##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended: March 31, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 0-20707
 COLONIAL REALTY LIMITED PARTNERSHIP
 (Exact name of registrant as specified in its charter)
 Delaware
    
    63-1098468(State or other jurisdiction 
of incorporation)
    
    (IRS Employer
Identification Number)
 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama 35203  Address of principal executive offices) (Zip Code)
 (205) 250-8700
 Not applicable  (Former name or former address, if changed since last report)
  þ o
  þ o o
  o þ




---



##### 



COLONIAL REALTY LIMITED PARTNERSHIP
INDEX TO FORM 10-Q
 PagePART I: FINANCIAL INFORMATIONItem 1. Consolidated Condensed Financial Statements (Unaudited):Consolidated Condensed Balance Sheets as of
March 31, 2007 and December 31, 2006
    
    
    3Consolidated Condensed Statements of Income and Comprehensive
Income for the Three Months ended March 31, 2007 and 2006
    
    
    4Consolidated Condensed Statements of Cash Flows for the Three Months
ended March 31, 2007 and 2006
    
    
    5Notes to Consolidated Condensed Financial Statements
    
    
    6Report of Independent Registered Public Accounting Firm *
    
    
    20Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    31PART II: OTHER INFORMATIONItem 1A. Risk Factors
    
    
    32Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 5. Other Information
    
    
    33Item 6. Exhibits
    
    
    33SIGNATURES
    
    
    34EXHIBIT INDEX
    
    
    35EX-12.1 RATIO OF EARNINGS TO FIXED CHARGESEX-15.1 LETTER REGARDING UNAUDITED INTERIM FINANCIAL INFORMATIONEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO
  Review by Independent Registered Public Accounting Firm *




---



##### Table of Contents



COLONIAL REALTY LIMITED PARTNERSHIP
 
 CONSOLIDATED CONDENSED BALANCE SHEETS
 (Unaudited)
 (in thousands, except unit data)
 March 31, 2007
    
    
    December 31, 2006ASSETSLand, buildings, & equipment
    
    $
    3,799,308
    
    
    $
    3,601,865Undeveloped land and construction in progress
    
    
    454,875
    
    
    
    434,196Less: Accumulated depreciation
    
    
    (446,505
    )
    
    
    (420,359
    )Real estate assets held for sale, net
    
    
    211,876
    
    
    
    381,445Net real estate assets
    
    
    4,019,554
    
    
    
    3,997,147Cash and equivalents
    
    
    18,859
    
    
    
    87,647Restricted cash
    
    
    17,374
    
    
    
    15,907Accounts receivable, net
    
    
    23,633
    
    
    
    26,138Notes receivable
    
    
    28,765
    
    
    
    19,519Prepaid expenses
    
    
    14,701
    
    
    
    61,269Deferred debt and lease costs
    
    
    40,596
    
    
    
    42,258Investment in partially owned entities
    
    
    88,806
    
    
    
    92,892Other assets
    
    
    89,463
    
    
    
    88,997Total assets
    
    $
    4,341,751
    
    
    $
    4,431,774LIABILITIES AND PARTNERS EQUITYNotes and mortgages payable
    
    $
    2,142,110
    
    
    $
    2,165,884Unsecured credit facility
    
    
    122,624
    
    
    
    185,000Mortgages payable related to real estate assets held for sale
    
    
    47,000
    
    
    
    47,022Total debt
    
    
    2,311,734
    
    
    
    2,397,906Accounts payable
    
    
    68,442
    
    
    
    75,185Accrued interest
    
    
    19,983
    
    
    
    32,469Accrued expenses
    
    
    23,669
    
    
    
    16,557Other liabilities
    
    
    22,372
    
    
    
    26,546Total liabilities
    
    
    2,446,200
    
    
    
    2,548,663Redeemable units, at redemption value - 10,579,261 units outstanding
at March 31, 2007 and December 31, 2006
    
    
    483,155
    
    
    
    495,956Limited partners minority interest in consolidated partnership
    
    
    7,304
    
    
    
    7,406General partner -Common equity - 46,405,563 and 46,144,909 units outstanding at
March 31, 2007 and December 31, 2006, respectively
    
    
    1,091,447
    
    
    
    1,066,063Preferred equity ($229,760 liquidation preference)
    
    
    224,986
    
    
    
    224,986Limited partners preferred equity ($100,000 liquidation preference)
    
    
    97,406
    
    
    
    97,406Accumulated other comprehensive income (loss)
    
    
    (8,747
    )
    
    
    (8,706
    )Total general partners equity
    
    
    1,405,092
    
    
    
