Colonial Properties Trust Reports Earnings for Third Quarter 2006.

BIRMINGHAM, Ala. -- Colonial Properties Trust (NYSE: CLP), a real estate investment trust that owns a portfolio of multifamily, office and retail properties, reported results for the quarter ending September 30, 2006.

Net income available to common shareholders was $14.7 million or $0.32 per fully diluted share for the quarter, compared to $41.9 million or $1.04 per fully diluted share in the same period in 2005. Prior year net income included gains recognized from the sale of two regional malls which was greater than the gain on the sale of Colonial Bank Centre in Miami, Fla. in the current year. Year-to-date earnings per fully diluted share (EPS) were $1.06 compared to $3.41 for the prior year.

Funds from operations (FFO), a widely accepted measure of REIT performance, were $44.2 million for the third quarter 2006, compared to $47.3 million in the same period a year ago. Funds from operations per fully diluted share/unit (FFOPS) were $0.79 for the third quarter of 2006 compared to $0.93 for the same period in 2005. The decrease is primarily attributable to a reduction in leverage through asset sales, a decrease in fees and lease terminations, and an increase in interest rates. This decrease is offset by growth in same-property net operating income (NOI), and an increase in income from for-sale residential and out-parcel sales. Year-to-date funds from operations were $139.7 million or $2.47 FFOPS compared to $125.6 million or $2.70 FFOPS for the same period in 2005. A reconciliation of net income available to common shareholders to FFO is provided in the attached tables.

"We are still on target for the year. Our core operating portfolio continues to deliver solid year-over-year results and we have reduced leverage by approximately 200 basis points since this time last year," stated Reynolds Thompson, the company's chief executive officer. "As we have previously stated, the for-sale residential business has not met our expectations, but we have multiple ways to create value. For example, the pending sale of Colonial Pinnacle at Tutwiler Farm is expected to generate an attractive gain in the fourth quarter of 2006. Additionally, we continue to build a meaningful development pipeline for future growth."

Highlights for the third quarter of 2006:

Corporate:

* Achieved positive growth year-to-date in same-property net operating income (NOI) for each operating division: multifamily, 5.8 percent; office, 1.1 percent and retail, 6.9 percent compared to the same period in 2005;

* Recognized $0.02 of EPS and FFOPS contribution from management and development fees;

* Realized $0.03 of EPS and FFOPS from sale of out parcels;

* Announced Metropolitan Midtown, an 11-acre, urban infill mixed-use community in Charlotte, North Carolina;

* Completed $275 million unsecured debt offering; and

* Paid quarterly dividend of $0.68 per common share/unit.

Multifamily:

* Recognized a 4.2 percent increase in same-property NOI for the third quarter of 2006, the twelfth consecutive quarter of year-over-year same-property NOI growth for Colonial Properties' multifamily division;

* Reported occupancy of 96.2 percent for stabilized properties, up 30 basis points sequentially; reported occupancy on same-property portfolio of 96.3 percent, up 20 basis points sequentially;

* Acquired four wholly-owned multifamily communities totaling 1,606 units in key Sunbelt markets of Phoenix, Ariz.; Dallas, Texas; and Atlanta, Ga.; acquired one partially-owned community in Fort Worth, Texas with 288 units; and

* Disposed of one wholly-owned apartment community in San Antonio, Texas in October.

Office:

* Reported a 1.1 percent decrease in NOI on a same-property basis compared to third quarter of 2005;

* Posted occupancy on stabilized properties of 93.6 percent, up 130 basis points over the previous quarter and up 340 basis points over the same period in the prior year; reported occupancy on same-property portfolio of 96.3 percent, a 70 basis point increase sequentially and a 150 basis point increase over the third quarter 2005;

* Sold two partially-owned office properties totaling 1.4 million square feet; and

* Sold Colonial Bank Centre in Miami, Florida recognizing a gain of $17.4 million.

Retail:

* Realized a 4.7 percent increase in same-property NOI for the third quarter compared to the third quarter of 2005;

* Reported occupancy for stabilized properties of 92.3 percent, up 40 basis points from the prior quarter and up 90 basis points from the third quarter of 2005; posted occupancy for the same-property portfolio of 93.1 percent, a 50 basis point increase sequentially and a 270 basis point increase over the same period in the prior year; and

* Announced a contract to sell Colonial Pinnacle and Colonial Promenade at Tutwiler Farm with an estimated gain between $0.30 - $0.35 of EPS and FFOPS.

For Sale:

* Recognized $0.08 of EPS and FFOPS contribution from the sales of residential units; and

Portfolio Overview - As of September 30, 2006

Multifamily: The company owns or manages 46,125 units comprised of 110 wholly-owned properties totaling 34,247 units and 33 partially-owned properties with 9,641 units. Additionally, the company provides third-party management services for 2,237 units.

Office: Colonial Properties owns or manages 17.7 million square feet of office space. The company's office portfolio includes 31 wholly-owned properties and 24 partially-owned properties that together total 17.4 million square feet. The company manages three additional office properties totaling 0.3 million square-feet.

Retail: The company owns or manages 12.1 million square feet of retail space. The portfolio includes 35 wholly-owned and 14 partially-owned retail properties totaling 11.8 million square feet. The company manages an additional four retail centers with 0.4 million square feet of space.

EPS and FFO Per Share Guidance

The company's guidance for 2006 fully diluted EPS and FFOPS is set forth and reconciled below.

                                        Full-Year 2006 Range

                                        Low     -     High

     Fully Diluted EPS                  $2.79   -    $2.84

     Plus: Real Estate

      Depreciation &

      Amortization                      3.10    -     3.10

     Less: Gain on

      Sale of Assets                   (2.11)   -    (2.09)
                                       ---------------------

     Fully Diluted FFOPS               $3.78    -    $3.85

"At our investor day earlier this month, we reiterated our intention to permanently shift operating capital to focus on our multifamily business wherein we expect that 75-80% of our NOI will be derived from our multifamily portfolio," Thompson said. "Our commercial activities provide a solid foundation for creating value as well as for executing mixed-use developments in house. As we look toward 2007, we will continue to execute our strategic plan."

For additional details of disposition and investment activities, see the company's detailed Supplemental Financial Highlights available on the company's website.

Conference Call and Supplemental Materials

The company will hold its quarterly conference call Thursday, October 26 at 1:00 pm Central Time. The call will include a review of the company's third quarter performance and discussion of the company's strategy and expectations for the future.

To participate, dial 1-877-500-9123. A replay will be available for one week by dialing 1-800-642-1687; the Conference ID will be 3924318. Access to the live call and a replay will be available through the company's website at www.colonialprop.com under "Investor Relations: Shareholder Information."

Colonial Properties produces a supplemental information package that provides detailed information regarding operating performance, investing activities and the company's overall financial position. For a copy of Colonial Properties' detailed Supplemental Financial Highlights, please visit the Company's website at www.colonialprop.com under the "Investor Relations: Financial Reporting" tab or contact Investor Relations at 800-645-3917.

Colonial Properties Trust, through its subsidiaries, owns a portfolio of multifamily, office and retail properties throughout the Sunbelt. Colonial Properties Trust performs development, acquisition, management, leasing and brokerage services for its portfolio and properties owned by third parties. The company has a total market capitalization of approximately $5.6 billion. As of September 30, the company owns or manages 46,125 apartment units, 17.7 million square feet of office space and 12.1 million square feet of retail shopping space. 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.

Safe Harbor Statement

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Certain statements 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; changes in operating costs; 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, 2005, 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.

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