia, Lakeshore Mall in Gainesville, Georgia, and Valdosta Mall in Valdosta, Georgia) for an aggregate purchase price of $97.0 million. The portfolio contains a total of 1.4 million square feet of gross leasable area. In connection with the acquisition, which was structured as a tax-deferred, like-kind exchange, the Company agreed to sell to a third party four multifamily properties for an aggregate sales price of $54.8 million, which the third-party purchaser paid by assuming an existing mortgage of $10.0 million and paying $44.8 million in cash. The Company used the cash portion of the sales price, together with an advance on the Company's line of credit in the approximate amount of $52.2 million, to pay the purchase price of the three malls. The three properties have anchor tenants including Sears, Belk, JC Penney, and Kmart, and collectively were 91% leased at December 31, 1997.
Retail Portfolio--On December 5, 1997, and January 20, 1998, the Company completed the acquisition of eight retail properties consisting of three enclosed malls located in Staunton, Virginia and Burlington and Mount Airy, North Carolina and five community shopping centers located in Abingdon, Virginia, Greensboro, Locust, and Yadkinville, North Carolina and Chattanooga, Tennessee. The portfolio contains a total of 1.5 million square feet of gross leasable area and was acquired for a total purchase price of $78.5 million. The purchase price was funded through the issuance of 661,517 OP Units, valued at $19.5 million, the assumption of $5.7 million of debt , and an advance on the Company's unsecured line of credit. The eight properties collectively were 97% leased at December 31, 1997. The acquisition agreement for the mall in Staunton, Virginia provides for the Company to make an additional payment to the seller if certain lease-up conditions are satisfied. The Company expects to make an additional payment of $1.8 million pursuant to this provision.
Village at Roswell Summit--On December 31, 1997, the Company acquired through merger the Village at Roswell Summit, a 25,000 square foot community shopping center in Atlanta, Georgia, for a purchase price of $3.0 million. The purchase price was funded through the assumption of $1.7 million of debt with an interest rate of 8.93%, and an advance on the Company's unsecured line of credit. The center was 90% leased at December 31, 1997. Village at Roswell Summit was purchased from a partnership whose partners included a trustee of the Company.
Retail Expansion Activity
Macon Mall--During the first quarter of 1997, the Company completed its 422,000 square foot expansion of Macon Mall, a super regional mall located in Macon, Georgia. The mall expansion includes new anchor tenants Parisian, Inc. and Dillard Department Stores, Inc. together with 50 specialty shops, which have joined existing department stores including Macy's Primary Real Estate, Inc., Belk-Matthews Company of Macon, Georgia, a Georgia Corporation, Sears, Roebuck and Company and J.C. Penney Company, Inc. Macon Mall now contains approximately 1,439,000 square feet of retail shopping space. The project expansion costs totaled $52 million and were funded through advances on the Company's line of credit. The Company expects to complete lease-up of this expansion during the first quarter of 1998.
Montgomery Promenade--During the fourth quarter of 1997, the Company completed the 239,000 square foot expansion of Montgomery Promenade, a power center containing approximately 209,000 square feet located in Montgomery, Alabama. The expansion, which is known as Montgomery Promenade North, increases the shopping center to 448,000 square feet of leasable area and includes a 130,000 square foot tenant-owned Home Depot. Montgomery Promenade is anchored by Winn Dixie Market Place, Stein Mart, Michael's Arts & Crafts, Goody's, Books-A-Million, and K & B Drugs. Project expansion costs totaled $8.1 million and were funded through advances on the Company's line of credit. The Company expects to complete lease-up during the first quarter of 1998.
Office Property Acquisitions
Riverchase Center--In two transactions on January 1 and January 8, 1997, the Company acquired Riverchase Center 2100 and a 73.05% interest in Riverchase Center 2200/2300. Riverchase Center is an office park comprised of eight one-level buildings in Birmingham, Alabama. Major tenants include AT & T, BellSouth, and Hewlett Packard. The purchase price of $20.8 million was funded by the assumption of $8.7 million in mortgage debt, the issuance of 25,163 OP Units, valued at $700,000, and an advance on the Company's unsecured line of credit. Effective November 1, 1997, the Company purchased the remaining 26.95% interest in the property by issuing 114,798 OP Units. Riverchase Center was built between 1984 and 1988 and was 87% leased at December 31, 1997.
Lakeside Office Park--On May 22, 1997, the Company acquired Lakeside Office Park, an office park comprised of two three-story brick and glass multi-tenant buildings in Huntsville, Alabama totaling 121,000 square feet of leasable area. Major tenants include Lockheed Martin, Accugraph, and IBM. The purchase price of $8.8 million was funded by an advance on the Company's unsecured line of credit. Lakeside Office Park was built during 1989 and 1990 and was 96% leased at December 31, 1997.