    1,379,749Total liabilities and partners equity
    
    $
    4,341,751
    
    
    $
    4,431,774
  3




---



##### Table of Contents



COLONIAL REALTY LIMITED PARTNERSHIP
 
 CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 (Unaudited)
 (in thousands, except per unit data)
 
 Three Months EndedMarch 31,2007
    
    
    2006Revenue:Minimum rent
    
    $
    101,412
    
    
    $
    95,234Percentage rent
    
    
    89
    
    
    
    279Tenant recoveries
    
    
    5,224
    
    
    
    6,217Construction revenues
    
    
    12,785
    
    
    
    12,140Other property related revenue
    
    
    8,494
    
    
    
    6,535Other non-property related revenue
    
    
    3,243
    
    
    
    4,108Total revenue
    
    
    131,247
    
    
    
    124,513Operating Expenses:Property operating expenses
    
    
    27,735
    
    
    
    25,019Taxes, licenses, and insurance
    
    
    13,796
    
    
    
    12,686Construction expenses
    
    
    12,371
    
    
    
    11,370Property management expenses
    
    
    3,490
    
    
    
    3,711General and administrative expenses
    
    
    6,113
    
    
    
    5,263Management fee and other expense
    
    
    2,943
    
    
    
    2,540Depreciation
    
    
    34,514
    
    
    
    34,342Amortization
    
    
    5,725
    
    
    
    6,984Total operating expenses
    
    
    106,687
    
    
    
    101,915Income from operations
    
    
    24,560
    
    
    
    22,598Other income (expense):Interest expense and debt cost amortization
    
    
    (28,664
    )
    
    
    (31,182
    )Interest income
    
    
    2,131
    
    
    
    1,530Income (loss) from partially owned entities
    
    
    6,814
    
    
    
    (572
    )Gain (loss) on hedging activities
    
    
    (7
    )
    
    
    2,464Gains from sales of property, net of income taxes of $747 in 2007 and $513 in 2006
    
    
    1,317
    
    
    
    7,330Minority interest of limited partners
    
    
    144
    
    
    
    (154
    )Other
    
    
    (294
    )
    
    
    (1,424
    )Total other income (expense)
    
    
    (18,559
    )
    
    
    (22,008
    )Income from continuing operations
    
    
    6,001
    
    
    
    590Income from discontinued operations
    
    
    4,671
    
    
    
    6,049Gain on disposal of discontinued operations, net of taxes of $1,528 in 2007 and $1,269 in 2006
    
    
    34,809
    
    
    
    9,202Minority interest of limited partners
    
    
    (42
    )
    
    
    (946
    )Income from discontinued operations
    
    
    39,438
    
    
    
    14,305Net income
    
    
    45,439
    
    
    
    14,895Distributions to general partner preferred unitholders
    
    
    (4,491
    )
    
    
    (6,099
    )Distributions to limited partner preferred unitholders
    
    
    (1,813
    )
    
    
    (1,813
    )Preferred unit issuance costs write-off
    
    
    
    
    
    
    (159
    )Net income available to common unitholders
    
    $
    39,135
    
    
    $
    6,824Net income available to common unitholders allocated to limited partners
    
    
    (7,279
    )
    
    
    (1,322
    )Net income available to common unitholders allocated to general partner
    
    $
    31,856
    
    
    $
    5,502Net income per common unit  Basic:Income (loss) from continuing operations
    
    $
    (0.01
    )
    
    $
    (0.13
    )Income from discontinued operations
    
    
    0.70
    
    
    
    0.25Net income per common unit  Basic
    
    $
    0.69
    
    
    $
    0.12Net income per common unit  Diluted:Income (loss) from continuing operations
    
    $
    (0.01
    )
    
    $
    (0.13
    )Income from discontinued operations
    
    
    0.70
    
    
    
    0.25Net income per common unit  Diluted
    
    $
    0.69
    
    
    $
    0.12Average units outstanding:Basic
    
    
    56,543
    
    
    
    55,844Diluted
    
    
    56,543
    
    
    
    55,844CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOMENet income
    
    $
    45,439
    
    
    $
    14,895Other comprehensive incomeUnrealized income (loss) on cash flow hedging activities
    
    
    (185
    )
    
    
    6,343Comprehensive income
    
    $
    45,254
    
    
    $
    21,238
  4




---



##### Table of Contents



COLONIAL REALTY LIMITED PARTNERSHIP
 
 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (in thousands)
 Three Months EndedMarch 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    45,439
    
    
    $
    14,895Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    39,794
    
    
    
    46,518Loss (income) from partially-owned unconsolidated entities
    
    
    (6,814
    )
    
