Colonial Properties Trust Reports Earnings For First Quarter 2005

BIRMINGHAM, Ala., April 28 /PRNewswire-FirstCall/ -- Colonial Properties Trust (the "Company") a real estate investment trust (REIT) that owns a diversified portfolio of multifamily, office and retail properties, today reported financial results for the quarter ended March 31, 2005.

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For the first quarter of 2005, net income available to common shareholders was $69.9 million or $2.51 per fully diluted share. In the first quarter of 2004, net income available to common shareholders was $13.4 million, or $0.50 per fully diluted share. The increase from first quarter 2004 is primarily due to gains from the sales of Colonial Mall Gadsden and eight multifamily properties. Total gains from dispositions were $91.8 million or $2.40 per fully diluted share for the first quarter of 2005 compared to $9.4 million or $0.25 per fully diluted share for the same period in 2004.

Funds from operations (FFO), a widely accepted measure of REIT performance, increased to $34.0 million, or $0.89 per fully diluted share/unit (FFOPS), representing a 3.0 percent increase on a per share/unit basis from $32.4 million, or $0.87 per fully diluted share/unit in the first quarter 2004. A reconciliation of net income available to common shareholders to FFO is provided in the attached tables.

Thomas H. Lowder, the Company's Chairman and Chief Executive Officer, stated, "We began 2005 by executing successfully on key aspects of our growth strategy. Chief among them was the completion of our merger with Cornerstone, a multifamily REIT. In addition, we made progress toward our strategic initiative of repositioning our assets with the first quarter divestment of Colonial Mall Gadsden in Gadsden, AL and the subsequent divestment of Colonial Mall Temple in Temple, TX, which closed early in the second quarter of 2005. Both moves position the Company to unlock value by leveraging our expertise in the multifamily and shopping center areas. Our purchases of two Class A office properties in Tampa, FL and the retail shopping center in Houston, TX further enhance the diversity of our portfolio."

Highlights - Closed the merger with Cornerstone Realty Income Trust ("Cornerstone") on April 1, 2005. - Completed $275 million unsecured senior note bond offering providing balance sheet flexibility. - Announced the appointment of John E. Tomlinson as Executive Vice-President and Chief Accounting Officer for the Company. - Increased dividend for the 12th consecutive year to $0.675 per common share. - One of only 314 public companies included on Mergent's 2005 Dividend Achievers List. - Multifamily: -- Realized an increase of 6.7 percent in net operating income (NOI) on a same-property basis over the comparable period in 2004; represents the sixth consecutive quarter of year-over-year increases. -- Posted occupancies for stabilized properties for quarter end of 96.4 percent, an increase of 170 basis points sequentially. -- Commenced ownership and management of 23,000 multifamily units formerly owned by Cornerstone on April 1, 2005. -- Sold six wholly owned and two partially owned multifamily properties as part of its geographic diversification strategy. - Office: -- On a same-property basis, NOI decreased 7.5 percent compared to the first quarter of 2004. -- Posted occupancies at period end for stabilized properties of 89.5 percent. -- Acquired Colonial Place I & II (formerly Westshore Place I & II), in Tampa, FL. - Retail: -- On a same-property basis, realized a 1.3 percent increase in NOI from first quarter 2004. -- Posted occupancy for stabilized properties of 91.0 percent. -- Completed the planned sale of Colonial Mall Gadsden in March and Colonial Mall Temple in April. -- In keeping with its strategy of increasing its investments in shopping center assets, acquired Colonial Promenade Portofino in Houston, TX. Acquisitions

On April 1, 2005, Colonial Properties completed its merger with Cornerstone. At the completion of the merger, the Company owned or managed more than 49,300 apartment units making it one of the largest multifamily portfolios in the Sunbelt region of the United States. In connection with the merger, the Company issued an additional 11.3 million common shares representing approximately 77 percent of the Cornerstone shares outstanding and 5.4 million Series E preferred depositary shares representing approximately 23 percent of the Cornerstone shares outstanding.

