SECURITIES AND EXCHANGE  COMMISSIONWashington, D.C.
20549

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FORM 10-K

[ X]
      ANNUAL
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
 SECURITIES EXCHANGE ACT OF
        1934For the Fiscal Year Ended December
        31,
        2001[   ]
      TRANSITION REPORT PURSUANT
        TO SECTION 13 OR 15 (d) OF THE 
 SECURITIES EXCHANGE ACT OF 1934


Commission File Number: 000-22683

GABLES REALTY LIMITED PARTNERSHIP(Exact name of Registrant as
specified in its charter)

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|Delaware(State or other jurisdiction
      of incorporation or
      organization) |                 | 58-2077966(I.R.S. employer identification no.)
|---------------------------------------------------------------------------------- | --------------- | ----------------------------------------------
|                                                                                  
|2859 Paces Ferry Road,
      Suite 1450
      Atlanta, Georgia                    
|                                                                                   | 30339(Zip
Code)
|(Address of principal executive
      offices)                                     |                

Registrant's telephone number, including area code: 
(770) 436-4600

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Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to Section 12(g) of the Act: Common Units of Limited Partnership Interest
(Title of Class)

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.

(1) Yes [X]
      No [   ](2) Yes [X]
      No [   ]


Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.  XAs
of March 15, 2002, the aggregate market value of the 4,678,638 common units of
limited partnership ("Units") held by non-affiliates of the Registrant was
$143,400,255 based upon the closing price of $30.65 on the New York Stock
Exchange composite tape on such date of the common shares of beneficial
interest, par value $.01 per share, of Gables Residential Trust (the
"Trust"), a Maryland real estate investment trust and the 100% owner of
Gables GP, Inc., the sole general partner of the Registrant into which Units are
redeemable under certain circumstances at the election of the Trust. 
(For this computation, the Registrant has excluded the market value of
all Units reported as beneficially owned by the Trust and by executive officers
and directors of the Registrant; such exclusion shall not be deemed to
constitute an admission that any such person is an "affiliate" of the
Registrant.)

DOCUMENTS INCORPORATED BY REFERENCE

Information contained in
Gables Residential Trust's Proxy Statement relating to its Annual Meeting of Shareholders to be held May 24,
2002 is incorporated by reference in Part III, Items 10, 11, 12 and 13. 
FORM 10-K ANNUAL REPORTFISCAL YEAR ENDED DECEMBER 31,
2001TABLE OF CONTENTS

|ItemNo. |  |                                                                                             | PageNo.
|------- |  | ------------------------------------------------------------------------------------------- | -------
|PART I  | 
|        | 
|1.      |  | Business                                                                                    | 3      
|2.      |  | Properties                                                                                  | 16     
|3.      |  | Legal Proceedings                                                                           | 20     
|4.      |  | Submission of Matters to a Vote of
      Security Holders                                   | 20     
|        | 
|        | 
|PARTII  | 
|        |  |                                                                                             |        
|        |  |                                                                                             |        
|5.      |  | Market for Registrant's Common
      Equity and Related Shareholder Matters                 | 21     
|6.      |  | Selected Financial and Operating
      Information                                          | 21     
|7.      |  | Management's Discussion and
      Analysis of Financial Condition and Results of Operations | 24     
|7A.     |  | Quantitative and Qualitative
      Disclosures About Market Risk                            | 40     
|8.      |  | Financial Statements and
      Supplementary Data                                           | 41     
|9.      |  | Changes in and Disagreements with
      Accountants on Accounting and Financial Disclosure  | 41     
|        |  |                                                                                             |        
|        | 
|PARTIII | 
|        |  |                                                                                             |        
|        |  |                                                                                             |        
|10.     |  | Directors and Executive Officers of
      the Registrant                                    | 41     
|11.     |  | Executive Compensation                                                                      | 41     
|12.     |  | Security Ownership of Certain
      Beneficial Owners and Management                        | 41     
|13.     |  | Certain Relationships and Related
      Transactions                                        | 41     
|        |  |                                                                                             |        
|        | 
|PARTIV  | 
|        |  |                                                                                             |        
|        |  |                                                                                             |        
|14.     |  | Exhibits, Financial Statements and
      Schedule and Reports on Form 8-K                   | 41     

