Colonial Properties Trust Reports Fourth Quarter and Full Year 2006 Results.

BIRMINGHAM, Ala. -- Colonial Properties Trust (NYSE: CLP), reported results for the quarter and year ending December 31, 2006.

Net income available to common shareholders was $132.2 million or $2.85 per fully diluted share for the quarter, compared to $76.3 million or $1.69 per fully diluted share in the same period in 2005. The increase over the prior year is primarily due to increased gains on sales of assets. Full year 2006 earnings per fully diluted share (EPS) were $3.92 compared to $5.13 for the prior year.

Funds from operations (FFO), a widely accepted measure of REIT performance, increased to $75.8 million for the fourth quarter 2006, compared to $52.3 million in the same period a year ago. Funds from operations per fully diluted share/unit (FFOPS) increased to $1.33 from $0.93 in the fourth quarter of 2006, a 43 percent increase over the same period in the prior year. The increase is primarily attributable to the gain on sale of Colonial Pinnacle at Tutwiler Farm of $0.35, an increase in same-property net operating income (NOI) of $0.06, a decrease in interest expense of $0.06, an increase of $0.06 from the sale of land, and gain on a settlement of a forward starting interest rate SWAP of $0.05. These increases were offset primarily by a decrease in net operating income of $0.13 due to net property dispositions and other miscellaneous items of $0.05. Full year 2006 FFO increased to $215.5 million or $3.80 FFOPS compared to $177.9 million or $3.62 FFOPS for the full year 2005, a 5.1 percent increase on a per share/unit basis. A reconciliation of net income available to common shareholders to FFO is provided in the attached tables.

"Growth in year-over-year same-property net operating income exceeded expectations for each of our operating divisions," said Reynolds Thompson, chief executive officer of the company. "We disposed of approximately $360 million of wholly-owned multifamily properties that did not fit our long-term strategy and are focused on improving the quality and age of our multifamily portfolio. The dispositions were offset by an equal investment in fourteen multifamily properties with an average age of 7.8 years. Our geographic diversity continues to improve as we increase our presence in markets such as Charlotte, N.C., Dallas, Texas and Phoenix, Ariz.. In our commercial businesses, we disposed of approximately $500 million of assets, of which we continue to manage more than 70 percent. We have been adept in capitalizing on opportunistic ways to create shareholder value, most notably with transactions monetizing the increased value of fifteen multifamily properties held in a joint venture with DRA Advisors in the southwestern United States, Colonial Bank Centre in Miami and the newly developed Colonial Pinnacle and Colonial Promenade at Tutwiler Farm in Birmingham. Our development pipeline has doubled from last year to almost $1 billion which includes two new mixed-use projects, one in Orlando, Fla. and one in Charlotte, N.C. Finally, we improved our balance sheet by reducing our overall leverage by an additional 160 basis points to 60.8% from the end of 2005."

Highlights for 2006

* Announced strategic plan to focus core business operations on multifamily by the end of 2007;

* Achieved positive growth in same-property NOI for the year in each operating division: multifamily, 5.0 percent; office, 5.2 percent; and retail, 6.4 percent;

* Closed the year with CRT office portfolio 90 percent leased, up from 86.4 percent at acquisition;

* Announced two new mixed-use projects, Randal Park in Orlando, Fla. and Metropolitan in Charlotte, N.C.;

* Doubled multifamily development pipeline; at year-end 2006, eleven communities under development totaling $300 million with over 3,700 units.

* Realized a gain of $20.1 million from the sale of Colonial Pinnacle Tutwiler Farm, a newly developed 447,000 square foot open-air shopping center in Birmingham, Ala.; and

* Improved balance sheet by reducing total leverage by approximately 160 basis points.

