UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-Q

Quarterly  Report  Pursuant to Section 13 or 15(d) of the Securities  Exchange
Act of 1934


For the  Quarterly  Period  Ended:  September  Commission File Number: 0-20707
30,  1997


                     COLONIAL REALTY LIMITED PARTNERSHIP
            (Exact name of registrant as specified in its charter)



                Delaware                              63-1098468
        (State of organization)                      (IRS Employer
                                                Identification Number)

        2101 Sixth Avenue North                          35203
               Suite 750                              (Zip Code)
          Birmingham, Alabama
(Address of principal executive offices)

                                (205) 250-8700
             (Registrant's telephone number, including area code)



      Indicate by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. YES X NO ___


<PAGE>


                    COLONIAL REALTY LIMITED PARTNERSHIP
                              INDEX TO FORM 10-Q


                                                                          Page

PART I:  FINANCIAL INFORMATION

      Item 1.  Financial Statements (Unaudited)

               Consolidated Condensed Balance Sheets as of
               September 30, 1997 and December 31, 1996                     3

               Consolidated Condensed Statements of Income for the
               Three Months and for the Nine Months Ended  September 30,    4
               1997 and 1996

               Consolidated Condensed Statements of Cash Flows
               for the Nine Months Ended September 30, 1997 and 1996        5

               Notes to Consolidated Condensed Financial Statements         6

               Report of Independent Accountants                            9

      Item 2.  Management's Discussion and Analysis of Financial           10
               Condition and Results of Operations

PART II:  OTHER INFORMATION


      Item 2.  Changes in Securities                                       13

      Item 6.  Exhibits and Reports on Form 8-K                            14

SIGNATURES                                                                 15

EXHIBITS                                                                   16



                                     Page 2
<PAGE>
<TABLE>

                       COLONIAL REALTY LIMITED PARTNERSHIP
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (in thousands)
                              --------------------

<CAPTION>
                                                     September 30, 1997
                                                        (Unaudited)          December 31, 1996
                                                    -------------------     -------------------
ASSETS

<S>                                                    <C>                     <C>
Land, buildings, and equipment, net                    $ 1,085,173             $ 801,798
Undeveloped land and construction in progress               93,753               113,689
Cash and equivalents                                         3,253                 3,340
Restricted cash                                              2,831                 2,450
Accounts receivable, net                                     5,320                 4,779
Prepaid expenses                                             2,909                 4,468
Notes receivable                                               595                   584
Deferred debt and lease costs, net                           7,141                 6,288
Investments                                                  4,946                 5,028
Other assets                                                 5,304                 5,523
                                                    ---------------     -----------------

                                                       $ 1,211,225             $ 947,947
                                                    ===============     =================


LIABILITIES AND PARTNERS' CAPITAL

Notes and mortgages payable                              $ 666,617             $ 506,435
Accounts payable                                             5,266                17,424
Accrued interest                                             6,422                 5,465
Accrued expenses                                            11,195                 1,585
Tenant deposits                                              3,739                 2,926
Unearned rent                                                1,467                   924
                                                    ---------------     -----------------

      Total liabilities                                    694,706               534,759
                                                    ---------------     -----------------

Minority interest in consolidated operating property         3,248                     0
                                                    ---------------     -----------------

Redeemable units, at redemption value                      273,136               256,098
                                                    ---------------     -----------------

Partners' capital, excluding redeemable units              240,135               157,090
                                                    ---------------     -----------------

                                                       $ 1,211,225             $ 947,947
                                                    ===============     =================

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>


                                     Page 3
<PAGE>
<TABLE>

                       COLONIAL REALTY LIMITED PARTNERSHIP
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)
                      (in thousands, except per share data)
                              ---------------------
<CAPTION>


                                                                     Three Months Ended                         Nine Months Ended
                                                                         September 30,                             September 30,
                                                              -------------------------------------    ----------------------------
                                                                    1997                 1996              1997            1996
                                                              -------------------------------------    ----------------------------