The Company acquired two office buildings known as Colonial Place I & II totaling 371,000 square-feet in Tampa, FL on February 2, 2005. The property's largest tenant is Blue Cross Blue Shield and the buildings are 95 percent occupied. Subsequent to the first quarter close, on April 5, 2005, the Company purchased Mangrove Bay in Tampa, FL, a 214,000 square-foot office asset which is currently 50 percent occupied.

On January 13, 2005 the Company purchased Colonial Promenade Portofino, a 373,000 square-foot retail shopping center in Houston, TX. The property is 82.3 percent leased and includes such tenants as Oshman's, Steinmart and Old Navy.

Dispositions

On March 30, 2005, the Company sold six apartment communities totaling 2,074 units for $143.8 million excluding closing costs. In conjunction with the sale, the Company paid off mortgage debt of $69.8 million at a blended interest rate of 5.97 percent. The properties were approximately 94 percent occupied with an average age of 10 years. Included in the sale were two Colonial Grand apartment communities totaling 572 units located in Macon, GA and Birmingham, AL and four Colonial Village apartment communities totaling 1,502 units located in Gainesville, FL; Augusta, GA; Bluffton, SC; and Sarasota, FL. Additionally, the Company sold its 15 percent interest in two partially owned apartment communities totaling 901 units for approximately $8.1 million, of which $4.5 million was used to pay off the portion of associated mortgage debt.

On March 31, 2005, the Company completed the sale of Colonial Mall Gadsden located in Gadsden, AL. The total sales price was $58.8 million which represented a capitalization rate of 8.1 percent. The mall was 96 percent occupied upon disposition.

On April 15, 2005, the Company sold Colonial Mall Temple located in Temple, TX for $33.5 million representing a capitalization rate of 9.0 percent. The mall was 91.1 percent occupied upon disposition.

Financing Activities

During the first quarter, the Company's operating partnership, Colonial Realty Limited Partnership, completed an offering of $275 million, 4.750 percent senior unsecured notes due February 1, 2010. The notes were priced to yield 4.751 percent, representing a 105 basis point spread over the 5-year Treasury rate. Net proceeds of approximately $273.3 million were used to pay down the Company's unsecured bridge facility and for general corporate purposes. Lowder noted, "Through active marketing, the Company successfully reduced its bond spreads with the latest offering."

Portfolio Overview - As of April 2005

Multifamily: The Company owns or manages approximately 49,300 units which are currently 94.6 percent occupied. This is comprised of 126 wholly owned properties totaling approximately 36,580 units and a partial interest in 31 properties with 8,619 units. Additionally, the Company provides third party management services for approximately 4,100 units.

Office: Colonial Properties owns or manages 7.2 million square feet of office space. The Company's office portfolio includes 29 wholly owned properties and one partially owned property that together total 6.5 million square feet. The Company manages six additional office properties totaling 0.7 million square-feet.

Retail: The Company owns or manages 15.3 million square feet of retail space. These properties include 31 wholly owned and two partially owned shopping centers totaling 6.4 million square feet as well as 13 wholly owned and one partially owned regional mall with 8.5 million square feet. The Company manages an additional four shopping centers with 0.3 million square feet of space. The total retail portfolio is currently 91.0 percent occupied.

EPS and FFO Per Share Guidance

The Company's guidance for the second-quarter and full-year 2005 for fully diluted EPS and FFOPS is set forth and reconciled below.

Second-Quarter 2005 Range Full-Year 2005 Range Low - High Low - High Fully Diluted EPS $0.13 - $1.53 $3.20 - $4.73 Plus: Real Estate Depreciation & Amortization 0.74 - 0.74 2.28 - 2.28 Less: Gain on Sale of Assets ( - ) - (1.37) (1.80) - (3.25) Fully Diluted FFOPS $0.87 - $0.90 $3.68 - $3.76

Looking ahead, Lowder stated, "We already see evidence in our portfolio of improved market fundamentals. We are set to capitalize on the investments we have made throughout our asset base."

For additional details of disposition and investment activities, see the Company's detailed Supplemental Financial Highlights available on the Company's website.

Conference Call and Supplemental Materials

Colonial Properties will hold its quarterly conference call today, April 28th at 1:00 p.m. Central time. The call will include a review of the Company's first quarter 2005 performance and discussion of its strategy and expectations for the future.

