"The time was right," explains William Friedman, Tarragonpresident. "And the rates are so low now. The properties involvedhave reached stability and occupancy."

In addition to the flexibility of the agreement, Friedman notes,the transaction reduces the weighted average interest rate on theseven properties covered by 81 basis points, resulting in annualsavings of $777,000 to Tarragon, as compared to the cost of thefloating rate project loans paid off with the facility.

"We are still in a position to sell or convert to condominiumsany of the communities securing this facility without penalty orexit fee," Friedman adds. "With an initial interest rate ofapproximately three percent, this financing gives us thecombination of low cost, complete flexibility and substantialproceeds that we were looking for."

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