Progress Center--On June 26, 1997, the Company acquired Progress Center, an office park comprised of five one-story multi-tenant buildings in Huntsville, Alabama totaling 225,000 square feet of leasable area. Major tenants include McDonnell Douglas, ADTRAN, Nichols Research Corporation, IKON, and Telos Engineering. The purchase price of $15.6 million was funded through the exchange of the Company's 25,000 square foot Whitesburg office building, which was also in Huntsville, and by an advance on the Company's unsecured line of credit. Progress Center was built in phases from 1983 to 1991 and was 96% leased at December 31, 1997.
Mansell Office Park--On July 31, 1997, the Company acquired through merger Mansell Office Park in Atlanta, Georgia, comprised of six buildings totaling 352,000 square feet, for a purchase price of $48.5 million. Major tenants include Compdent, Electronic Data Services (EDS), Motorola, NationsBank, and Xerox. The purchase price was funded by the assumption of $31.7 million in mortgage debt, the issuance of 540,235 OP Units, valued at $15.7 million, and an advance on the Company's unsecured line of credit. Mansell Office Park was built between 1987 and 1996 and was 100% leased at December 31, 1997. As a result of this transaction, the seller, William M. Johnson, was elected as a trustee of the Company. In connection with its acquisition of this property, the Company also agreed to acquire an additional office property consisting of 163,000 square feet of net rentable area and an additional retail property containing 21,000 square feet of gross leasable area. The purchase price of the additional properties, which are located in or near the Mansell Office Park, is expected to be approximately $24.3 million (subject to increase if certain lease-up conditions are satisfied), which will be paid through the issuance of OP Units, the assumption of debt and an advance on the Company's unsecured line of credit. The Company expects to acquire the additional properties by the end of the second quarter of 1998.
Financing Activity
The Company funded a large portion of its acquisitions and developments through the issuance of common shares, preferred shares, and debt securities. During 1997, the Company completed the following equity and debt transactions:
Common Share Offerings (in thousands) ------------------------- Number of Price Gross Offering Net Date Common Per Costs Proceeds Shares Share Proceeds - ----------------------- -------- -------- ------- ------- January 1,500,000 $ 29.8750 $ 44,812 $ 1,457 $ 43,355 July 1,700,000 $ 30.9375 $ 52,594 $ 2,945 $ 49,649 December 165,632 $ 30.1875 $ 5,000 $ 330 $ 4,670
Preferred Share Offering (in thousands) ------------------------- Number of Price Date Preferred Per Gross Offering Net Shares Share Proceeds Costs Proceeds - ----------------------- -------- -------- ------- ------- November 5,000,000 $ 25.0000 $ 125,000 $ 4,451 $ 120,549
Debt Offerings Gross Type of Proceeds Date Note Maturity Rate (in thousands) - ----------------- --------------- -------------------------- ---------------- January Medium-term January, 2003 7.16% $ 50,000 July Medium-term July, 2004 6.96% $ 75,000 August Medium-term August, 2005 6.96% $ 25,000 September Medium-term September, 2005 6.98% $ 25,000
On July 10, 1997, the Company increased the borrowing capacity under its unsecured line of credit from $125 million to $200 million. The credit facility, which is used by the Company primarily to finance additional property investments, bears interest at a rate ranging between 100 and 150 basis points above LIBOR and is renewable annually. As of December 31, 1997, the balance outstanding on the Company's line of credit was $117.1 million, bearing interest at a rate of 110 basis points above LIBOR.
Business Strategy
The general business strategy of the Company is to generate stable and increasing cash flow and portfolio value for its shareholders. The Company (and its predecessor) has implemented this strategy principally by (i) realizing growth in income from its existing portfolio of properties, (ii) developing, expanding, and selectively acquiring additional multifamily, retail, and office properties in growth markets located in the Sunbelt region of the United States, where the Company has first-hand knowledge of growth patterns and local economic conditions, (iii) managing its own properties, which has enabled it to better control operating expenses and establish long-term relationships with its retail and office tenants, (iv) maintaining its third-party property management business, which has increased cash flow and established additional relationships with tenants, and (v) employing a comprehensive capital maintenance program to maintain properties in first-class condition. The Company's business strategy and the implementation of that strategy are determined by the Company's board of trustees and may be changed from time to time.