    
    870Gains from sales of property
    
    
    (38,401
    )
    
    
    (12,820
    )Distributions of income from partially-owned unconsolidated entities
    
    
    2,335
    
    
    
    1,915Decrease (increase) in:Restricted cash
    
    
    (1,467
    )
    
    
    (56
    )Accounts receivable
    
    
    2,505
    
    
    
    4,734Prepaid expenses
    
    
    4,824
    
    
    
    1,502Other assets
    
    
    (5,304
    )
    
    
    547Increase (decrease) in:Accounts payable
    
    
    9,756
    
    
    
    (4,680
    )Accrued interest
    
    
    (12,486
    )
    
    
    2,844Accrued expenses and other
    
    
    5,100
    
    
    
    3,488Net cash provided by operating activities
    
    
    45,281
    
    
    
    59,757Cash flows from investing activities:Acquisition of properties
    
    
    (116,726
    )
    
    
    (8,313
    )Development expenditures
    
    
    (74,138
    )
    
    
    (65,299
    )Tenant improvements
    
    
    (7,425
    )
    
    
    (7,472
    )Capital expenditures
    
    
    (5,723
    )
    
    
    (3,641
    )Proceeds from sales of property, net of selling costs
    
    
    186,801
    
    
    
    238,821Proceeds from (issuance of) notes receivable
    
    
    32,504
    
    
    
    (9,995
    )Distributions from partially-owned unconsolidated entities
    
    
    15,215
    
    
    
    342Capital contributions to partially-owned unconsolidated entities
    
    
    (7,114
    )
    
    
    (5,651
    )Net cash used in investing activities
    
    
    23,394
    
    
    
    138,792Cash flows from financing activities:Proceeds from dividend reinvestment plan and exercise of stock options
    
    
    7,256
    
    
    
    10,038Principal reductions of debt
    
    
    (22,546
    )
    
    
    (69,843
    )Net change in revolving credit balances
    
    
    (77,224
    )
    
    
    (58,427
    )Dividends paid to common and preferred unitholders
    
    
    (44,949
    )
    
    
    (46,049
    )Redemption of Preferred Series E Shares
    
    
    
    
    
    
    (27,570
    )Net cash provided by (used in) financing activities
    
    
    (137,463
    )
    
    
    (191,851
    )Increase (decrease) in cash and cash equivalents
    
    
    (68,788
    )
    
    
    6,698Cash and cash equivalents, beginning of period
    
    
    87,647
    
    
    
    30,615Cash and cash equivalents, end of period
    
    $
    18,859
    
    
    $
    37,313Supplemental disclosure of cash flow information:Cash paid during the period for interest, including amounts capitalized
    
    $
    48,292
    
    
    $
    36,752Cash paid during the period for income taxes
    
    $
    3,408
    
    
    $
    3,016Supplemental disclosure of non-cash transactions:Cash flow hedging activities
    
    $
    (185
    )
    
    $
    6,343
  5




---



##### Table of Contents



COLONIAL REALTY LIMITED PARTNERSHIP
 
 NOTES TO
 CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 March 31, 2007
  The consolidated condensed financial statements of Colonial Realty Limited Partnership
have been prepared pursuant to the Securities and Exchange Commission (SEC) rules and
regulations. The following notes, which represent interim disclosures as required by the SEC,
highlight significant changes to the notes included in the December 31, 2006 audited consolidated
financial statements of Colonial Realty Limited Partnership and should be read together with the
consolidated financial statements and notes thereto included in the Colonial Realty Limited
Partnership 2006 Annual Report on Form 10-K .
 Note 1  Organization and Business
   Note 2  Summary of Significant Accounting Policies
 Basis of Presentation
  6




---



##### Table of Contents



Consolidation of Variable Interest Entities,
 Federal Income Tax Status
      Use of Estimates
  Unaudited Interim Statements
  7




---



##### Table of Contents



Revenue Recognition
    Notes Receivable
  Contingencies
   New Accounting Pronouncements
  Fair Value Measurements
 8




---



##### Table of Contents



Applicability of the Assessment of a
Buyers Continuing Investment under FASB Statement No. 66, Accounting for Sales of Real Estate, for
Sales of Condominiums
  Note 3 Capital Structure
     9




---



##### Table of Contents



Note 4  Acquisition and Disposition Activity
 Property Acquisitions
       Property Dispositions
  Property Name
    
    Location
    
    Units
    
    
    Sales Price(in millions)Beacon Hill
    
    Charlotte, NC
    
    
    349
    
    
    $
    15.9Clarion Crossing
    
    Raleigh, NC
    
    
    260
    
    
    