 Revenue:
<S>                                                                  <C>              <C>               <C>                <C>
       Base rent                                                     $ 40,150         $ 30,015          $ 109,910          $ 83,522
       Percentage rent                                                    214              310                906               969
       Tenant recoveries                                                4,386            2,907             11,592             7,472
       Other                                                            2,729            1,600              7,064             4,300
                                                            ------------------     ------------     --------------     -------------

           Total revenue                                               47,479           34,832            129,472            96,263
                                                            ------------------     ------------     --------------     -------------

 Property operating expenses:
       General operating expenses                                       3,393            2,558              9,010             7,100
       Salaries and benefits                                            2,781            2,321              7,468             6,449
       Repairs and maintenance                                          5,180            3,630             13,204             9,777
       Taxes, licenses, and insurance                                   4,055            2,840             11,489             8,374
 General and administrative                                             1,508            1,033              4,272             2,598
 Depreciation                                                           8,372            5,790             22,426            15,792
 Amortization                                                             162              251                888             1,241
                                                            ------------------     ------------     --------------     -------------

           Total operating expenses                                    25,451           18,423             68,757            51,331
                                                            ------------------     ------------     --------------     -------------

           Income from operations                                      22,028           16,409             60,715            44,932
                                                            ------------------     ------------     --------------     -------------

 Other income (expense):
       Interest expense                                               (10,934)          (6,383)           (28,796)          (16,614)
       Income from equity investments                                     196              137                556               456
       Gains (losses) from sales of property                               -0-              -0-                (1)               15
       Minority interest in consolidated operating property               (64)              -0-              (179)               -0-
                                                            ------------------     ------------     --------------     -------------

           Total other expense                                        (10,802)          (6,246)           (28,420)          (16,143)
                                                            ------------------     ------------     --------------     -------------

           Income before extraordinary item                            11,226           10,163             32,295            28,789
 Extraordinary loss from early extinguishment of debt                  (2,927)              (9)            (3,408)             (488)
                                                            ------------------     ------------     --------------     -------------

           Net income                                                 $ 8,299         $ 10,154           $ 28,887          $ 28,301
                                                            ==================     ============     ==============     =============

 Net income per unit                                                   $ 0.28           $ 0.39             $ 1.03            $ 1.11
                                                            ==================     ============     ==============     =============

 Weighted average units outstanding                                    29,327           26,080             28,062            25,576
                                                            ==================     ============     ==============     =============
<FN>
 The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

                                     Page 4
<PAGE>
<TABLE>


                       COLONIAL REALTY LIMITED PARTNERSHIP
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
                               -------------------
<CAPTION>

                                                                           Nine Months Ended
                                                                             September 30,
                                                                   -------------------------------
                                                                         1997           1996
                                                                   --------------   --------------

 Cash flows from operating activities:
<S>                                                                    <C>            <C>
      Net  income                                                      $ 28,887       $ 28,301
      Adjustments to  reconcile  net income to net cash  provided  by  operating
           activities:
           Depreciation and amortization                                 23,314         17,033
           Income from equity investments                                  (556)          (456)
           Minority interest in income of property partnership              179             -0-
           Other                                                          3,807              4
      Decrease (increase) in:
           Restricted cash                                                 (381)          (394)
           Accounts receivable                                             (585)          (331)
           Notes receivable                                                 (11)           (17)
           Prepaid expenses                                                 963         (1,420)
           Other assets                                                     (69)        (1,257)
      Increase (decrease) in:
           Accounts payable                                             (12,158)            72
           Accrued interest                                                 957          8,542
           Accrued expenses and other                                     5,522             83
                                                                   -------------    -----------
                Net cash provided by operating activities                49,869         50,160
                                                                   -------------    -----------

 Cash flows from investing activities:
      Acquisition of properties                                        (113,400)       (90,054)
      Development expenditures                                          (68,450)       (68,015)
      Tenant improvements                                                (1,289)          (556)
      Capital expenditures                                               (8,052)        (4,490)
      Proceeds from sales of property                                        -0-             6
      Distributions from subsidiaries                                       778            738
      Capital contributions to subsidiaries                                (272)           (14)
                                                                   -------------    -----------
                Net cash used in investing activities                  (190,685)      (162,385)
                                                                   -------------    -----------

