Distribution of asset sales, though, will be paid in the form of dividends, the Birmingham, AL-based REIT's CEO C. Reynolds Thompson said during yesterday's third-quarter earnings call. On the development side, he said 60% remains in the pipeline, with $175 million need to complete everything in 2009.

Thompson reported development staff has been cut. "We're reexamining the organization," he said, adding the company hasn't committed to any new development since Q4 2007. In 2007, Colonial Properties spent $906 million on development and $425 million so far this year.

"With the current state of the economy, we are continuing to reduce development spending as well as construction and development personnel," Thompson said. "We're keeping a core staff and will retail the land we own to hold for future development when the economy recovers."

While the company is downsizing development and staff, its board authorized a repurchase program allowing the repurchase of an additional $25 million of outstanding 8 1/8% Series D preferred depository shares. During Q3, the company repurchased $57.8 million of outstanding unsecured senior notes of Colonial Realty LP under a $200-million repurchase program.

Additionally, the third quarter brought a repurchase of 205,000 of 8 1/8% Series D depositary shares at $21.75 per share for an aggregate of $2.3 million. The result of the repurchases was recognized net gain of $2.8 million for the quarter. Thompson said the debt repurchase program is focused on liquidity.

Although Colonial Properties is tightening its balance sheet belt, there were some glimmers of optimism in the previous quarter. The just-opened 355,729-sf Colonial Promenade Fultondale at Interstate 65 and Walkers Chapel Road in Fultondale, AL is under contract to a well-known domestic buyer, with the retail sale slated to close in the fourth quarter. The 194,000-sf Colonial Promenade Smyrna in Nashville is nearing completion. It will come to market by the end of the year.

Furthermore, the company's multifamily portfolio is 90% unencumbered of debt. Thomas said he and his staff are in discussion with Fannie Mae and Freddie Mac on a $350-million credit facility and working with joint venture partners on refinance options.