Colonial Properties Trust Announces Major Joint Venture Agreements for Office and Retail Assets.

-- Transaction Value for the Office and Retail Joint Ventures and Retail Sales Expected to Top $1.7 Billion --

-- Shareholders Projected to Receive Special Dividend of Approximately $10.75 Per Share --

BIRMINGHAM, Ala. -- Colonial Properties Trust (NYSE:CLP), a multifamily-focused real estate investment trust (REIT) with extensive development and management capabilities, today announced that the company has signed agreements to contribute its interest in 26 office properties and 11 retail properties into two separate joint venture (JV) partnerships. The company expects the transaction value from these two joint ventures and other anticipated outright sales of retail assets to exceed $1.7 billion. As part of these agreements, Colonial Properties will retain a 15 percent minority interest in each of the joint ventures, as well as the management and leasing responsibilities for the properties, while the joint venture partners will hold the remaining 85 percent interest. As a result of these transactions, Colonial Properties anticipates common shareholders will receive a special dividend of approximately $10.75 per common share, pending approval by the Colonial Properties Board of Trustees.

Reynolds Thompson, Chief Executive Officer of Colonial Properties said, "These exciting new agreements complete the execution of our long-term strategy to become a multifamily-focused REIT. Concentrating resources primarily on our multifamily business, positions us to benefit from strong multifamily fundamentals and a robust development pipeline. We will retain our mixed-use and commercial expertise and add value to the company through these activities. We believe this strategy capitalizes on our strengths and will benefit the company, our shareholders and our new joint venture partners."

The joint venture partner for the office assets is a fund advised by DRA Advisors LLC (DRA), and the joint venture partner for the retail assets is OZRE Retail, LLC (Och-Ziff). DRA will purchase Colonial Properties Trust's interest in the office joint venture based on a portfolio value of $1.13 billion, at a capitalization rate of 6.9 percent based on the trailing twelve month net operating income (NOI). The office joint venture is composed of 6.9 million square feet of Class A suburban office assets and two adjoining retail centers located in strong suburban office markets in the Sunbelt region. Currently, 93.7 percent of the total space is leased. Och-Ziff will purchase Colonial Properties Trust's interest in the retail joint venture based on a portfolio value of $360 million, at a capitalization rate of 6.6 percent based on the trailing twelve month NOI. The retail joint venture is composed of 2.7 million square feet of retail properties located in Florida, Alabama, Texas and Georgia. The retail properties are currently 95.1 percent occupied.

Thompson said, "We are enthusiastic about working with such well-respected joint venture partners. As a result of these new relationships, we expect to realize a stable stream of joint venture income, as well as increased access to future investment opportunities."

Colonial Properties is also actively marketing 13 additional retail assets, consisting of 3.0 million square feet of regional malls and grocery-anchored neighborhood centers, and it intends to sell these assets outright. During 2007, the company sold three retail assets consisting of 0.3 million square feet for $33.1 million. The company expects total proceeds from the outright retail asset sales to be approximately $265 million.

"As a result of these collective transactions, we expect 75 - 80 percent of our NOI to be derived from our multifamily operations, compared with 50 percent prior to the transactions," said Weston Andress, the company's president and chief financial officer. "Once these transactions are complete, we will be well positioned for higher growth by focusing on our core multifamily business, while still leveraging our mixed-use and commercial development, leasing and management expertise to drive additional long-term value for our shareholders."

Colonial Properties expects to pay a special cash distribution of approximately $10.75 per common share (CUSIP #195872106), representing an aggregate distribution of approximately $500 million as soon as practicable after the closing of the transactions. As stated above, this distribution is subject to approval by the Colonial Properties Trust Board of Trustees. The remaining proceeds will be used to reduce the company's outstanding debt.

As a result of these transactions, Colonial Properties expects to reduce its annualized dividend rate from $2.72 per common share to approximately $2.05-$2.15 per common share, beginning with Colonial's third quarter dividend. Quarterly dividends are also subject to approval by the Colonial Properties Board of Trustees.