 Cash flows from financing activities:
      Cash contributions                                                 94,651        106,976
      Principal reductions of debt                                     (101,589)       (37,561)
      Proceeds from additional borrowings                               175,246        130,040
      Net change in revolving credit balances                            21,211        (44,994)
      Capital distributions                                             (44,083)       (38,804)
      Payment of mortgage financing cost                                 (1,299)        (2,587)
      Other, net                                                         (3,408)            -0-
                                                                   -------------    -----------
                Net cash provided by financing activities               140,729        113,070
                                                                   -------------    -----------
                Increase (decrease) in cash and equivalents                 (87)           845
 Cash and equivalents, beginning of period                                3,340          1,585
                                                                   -------------    -----------
 Cash and equivalents, end of period                                    $ 3,253        $ 2,430
                                                                   =============    ===========

<FN>
 The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>



                                     Page 5
<PAGE>

                       COLONIAL REALTY LIMITED PARTNERSHIP
                            NOTES TO CONSOLIDATED
                        CONDENSED FINANCIAL STATEMENTS
                              September 30, 1997
                                 (Unaudited)

Note 1 -- Basis of Presentation
      Colonial Realty Limited Partnership ("CRLP") is the operating  partnership
of Colonial Properties Trust (the "Company"),  an Alabama real estate investment
trust whose shares are traded on the New York Stock Exchange.  The  accompanying
unaudited consolidated condensed financial statements of CRLP have been prepared
by management in accordance with generally  accepted  accounting  principles for
interim financial reporting and in conjunction with the rules and regulations of
the  Securities  and  Exchange  Commission.  In the opinion of  management,  all
adjustments  considered  necessary for a fair  presentation  have been included.
These financial  statements  should be read in conjunction  with the information
included  in  CRLP's  Financial  Statements  as filed  with the  Securities  and
Exchange  Commission on Form 10-K for the year ended December 31, 1996, and with
the information  filed with the Securities and Exchange  Commission on Form 10-Q
for the quarters  ended March 31, 1997, and June 30, 1997. The December 31, 1996
balance  sheet  data  presented  herein  was  derived  from  audited   financial
statements but does not include all disclosures  required by generally  accepted
accounting principles.

      In  February  1997,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting Standards No. 128, "Earnings Per Share" (SFAS
128). SFAS 128 supersedes  existing  generally  accepted  accounting  principles
relative to the calculation of earnings per share (unit), is effective for years
ending after  December 15, 1997,  and requires  restatement  of all prior period
earnings  per  share  (unit)  information  upon  adoption.  Generally,  SFAS 128
requires a  calculation  of basic  earnings per share  (unit),  which takes into
consideration  income (loss) available to common shareholders  (unitholders) and
the  weighted  average  of  common  shares  (units)  outstanding.  SFAS 128 also
requires the  calculation  of a diluted  earnings per share (unit),  which takes
into account the impact of all additional  common shares (units) that would have
been  outstanding if all dilutive  potential  common shares (units)  relating to
options,  warrants, and convertible securities had been issued, as long as their
effect is dilutive,  with a related  adjustment  of income  available for common
shareholders (unitholders),  as appropriate. SFAS 128 requires dual presentation
of basic and diluted  earnings per share (unit) on the face of the  statement of
operations and requires a reconciliation of the numerator and denominator of the
basic earnings per share (unit) computation.  CRLP does not expect the effect of
its adoption of SFAS 128 to be material to the financial statements.

      In June  1997,  the FASB  issued  SFAS No.  130,  Reporting  Comprehensive
Income, which requires the reporting and display of comprehensive income and its
components in an entity's financial  statements,  and SFAS No. 131,  Disclosures
about Segments of an Enterprise and Related Information, which specifies revised
guidelines for determining an entity's operating segments and the type and level
of  financial  information  to be  included.  CRLP is  required  to adopt  these
statements in fiscal year 1998.  The impact of these  pronouncements  on CRLP is
currently being evaluated.

                                     Page 6
<PAGE>

Note 2 -- Acquisitions
      On July 11,  1997,  CRLP  acquired  a  multifamily  community  in  Athens,
Georgia.  The property was acquired for a purchase  price of $12.9 million which
was financed through the issuance of 27,275 limited  partnership units valued at
$.8 million and an advance on CRLP's unsecured line of credit. The community was
purchased  from a  corporation  whose  shareholders  included  two  directors of
Colonial Properties Holding Company, Inc..

