BIRMINGHAM, AL-In an attempt to protect its balance sheet, liquidity and operations in the current downturn, Colonial Properties Trust is cutting dividends and development, with the possibility of further staff cutbacks likely. One step already in force is the reduction of the quarterly dividend from 50 cents to 25 cents.

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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.