Financing Strategy
The Company intends to maintain a ratio of long-term debt to total market capitalization (i.e., the total debt divided by the market value of issued and outstanding Common Shares and Units plus total debt) in the range of 30% to 45%. The Company's total market capitalization as of December 31, 1997, was $1.8 billion, and its ratio of debt to total market capitalization was 39.8%. At December 31, 1997, the Company's total debt included fixed-rate debt of $531.3 million, or 75.7% of total debt, and floating-rate debt of $170.7 million, or 24.3% of total debt. The Company has obtained interest rate protection for $67.8 million of the floating-rate debt.
The Company may from time to time reevaluate its borrowing policies in light of then current economic conditions, relative costs of debt and equity capital, market values of properties, growth and acquisition opportunities, and other factors. The Company may modify its borrowing policy and may increase or decrease its ratio of debt to total market capitalization. To the extent that the board of trustees of the Company determines to seek additional capital, the Company may raise such capital through additional equity offerings, debt financings, or retention of cash flow (subject to provisions in the Code requiring the distribution by a REIT of a certain percentage of taxable income and taking into account taxes that would be imposed on undistributed taxable income) or a combination of these methods.
Property Management
The Company is experienced in the management and leasing of multifamily, retail, and office properties and believes that the management and leasing of its own portfolio has helped the Properties maintain consistent income growth and has resulted in reduced operating expenses from the Properties. The third-party management, leasing, and brokerage businesses conducted through the Management Corporation have provided the Company both with a source of cash flow that is relatively stable and with the benefits of economies of scale in conjunction with the management and leasing of its own properties. These businesses also allow the Company to establish additional relationships with tenants who may require additional retail or office space and to identify potential acquisitions.
Operational Structure
Multifamily Division--The multifamily division of the Company is responsible for all aspects of the Company's multifamily operations, including day-to-day management and leasing of the 43 Multifamily Properties, as well as development and acquisition of additional multifamily properties. The multifamily division also is responsible for the provision of third-party management services for apartment communities in which the Company does not have an ownership interest. The multifamily division has regional offices in Birmingham, Mobile and Montgomery, Alabama, Orlando and Tampa, Florida, and Stockbridge, Georgia.
Retail Division--The Company's retail division is responsible for all aspects of the Company's retail operations, including the provision of management and leasing services for the 37 Retail Properties, as well as the development and acquisition of additional retail properties. The retail division also is responsible for the provision of third-party management services for retail properties in which the Company does not have an ownership interest and for brokerage services in other retail property transactions. The retail division has regional offices in Birmingham, Alabama, Orlando, Florida, Macon, Georgia and Burlington, North Carolina.
Office Division--The Company's office division is responsible for all aspects of the Company's commercial office operations, including the provision of management and leasing services for the 13 Office Properties, as well as the development and acquisition of additional office properties. The office division also is responsible for the provision of third-party management services for office properties in which the Company does not have an ownership interest and for brokerage services in other office property transactions. The office division has a regional office in Atlanta, Georgia.
Employees
The Company employs approximately 800 persons, including on-site property employees who provide services for the Properties that the Company owns and/or manages.
Tax Status
The Company has made an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), commencing with its taxable year ending December 31, 1993. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to Federal income tax to the extent it distributes at least 95% of its REIT taxable income to its shareholders. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property and to federal income and excise taxes on its undistributed income.
Executive Officers of the Company
The following is a biographical summary of the executive officers of the Company:
Thomas H. Lowder, 48, has been President and Chief Executive Officer of the Company and CPHC, a trustee of the Company, and a director of CPHC since 1993. Mr. Lowder became President of Colonial Properties Inc., the Company's predecessor, in 1976 and since that time has been actively engaged in the acquisition, development, management, leasing, and sale of multifamily, retail, and office properties for Colonial. Mr. Lowder is a member and past president of the Alabama Chapter of the Commercial Investment Real Estate Institute. Mr. Lowder is a former state Chairman of the Young Presidents' Organization and a member of the Birmingham Area Board of Realtors, the National Association of Industrial Office Parks, the International Council of Shopping Centers, and the National Association of Real Estate Investment Trusts. He serves on the board of directors for, among other companies, the Children's Hospital of Alabama, American Red Cross-Birmingham Area Chapter, and the United Way of Central Alabama. He graduated with honors from Auburn University with a Bachelor of Science Degree.