      On July 14, 1997,  CRLP  acquired a  multifamily  community in  Pensacola,
Florida.  The property was acquired for a purchase  price of $10.6 million which
was financed through the issuance of 35,522 limited  partnership units valued at
$1.0 million and an advance on CRLP's unsecured line of credit.

     On  July  31,  1997,  CRLP  merged  a  portion  of the  assets  of  Johnson
Development  Company,  LLC, which included six existing office  buildings in the
Mansell Office Park in Atlanta, Georgia. The total transaction, which was valued
at $48.5 million, was funded through the issuance of 540,235 limited partnership
units,  valued at $15.7 million,  the assumption of mortgage debt totaling $31.7
million which bears interest at a weighted average rate of 8.42%, and an advance
on CRLP's unsecured line of credit. As a result of this transaction, the seller,
William M.  Johnson,  was elected as a director of Colonial  Properties  Holding
Company, Inc.. In connection with this acquisition,  CRLP also agreed to acquire
an additional office property  consisting of 163,000 square feet of net rentable
area and two retail properties containing a total of 46,000 square feet of gross
leasable  area.  The  purchase  price of the  additional  properties,  which are
located in or near the Mansell  Office  Park,  is  expected to be  approximately
$27.3  million  (subject  to  increase  if  certain   lease-up   conditions  are
satisfied),  which will be paid  through  the  issuance  of limited  partnership
units, the assumption of debt and an advance on CRLP's unsecured line of credit.
CRLP  expects  to acquire  the  additional  properties  by the end of the second
quarter of 1998.

      On August 29,  1997,  CRLP  acquired a  multifamily  community in Jackson,
Mississippi.  The property was  acquired for a purchase  price of $17.9  million
which was  financed  through the  assumption  of mortgage  debt  totaling  $11.0
million which bears interest at a weighted average rate of 8.09%, and an advance
on CRLP's unsecured line of credit.

      On  October  14,  1997,  CRLP  acquired  a  community  shopping  center in
Jacksonville,  Florida.  The property was acquired for a purchase price of $14.4
million which was financed  through the issuance of 74,709  limited  partnership
units,  valued at $2.1  million,  and an  advance  on CRLP's  unsecured  line of
credit.  The  acquisition  agreement  provides  for  CRLP to make an  additional
payment to the seller if certain lease-up conditions are satisfied. CRLP expects
to make an additional  payment to the seller of approximately  $700,000 pursuant
to this provision.

      On October 31, 1997, CRLP acquired a multifamily  community in Greenville,
South Carolina.  The property was acquired for a purchase price of $21.3 million
which was financed through an advance on CRLP's unsecured line of credit.

      On  November 4, 1997,  CRLP  acquired  three  regional  shopping  malls in
 Brunswick,  Gainesville,  and Valdosta,  Georgia, for a purchase price of $97.0
 million.  CRLP funded the acquisitions through the exchange of four multifamily
 properties in Alabama with an exchange value of $54.8 million and an advance on
 CRLP's unsecured line of credit.

Note 3 -- Increase in Revolving Credit Agreement
      On July  10,  1997,  CRLP  increased  the  borrowing  capacity  under  its
unsecured line of credit from $125 million to $200 million. The credit facility,
which is used by CRLP  primarily  to finance  additional  property  investments,
bears  interest at a rate ranging  between 100 and 150 basis points above LIBOR.
The credit  facility is renewable  annually in July with approval of all parties
involved and provides for a two-year amortization in the event of non-renewal.

                                     Page 7
<PAGE>

Note 4 -- Public Offerings of Securities
      On July  25,  1997,  CRLP  completed  a $75  million  public  offering  of
unsecured medium term notes.  The securities,  which mature in July 2004, bear a
coupon  rate of 6.96%,  which  equated to a spread of 75 basis  points  over the
seven-year  Treasury.  CRLP used the net  proceeds  of the  offering  to repay a
portion of the outstanding balance on its unsecured line of credit.