PART I

ITEM 1.  BUSINESS

Introduction

       
         Gables Realty Limited Partnership (the "Operating
  Partnership") is the entity through which Gables Residential Trust (the
  "Trust"), a real estate investment trust (a "REIT"), conducts
  substantially all of its business and owns, either directly or indirectly
  through subsidiaries, substantially all of its assets. 
  In 1993, the Trust was formed under Maryland law and the Operating
  Partnership was organized as a Delaware limited partnership to continue and
  expand the multifamily apartment community management, development,
  construction, acquisition and disposition operations of its privately owned
  predecessor organization.  The
  Trust completed its initial public offering on January 26, 1994 (the
  "IPO") and its common shares are listed on the NYSE under the symbol GBP. 
         At December 31, 2001, the Trust
  was an 80.0% economic owner of the common equity of the Operating Partnership. 
  The Trust controls the Operating Partnership through Gables GP, Inc.
  ("Gables GP"), a wholly-owned subsidiary and the sole general partner of
  the Operating Partnership.  This
  structure is commonly referred to as an umbrella partnership REIT or UPREIT. 
  The board of directors of Gables GP, the members of which are the same
  as the members of the board of trustees of the Trust, manages the affairs of
  the Operating Partnership by directing the affairs of Gables GP. 
  The Trust's limited partner and indirect general partner interests in
  the Operating Partnership entitle it to share in cash distributions from, and
  in the profits and losses of, the Operating Partnership in proportion to its
  ownership interest therein and entitles the Trust to vote on all matters
  requiring a vote of the limited partners.
  
   
  
         Generally, the other limited partners of the
  Operating Partnership are persons who contributed their direct or indirect
interests in certain real estate assets to the Operating Partnership primarily in
  connection with the IPO and the acquisition of Trammell Crow Residential South
Florida. The Operating
  Partnership is obligated to redeem each common unit of limited partnership
interest ("Unit") held by a person other than the Trust, at the request of
  the holder, for an amount equal to the fair market value of a common share at
  the time of such redemption, provided that the Trust, at its option, may elect
  to acquire any such Unit presented for redemption for one common share or
  cash.  With each redemption, the
  Trust's percentage ownership interest in the Operating Partnership will
increase.  In addition, whenever
  the Trust issues common shares or preferred shares, it is obligated to
  contribute any net proceeds to the Operating Partnership and the Operating
  Partnership is obligated to issue an equivalent number of common or preferred
  units, as applicable, to the Trust.
         The Operating Partnership may issue
  additional Units to acquire land parcels for the development of apartment
  communities or operating apartment communities in transactions that in certain
  circumstances defer some or all of the seller's tax consequences.  The Operating Partnership believes that many potential
  sellers of multifamily residential properties have a low tax basis in their
  properties and would be more willing to sell the properties in transactions
  that defer federal income taxes.  Offering
  Units instead of cash for properties may provide potential sellers partial
  federal income tax deferral.
      Unless the context otherwise
  requires, all references to "we," "our" or "us" in this report
  refer collectively to the Trust and the Operating Partnership.
  Business Objectives and Strategy

We are one of the
  largest owners, operators and developers of multifamily apartment communities
  in demand-driven markets that have high job growth and have shown resiliency
  to national economic downturns in the United States.  Our objective is to increase shareholder
value by producing consistent, high quality earnings that result in dividend
growth and annual total returns which exceed the multifamily sector average. To
achieve this objective, we employ a number of business strategies which are
outlined below:
Investment Strategy. Our
long-term investment strategy is research-driven and aimed at achieving
sustainable growth in operating cash flow while reducing exposure to inherent
volatility associated with real estate supply/demand dynamics. We believe the
success of a real estate investment is predicated on three basic factors:
(1) macro-market fundamentals, (2) specific sub-market dynamics, and
(3) product decisions.
Our objective is to have a portfolio of
assets in approximately six to eight strategically selected markets that are
complementary through economic diversity and characterized by high job growth
and resiliency to national economic downturns. We believe such a portfolio will
provide predictable growth in operating cash flow on a sustainable basis.
Real estate is a cyclical business and,
as a long-term owner and operator of apartment communities, we believe it is
important to evaluate performance potential throughout various economic cycles.
It is also our belief that job creation and household formation are key
components of demand for apartment communities. Research has shown that certain
markets in the United States create more jobs and are more resilient to national
economic downturns than others. In addition, the industrial job base of various
markets can provide economic diversity through portfolio allocation that, in
turn, can reduce volatility in performance. These factors, along with other
macro-demographic characteristics, have led us to identify markets in which to
make real estate investments.
We believe that within a macro-market
environment, apartment communities located in different sub-markets can have
different economic performance, and that specific sub-market locations are an
important factor in determining the potential economic success of an investment.
Factors that differentiate specific sub-markets within a macro-market include,
among other items, proximity to employment centers, entertainment and shopping,
quality of education systems, availability of land that could be used to
introduce new apartment communities, and the local entitlement process. It is
our belief that apartment communities located in close proximity to these areas
and areas with high barriers to entry through lack of available land and/or
difficult entitlement processes should produce economic performance that exceeds
that of apartment communities in locations without those characteristics. We
generally refer to our desired locations as "in-fill" or "master-planned
community" locations versus suburban locations that lack many of these
differentiating characteristics. A key component used to identify
in-fill/master-planned communities is the average cost per square foot for
single family housing. We believe the single family housing market is very
efficient in pricing the quality of housing and the proximity of neighborhoods
to employment centers, entertainment, shopping, and quality education systems. By identifying these highly desirable sub-markets where
people are spending the most on a per square foot basis to live, and targeting
them for investment, we believe we can achieve above-average economic
performance from our apartment communities.
The third component of our investment
strategy is product specific. Our target customer is the affluent
renter-by-choice who desires a high quality apartment community in which to
live. We perform extensive market research, both internal and external, in an
effort to design apartment communities that meet the current and future desires
of our target customers. In addition, we invest for the long term by acquiring
and developing apartment communities with high quality construction materials
and amenities. We believe that long-term maintenance and capital expenditure
requirements are reduced by investing additional capital up front in apartment
communities built with quality construction materials. The timeless design and
high quality of the product targeted to the affluent renter-by-choice also gives
us a competitive advantage over many other apartment owners through our ability
to sell assets to condominium converters at prices in excess of apartment
valuations. We have received numerous local and national awards and recognition
for the quality of our apartment communities.