Howard B. Nelson, Jr., 50, has been Chief Financial Officer of the Company and CPHC, with general responsibility for financing matters since May 1997. Mr. Nelson was Senior Vice President and Chief Operating Officer of the Company and CPHC, with responsibility for the day-to-day management of the Company, from September 1993 to May 1997. He joined Colonial in 1984 as a vice president and became Senior Vice President-Finance in 1987. Mr. Nelson has served as treasurer, vice president, president, and board member of the Birmingham Chapter of the National Association of Industrial and Office Parks as well as vice president and board member of the Building Owners and Managers Association of Metropolitan Birmingham. He also serves on the Board of Directors of the Children's Harbor Family Center and the College of Business Advisory Council of Auburn University. He holds a Bachelor of Science Degree from Auburn University.
Paul F. Earle, 40, has been Executive Vice-President-Multifamily Division of CPHC, with responsibility for management of all multifamily properties owned and/or managed by the Company, since May 1997. He joined Colonial in 1991 and has served as Vice President-Acquisitions, as well as Senior Vice President--Multifamily Division. Mr. Earle serves as Chairman of the Alabama Multifamily Council and is an active member of the National Apartment Association. He also serves on the Board of Directors of Big Brother/Big Sisters. Before joining Colonial, Mr. Earle was the President and Chief Operating Officer of American Residential Management, Inc., Executive Vice President of Great Atlantic Management, Inc., and Senior Vice President of Balcor Property Management, Inc.
John N. Hughey, 38, has been Executive Vice President-Retail Division of CPHC, with responsibility for all retail properties owned and/or managed by the Company, since May 1997. He joined Colonial in 1982 and assumed responsibility for an increasing number of shopping centers until being named to Senior Vice President-Retail Division of Colonial in 1991. Mr. Hughey served as the Alabama/Mississippi State Operations Chairman for the International Council of Shopping Centers from 1993-1995. He holds a Bachelor of Science Degree from Auburn University.
Charles A. McGehee, 52, has been Executive Vice President-Land Acquisitions, Brokerage and Dispositions of CPHC, with responsibility for the Company's acquisitions and dispositions and the sales brokerage departments, since May 1997. Mr. McGehee was Senior Vice President--Multifamily Acquisitions/Development from September 1993 to May 1997 and Senior Vice President--Office Division from January 1990 to September 1993. He joined Colonial in 1976 as vice president of retail leasing and was responsible for leasing all retail space owned and/or managed by Colonial. Mr. McGehee has served as president and a board member of the National Association of Industrial and Office Parks as well as a member of the board of directors of the Birmingham Area Board of Realtors. He holds a Bachelor of Science Degree from Auburn University.
C. Reynolds Thompson, III, 35, has been Executive Vice President--Office Division of CPHC, with responsibility for management of all office properties owned and/or managed by the Company, since May 1997. Mr. Thompson joined Colonial in February 1997 as Senior Vice President--Office Acquisitions, with responsibility for all acquisitions of office properties. Prior to joining Colonial, Mr. Thompson worked for CarrAmerica Realty Corporation in office building acquisitions and due diligence. Mr. Thompson's ten year real estate background includes acquisitions, development, leasing, and management of office properties in the south. He is an active member of the National Association of Industrial and Office Parks and holds a Bachelor of Science degree from Washington and Lee University.
Douglas B. Nunnelley, 55, has been Senior Vice President and Secretary of the Company and CPHC, with general responsibility for regulatory, accounting, management information systems, and insurance matters, since May 1997. He joined Colonial in 1993 as Senior Vice President and Chief Financial Officer. From 1979 until 1993, Mr. Nunnelley served as Executive Vice President, Comptroller, and Chief Accounting Officer of the AmSouth Bancorporation, and as Senior Vice President and Comptroller of the First National Bank of Birmingham. He serves on the Board of Directors of Eastern Health Systems, Inc. Mr. Nunnelley holds a Bachelor of Science Degree in accounting from the University of Alabama and is a graduate of the Stonier Graduate School of Banking at Rutgers University and is a Certified Public Accountant.
Kenneth E. Howell, 48, has been Vice President, Controller and Chief Accounting Officer of the Company and CPHC, with general responsibility for the supervision of accounting, management information systems, and payroll and benefits for all of the properties owned and/or managed by the Company, since 1981. He joined Colonial in 1981 and holds a Bachelor of Science Degree in business administration from Auburn University.
Item 2.
Item 2. Properties.
General
The Company acquired 36 properties in connection with the Formation Transactions, and acquired or developed 19 additional properties and an additional phase of an existing property in 1994, six additional properties in 1995, 11 additional properties in 1996, and 25 additional properties in 1997. Since the Company's initial public offering ("IPO"), the Company has developed four additional Multifamily Properties and has disposed of eight properties, all through tax-deferred, like-kind exchanges. The 93 Properties owned by the Company at December 31, 1997, consisted of 43 Multifamily Properties, 37 Retail Properties, and 13 Office Properties, as described in more detail below.
