BIRMINGHAM, AL-More details are available on locally based REIT Colonial Properties Trust's plan to focus on the multifamily portion of its business. The plan would entail selling its office and retail properties. Assets will either be sold outright or through joint venture arrangements in which Colonial will continue to manage the properties. Under the plan, the company expects proceeds of the sales to be approximately $1.5 billion to $1.7 billion. The company plans to retain a 10% to 20% interest in each of the joint ventures and receive market-based management fees. The property sales will be conducted over the next six to 12 months, a company spokesperson tells GlobeSt.com.

After the sales have been completed, the company estimates that annualized net operating income from multifamily operations will be approximately 80% of the company's total NOI, compared with 50% today. "The successful execution of this plan will accelerate our strategic objective of becoming a multifamily-focused REIT," says Colonial Properties Trust CEO C. Reynolds Thompson. "Given the current cap-rate environment and availability of capital, now is an optimal time to maximize the value of our commercial assets and complete the realignment of our portfolio."

As of Sept. 30, the company had a total market capitalization of approximately $5.6 billion. Colonial owns 17.7 million sf of office space in Alabama, Florida, Georgia, Maryland, North Carolina, Tennessee and Texas. It also owns 12.1 million sf of retail space, including 35 open-air centers in cities including Birmingham, Orlando, Houston and Dallas.

"Proceeds from the sale will be used primarily to reduce the company's leverage and pay a special dividend," says president and CFO Weston Andress. "The distribution will be sized to the overall level of taxable income."