In order to execute our investment
strategy, we believe it is important to maintain a strong local presence in each
of our markets. Through our local expertise, we stay abreast of current market
conditions and can proactively adjust tactics in anticipation of changes in
market fundamentals. In addition, we believe we have a competitive advantage
over many other apartment community owners through the vertical integration of
our organization. We have expertise in all facets of apartment community
investment, including the disciplines of construction, development, acquisition
and disposition. Since 1982, we have been involved in the development,
acquisition and disposition of approximately 34,000, 20,000 and 27,000 apartment
homes, respectively.

Operating Strategy. We adhere
to a strategy of owning and operating high quality, class AA/A apartment
communities under the Gables brand. We believe that such communities, when
located in highly desirable areas to live and supplemented with high quality
service and amenities, attract the affluent renter-by-choice who is willing to
pay a premium for location preference, superior service and high quality
communities. The resulting portfolio should maintain high levels of occupancy
and rental rates. This, coupled with more predictable operating expenses and
reduced capital expenditure requirements associated with high quality
construction materials, should lead to operating margins that exceed national
averages for the multifamily sector and sustainable growth in operating cash
flow.

We are continuing to pursue a
long-standing strategy of brand name development by linking the "Gables" name to
our communities. This strategy is intended to reinforce our reputation for
excellent service and build recognition of our multifamily communities as a high
quality, recognizable brand. We believe that increased consumer recognition of
the "Gables" brand name in each of our markets enhances our ability to attract
new residents, increases the markets' perception of our communities as high
quality residential developments, and enhances our relationships with local
authorities.

We operate our communities to maximize
sustainable cash flow growth and create long-term value. This is achieved by
proactive marketing and leasing of apartment homes, providing the best possible
resident service, generating economies of scale to lower expenses, and
maintaining the communities to the highest standards. We believe that
excellent
service and branding thereof will distinguish us from our competitors, retain
current residents and attract new prospects.

We employ a number of operating
strategies based on market fundamentals and prediction models in order to
maximize the sustainability of growth in operating cash flow. Financial and
marketing information is collected and distributed through local and wide-area
networks from on-site computer systems at all of our communities, and
effectively summarizes operating and marketing data critical for making accurate
daily decisions. The system also compiles demographic profile information on
prospective and current residents, allowing us to effectively target our
customer base through our branding efforts. We also utilize the Internet
extensively as a marketing tool to attract new customers through our
award-winning web site at www.gables.com. Capturing and analyzing macro-market
and sub-market data through our sophisticated operating systems allows us to
perform analyses via our proprietary prediction models. As a result of these
analyses, we may choose an operating strategy for a particular market aimed at
maximizing rental rate growth while increasing short-term vacancy exposure. In
other scenarios, a focus on maximizing occupancy at the expense of rental rate
growth may deliver the best operating cash flow growth. We may also utilize
different operating strategies for assets that are targeted for disposition in
order to maximize the sales price based on current market underwriting conditions. These and other operating strategies are
employed to maximize sustainable cash flow growth and create long-term value for
shareholders.

