1013844--2/27/2009--COLONIAL_REALTY_LIMITED

related topics

{investment, property, distribution}

{loan, real, estate}

{debt, indebtedness, cash}

{acquisition, growth, future}

{tax, income, asset}

{regulation, change, law}

{capital, credit, financial}

{cost, contract, operation}

{operation, international, foreign}

{cost, regulation, environmental}

{loss, insurance, financial}

{stock, price, share}

{stock, price, operating}

{provision, law, control}

Increased competition and increased affordability of residential homes could limit our ability to retain our residents, lease apartment homes or increase or maintain rents. We are subject to significant regulation, which could adversely affect our results of operations through increased costs and/or an inability to pursue business opportunities. Real estate investments are illiquid, and therefore we may not be able to sell our properties in response to economic changes which could adversely affect our results of operations or financial condition. Compliance or failure to comply with the Americans with Disabilities Act and Fair Housing Act could result in substantial costs. Risks Associated with Our Operations Our revenues are significantly influenced by demand for multifamily properties generally, and a decrease in such demand will likely have a greater adverse effect on our revenues than if we owned a more diversified real estate portfolio. Our ability to dispose of our existing inventory of condominium and for-sale residential assets could adversely affect our results of operations. Our properties may not generate sufficient rental income to pay our expenses if we are unable to lease our new properties or renew leases or re-lease space at our existing properties as leases expire, which may adversely affect our operating results. We may not be able to control our operating costs or our expenses may remain constant or increase, even if our revenues decrease, causing our results of operations to be adversely affected. We are subject to increased exposure to economic and other factors due to the concentration of our properties in the Sunbelt region, and economic downturns, natural disasters or acts of terrorism in the Sunbelt region could adversely affect our results of operations or financial condition. Tenant bankruptcies and downturns in tenants businesses may adversely affect our operating results by decreasing our revenues. Risks associated with the property management, leasing and brokerage businesses could adversely affect our results of operations by decreasing our revenues. We could incur significant costs related to environmental issues which could adversely affect our results of operations through increased compliance costs or our financial condition if we become subject to a significant liability. Costs associated with addressing indoor air quality issues, moisture infiltration and resulting mold remediation may be costly. As the owner or operator of real property, we could become subject to liability for asbestos-containing building materials in the buildings on our properties. Uninsured or underinsured losses could adversely affect our financial condition. We may be unable to develop new properties or redevelop existing properties successfully, which could adversely affect our results of operations due to unexpected costs, delays and other contingencies. Our joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on our joint venture partners financial condition, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners. Our results of operations could be adversely affected if we or the Trust are required to perform under various financial guarantees that we and the Trust have provided with respect to certain of our joint ventures and retail developments. Competition for acquisitions could reduce the number of acquisition opportunities available to us and result in increased prices for properties, which could adversely affect our return on properties we purchase. Acquired properties may expose us to unknown liability. We may be unable to successfully integrate and effectively manage the properties we acquire, which could adversely affect our results of operations. We may not be able to achieve the anticipated financial and operating results from our acquisitions, which would adversely affect our operating results. Failure to succeed in new markets may limit our growth. Risks Associated with Our Indebtedness and Financing Activities We have substantial indebtedness and our cash flow may not be sufficient to make required payments on our indebtedness or repay our indebtedness as it matures. Our degree of leverage could limit our ability to obtain additional financing and have other adverse effects which would negatively impact our results of operation and financial condition. Due to the amount of our variable rate debt, rising interest rates would adversely affect our results of operation. We have entered into debt agreements with covenants that restrict our operating activities, which could adversely affect our results of operations, and violation of these restrictive covenants could adversely affect our financial condition through debt defaults or acceleration. Our inability to obtain sufficient third party financing could adversely affect our results of operations and financial condition because we depend on third party financing for our capital needs, including development, expansion, acquisition and other activities. Disruptions in the financial markets could adversely affect our ability to obtain sufficient third party financing for our capital needs, including development, expansion, acquisition and other activities, on reasonable terms or at all and could have other adverse effects on us and the market price of the Trust s common shares. Our senior notes do not have an established trading market, therefore, holders of our notes may not be able to sell their notes. A Downgrade in Our Credit Ratings Could Adversely Affect Our Performance Risks Associated with Our Organization and Structure Some of the Trust s trustees and officers have conflicts of interest and could exercise influence in a manner inconsistent with the interests of our unitholders. Restrictions on the acquisition and change in control of the Trust may have adverse effects on the value of our common units. We may change our business policies in the future, which could adversely affect our financial condition or results of operations. We may change our dividend policy. Risks Associated with Income Tax Laws The Trust s failure to qualify as a REIT could have adverse tax consequences. Even if the Trust qualifies as a REIT, we and our subsidiaries will be required to pay some taxes. If the IRS were to challenge successfully our status as a partnership for federal income tax purposes, the Trust would cease to qualify as a REIT and suffer other adverse consequences.

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1013844--2/27/2009--COLONIAL_REALTY_LIMITED_PARTNERSHIP