To participate, dial 1-877-500-9123. As with previous calls, a replay will be available for one week by dialing 800-642-1687; the Conference ID will be 5272798. Access to the live call and a replay will be available through the Company's website at http://www.colonialprop.com/ under "Investor Relations: Shareholder Information."

Colonial Properties produces a supplemental information package that provides detailed information regarding operating performance, investing activities and the Company's overall financial position. For a copy of Colonial Properties' detailed Supplemental Financial Highlights, please visit the Company's website at http://www.colonialprop.com/ under the "Investor Relations: Financial Reporting" tab or contact Barbara Pooley in Investor Relations at 800-645-3917.

Company Summary

Colonial Properties Trust is a diversified REIT that, through its subsidiaries, owns a portfolio of multifamily, office and retail properties where you live, work and shop in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Virginia, Tennessee, Texas, Arizona, Nevada and New Mexico. Colonial Properties Trust performs development, acquisition, management, leasing and brokerage services for its portfolio and properties owned by third parties. The Company has a total market capitalization of approximately $5 billion. The foundation of Colonial Properties' success is its live, work and shop diversified investment strategy. The Company owns or manages 49,300 apartment units, 7.2 million square-feet of office space and 15.3 million square-feet of retail shopping space. Additional information on Colonial Properties Trust is available on the Internet at http://www.colonialprop.com/ . The Company, headquartered in Birmingham, AL, is listed on the New York Stock Exchange under the symbol "CLP" and is included in the S&P SmallCap 600 Index

Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Except for the historical information contained herein, this news release contains forward-looking statements regarding Company and property performance, and is based on the Company's current expectations and judgment. Actual results could vary materially depending on risks and uncertainties inherent to general and local real estate conditions, competitive factors specific to markets in which Colonial Properties operates, legislative or other regulatory decisions, future interest rate levels or capital markets conditions. The Company assumes no liability to update this information. For more details, please refer to the Company's SEC filings, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q.

