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                                                                   EXHIBIT 10.4

                               THIRD AMENDMENT TO
                           SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                           POST APARTMENT HOMES, L.P.


         This Third Amendment to Second Amended and Restated Agreement of
Limited Partnership of Post Apartment Homes, L.P. (this "Amendment") is entered
into as of February 9, 1998, by and among Post GP Holdings, Inc. (the "General
Partner") and the Limited Partners of Post Apartment Homes, L.P. All capitalized
terms used herein shall have the meanings given to them in the Second Amended
and Restated Agreement of Limited Partnership of Post Apartment Homes, L.P.,
dated October 24, 1997 as amended to date (the "Partnership Agreement").

         WHEREAS, Post Properties, Inc. ("PPI"), on even date herewith, has
issued 2,000,000 shares of its 7 5/8% Series C Cumulative Redeemable Preferred
Shares, par value $.01 per share, having a liquidation preference equivalent to
$25.00 per share (the "Series C Preferred Shares"), and has sold such Series C
Preferred Shares in a public offering;

         WHEREAS, PPI has contributed to Post LP Holdings, Inc. ("Post LP
Holdings") the net proceeds of the sale of the Series C Preferred Shares;

         WHEREAS, Post LP Holdings desires to contribute such net proceeds of
the sale of the Series C Preferred Shares to the Partnership in exchange for
partnership interests in the Partnership as set forth herein;

         WHEREAS, the General Partner is authorized to cause the Partnership to
issue interests in the Partnership to Post LP Holdings in exchange for such
contribution;

         NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

         Section 1.        Contribution.

         PPI has contributed to Post LP Holdings, and Post LP Holdings in turn
hereby contributes to the Partnership, the entire net proceeds received by PPI
from the issuance of the Series C Preferred Shares. As provided in Section 4.3
of the Partnership Agreement, Post LP Holdings shall be deemed to have made a
Capital Contribution to the Partnership in the amount of the gross proceeds of
such issuance, which is $50,000,000, and the Partnership shall be deemed
simultaneously to have reimbursed Post LP Holdings (and Post LP Holdings shall
be deemed to have reimbursed PPI) pursuant to Section 7.4.C of the Partnership
Agreement for the amount of the underwriters discount and other costs incurred
by PPI in connection with such issuance.



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         Section 2.        Issuance of Series B Preferred Partnership Units.

         In consideration of the contribution to the Partnership made by Post LP
Holdings pursuant to Section 1 hereof, the Partnership hereby issues to Post LP
Holdings 2,000,000 Series C Preferred Partnership Units (as defined herein).

         Section 3.        Definitions.

         In addition to those terms defined in the Partnership Agreement, the
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in the Partnership
Agreement and in this Amendment:

                  "Series C Preferred Partnership Unit" means a Partnership Unit
         issued by the Partnership to Post LP Holdings in consideration of the
         contribution by Post LP Holdings to the Partnership of the entire net
         proceeds received by Post LP Holdings from PPI in connection with PPI's
         issuance of the Series C Preferred Shares. The Series C Preferred
         Partnership Units shall constitute Preferred Partnership Units. The
         Series C Preferred Partnership Units shall have the voting powers,
         designation, preferences and relative, participating, optional or other
         special rights and qualifications, limitations or restrictions as are
         set forth in Exhibit G, attached hereto. It is the intention of the
         General Partner, in establishing the Series C Preferred Partnership
         Units, that each Series C Preferred Partnership Unit shall be
         substantially the economic equivalent of a Series C Preferred Share.

                  "Series C Preferred Shares" means the 7 5/8% Series C
         Cumulative Redeemable Preferred Shares, par value $.01 per share,
         having a liquidation preference equivalent to $25.00 per share, issued
         by PPI.

         Section 4.        Exhibits to Partnership Agreement.

         The Partnership Agreement is hereby amended by attaching thereto as
Exhibit G the Exhibit G attached hereto.




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         IN WITNESS WHEREOF, the parties hereto have executed the Amendment
under seal as of the date first written above.

                                 GENERAL PARTNER:

                                 POST GP HOLDINGS, INC.,
                                 a Georgia corporation


                                 By: John A. Williams
                                    --------------------------------------
                                    John A. Williams
                                    Chairman and Chief Executive Officer


                                 Attest: Sherry W. Cohen
                                        ----------------------------------
                                        Sherry W. Cohen
                                        Vice President and Secretary

                                                   [CORPORATE SEAL]


                                 LIMITED PARTNERS:


                                 POST LP HOLDINGS, INC.,
                                 a Georgia corporation,
                                 as attorney-in-fact for the
                                 Limited Partners

                                 By: John A. Williams
                                    --------------------------------------
                                    John A. Williams
                                    Chairman and Chief Executive Officer


                                 Attest: Sherry W. Cohen
                                        ----------------------------------
                                         Sherry W. Cohen
                                         Vice President and Secretary

                                                   [CORPORATE SEAL]



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                                    EXHIBIT G


                           POST APARTMENT HOMES, L.P.