Highlights for the fourth quarter of 2006:

Corporate:

* Achieved positive growth in fourth quarter same-property NOI for each operating division: multifamily, 5.5 percent; office, 6.8 percent; and retail, 2.9 percent compared to the same period in 2005;

* Recognized $0.01 of EPS and FFOPS contribution from management and other fees;

* Realized $0.08 of EPS and FFOPS from sale of land;

* Terminated $175 million forward starting interest rate SWAP recognizing $0.05 in EPS and FFOPS;

* Sold the newly developed Colonial Pinnacle at Tutwiler Farm recognizing $0.35 in EPS and FFOPS; and

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

Multifamily:

* Recognized a 5.5 percent increase in same-property NOI for the fourth quarter of 2006, the thirteenth consecutive quarter of quarter-over-quarter same-property NOI growth for the division;

* Reported occupancy of 95.5 percent for stabilized properties, up 70 basis points over the same period in the prior year; reported occupancy on same-property portfolio of 95.5 percent, up 10 basis points over the fourth quarter of 2005;

* Acquired two wholly-owned multifamily communities totaling 420 units in key Sunbelt markets of Charlotte, N.C. and Charleston, S.C.;

* Disposed of 4 wholly-owned apartment communities totaling 2,284 units: three in Alabama and one in Texas; and

* Disposed of 15 partially-owned multifamily properties totaling 3,957 units located in Nevada, Arizona and New Mexico, which were held in a joint venture with DRA Advisors; realized a gain of approximately $40 million resulting in a 77 percent return on investment during the two year ownership period.

Office:

* Reported a 6.8 percent increase in NOI on a same-property basis compared to fourth quarter of 2005;

* Posted occupancy on stabilized properties of 93.5 percent, up 220 basis points over the same period in the prior year; reported occupancy on same-property portfolio of 95.0 percent; and

* Sold two wholly-owned office properties totaling 0.3 million square feet, one in Montgomery, Ala. and one in Orlando, Fla.

Retail:

* Realized a 2.9 percent increase in same-property NOI for the fourth quarter compared to the fourth quarter of 2005;

* Reported occupancy for stabilized properties of 93.1 percent, up 80 basis points from the prior quarter and up 150 basis points from the fourth quarter of 2005; posted occupancy for the same-property portfolio of 93.8 percent, a 110 basis point increase sequentially and a 320 basis point increase over the same period in the prior year; and

* Sold Colonial Pinnacle and Colonial Promenade at Tutwiler Farm.

For Sale:

* Recognized $0.07 of EPS and FFOPS contribution from for-sale residential.

Portfolio Overview - As of December 31, 2006

Multifamily: The company owns or manages 39,104 units comprised of 107 wholly-owned properties totaling 31,805 units and 17 partially-owned properties with 5,396 units. Additionally, the company provides third-party management services for 1,903 units.

Office: Colonial Properties owns or manages 17.6 million square feet of office space. The company's office portfolio includes 30 wholly-owned properties and 23 partially-owned properties that together total 16.9 million square feet. The company manages three additional office properties totaling 0.7 million square feet.

Retail: The company owns or manages 12.1 million square feet of retail space. The portfolio includes 33 wholly-owned and 10 partially-owned retail properties totaling 10.6 million square feet. The company manages an additional eight retail centers with 1.5 million square feet of space.

2007 Guidance

* Multifamily same-property growth in net operating income: 4.5 -5.5 percent

* For sale income from the Taxable REIT Subsidiary: $0.30 - $0.40 EPS and FFOPS

* Land/out parcel sales: $0.08 - $0.10 EPS and FFOPS

* Management and other fees (for in-place agreements): $0.07-$0.08 EPS and FFOPS

"During the first half of 2007, we are focused on completing the transactions we announced in November to reposition our operating portfolio to multifamily," Thompson said. "Once complete, we estimate that we will derive 80 percent of our net operating income on an annualized basis from our multifamily operations. In our commercial businesses, we will retain the development, leasing and management expertise to emphasize value creation through development of office, open-air shopping center and mixed-use properties. Colonial Properties Trust will be positioned to drive higher growth by capitalizing on our core strengths."

Conference Call and Supplemental Materials

The company will hold its quarterly conference call Tuesday, January 30 at 1:00 pm Central Time. The call will include a review of the company's fourth quarter and full year 2006 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 4611903. 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 1-800-645-3917.

Colonial Properties Trust is a multifamily focused real estate investment trust (REIT) which leverages its diversified history to create additional value for its shareholders by managing commercial assets through joint venture investments and aggressively pursuing development opportunities. As of December 31, 2006 the company owns or manages 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 spanning Virginia to Nevada. 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: Estimates of future earnings included in this press release are, by definition, and certain other statements (including statements regarding the implementation of the transactions to reposition the operating portfolio to multifamily and the expected timing of such implementation) 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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