      On July 30, 1997, the Company  completed a public  offering of 1.7 million
of its common  shares at $30.9375  per share.  The net  proceeds to the Company,
after  the   underwriter's   discount  and  minimal  offering   expenses,   were
approximately  $49.7 million.  The net proceeds of the offering were contributed
to CRLP.  CRLP used the net  proceeds of the  offering to repay a portion of the
outstanding balance on its unsecured line of credit.

      On August 6,  1997,  CRLP  completed  a $25  million  public  offering  of
unsecured medium term notes. The securities, which mature in August 2005, bear a
coupon  rate of 6.96%,  which  equated to a spread of 80 basis  points  over the
eight-year  Treasury.  CRLP  used the net  proceeds  to repay a  portion  of the
outstanding balance on its unsecured line of credit.

      On September 26, 1997,  CRLP  completed a $25 million  public  offering of
unsecured  medium term notes.  The  securities,  which mature in September 2005,
bear a coupon rate of 6.98%,  which  equated to a spread of 85 basis points over
the  eight-year  Treasury.  CRLP used the net proceeds to repay a portion of the
outstanding balance on its unsecured line of credit.

      On  November  6, 1997,  the  Company  completed  a public  offering of 5.0
million shares of its Series A Cumulative  Redeemable Preferred Shares at $25.00
per share. The net proceeds to the Company, after the underwriter's discount and
minimal offering expenses,  were approximately  $121.0 million. The net proceeds
of the  offering  were  contributed  to CRLP.  CRLP used the net proceeds of the
offering to repay a portion of the outstanding  balance on its unsecured line of
credit.  The  offering's  underwriters  have a  30-day  option  to  purchase  an
additional 750,000 preferred shares to cover over allotments.

Note 5 -- Distribution
      On October 23, 1997, a cash  distribution was declared to partners of CRLP
in the amount of $0.52 per unit,  totaling $15.5 million.  The  distribution was
made to partners of record as of November 3, 1997,  and was paid on November 10,
1997.



                                     Page 8
<PAGE>


REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors
Colonial Properties Holding Company, Inc.:

We have  reviewed  the  accompanying  consolidated  condensed  balance  sheet of
Colonial  Realty Limited  Partnership  (the  "Partnership")  as of September 30,
1997,  and the  related  consolidated  condensed  statements  of income  for the
three-month  and nine-month  periods ended  September 30, 1997 and 1996, and the
consolidated condensed statements of cash flows for the nine-month periods ended
September 30, 1997 and 1996. These financial  statements are the  responsibility
of the Partnership's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the accompanying condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the  consolidated  balance  sheet as of December 31,  1996,  and the
related consolidated statements of operations, partners' capital, and cash flows
for the year then ended (not presented herein);  and in our report dated January
24, 1997, we expressed an unqualified  opinion on those  consolidated  financial
statements.  In our  opinion,  the  information  set  forth in the  accompanying
consolidated  condensed  balance sheet as of December 31, 1996, is fairly stated
in all  material  respects in relation to the  consolidated  balance  sheet from
which it has been derived.



                                               /s/ Coopers & Lybrand L.L.P.
                            COOPERS & LYBRAND L.L.P.

Birmingham, Alabama
October 20, 1997


                                     Page 9
<PAGE>

                     COLONIAL REALTY LIMITED PARTNERSHIP


Item 2.     Management's  Discussion  and Analysis of Financial  Condition and
            Results of Operations


General
      The following  discussion  should be read in conjunction with management's
discussion and analysis of financial condition and results of operations and all
of  the  other  information   appearing  in  the  Partnership's  1996  Financial
Statements as filed with the Securities and Exchange Commission on Form 10-K and
with the financial statements included therein and the notes thereto.

Results of Operations -- Three Months Ended  September 30, 1997 and 1996 Revenue
      -- Total revenue increased by $12,647,000, or 36.6%, for the
third  quarter  of 1997 when  compared  to the third  quarter  of 1996.  Of this
increase,  $11,021,000  represents  revenues generated by properties acquired or
developed  during  1996 and  1997.  The  $1,626,000  remainder  of the  increase
primarily represents an increase in rents charged to tenants.