         DESIGNATION OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND
          RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
                   QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS

                                     OF THE

                      SERIES C PREFERRED PARTNERSHIP UNITS


         The following are the terms of the Series C Preferred Partnership Units
established pursuant to this Amendment:

         (a)      NUMBER. The maximum number of authorized Series C Preferred
Partnership Units shall be 2,300,000.

         (b)      RELATIVE SENIORITY. In respect of rights to receive quarterly
distributions and to participate in distributions of payments in the event of
any liquidation, dissolution or winding up of the Partnership, the Series C
Preferred Partnership Units shall rank senior to the Common Partnership Units
and any other class or series of Partnership Units of the Partnership ranking,
as to quarterly distributions and upon liquidation, junior to the Series C
Preferred Partnership Units (collectively, "Junior Partnership Units").

         (c)      QUARTERLY DISTRIBUTIONS.

         (1)      The Post Partners, in their capacity as the holders of the
then outstanding Series C Preferred Partnership Units, shall be entitled to
receive, when and as declared by the General Partner out of any funds legally
available therefor, cumulative quarterly distributions at the rate of $1.90625
per Series C Preferred Partnership Unit per year, payable in equal amounts of
$0.47656 per unit quarterly in cash on the last day of each March, June,
September, and December or, if not a Business Day (as hereinafter defined), the
next succeeding Business Day (each such day being hereafter called a "Quarterly
Distribution Date" and each period ending on a Quarterly Distribution Date being
hereinafter called a "Distribution Period"). Quarterly distributions on each
Series C Preferred Partnership Unit shall accrue and be cumulative from and
including the date of original issue thereof, whether or not (i) quarterly
distributions on such Series C Preferred Partnership Units are earned or
declared or (ii) on any Quarterly Distribution Date there shall be funds legally
available for the payment of quarterly distributions. Quarterly distributions
paid on the Series C Preferred Partnership Units in an amount less than the
total amount of such quarterly distributions at the time accrued and

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payable on such Partnership Units shall be allocated pro rata on a per unit
basis among all such Series C Preferred Partnership Units at the time
outstanding.

         "Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.

         (2)      The amount of any quarterly distributions accrued on any
Series C Preferred Partnership Units at any Quarterly Distribution Date shall be
the amount of any unpaid quarterly distributions accumulated thereon, to and
including such Quarterly Distribution Date, whether or not earned or declared,
and the amount of quarterly distributions accrued on any Series C Preferred
Partnership Units at any date other than a Quarterly Distribution Date shall be
equal to the sum of the amount of any unpaid quarterly distributions accumulated
thereon, to and including the last preceding Quarterly Distribution Date,
whether or not earned or declared, plus an amount calculated on the basis of the
annual distribution rate of $1.90625 per unit for the period after such last
preceding Quarterly Distribution Date to and including the date as of which the
calculation is made based on a 360-day year of twelve 30-day months.

         (3)      Except as provided herein, the Series C Preferred Partnership
Units shall not be entitled to participate in the earnings or assets of the
Partnership, and no interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution or distributions on the Series C
Preferred Partnership Units which may be in arrears.

         (4)      Any distribution made on the Series C Preferred Partnership
Units shall be first credited against the earliest accrued but unpaid quarterly
distribution due with respect to such Partnership Units which remains payable.

         (5)      No quarterly distributions on the Series C Preferred
Partnership Units shall be authorized by the General Partner or be paid or set
apart for payment by the Partnership at such time as the terms and provisions of
any agreement of PPI, any Post Partner or the Partnership, including any
agreement relating to its indebtedness, prohibits such authorization, payment or
setting apart for payment or provides that such authorization, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or if such authorization or payment shall be restricted or
prohibited by law. Notwithstanding the foregoing, quarterly distributions on the
Series C Preferred Partnership Units will accrue whether or not the Partnership
has earnings, whether or not there are funds legally available for the payment
of such quarterly distributions and whether or not such quarterly distributions
are authorized.

         (d)      LIQUIDATION RIGHTS.

         (1)      Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Partnership, the Post Partners, in their capacity as the
holders of the Series C Preferred Partnership Units then outstanding, shall be
entitled to receive and to be paid out of the assets of the Partnership

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available for distribution to its partners, before any payment or distribution
shall be made on any Junior Partnership Units, the amount of $25.00 per Series C
Preferred Partnership Unit, plus accrued and unpaid quarterly distributions
thereon.

