Colony and KB officials couldn't be reached at GlobeSt.com's publication deadline. Both companies have denied the deal was in the works for months. Bruce Karatz is KB's CEO; Tom Bradbury heads Colony which he founded in 1975.

KB, formerly Kaufman and Broad, the nation's sixth largest homebuilder, is also negotiating to buy other Southeast firms, area brokers intimate with the Atlanta deal, tell GlobeSt.com on condition of anonymity.

KB Homes, a New York Stock Exchange-traded company, is expected to disclose the purchase price in near-future filings with the Securities and Exchange Commission, area brokers tell GlobeSt.com.

Privately held Colony is expected to keep its name and its headquarters in suburban Woodstock, GA, about 15 miles north of Downtown Atlanta, brokers tell GlobeSt.com. "Why the deal was done at this particular time is anybody's guess," an area broker says.

For KB, the acquisition means immediate entree to three prime Southeast shelter markets--Atlanta, Charlotte and Raleigh, NC. The deal also caps KB's four-year yearning to break into the Southeast arena with an existing robust product rather than build a network from ground up, area multifamily brokers tell GlobeSt.com.

Colony brings to KB's table sales of $244 million on 1,872 single-family, townhomes and detached cluster homes in 2002. KB did $5 billion on 25,565 shelter contracts last year. Colony's inventory of 8,200 lots makes the firm one of the largest land bankers in the Southeast.

KB, with expansion eyes on the Southeast, bought two Florida companies in the past 18 months--Trademark Home Builders in Jacksonville and American Heritage Homes in Orlando. The company also set up a Tampa office.

The product lines of both companies are about the same. KB homes sell for an average $200,000. Colony residences average $130,000. Colony sold 1,052 homes in Atlanta last year; 544 in Raleigh; and 276 in Charlotte. Weatherstone Square, near Woodstock, GA, is one of Colony Homes' newest townhome communities.