Summary of Properties
Total 1997 Percent of Percentage Units/ Property Total 1997 Occupancy at Type of Number of GLA/ Revenue (2) Property Dec. 31, 1997 Property Properties NRA (1) (in thousands) Revenue (2) (3) - ------------ ----------- -------- -------------- ------------ ------------
Multifamily 43 13,759 $ 95,503 51.8% 93.8% Retail .... 37 10,558,000 71,179 38.6% 93.3% Office .... 13 1,859,000 17,761 9.6% 95.5% ----------- ----- Total . 93 $ 184,443 100.0% =========== =====
(1) Units (in this table only) refers to multifamily apartment units, GLA refers to gross leasable area of retail space and NRA refers to net rentable area of office space. Information is presented as of December 31, 1997. (2) Includes the Company's proportionate share of revenue from those Office Properties accounted for under the equity method, and the Company's share of the properties disposed of in 1997. (3) Excludes 1,972 units of expansion phases of five Multifamily Properties that had not achieved stabilized occupancy as of December 31, 1997.
Multifamily Properties
The 43 Multifamily Properties owned by the Company at December 31, 1997, contain a total of 13,759 garden-style apartments and range in size from 104 to 1,080 apartment units. Fourteen of the Multifamily Properties were acquired by the Company in connection with the Formation Transactions, 13 Properties and one additional phase of an existing Property were acquired during 1994, seven Properties were acquired during 1996 and five Properties were acquired during 1997. Also, since its IPO the Company has developed four additional Multifamily Properties. Twenty Multifamily Properties (containing a total of 6,985 apartment units) are located in Alabama, 13 Multifamily Properties (containing a total of 4,502 apartment units) are located in Florida, eight Multifamily Properties (containing a total of 1,594 apartments units) are located in Georgia, one Multifamily Property (containing a total of 328 apartment units) is located in Mississippi, and one Multifamily Property (containing a total of 350 apartment units) is located in South Carolina. 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. All of the Multifamily Properties are managed by the Company.
The following table sets forth certain additional information relating to the Multifamily Properties as of and for the year ended December 31, 1997.
The following table sets forth the total number of apartment units, percent leased and average base rental rate per apartment unit as of the end of each of the last five years for the Multifamily Properties:
Retail Properties
The 37 Retail Properties owned by the Company at December 31, 1997, contain a total of approximately 10.6 million square feet (including space owned by anchor tenants). Ten of the Retail Properties are located in Alabama, 11 are located in Florida, seven are located in Georgia, five are located in North Carolina, one is located in South Carolina, one is located in Tennessee, and two Retail Properties are located in Virginia. The Retail Properties consist of 12 enclosed regional malls (Briarcliffe Mall, Brookwood Village, Gadsden Mall, Glynn Place Mall, Holly Hill Mall, Lakeshore Mall, Macon Mall, Mayberry Mall, River Oaks Center, Staunton Mall, Valdosta Mall, and Village Mall), two power centers, and 23 neighborhood shopping centers. Nine of the 37 Retail Properties were originally developed by the Company, two were acquired in 1994, six were acquired in 1995, four were acquired in 1996, and 16 were acquired in 1997. All of the Retail Properties are managed by the Company.
The following table sets forth certain information relating to the Retail Properties as of and for the year ended December 31, 1997.
The following table sets forth the total gross leasable area, percent leased and average base rent per leased square foot as of the end of each of the last five years for the Retail Properties:
The following table sets out a schedule of the lease expirations for leases in place as of December 31, 1997, for the Retail Properties:
Office Properties
The 13 Office Properties owned by the Company at December 31, 1997, contain a total of approximately 1.9 million rentable square feet. Eleven of the Office Properties are located in Alabama (representing 77% of the office portfolio's net rentable square feet) , one is located in Atlanta, Georgia and one is located in Orlando, Florida. The Office Properties range in size from approximately 30,000 square feet to 352,000 square feet. Four of the Office Properties were developed by Colonial, five of the Properties were acquired at various times between 1980 and 1990, and four of the Properties were acquired in 1997. All of the Office Properties are managed by the Company.
The following table sets forth certain additional information relating to the Office Properties as of and for the year ended December 31, 1997.