    15.9Colonial Grand at Enclave
    
    Atlanta, GA
    
    
    200
    
    
    
    16.9Colonial Village at Poplar Place
    
    Atlanta, GA
    
    
    324
    
    
    
    19.6Colonial Village at Regency Place
    
    Raleigh, NC
    
    
    180
    
    
    
    10.3Colonial Village at Spring Lake
    
    Atlanta, GA
    
    
    188
    
    
    
    11.5Colonial Village at Timothy Woods
    
    Athens, GA
    
    
    204
    
    
    
    13.2$
    103.3
   10




---



##### Table of Contents



Accounting for the Impairment on Disposal of Long-Lived
Assets
 11




---



##### Table of Contents



Units/Property
    
    Location
    
    Date Sold
    
    Square FeetMultifamilyColonial Grand at Promenade
    
    Montgomery, AL
    
    February 2007
    
    
    384Beacon Hill
    
    Charlotte, NC
    
    January 2007
    
    
    349Clarion Crossing
    
    Raleigh, NC
    
    January 2007
    
    
    260Colonial Grand at Enclave
    
    Atlanta, GA
    
    January 2007
    
    
    200Colonial Village at Poplar Place
    
    Atlanta, GA
    
    January 2007
    
    
    324Colonial Village at Regency Place
    
    Raleigh, NC
    
    January 2007
    
    
    180Colonial Village at Spring Lake
    
    Atlanta, GA
    
    January 2007
    
    
    188Colonial Village at Timothy Woods
    
    Athens, GA
    
    January 2007
    
    
    204Colonial Grand at Galleria
    
    Birmingham, AL
    
    December 2006
    
    
    1,080Colonial Grand at Riverchase
    
    Birmingham, AL
    
    December 2006
    
    
    468Colonial Village at Research Park
    
    Huntsville, AL
    
    December 2006
    
    
    736Colonial Village at Haverhill
    
    San Antonio, TX
    
    October 2006
    
    
    322Arbor Trace
    
    Norfolk, VA
    
    April 2006
    
    
    148Colonial Village at Estrada
    
    Dallas, TX
    
    March 2006
    
    
    248Copper Crossing
    
    Fort Worth, TX
    
    March 2006
    
    
    400The Meadows I, II & III
    
    Asheville, NC
    
    March 2006
    
    
    392The Trestles
    
    Raleigh, NC
    
    March 2006
    
    
    280Colonial Grand at Caledon Woods
    
    Greenville, SC
    
    January 2006
    
    
    350Colonial Village at Paces Glen
    
    Charlotte, NC
    
    January 2006
    
    
    172Colonial Village at Remington Place
    
    Raleigh, NC
    
    January 2006
    
    
    136Colonial Village at Whitemarsh
    
    Savannah, GA
    
    January 2006
    
    
    352Summerwalk
    
    Charlotte, NC
    
    January 2006
    
    
    160The Timbers
    
    Raleigh, NC
    
    January 2006
    
    
    176OfficeColonial Bank Centre
    
    Miami, FL
    
    September 2006
    
    
    235,500RetailColonial Shoppes Yadkinville
    
    Yadkinville, NC
    
    March 2007
    
    
    90,917Rivermont Shopping Center
    
    Chattanooga, TN
    
    February 2007
    
    
    73,481
   12




---



##### Table of Contents



Three Months EndedMarch 31,(amounts in thousands)
    
    2007
    
    2006Property revenues:Base rent
    
    $
    8,198
    
    
    $
    22,394Percentage rent
    
    
    159
    
    
    
    135Tenant recoveries
    
    
    1,669
    
    
    
    1,739Other revenue
    
    
    503
    
    
    
    2,046Total revenues
    
    
    10,529
    
    
    
    26,314Property operating and administrative expenses
    
    
    4,571
    
    
    
    10,464Depreciation
    
    
    330
    
    
    
    5,513Amortization
    
    
    62
    
    
    
    992Total expenses
    
    
    4,963
    
    
    
    16,969Interest expense, net
    
    
    (895
    )
    
    
    (2,745
    )Other income (expenses)
    
    
    
    
    
    
    (551
    )Income from discontinued operations before net gain
on disposition of discontinued operations
    
    
    4,671
    
    
    
    6,049Net gain on disposition of discontinued operations
    
    
    34,809
    
    
    
    9,202Minority interest to limited partners
    
    
    (42
    )
    
    
    (946
    )Income from discontinued operations
    
    $
    39,438
    
    
    $
    14,305
 For-Sale Projects
  Three Months EndedMarch 31,(amounts in thousands)
    