COLONIAL PROPERTIES TRUST Financial Statements First Quarter 2005 BALANCE SHEET ($ in 000s) As of As of 03/31/2005 12/31/2004 ASSETS Real Estate Investments Operating Properties $2,702,651 $2,696,304 Undeveloped Land & Construction in Progress 170,583 158,954 Total Real Estate, before Depreciation 2,873,234 2,855,258 Less: Accumulated Depreciation (427,812) (437,635) Real estate assets held for sale, net 153,189 167,712 Net Real Estate Assets 2,598,611 2,585,335 Cash and Equivalents 146,317 10,725 Restricted Cash 4,613 2,333 Accounts Receivable, net 20,638 20,642 Notes Receivable 879 906 Prepaid Expenses 8,615 11,238 Deferred Debt and Lease Costs 43,659 36,750 Investment in Unconsolidated Subsidiaries 64,935 65,472 Other Assets 83,030 67,942 Total Assets $2,971,297 $2,801,343 LIABILITIES Long-Term Liabilities Unsecured Credit Facility $253,520 $239,970 Notes and Mortgages Payable 1,677,438 1,615,817 Total Long-Term Liabilities 1,930,958 1,855,787 Other Liabilities 77,083 74,548 Total Liabilities 2,008,041 1,930,335 MINORITY INTEREST & EQUITY Limited Partners' Interest in Consolidated Partnership 1,397 1,389 Preferred Shares and Units, at Liquidation Value Series B 7 1/4%, Preferred Units 100,000 100,000 Series C 9 1/4%, Preferred Shares 50,000 50,000 Series D 8 1/8%, Preferred Shares 125,000 125,000 Total Preferred Shares and Units, at Liquidation Value 275,000 275,000 Common Equity, including Minority Interest 686,859 594,619 Total Equity, including Minority Interest in Operating Partnership 963,256 871,008 Total Liabilities, Minority Interest and Equity $2,971,297 $2,801,343 SHARES & UNITS OUTSTANDING, END OF PERIOD (shares and units in 000s) As of As of 03/31/2005 12/31/2004 Basic Shares 28,007 27,599 Operating Partnership Units (OP Units) 10,296 10,373 Total Shares & OP Units 38,303 37,972 Dilutive Common Share Equivalents - 341 Diluted Shares 28,007 27,940 Total Shares & OP Units 38,303 38,313 COLONIAL PROPERTIES TRUST Financial Statements First Quarter 2005 CONSOLIDATED STATEMENTS OF INCOME ($ in 000s, except per share data) Three Months Ended 03/31/2005 03/31/2004 Revenue Minimum Rent $74,546 $58,511 27.4% Percentage Rent 629 434 44.9% Tenant Recoveries 8,747 6,981 25.3% Other Property Related Revenue 4,542 3,772 20.4% Other Non-Property Related Revenue 3,306 1,330 148.6% Total Revenue 91,770 71,028 29.2% Operating Expenses Property Operating Expenses: General Operating Expenses 6,635 5,303 25.1% Salaries and Benefits 4,573 3,370 35.7% Repairs and Maintenance 8,215 6,327 29.8% Taxes, Licenses, and Insurance 9,611 6,878 39.7% Total Property Operating Expenses 29,034 21,878 32.7% General and Administrative 8,401 5,460 53.9% Depreciation 24,222 17,565 37.9% Amortization 4,554 2,245 102.9% Total Operating Expenses 66,211 47,148 40.4% Income from Operations 25,559 23,880 7.0% Other Income (Expense) Interest Expense (23,696) (15,474) 53.1% Income from Investments 100 105 -4.8% Gain (Loss) on Hedging Activities 280 (80) 450.0% Gain on Sale of Property 1,126 1,002 12.4% Other (210) (20) -950.0% Total Other Expense (22,400) (14,467) 54.8% Income before Minority Interest & Discontinued Operations 3,159 9,413 -66.4% Minority Interest Minority Interest of limited partners (229) - Minority Interest in CRLP - Preferred (1,813) (2,055) -11.8% Minority Interest in CRLP - Common 698 (1,025) -168.1% Total Minority Interest (1,344) (3,080) -56.4% Income from Continuing Operations 1,815 6,333 -71.3% Discontinued Operations Income from Discontinued Operations 6,685 5,537 20.7% Gain (Loss) on Disposal of Discontinued Operations 91,772 9,391 877.2% Minority Interest in Discontinued Operations (26,672) (4,177) 538.5% Income from Discontinued Operations 71,785 10,751 567.7% Net Income 73,600 17,084 330.8% Dividends to Preferred Shareholders (3,695) (3,695) 0.0% Net Income Available to Common Shareholders $69,905 $13,389 422.1% Earnings per Share - Basic Continuing Operations $(0.07) $0.10 -170.0% Discontinued Operations 2.58 0.40 545.0% EPS - Basic $2.51 $0.50 402.0% Earnings per Share - Diluted Continuing Operations $(0.07) $0.10 -170.0% Discontinued Operations 2.58 0.40 545.0% EPS - Diluted $2.51 $0.50 402.0% COLONIAL PROPERTIES TRUST Financial Statements First Quarter 2005 FIRST QUARTER FUNDS FROM OPERATIONS (FFO) RECONCILIATION ($ in 000s, except per share data) Three Months Ended 03/31/2005 03/31/2004 Net Income Available to Common Shareholders $69,905 $13,389 422.1% Minority Interest in CRLP (Operating Ptr Unitholders) 25,974 5,202 399.3% Total 95,879 18,591 415.7% Adjustments - Consolidated Properties Depreciation - Real Estate 25,227 20,728 21.7% Amortization - Real Estate 3,587 1,399 156.4% Remove: Gain/(Loss) on Sale of Property (90,462) (10,393) 770.4% Include: Gain/(Loss) on Sale of Undepreciated Property 1,063 1,008 5.5% Total Adjustments - Consolidated (60,585) 12,742 -575.5% Adjustments - Unconsolidated Properties Depreciation - Real Estate 1,173 1,041 12.7% Amortization - Real Estate 1 16 -93.8% Remove: Gain/(Loss) on Sale of Property (2,440) - Include: Gain/(Loss) on Sale of Undepreciated Property - - Total Adjustments - Unconsolidated (1,266) 1,057 -219.8% Funds from Operations $34,028 $32,390 5.1% FFO per Share Basic $0.89 $0.87 1.9% Diluted $0.89 $0.87 3.0%

Pursuant to the definition of Funds from Operations ("FFO") adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"), FFO is calculated by adjusting net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis.