The following table sets out a schedule of the lease expirations for leases in place as of December 31, 1997, for the Office Properties (including all lease expirations for partially-owned Properties):
The following sets forth the net rentable area, total percent leased and average base rent per leased square foot for each of the last five years for the Office Properties:
Undeveloped Land
The Company owns eight undeveloped land parcels consisting of approximately 103.2 acres (collectively, the "Land"). These parcels are adjacent to five of the Properties and are suitable for potential expansion at those Properties. The Land suitable for expansion is located adjacent to a Multifamily Property and four Retail Properties. Land adjacent to Multifamily Properties typically will be considered for potential development of another phase of an existing Multifamily Property if the Company determines that the particular market can absorb additional apartment units. The Company currently owns one such parcel. For expansions at Retail Properties, the Company owns parcels both contiguous to the boundaries of Retail Properties, which would accommodate expansion of the mall or shopping center, and outparcels which are suitable for restaurants, financial institutions or free standing retailers. The Company owns seven such parcels.
Options to Acquire Additional Land--In addition to the Land, the Company has options to acquire certain additional land parcels owned by the Lowder family (collectively, the "Option Parcels"). The name, location, proposed use and acreage of each Option Parcel is as follows:
Each option has a term of five years from the date of the closing of the IPO, subject to earlier termination if the Company elects not to exercise a right of first opportunity on a proposed sale of such Option Parcel by the Lowder family. The Company also has a five-year right of first opportunity with respect to each Option Parcel beginning on the expiration date of the option term (if the option is not exercised).
Property Markets
The table below sets forth certain information with respect to the geographic concentration of the Properties as of December 31, 1997.
The Company believes that the demographic and economic trends and conditions in the markets where the Properties are located indicate a potential for continued growth in property net operating income. The Properties are located in a variety of distinct submarkets within Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee and Virginia; however, Birmingham, Huntsville and Montgomery, Alabama, Orlando, Tampa and Sarasota/Bradenton, Florida, and Macon and Atlanta, Georgia, are the Company's primary markets. The Company believes that its markets in these eight states, which are characterized by stable and increasing population and employment growth, should continue to provide a steady demand for multifamily, retail, and office properties.
Mortgage Financing
Certain of the Properties are subject to mortgage indebtedness. The Properties whose financial results are consolidated in the financial statements of the Company are subject to existing mortgage indebtedness and other notes payable in an aggregate amount as of December 31, 1997, of approximately $702.0 million carrying a weighted average interest rate of 7.23% and a weighted average maturity of 7.3 years. The mortgage indebtedness on the Properties as of December 31, 1997, is set forth in the table below:
In addition to the foregoing mortgage debt, the two Office Properties in which the Company owns partial interests (and which therefore are not consolidated in the financial statements of the Company) also are subject to existing mortgage indebtedness. The Company's pro-rata share of such indebtedness as of December 31, 1997, was $1,057,000 which carried a weighted average interest rate of 9.3%. The maturity dates of these loans range from May 31, 1998 to July 17, 2000, and as of December 31, 1997, the loans had a weighted average maturity of 1.8 years.
Item 3.
Item 3. Legal Proceedings.
Neither the Company nor the Properties are presently subject to any material litigation nor, to the Company's knowledge, is any material litigation threatened against the Company or the Properties, other than routine litigation arising in the ordinary course of business which is expected to be covered by liability insurance.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
A Special Meeting of Shareholders of Colonial Properties Trust was held on October 23, 1997. The following is a tabulation of the voting on each proposal presented at the Special Meeting:
PROPOSAL 1 - TO AMEND THE DECLARATION OF TRUST TO INCREASE THE NUMBER OF AUTHORIZED SHARES
Votes For 11,953,101 Votes Against 3,067,835 Votes Withheld 103,089 Broker -0- Non-Votes
PROPOSAL 2 - TO AUTHORIZE THE BOARD OF TRUSTEES TO AUTHORIZE ISSUANCES OF PREFERRED SHARES
Votes For 14,121,859 Votes Against 885,237 Votes Withheld 116,928 Broker -0- Non-Votes
PROPOSAL 3 - TO AUTHORIZE THE BOARD OF TRUSTEES TO AUTHORIZE ISSUANCES OF BONDED INDEBTEDNESS
Votes For 14,362,614 Votes Against 466,136 Votes Withheld 295,274 Broker -0- Non-Votes
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.
The following sets forth the high and low sale prices for the Common Shares for each quarter in the two-year period ended December 31, 1997, as reported by the New York Stock Exchange Composite Tape, and the dividends paid by the Company with respect to each such period.
On March 9, 1998, the last reported sale price of the Common Shares on the NYSE was $29.5625. On March 9, 1998, the Company had 460 shareholders of record.
Item 6.
Item 6. Selected Financial Data.
The information required by this item is hereby incorporated by reference to the material appearing in the 1997 annual report to shareholders (the "Annual Report to Shareholders"), filed as Exhibit 13.1 hereto, under the caption "Selected Financial Information."