    2007
    
    
    2006Condominium revenues, net
    
    $
    34,079
    
    
    $
    29,604Condominium costs
    
    
    (25,956
    )
    
    
    (24,114
    )Gains on condominium sales, before minority interest and income taxes
    
    
    8,123
    
    
    
    5,490For-sale residential revenues, net
    
    
    9,259
    
    
    
    For-sale residential costs
    
    
    (7,017
    )
    
    
    Gains on for-sale residential sales, before minority interest and income taxes
    
    
    2,242
    
    
    
    Minority interest
    
    
    142
    
    
    
    (1,135
    )Provision for income taxes
    
    
    (2,275
    )
    
    
    (1,782
    )Gains on condominium and for-sale residential sales, net of minority
interest and income taxes
    
    $
    8,232
    
    
    $
    2,573
  13




---



##### Table of Contents



Note 5  Net Income Per Unit
  Three Months EndedMarch 31,
    
    
    March 31,(amounts in thousands, except per unit data)
    
    2007
    
    
    2006Numerator:Income from continiung operations
    
    $
    6,001
    
    
    $
    590Less: Distributions to general partner preferred unitholders
    
    
    (4,491
    )
    
    
    (6,099
    )Less: Distributions to limited partner preferred unitholders
    
    
    (1,813
    )
    
    
    (1,813
    )Less: Preferred unit issuance costs
    
    
    
    
    
    
    (159
    )Net income available to common unitholders
    
    $
    (303
    )
    
    $
    (7,481
    )Denominator:Denominator for basic net income per unit  weighted average units
    
    
    56,543
    
    
    
    55,844Effect of dilutive securities:Trustee and employee stock options, treasury method
    
    
    
    
    
    
    Denominator for diluted net income per unit -
adjusted weighted average units
    
    
    56,543
    
    
    
    55,844
  Note 6  Segment Information
  14




---



##### Table of Contents



Three Months EndedMarch 31,(in thousands)
    
    2007
    
    
    2006Revenues:Segment Revenues:Multifamily
    
    $
    76,489
    
    
    $
    77,969Office
    
    
    38,026
    
    
    
    44,422Retail
    
    
    25,301
    
    
    
    28,349Total Segment Revenues
    
    
    139,816
    
    
    
    150,740Partially-owned unconsolidated entities
    
    
    (14,068
    )
    
    
    (16,161
    )Construction revenues
    
    
    12,785
    
    
    
    12,140Unallocated corporate revenues
    
    
    3,243
    
    
    
    4,108Discontinued operations property revenues
    
    
    (10,529
    )
    
    
    (26,314
    )Total Consolidated Revenues
    
    
    131,247
    
    
    
    124,513NOI:Segment NOI:Multifamily
    
    
    45,146
    
    
    
    46,706Office
    
    
    25,194
    
    
    
    29,356Retail
    
    
    17,859
    
    
    
    20,605Total Segment NOI
    
    
    88,199
    
    
    
    96,667Partially-owned unconsolidated entities
    
    
    (8,597
    )
    
    
    (10,042
    )Unallocated corporate revenues
    
    
    3,243
    
    
    
    4,108Discontinued operations property NOI
    
    
    (5,958
    )
    
    
    (15,850
    )Construction NOI
    
    
    414
    
    
    
    770Property management expenses
    
    
    (3,490
    )
    
    
    (3,711
    )General and administrative expenses
    
    
    (6,113
    )
    
    
    (5,263
    )Management fee and other expenses
    
    
    (2,943
    )
    
    
    (2,540
    )Depreciation
    
    
    (34,514
    )
    
    
    (34,342
    )Amortization
    
    
    (5,725
    )
    
    
    (6,984
    )Other
    
    
    44
    
    
    
    (215
    )Income from operations
    
    
    24,560
    
    
    
    22,598Total other expense, net
    
    
    (18,559
    )
    
    
    (22,008
    )Income (loss) from continuing operations
    
    $
    6,001
    
    
    $
    590
 March 31,
    
    
    December 31,(in thousands)
    
    2007
    
    
    2006AssetsSegment AssetsMultifamily
    
    $
    2,513,940
    
    
    $
    2,539,367Office
    
    
    806,404
    
    
    
    799,089Retail
    
    
    661,576
    
    
    
    663,216Total Segment Assets
    
    
    3,981,920
    
    
    
    4,001,672Unallocated corporate assets (1)
    
    
    359,831
    
    
    
    430,105$
    4,341,751
    
    
    $
    4,431,777
 
 (1)
    
    Includes CRLPs investment in partially-owned entities of $88,806 as of March 31, 2007 and $92,892
as of December 31, 2006. Note 7  Investment in Partially Owned Entities
  15