      Operating Expenses -- Total operating expenses increased by $7,028,000, or
38.1%, for the third quarter of 1997 when compared to the third quarter of 1996.
Of this increase,  $5,439,000  represents  operating  expenses of the properties
acquired or developed  during 1996 and 1997.  Operating  expenses also increased
$232,000 due to the accrual of additional  salaries in 1997 and the amortization
of additional  deferred  compensation on restricted shares. The remainder of the
increase  in  operating  expenses  is due to an overall  increase  in  corporate
overhead and personnel costs.

      Other Income and Expense -- Interest expense  increased by $4,551,000,  or
71.3%, for the third quarter of 1997 when compared to the third quarter of 1996.
Interest expense increased  $4,467,000 due to the increase in indebtedness which
was  incurred  to  finance   acquisition  and  development   activity,   net  of
indebtedness  which  was  repaid  through a portion  of the  proceeds  of CRLP's
issuance  of  limited  partnership  units in January  and July 1997,  and net of
interest expense of two properties  exchanged in two of the acquisitions in 1997
in which the  purchasers  assumed the existing  mortgages  on those  properties.
Interest expense  decreased by $295,000 due to the  capitalization of $1,466,000
in  interest  on  construction  expenditures  during  the third  quarter of 1997
compared to $1,171,000 capitalized during the third quarter of 1996.

Results of Operations  -- Nine Months Ended  September 30, 1997 and 1996 Revenue
      -- Total revenue increased by $33,209,000, or 34.5%, for the
nine months  ended  September  30, 1997 when  compared to the nine months  ended
September 30, 1996. Of this increase,  $28,028,000 represents revenues generated
by  properties  acquired  or  developed  during  1996 and 1997.  The  $5,181,000
remainder of the increase in revenues  when  comparing  the first nine months of
1997 to the first nine months of 1996 primarily  represents an increase in rents
charged to tenants.

                                    Page 10
<PAGE>

      Operating  Expenses -- Total operating  expenses increased by $17,426,000,
or 33.9%, for the nine months ended September 30, 1997 when compared to the nine
months  ended  September  30, 1996.  Of this  increase,  $13,672,000  represents
operating expenses of the properties acquired or developed during 1996 and 1997.
Operating  expenses  also  increased by $480,000 due to the  resolution of prior
reserves for certain  state tax  contingencies  in the amount of $750,000 in the
first nine  months of 1996 and only  $270,000  in the first nine months of 1997.
Operating  expenses  also  increased  $238,000 due to the accrual of  additional
salaries in 1997 and the  recognition  of additional  deferred  compensation  on
restricted shares. The remainder of the increase in operating expenses is due to
an overall increase in corporate overhead and personnel costs.

      Other Income and Expense -- Interest expense increased by $12,182,000,  or
73.3%,  for the nine months ended  September  30, 1997 when compared to the nine
months ended September 30, 1996.  Interest expense increased  $13,889,000 due to
the  increase in  indebtedness  which was  incurred to finance  acquisition  and
development activity,  net of indebtedness which was repaid through a portion of
the proceeds of CRLP's issuance of limited partnership units in January and July
1997,  and net of interest  expense of two  properties  exchanged  in two of the
acquisitions in 1997 in which the purchasers  assumed the existing  mortgages on
those   properties.   Interest  expense  decreased  by  $1,282,000  due  to  the
capitalization of $3,871,000 in interest on construction expenditures during the
first nine months of 1997  compared to $2,589,000  capitalized  during the first
nine months of 1996.

Liquidity and Capital Resources
      As of September 30, 1997,  CRLP had one bank line of credit with a balance
outstanding of $70.0 million.  The line of credit provides for total  borrowings
of up to $200  million.  The line,  which is used by CRLP  primarily  to finance
property acquisitions and development,  bears interest at a rate ranging between
LIBOR plus 100 to LIBOR plus 150 basis points and expires in July 1998.

      On July  25,  1997,  CRLP  completed  a $75  million  public  offering  of
unsecured  medium  term  notes.  The  securities  mature in July 2004 and bear a
coupon  rate of 6.96%.  CRLP used the net  proceeds  of the  offering to repay a
portion of the outstanding balance on its unsecured line of credit.