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The information required by this item is hereby incorporated by reference to the material appearing in the Annual Report to Shareholders under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations."
Item 8.
Item 8. Financial Statements and Supplementary Data.
The financial statements of the Company are hereby incorporated by reference to the Consolidated Financial Statements of Colonial Properties Trust appearing in the Annual Report to Shareholders.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
PART III
Item 10.
Item 10. Trustees and Executive Officers of the Registrant.
The information required by this item with respect to trustees and compliance with the Section 16(a) reporting requirements is hereby incorporated by reference to the material appearing in the Company's definitive proxy statement for the annual meeting of shareholders to be held in 1998 (the "Proxy Statement") under the captions "Election of Trustees" and "Section 16(a) Beneficial Ownership Reporting Compliance." Information required by this item with respect to executive officers is provided in Item 1 of this report. See "Executive Officers of the Company."
Item 11.
Item 11. Executive Compensation.
The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption "Executive Compensation."
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the caption "Voting Securities and Principal Holders Thereof."
Item 13.
Item 13. Certain Relationships and Related Transactions.
The information required by this item is hereby incorporated by reference to the material appearing in the Proxy Statement under the captions "Executive Compensation Committee Interlocks and Insider Participation" and "Certain Transactions."
Part IV
Item 14.
Item 14. Exhibits, Financial Schedules, and Reports on Form 8-K.
14(a)(1) and (2) Financial Statements and Schedules
Index to Financial Statements and Financial Statement Schedules
Financial Statements:
The following financial statements of the Company are hereby incorporated by reference to the Consolidated Financial Statements of Colonial Properties Trust appearing in the Annual Report to Shareholders:
Consolidated Balance Sheets as of December 31, 1997 and 1996
Consolidated Statements of Income for the years ended December 31, 1997, 1996, and 1995
Consolidated Statements of Shareholders' Equity for the years ended December 31, 1997, 1996, and 1995
Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1996, and 1995
Notes to Consolidated Financial Statements
Report of Independent Accountants
Financial Statement Schedules:
Schedule IIIReal Estate and Accumulated Depreciation
Report of Independent Accountants
All other schedules have been omitted because the required information of such other schedules is not present in amounts sufficient to require submission of the schedule or because the required information is included in the consolidated financial statements.
14(a)(3) Exhibits
*3.1 Declaration of Trust of Company. *3.2 Bylaws of the Company. **10.1 Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended. +10.2.1 Registration Rights and Lock-Up Agreement dated September 29, 1993,among the Company and the persons named therein. 10.2.2 Registration Rights and Lock-Up Agreement dated March 25, 1997, among the Company and the persons named therein. (EDGAR Version Only) 10.2.3 Registration Rights and Lock-Up Agreement dated November 4, 1994, among the Company and the persons named therein. (EDGAR Version Only) 10.2.4 Registration Rights and Lock-Up Agreement dated August 20, 1997, among the Company and the persons named therein. (EDGAR Version Only) 10.2.5 Registration Rights and Lock-Up Agreement dated November 1, 1997, among the Company and the persons named therein. (EDGAR Version Only) 10.2.6 Registration Rights and Lock-Up Agreement dated July 1, 1997, among the Company and the persons named therein. (EDGAR Version Only) 10.2.7 Registration Rights and Lock-Up Agreement dated July 1, 1996, among the Company and the persons named therein. (EDGAR Version Only)
(PI)10.3.1 First Amended and Restated Employee Share ++ Option and Restricted Share Plan. +/-10.3.2 Non-employee Trustee Share Option Plan. ++ +/-+/-10.3.3 Non-employee Trustee Share Plan. ++ (OMEGA)10.3.4 Employee Share Purchase Plan. ++ +10.5 Non-employee Trustee Option Agreement. +10.6 ++ Employment Agreement between the Company and Thomas H. Lowder. +10.7 Officers and Trustees Indemnification Agreement. +10.8 Partnership Agreement of the Management Partnership. **10.9 Articles of Incorporation of the Management Corporation, as amended. +10.10 Bylaws of the Management Corporation. **10.11 Articles of Incorporation of CPHC, as amended. +10.12 Bylaws of CPHC. +10.13 Land Option Agreement. ++10.14 Credit agreement between the Colonial Realty Limited Partnership and SouthTrust Bank, National Association, AmSouth Bank, N.A., Wells Fargo Bank, National Association, Wachovia Bank, N.A., First