---



##### Table of Contents



(in thousands)Percent
    
    
    March 31,
    
    
    December 31,Owned
    
    
    2007
    
    
    2006Multifamily:Arbors at Windsor Lake, Columbia, SC
    
    
    10.00
    %
    
    $
    605
    
    
    $
    614Auberry at Twin Creeks, Dallas, TX
    
    
    15.00
    %
    
    
    869
    
    
    
    Belterra, Ft. Worth, TX
    
    
    10.00
    %
    
    
    891
    
    
    
    944Carter Regents Park, Atlanta, GA
    
    
    40.00
    %
    
    
    6,281
    
    
    
    6,231CG at Canyon Creek, Austin, TX
    
    
    25.00
    %
    
    
    1,452
    
    
    
    1,416CG at Huntcliff Village, Atlanta, GA
    
    
    20.00
    %
    
    
    2,305
    
    
    
    2,327CG at Research Park, Durham, NC
    
    
    20.00
    %
    
    
    1,234
    
    
    
    1,247CG at Traditions, Gulf Shores, AL
    
    
    35.00
    %
    
    
    3,006
    
    
    
    CMS / Colonial Joint Venture I
    
    
    15.00
    %
    
    
    478
    
    
    
    498CMS / Colonial Joint Venture II
    
    
    (1
    )
    
    
    (250
    )
    
    
    (252
    )CMS Florida
    
    
    25.00
    %(2)
    
    
    66
    
    
    
    1,072CMS Tennessee
    
    
    25.00
    %
    
    
    1,228
    
    
    
    1,234CV at Matthews, Charlotte, NC
    
    
    25.00
    %
    
    
    1,033
    
    
    
    1,059DRA Alabama
    
    
    10.00
    %
    
    
    2,303
    
    
    
    2,311DRA Cunningham, Austin, TX
    
    
    20.00
    %
    
    
    1,029
    
    
    
    1,053DRA Southwest Partnership
    
    
    23.00
    %(3)
    
    
    290
    
    
    
    495DRA The Grove at Riverchase, Birmingham, AL
    
    
    20.00
    %
    
    
    1,529
    
    
    
    1,552Fairmont at Fossil Creek, Fort Worth, TX
    
    
    15.00
    %
    
    
    717
    
    
    
    Heritage at Deerwood, Jacksonville, FL
    
    
    47.00
    %(4)
    
    
    
    
    
    
    4,765Merritt at Godley Station, Pooler, GA
    
    
    35.00
    %
    
    
    3,091
    
    
    
    3,169Park Crossing, Fairfield, CA
    
    
    10.00
    %
    
    
    930
    
    
    
    1,000Stone Ridge, Columbia, SC
    
    
    10.00
    %
    
    
    481
    
    
    
    492Total Multifamily
    
    
    
    
    
    
    29,568
    
    
    
    31,227Office:600 Building Partnership, Birmingham, AL
    
    
    33.33
    %
    
    
    52
    
    
    
    50Colonial Center Mansell Joint Venture
    
    
    15.00
    %
    
    
    2,115
    
    
    
    2,513DRA / Colonial Office Joint Venture
    
    
    15.00
    %
    
    
    36,125
    
    
    
    38,069Total Office
    
    
    
    
    
    
    38,292
    
    
    
    40,632Retail:Colonial Promenade Madison, Huntsville, AL
    
    
    25.00
    %
    
    
    2,286
    
    
    
    2,308Colonial Promenade Smyrna, Smyrna, TN (Development)
    
    
    50.00
    %
    
    
    2,106
    
    
    
    2,393GPT / Colonial Retail JV
    
    
    10.00
    %(5)
    
    
    (3,804
    )
    
    
    (3,068
    )Highway 150, LLC, Birmingham, AL
    
    
    10.00
    %
    
    
    73
    
    
    
    70Parkway Place Limited Partnership, Huntsville, AL
    
    
    45.00
    %
    
    
    10,805
    
    
    
    11,012Parkside Drive LLC, Knoxville, TN
    
    
    50.00
    %
    
    
    8,283
    
    
    
    7,17819,749
    
    
    
    19,893Other:Heathrow, Orlando, FL
    
    
    50.00
    %
    
    
    1,181
    
    
    
    1,106Colonial / Polar-BEK Management Company, Birmingham, AL
    
    
    50.00
    %
    
    
    16
    
    
    
    341,197
    
    
    
    1,140$
    88,806
    
    
    $
    92,892
 
 (1)
    