      On July 30, 1997, the Colonial Properties Trust (the "Company")  completed
an offering of 1.7 million  shares of its common  shares at $30.9375  per share.
The net proceeds to the Company,  after the  underwriter's  discount and minimal
offering  expenses,  were approximately  $49.7 million.  The net proceeds of the
offering were contributed to CRLP. CRLP used the net proceeds of the offering to
repay a portion of the outstanding balance on its unsecured line of credit.

      On August 6,  1997,  CRLP  completed  a $25  million  public  offering  of
unsecured  medium term notes.  The  securities  mature in August 2005 and bear a
coupon  rate of 6.96%.  CRLP  used the net  proceeds  to repay a portion  of the
outstanding balance on its unsecured line of credit.

      On September 26, 1997,  CRLP  completed a $25 million  public  offering of
unsecured medium term notes. The securities  mature in September 2005 and bear a
coupon  rate of 6.98%.  CRLP  used the net  proceeds  to repay a portion  of the
outstanding balance on its unsecured line of credit.

      On  November  6, 1997,  the  Company  completed  a public  offering of 5.0
million shares of its Series A Cumulative  Redeemable Preferred Shares at $25.00
per share. The net proceeds to the Company, after the underwriter's discount and
minimal offering expenses,  were approximately  $121.0 million. The net proceeds
of the  offering  were  contributed  to CRLP.  CRLP used the net proceeds of the
offering to repay a portion of the outstanding  balance on its unsecured line of
credit.  The  offering's  underwriters  have a  30-day  option  to  purchase  an
additional 750,000 preferred shares to cover over allotments.

                                    Page 11
<PAGE>

      Management intends to replace  significant  borrowings that may accumulate
under the bank line of credit with funds  generated  from the sale of additional
limited  partnership  units to  Colonial  Properties  Holding  Company,  Inc. in
connection with public offerings of securities by the Company,  and/or permanent
financing, as market conditions permit. Management believes that these potential
sources of funds,  along with the  possibility  of issuing  limited  partnership
units in exchange  for  properties,  will provide CRLP with the means to finance
additional  acquisitions.  Management  anticipates that its net cash provided by
operations and its existing cash balances will provide the necessary  funds on a
short- and long-term basis to cover its operating expenses,  interest expense on
outstanding  indebtedness,  recurring  capital  expenditures,  distributions  to
unitholders,  and dividends to shareholders in accordance with Internal  Revenue
Code requirements applicable to real estate investment trusts.



                                    Page 12
<PAGE>

                       COLONIAL PROPERTIES TRUST
                      PART II -- OTHER INFORMATION



Item 2.  Changes in Securities.

      The Company from time to time issues common shares of beneficial  interest
("Common Shares") pursuant to its Dividend Reinvestment and Share Purchase Plan,
its Non-Employee Trustee Share Option Plan, its Non-Employee Trustee Share Plan,
its Employee  Share Option and  Restricted  Share Plan,  and its Employee  Share
Purchase Plan, in transactions  that are registered  under the Securities Act of
1933,  as amended (the "Act").  Pursuant to CRLP's  Second  Amended and Restated
Agreement of Limited  Partnership,  each time the Company  issues  Common Shares
pursuant to the  foregoing  plans,  CRLP issues to Colonial  Properties  Holding
Company, Inc., its general partner, an equal number of limited partnership units
("Units")  for the  same  price  at  which  the  Common  Shares  were  sold,  in
transactions  that are not registered  under the Act in reliance on Section 4(2)
of the Act.  During the quarter  ended  September  30, 1997,  CRLP issued 24,226
Units in such transactions for an aggregate of $0.7 million.

      On  July  1,  1997,  CRLP  issued  27,275  Units  to  Colonial  Commercial
Investments,  Inc. in  exchange  for its  interests  in a  multifamily  property
acquired by CRLP (see Note 2 to the Notes to  Consolidated  Condensed  Financial
Statements).  The Units were valued at an  aggregate of $.8 million for purposes
of the transaction.