National Bank of Commerce, N.A., and PNC Bank, Ohio, National Association dated July 10, 1997 and related promissory notes. +10.16 ++ Annual Incentive Plan. ++++10.17 Indenture dated as of July 22, 1996, by and between Colonial Realty Limited Partnership and Bankers Trust Company, as amended 13.1 Portions of the Annual Report to Shareholders incorporated by reference in Part II of this Form 10-K. (EDGAR Version Only) 21.1 List of Subsidiaries. (EDGAR Version Only) 23.1 Consent of Coopers & Lybrand L.L.P. (EDGAR Version Only) 27 Financial Data Schedules (EDGAR Version Only) - -------------------- * Incorporated by reference to the Annexes to the Company's Proxy Statement dated September 1, 1995. **Incorporated by reference to the same titled and number exhibit in the Company's Annual Report on Form 10-K dated December 31, 1994. + Incorporated by reference to the same titled and numbered exhibit in the Company's Registration Statement on Form S-11, No. 33-65954. ++Management contract or compensatory plan required to be filed pursuant to Item 14(c) of Form 10-K. ++Incorporated by reference to the same titled and number exhibit in the Company's Quarterly Report on Form 10-Q dated June 30, 1997. ++++ Incorporated by reference to (i) Exhibit D to the Form 8-K dated July 19, 1996, filed by Colonial Realty Limited Partnership, and (ii) Exhibit B to the Form 8-K dated December 6, 1996, filed by Colonial Realty Limited Partnership. (PI) Incorporated by reference to the Company's Registration Statement on Form S-8, No. 333-27203. +/- Incorporated by reference to the Company's Registration Statement on Form S-8, No. 333-27203. +/-+/- Incorporated by reference to the Company's Registration Statement on Form S-8, No. 333-27205. (OMEGA) Incorporated by reference to the Company's Registration Statement on Form S-8, No. 333-27201.
14(b) Reports on Form 8-K
Reports on Form 8-K filed during the last quarter of 1997: Form 8-K dated October 30, 1997, reported certain property acquisitions during 1997 under Item 5, "Other Events." Form 8-K dated November 5, 1997, filed certain documents related to the Company's offering of preferred shares under Item 5, "Other Events." Form 8-K dated December 11, 1997, reported certain property acquisitions during 1997 under Item 5, "Other Events." Form 8-K dated December 19, 1997, filed certain documents related to the Company's offering of common shares under Item 5, "Other Events."
14(c) Exhibits
The list of Exhibits filed with this report is set forth in response to Item 14(a)(3).
14(d) Financial Statements
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 20, 1998.
Colonial Properties Trust
By:/s/ Thomas H. Lowder ----------------------- Thomas H. Lowder Chairman of the Board, President, and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and the capacities indicated on March 20, 1998.
Signature
/s/ Thomas H. Lowder Chairman of the Board, President, - ------------------------------ and Chief Executive Officer Thomas H. Lowder
/s/ Howard B. Nelson, Jr. Chief Financial Officer - ------------------------------ Howard B. Nelson, Jr.
Vice President, Controller, and /s/ Kenneth E. Howell Assistant Secretary - ------------------------------ (Chief Accounting Officer) Kenneth E. Howell
/s/ Carl F. Bailey Trustee - ------------------------------ Carl F. Bailey
/s/ M. Miller Gorrie Trustee - ------------------------------ M. Miller Gorrie
/s/ William M. Johnson Trustee - ------------------------------ William M. Johnson
/s/ James K. Lowder Trustee - ------------------------------ James K. Lowder
/s/ Herbert A. Meisler Trustee - ------------------------------ Herbert A. Meisler
/s/ Claude B. Nielsen Trustee - ------------------------------ Claude B. Nielsen
/s/ Harold W. Ripps Trustee - ------------------------------ Harold W. Ripps
/s/ Donald T. Senterfitt Trustee - ------------------------------ Donald T. Senterfitt
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NOTES TO SCHEDULE III COLONIAL PROPERTIES TRUST December 31, 1997
(1) The aggregate cost for Federal Income Tax purposes was approximately $1,151,629,000 at December 31, 1997.
(2) See description of mortgage notes payable in Note 7 of Notes to Consolidated Financial Statements.
(3) The following is a reconciliation of real estate to balances reported at the beginning of the year:
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of Colonial Properties Trust:
Our report on the consolidated financial statements of Colonial Properties Trust has been incorporated by reference in this Form 10-K from the 1997 Annual Report to Shareholders of Colonial Properties Trust. In connection with our audits of such financial statements, we have also audited the related financial statement schedules listed in the index in Item 14 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein.
/s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Birmingham, Alabama January 19, 1998
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