During the second quarter of 2007, the company expects to record one-time charges to net approximately $0.30 - $0.35 per fully diluted earnings per share (EPS) and Funds from Operations per share (FFOPS). The charges relate primarily to the prepayment penalties on mortgage debt on various properties that are expected to be repaid with the proceeds from the joint venture and retail sale transactions, and other charges, which are expected to be partially offset by the write-off of mark-to-market intangibles on the associated mortgages repaid.

Any gains or losses on the sales of real estate will have an impact on net income, which may be material, but will not have an impact on Funds from Operations (FFO), since those amounts are not added back in the calculation of FFO. Any impairments of real estate will negatively impact both net income and FFO, which may be material. Also, as a result of these transactions and the pay down of outstanding indebtedness, the company's total debt plus its preferred/undepreciated book value ratio is expected to improve upon closing of these transactions to approximately 54 percent from 58 percent.

The joint venture transactions, which have been approved by the Colonial Properties Board of Trustees, are subject to customary closing conditions; therefore, no assurance can be made that these transactions will be consummated. The company expects the joint venture transactions to close during the second quarter of 2007. Wachovia Capital Markets, LLC is serving as financial advisors in these transactions.

Additional details regarding the joint venture and retail asset sale transactions and the implementation of the company's multifamily strategy are available on the company's website at www.colonialprop.com under "Investor Services: General Information: Presentations".

About Colonial Properties Trust

Colonial Properties Trust is a multifamily-focused real estate investment trust (REIT), which creates additional value for its shareholders by managing commercial assets through joint venture partnerships and by aggressively pursuing development opportunities. As of December 31, 2006, the company owned or managed 39,104 apartment units, 17.6 million square feet of office space and 12.1 million square feet of retail shopping space located in key Sunbelt states from Virginia to California. Headquartered in Birmingham, Ala., Colonial Properties is listed on the New York Stock Exchange under the symbol CLP and is included in the S&P SmallCap 600 Index. For more information, visit www.colonialprop.com.

About DRA Advisors LLC

DRA Advisors LLC is a New York-based registered investment advisor specializing in real estate investment management services for institutional and private investors, including pension funds, university endowments, foundations, and insurance companies. Founded in 1986, the firm currently manages over $8 billion in assets, including 500 individual office, retail, multifamily and industrial properties. Additional information about DRA can be found on the company's website at www.draadvisors.com.

About OZRE Retail, LLC

OZRE Retail, LLC is held by affiliates of Och-Ziff Real Estate Acquisitions, LLC and Colonial Norge, Inc. Och-Ziff Real Estate was co-founded by Och-Ziff Capital Management, a global institutional asset management firm, Stavros P. Galiotos and Steven E. Orbuch to make investments in real estate and real estate related assets. Messrs. Galiotos and Orbuch have invested over $3 billion in real estate assets including office, industrial, multifamily, senior housing, hotel, and retail properties within and outside the United States. Norge Churchill, Inc. is owned via investment vehicles by the clients of Acta Holding ASA. Acta Holding ASA is listed on the Oslo Stock Exchange and has approximately NOK 70 billion of assets under management for 73,000 clients.

Safe Harbor Statement

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Estimates of future earnings are, by definition, and certain other statements (including statements regarding the company's ability to complete and successfully implement the joint venture transactions and complete the retail asset sale transactions, including the timing of those transactions) in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance, achievements or transactions to be materially different from the results, performance, achievements or transactions expressed or implied by the forward looking statements. Factors that impact such forward looking statements include, among others, real estate conditions and markets; performance of affiliates or companies in which we have made investments; legislative or regulatory decisions; our ability to continue to maintain our status as a REIT for federal income tax purposes; our ability to successfully close previously announced transactions; the effect of any rating agency action; the cost and availability of new debt financings; level and volatility of interest rates or capital market conditions; effect of any terrorist activity or other heightened geopolitical crisis; or other factors affecting the real estate industry generally.

Except as otherwise required by the federal securities laws, the company assumes no responsibility to update the information in this press release.

The company refers you to the documents filed by the company from time to time with the Securities and Exchange Commission, specifically the section titled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2006, as may be updated or supplemented in the company's Form 10-Q filings, which discuss these and other factors that could adversely affect the company's results.