     On July 1, 1997,  CRLP issued 35,522 Units to Brent J. Mitchell,  Robert M.
Weber, Richard C. Mitchell,  Melinda M. Wertheim,  Joy M. Grodnick,  and Lisa M.
Bukstein in exchange for their interests in a multifamily  property  acquired by
CRLP (see Note 2 to the Notes to Consolidated  Condensed Financial  Statements).
The Units were  valued at an  aggregate  of $1.0  million  for  purposes  of the
transaction.

      On July 31,  1997,  CRLP  issued  534,832  and 5,403  Units to  William M.
Johnson and Phyllis B. Johnson, respectively, in exchange for their interests in
an office  property  acquired  by CRLP (see Note 2 to the Notes to  Consolidated
Condensed Financial Statements).  The Units were valued at an aggregate of $15.7
million for purposes of the transaction.

      On August 20, 1997,  CRLP issued 5,411 and 5,411 Units to Thomas H. Lowder
and  James  K.  Lowder,  respectively,   in  exchange  for  their  interests  in
undeveloped  land acquired by CRLP. The Units were valued at an aggregate of $.3
million for purposes of the transaction.


                                    Page 13
<PAGE>



Item 6.     Exhibits and Reports on Form 8-K.

      (a)  Exhibits

              12.
              Ratio of Earnings to Fixed Charges

             15.
             Letter re:  Unaudited Interim Financial Information

      (b)  Reports on Form 8-K

          The  following  reports on Form 8-K have been filed during the quarter
          ended September 30, 1997:

               Form  8-K  dated  July  21,  1997,   reported   certain  property
          acquisitions  during  1997 up to July 21,  1997,  under Item 5, "Other
          Events."

               Form 8-K dated  September  17, 1997,  reported  certain  property
          acquisitions  during  1997 since July 21,  1997,  under Item 5, "Other
          Events."





                                    Page 14
<PAGE>


                               SIGNATURES


      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  amendment  to be signed on its behalf by the
undersigned hereunto duly authorized.


                                         COLONIAL PROPERTIES TRUST




Date:  November 11, 1997                 /s/ Howard B. Nelson, Jr.
                                         Howard B. Nelson, Jr.
                                         Chief Financial Officer
                                         (Duly Authorized Officer
                                         and Principal Financial Officer)



Date:  November 11, 1997                 /s/ Kenneth E. Howell
                                         Kenneth E. Howell
                                         Vice President, Controller,
                                         and Assistant Secretary
                                         (Principal Accounting Officer)













                                    Page 15
<PAGE>


                     COLONIAL REALTY LIMITED PARTNERSHIP
               EXHIBIT 12 - Ratio of Earnings to Fixed Charges



      CRLP's  ratio of earnings  to fixed  charges  for the three  months  ended
September 30, 1997 and 1996,  was 1.88 and 2.32,  respectively.  CRLP's ratio of
earnings to fixed charges for the nine months ended September 30, 1997 and 1996,
was 1.97 and 2.45, respectively.

      The ratios of earnings to fixed charges were computed by dividing earnings
by fixed  charges.  For this purpose,  earnings  consist of income (loss) before
gains from sales of property and extraordinary  items plus fixed charges.  Fixed
charges consist of interest expense  (including  interest costs capitalized) and
the amortization of debt issuance costs.




                                    Page 16
<PAGE>



Securities and Exchange Commission
450 Fifth Street, N. W.
Washington, D. C. 20549



                                        Re: Colonial Realty Limited Partnership
                                           (File No. 0-20707)
                                            Registration on Form S-3


We are aware that our report  dated  October  20,  1997 on our review of interim
financial information of Colonial Realty Limited Partnership as of September 30,
1997 and for the three-month and nine-month periods ended September 30, 1997 and
1996 and  included in the  Partnership's  quarterly  report on Form 10-Q for the
quarters then ended, is incorporated by reference in the registration  statement
on Form S-3  related  to the  Shelf  Registration  filed on  October  25,  1996.
Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not
be considered a part of the registration  statement  prepared or certified by us
within the meaning of Sections 7 and 11 of that Act.




                                               /s/ Coopers & Lybrand L.L.P.
                                                  COOPERS & LYBRAND L.L.P.

Birmingham, Alabama
November 11, 1997






                                    Page 17