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NEW YORK CITY-In a series of transactions, locally based urban homebuilder Tarragon Corp. has sold or entered into contracts to sell seven properties for $67 million. The company expects to generate $28 million in cash and pre-tax gains on sale of approximately $35 million. The firm’s officials had previously said it was about to sell a number of its holdings. In May, the company started a capital redeployment program in which 27 rental properties were targeted for sale. The remaining properties are still being marketed for sale.

According to Tarragon officials, five of the seven properties are older apartment rental communities comprising 715 units in Florida. The other two properties are small shopping centers located in Paramus, NJ and Las Vegas. In total, the company is developing a disposition strategy for 39 rental properties with a market value of $275 million.

“The contract prices are, overall, 19.4% greater than the fair market values of these assets as of Dec. 31, 2004,” says William S. Friedman, Tarragon’s chairman and CEO. “We feel these prices affirm our decision to monetize these investments. We look forward to completing the remaining sales over the course of 2005 and reinvesting the cash proceeds into growing our homebuilding pipeline.” In fact, Tarragon expects total homebuilding sales to range from $775 million to $825 million for 2005, which is 10% higher than the guidance issued in early January.

Tarragon has also identified a portfolio of 27 properties in Connecticut and the southeast that it hopes to refinance and contribute to a joint venture with a financial partner to free up approximately $150 million in capital and reduce consolidated debt by more than $190 million. Eight rental properties comprising 2,500 apartments with a book value of $178 million will be retained for condo conversion with an estimated sellout exceeding $400 million.

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