    The CMS/Colonial Joint Venture II holds one property in which CRLP has a 15% partnership
interest and one in which CRLP has a 5% partnership interest.(2)
    
    CRLP sold its interest in Colonial Grand at Bayshore during January 2007.(3)
    
    The DRA Southwest Partnership, comprised of fifteen multifamily properties totaling 3,957
units, sold the properties held in the joint venture on December 21, 2006.(4)
    
    CRLP sold its interest in Heritage at Deerwood during March 2007.(5)
    
    Amount includes the value of CRLPs investment of approximately $6.4 million, offset by the
excess basis difference on the transaction of approximately $10.2 million, which is being amortized
over the life of the properties.  16




---



##### Table of Contents



Note 8  Financing Activities
    Note 9  Derivatives and Hedging
  17




---



##### Table of Contents



Note 10  Subsequent Events
 Property Disposition
  18




---



##### Table of Contents



Office and Retail Joint Venture Transactions
  Preferred Share Redemption
  Termination of Pension Plan
  Distribution
  19




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
     
 20




---



##### Table of Contents



COLONIAL REALTY LIMITED PARTNERSHIP
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  
    
    national and local economic, business and real estate conditions including, but
not limited to, the effect of demand for multifamily units, office and retail rental
space, the extent, strength and duration of any economic recovery, such as the
effects on demand for units and rental space and the creation of new multifamily,
office and retail developments, availability and creditworthiness of tenants, the
level of lease rents, and the availability of financing for both tenants and us;
    
    adverse changes in real estate markets, including, but not limited to, the extent
of tenant bankruptcies, financial difficulties and defaults, the extent of future
demand for multifamily units and office and retail space in our core markets and
barriers of entry into new markets which we may seek to enter in the future, the
extent of decreases in rental rates, competition, our ability to identify and
consummate attractive acquisitions on favorable terms, our ability to consummate any
planned dispositions in a timely manner on acceptable terms;
    
    actions, strategies and performance of affiliates that we may not control or
companies, including joint ventures, in which we have made investments;
    
    changes in operating costs, including real estate taxes, utilities, and insurance;
    
    higher than expected construction costs;
    
    development or conversion of for-sale projects could adversely affect our results of operations;
    
    legislative or other regulatory decisions, including government approvals,
actions and initiatives, including the need for compliance with environmental and
safety requirements, and changes in laws and regulations or the interpretation
thereof;
    
    effects of tax legislative action;
    
    our general partners ability to maintain its status as a Real Estate Investment
Trust (REIT) for federal income tax purposes, our ability to maintain our status
as a partnership for federal income tax purposes, the ability of certain of our
subsidiaries to maintain their status as taxable REIT subsidiaries for federal
income tax purposes, and our ability and the ability of our subsidiaries to operate
effectively within the limitations imposed by these rules;
    
    our ability to successfully implement our strategic shift to a predominately
multifamily focused REIT; including consummation of the recently announced office
and retail joint venture transactions and contemplated outright retail asset sales;
    
    effect of any rating agency actions on the cost and availability of new debt financing;
    
    level and volatility of interest rates or capital market conditions;
    
    effect of any terrorist activity or other heightened geopolitical crisis; and
    
    other factors affecting the real estate industry generally.
  21




---



##### Table of Contents



Overview
 As used herein, the terms CRLP, we, us, our and Operating Partnership refer to
Colonial Realty Limited Partnership, a Delaware limited partnership, and its subsidiaries and other
affiliates, including, Colonial Properties Services Limited Partnership, Colonial Property
Services, Inc., and CLNL Acquisition Sub, LLC or, as the context may require, Colonial Realty
Limited Partnership only. As used herein, the term Company or the Trust includes Colonial
Properties Trust, an Alabama real estate investment trust, and one or more of its subsidiaries and
other affiliates, including CRLP, Colonial Properties Services Limited Partnership, Colonial
Properties Services, Inc. and CLNL Acquisition Sub, LLC or, as the context may require, Colonial
Properties Trust only or Colonial Realty Limited Partnership only.
     22




---



##### Table of Contents



As of and for the QuarterEnded March 31,2007
    
    2006Multifamily PropertiesPhysical Occupancy
    
    
    96.3
    %
    
    
    96.2
    %Same-Property Economic Occupancy (1)
    
    
    83.8
    %
    
    
    83.0
    %End of Month EffectiveRent per Unit per Month
    
    $
    719
    
    
    $
    675Capital Expenditures per Unit
    
    $
    149
    
    
    $
    61Office PropertiesPhysical Occupancy
    
    
    92.7
    %
    
    
    92.8
    %Base Rent per Square Foot
    
    $
    18.81
    
    
    $
    19.15Capital Expenditures per Square Foot
    
    $
    0.41
    
    
    $
    0.79Retail PropertiesPhysical Occupancy
    
    
    92.3
    %
    
    
    90.1
    %Base Rent per Square Foot (2)
    