         (2)      After the payment to the holders of the Series C Preferred
Partnership Units of the full preferential amounts provided for herein, the Post
Partners, in their capacity as the holders of the Series C Preferred Partnership
Units as such, shall have no right or claim to any of the remaining assets of
the Partnership.

         (3)      If, upon any voluntary or involuntary dissolution,
liquidation, or winding upon of the Partnership, the amounts payable with
respect to the preference value of the Series C Preferred Partnership Units and
any other Preferred Partnership Units of the Partnership ranking as to any such
distribution on a parity with the Series C Preferred Partnership Units are not
paid in full, the holders of the Series C Preferred Partnership Units and of
such other Preferred Partnership Units will share ratably in any such
distribution of assets of the Partnership in proportion to the full respective
preference amounts to which they are entitled.

         (4)      Neither the sale, lease or conveyance of all or substantially
all of the property or business of the Partnership, nor the merger or
consolidation of the Partnership into or with any other entity or the merger or
consolidation of any other entity into or with the Partnership, shall be deemed
to be a dissolution, liquidation or winding up, voluntary or involuntary, for
the purposes hereof.

         (e)      REDEMPTION.

         (1)      OPTIONAL REDEMPTION. On and after February 9, 2003, the
General Partner may, at its option, cause the Partnership to redeem at any time
all or, from time to time, part of the Series C Preferred Partnership Units at a
price per unit (the "Redemption Price"), payable in cash, of $25.00, together
with all accrued and unpaid distributions to the and including the date fixed
for redemption (the "Redemption Date"), without interest, to the full extent the
Partnership has funds legally available therefore. The Series C Preferred
Partnership Units have no stated maturity and will not be subject to any sinking
fund or mandatory redemption provisions.

         (2)      PROCEDURES OF REDEMPTION.

                  (i)      At any time that PPI exercises its right to redeem
         all or any of the Series C Preferred Shares, the General Partner shall
         exercise its right to cause the Partnership to redeem an equal number
         of Series C Preferred Partnership Units in the manner set forth herein.

                  (ii)     No Series C Preferred Partnership Units may be
         redeemed except from proceeds from the sale of other capital stock of
         PPI, including but not limited to common stock, preferred stock,
         depositary shares, interests, participations or other ownership
         interests (however designated) and any rights (other than debt
         securities convertible into the

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         exchangeable for equity securities) or options to purchase any of the
         foregoing. The proceeds of such sale of capital stock of PPI shall be
         conveyed by PPI to the Post Partners, by contribution or loan, and
         thereupon contributed by the Post Partners to the Partnership pursuant
         to the requirements of Section 4.2 of the Partnership Agreement.

                  (iii)    Unless full accumulated distributions on all Series C
         Preferred Shares shall have been or contemporaneously are declared and
         paid or declared and a sum sufficient for the payment thereof set apart
         for payment for all past Distribution Periods and the then current
         Distribution Period, no Series C Preferred Partnership Units shall be
         redeemed or purchased or otherwise acquired directly or indirectly
         (except by conversion into or exchange for Junior Partnership Units);
         provided, however, that the foregoing shall not prevent the redemption
         of Series C Preferred Partnership Units to preserve PPI's REIT status
         or the purchase or acquisition of Series C Preferred Partnership Units
         pursuant to a purchase or exchange offer made on the same terms to
         holders of all outstanding Series C Preferred Partnership Units.


         (f)      VOTING RIGHTS. Except as required by law, the Post Partners,
in their capacity as the holder of the Series C Preferred Partnership Units,
shall not be entitled to vote at any meeting of the Partners or for any other
purpose or otherwise to participate in any action taken by the Partnership or
the Partners, or to receive notice of any meeting of Partners.

         (g)      CONVERSION. The Series C Preferred Partnership Units are not
convertible into or exchangeable for any other property or securities of the
Partnership.

         (h)      RESTRICTIONS ON OWNERSHIP. The Series C Preferred Partnership
Units shall be owned and held solely by one or both of the Post Partners. As of
the date hereof, all of the Series C Preferred Partnership Units are owned by
Post LP Holdings.

         (i)      GENERAL. The rights of the Post Partners, in their capacity as
holders of the Series C Preferred Partnership Units, are in addition to and not
in limitation on any other rights or authority of the Post Partners, in any
other capacity, under the Partnership Agreement. In addition, nothing contained
herein shall be deemed to limit or otherwise restrict any rights or authority of
the Post Partners, under the Partnership Agreement, other than in their capacity
as the holders of the Series C Preferred Partnership Units.




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