The Company believes that FFO is useful to investors because it provides an additional indicator of the Company's financial and operating performance. This is because, by excluding the effect of real estate depreciation and gains (or losses) from sales of properties (all of which are based on historical costs which may be of limited relevance in evaluating current performance), FFO can facilitate comparison of operating performance among equity REITs. FFO is a widely recognized measure in the Company's industry. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net cash flows from operating activities (determined in accordance with GAAP), as a measure of our liquidity, or as an indicator of our ability to make cash distributions.

FIRST QUARTER SHARES AND UNITS OUTSTANDING, WEIGHTED (shares and units in 000s) Three Months Ended 03/31/2005 03/31/2004 Basic Shares 27,824 26,670 4.3% Operating Partnership Units (OP Units) 10,338 10,361 -0.2% Total Shares & OP Units 38,162 37,031 3.1% Dilutive Common Share Equivalents - 375 -100.0% Diluted (1) Shares 27,824 27,045 2.9% Total Shares & OP Units 38,162 37,406 2.0% Notes: (1) For periods where the Company reported a net loss from continuing operations (after preferred dividends), the effect of dilutive shares has been excluded from per share computations as including such shares would be anti-dilutive. COLONIAL PROPERTIES TRUST Financial Statements First Quarter 2005 FIRST QUARTER SEGMENT DATA & RECONCILIATION Three Months Ended 03/31/2005 03/31/2004 Net Operating Income (NOI) Divisional Same-Property NOI Multifamily $13,807 $12,941 6.7% Office 15,460 16,707 -7.5% Retail 22,791 22,491 1.3% Total Same-Property 52,058 52,139 -0.2% Less: Unconsolidated Assets (899) (843) Same-Property NOI, Consolidated 51,159 51,296 Divisional Non Same-Property NOI Multifamily 9,255 3,234 Office 1,801 294 Retail 8,498 4,707 Total Non-Same Property 19,554 8,235 Less: Unconsolidated Assets (2,049) (1,535) Non Same-Property NOI, Consolidated 17,505 6,700 Divisional Total NOI Multifamily 23,062 16,175 42.6% Office 17,261 17,001 1.5% Retail 31,289 27,198 15.0% Total Divisional NOI 71,612 60,374 18.6% Less: NOI, Unconsolidated (2,948) (2,378) Less: Discontinued Operations (9,218) (10,128) Unallocated Corporate Rev 3,306 1,297 Other Expense (16) (15) General & Administrative Expenses (8,401) (5,460) Depreciation (24,222) (17,565) Amortization (4,554) (2,245) Income from Operations, restated for additional discontinued operations 25,559 23,880 Total Other Expense (22,400) (14,467) Income from Continuing Operations before Extraordinary Items, Minority Interest and Discontinued Operations, as restated for additional discontinued operations 3,159 9,413 Add: Discontinued Operations Income, post 1Q 2004 - 5,388 Income from Continuing Operations before Extraordinary Items, Minority Interest and Discontinued Operations, per corresponding 10-K or 10-Q $3,159 $14,801

Divisional NOI is defined as total property revenues, including unconsolidated partnerships and joint ventures, less real estate expenses (such items as repairs and maintenance, payroll, utilities, property taxes, insurance, advertising, management fees).

The Company believes Total Divisional NOI (and other NOI measures aggregating segment data) is useful to investors as a meaningful indicator of property level operating performance and current market conditions affecting the Company . Additionally, the Company also believes Total Divisional NOI (and such other NOI measures) is useful to investors because NOI is commonly used industry-wide to evaluate and compare property level operating results of real estate companies, allowing investors to view the Company in comparison to these other real estate companies. The Company cautions investors that other real estate companies may calculate Total Divisional NOI on a basis different than the Company. In addition, Total Divisional NOI (and such other NOI measures) should not be viewed as a substitute measure of performance for GAAP income from continuing operations or other applicable GAAP performance measures.