    $
    18.08
    
    
    $
    17.76Tenant Gross Sales per Square Foot (3)
    
    $
    274.77
    
    
    $
    261.10
 
 (1)
    
    Economic Occupancy represents scheduled base rents, less vacancy loss, all
concessions adjusted for straight-line (including but not limited to: renewals,
move-ins, models, employee units), and bad debts divided by scheduled base rents.(2)
    
    Retail Property Base Rent per Square Foot excludes anchor tenants and tenants
with leasable area greater than 10,000 square feet.(3)
    
    Tenant Gross Sales per Square Foot are for mall properties only and exclude
tenants with a leasable area greater than 10,000 square feet.  
    
    changes in job growth, household formation and population growth in our markets;
    
    changes in interest rates;
    
    supply and demand for apartment properties in our current markets; and
    
    competition, which could limit our ability to secure attractive investment
opportunities, lease apartment properties, or increase or maintain rents.
  23




---



##### Table of Contents



Results of Operations  Three Months Ended March 31, 2007 and 2006
 Minimum rent
 24




---



##### Table of Contents



Tenant recoveries
 Construction revenues and construction expenses
 Other property related revenue
 Other non-property related revenue
 Property operating expenses
 Taxes, licenses and insurance
 Property management expenses,
 General and administrative
 Management fee and other expense,
 Depreciation and amortization expenses
 Interest expense and debt cost amortization
 25




---



##### Table of Contents



Interest income
 Income (loss) from partially owned entities
 Gain (loss) on hedging activities
 Gains from sales of property, net of income taxes
 Income from discontinued operations
 Liquidity and Capital Resources
    Strategic Change
  Short-Term Liquidity Needs
  26




---



##### Table of Contents



Long-Term Liquidity Needs
     27




---



##### Table of Contents



Unsecured Revolving Credit Facilities
    Investing Activities
   28




---



##### Table of Contents



Distribution
   Off-Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
  Derivatives and Hedging
  29




---



##### Table of Contents



Inflation
   30




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
 Item 4. Controls and Procedures
     31




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors
  The Trust is in the process of changing its business plan to focus predominately on multifamily
properties and face certain risks inherent in the implementation of this strategy.
    
    
    We would not realize the expected benefits of the proposed transactions, including the
full execution of our long-term strategy to become principally a multifamily REIT, or our
ability to realize these expected benefits would be delayed; and
    
    We would continue to be exposed to the general competitive pressures and risks
associated with the ownership of office and retail assets discussed in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2006 and other SEC filings, which
pressures and risks could be increased if the joint venture transactions are not completed
or completion is significantly delayed.
 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
 32




---



##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 5. Other Information
  
 Item 6. Exhibits
  33




---



##### Table of Contents



SIGNATURES
  COLONIAL REALTY LIMITED PARTNERSHIP,A Delaware limited partnershipBy:
    
    Colonial Properties Trust,
Its General PartnerDate: May 9, 2007
    
    By:
    
    /s/ Weston M. AndressWeston M. AndressPresident and Chief Financial OfficerDate: May 9, 2007
    
    By:
    
    /s/ John E. TomlinsonJohn E. TomlinsonExecutive Vice President &Chief Accounting Officer(Principal Accounting Officer)
 34




---



##### Table of Contents



Index of Exhibits
 10.1
    
    Non-Competition Agreement, dated
May 4, 2007, among Colonial Realty Limited Partnership, Colonial
Properties Trust and Thomas H. Lowder
    
    Incorporated by
reference to
Exhibit 10.1 to the
Trusts Quarterly
Report on Form 10-Q
for the period
ending March 31,
200710.2
    
    Summary of 2007 Annual Incentive Plan
    
    Incorporated by
reference to
Exhibit 10.2 to the
Trusts Quarterly
Report on Form 10-Q
for the period
ending March 31,
200710.3
    
    Trustee Compensation Policy for 2007
    
    Incorporated by
reference to
Exhibit 10.3 to the
Trusts Quarterly
Report on Form 10-Q
for the period
ending March 31,
200712.1
    
    Ratio of Earnings to Fixed Charges
    
    Filed herewith15.1
    
    Letter re: Unaudited Interim Financial Information
    
    Filed herewith31.1
    
    CEO Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith31.2
    
    CFO Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith32.1
    
    CEO Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith32.2
    
    CFO Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
    
    Filed herewith
 35