Human Resources Strategy.Our
aim is to be the employer of choice within the industry, with a mission of 
Taking Care of the Way People Live.A cornerstone of our strategy
involves innovative human resource practices that we believe will attract and
retain the highest caliber associates. Because of our long-established presence
as a fully integrated apartment management, development, construction,
acquisition and disposition company within our markets, we have the ability to
offer multi-faceted career opportunities among the various disciplines within
the industry. Approximately 10% of our associates have tenure in excess of
10 years. Average tenure for executive officers, vice presidents and
regional managers, and property managers is over thirteen years, ten years and
four years, respectively. We believe the experience, expertise and depth of our
bench strength is a competitive advantage.

We believe our success with human
resource strategies is primarily due to our empowerment of associates and our
career development and training. By empowering associates to make decisions at a
local level where the point of service occurs, we increase customer and
associate satisfaction. We operate each of our apartment communities as a
business unit. Property managers and staff are responsible for achieving
specific economic goals associated with revenues, occupancy and expenses, in
addition to maintaining assets to a high standard in order to ensure long-term
success potential. Empowering associates with responsibility and encouraging
decision making requires hiring the highest caliber associate and allocating
extensive resources to training and career development.

We are committed to training at all
levels within the organization, from newly hired associates to the board of
trustees. This commitment is aimed at ensuring the competitive advantage
inherent in the expertise of our associates and deep bench strength, which
facilitates succession planning at all levels. Our service-oriented philosophy
is branded and reinforced through our college of career development, Gables
University. This comprehensive training system for our employees is overseen by
full-time training coordinators and offers classes in a variety of different
schools, such as the School of Leasing, School of People Resources and School of
Maintenance Development. Additionally, there are "degree" programs which are
completed with graduation ceremonies. Service is also reinforced with quarterly 
"I Made a Difference" recognition ceremonies, where personal achievement by
associates is acknowledged by senior management in each of the markets where we
operate. We believe recognition programs reinforce our culture and branding
philosophy.

A key component to achieving our
objectives is the alignment of interests between associates and shareholders.
Ownership of stock options and shares is held at all levels within our company
and includes property and maintenance managers as well as members of the board
of trustees. Approximately 460 of our associates have equity ownership in
Gables, and therefore have their interests aligned with all other shareholders.

Capital Strategy.Our
objective is to maximize return on invested capital. By doing so, we believe we
will achieve growth in earnings per share and net asset value per share. An
integral part of our capital strategy involves maintaining financial flexibility
via a conservative balance sheet that is investment grade. We have investment
grade, senior unsecured debt ratings from Moody's Investors Service and Standard
and Poor's of Baa2 and BBB, respectively. Our preferred shares are also
investment grade rated by those firms at baa3 and BBB-, respectively. We believe
our conservative credit profile provides security for shareholders and is a
competitive advantage over companies without the financial flexibility
associated with investment grade balance sheets.

Our attention to return on invested
capital manifests itself through a very focused approach to managing our capital
structure. We are able to recycle existing capital through asset dispositions,
which allows us to re-deploy capital into investments with higher return
potential. In certain situations, we may also capitalize on the arbitrage that
exists between the private market valuation of our assets and a discounted
public market valuation of our common shares by selling assets and repurchasing
stock. We have access to capital through a variety of sources, including common
equity, preferred equity and private equity via direct investment, in addition
to internally generated equity through asset dispositions and retained cash
flow.

Ancillary Business
Strategy.We are involved in ancillary businesses related to our core
competencies. These business lines include third-party property
management, furnished corporate apartments, development and construction
services, and asset disposition brokerage services. Our expertise in these areas
stems from our core competencies. In addition, we are innovative in identifying
and capitalizing on new services to our resident customers that provide for
increases in earnings and high returns on invested capital. Regular feedback
from resident customers and our clients provides avenues for enhanced service
and earnings potential.

As of December 31,
2001, we managed 79 multifamily communities for third parties, comprising approximately
22,937
apartment homes. These fee management contracts are maintained with a total of
approximately 50 owners. In addition to contributing to earnings, engaging in fee management
allows us to create economies of scale by leveraging our management operations
costs and providing access to development and acquisition opportunities, as well
as providing additional market knowledge.

2001 Significant Events.During 2001, we entered the Washington, D.C. apartment market.  Our
research identified Washington, D.C. as a market that would complement economic
growth dynamics in other Gables' markets, while reducing portfolio
volatility.  Our entry included the hiring of a local investment vice
president and the purchase of a management company.  These moves gave us
immediate market knowledge and the critical mass of apartment homes so important
for operating efficiencies.  Our first acquisition, Gables Dupont Circle, has performed
better than forecast.  We expect to grow our presence in Washington, D.C.
selectively and carefully.

During 2001, we continued our disposition
and acquisition efforts aimed at strategically repositioning our portfolio for
optimal performance.  We disposed of $94 million of operating real
estate assets and acquired $117 million of operating real estate assets.
We also contributed our interests in certain land and development rights to a
joint venture in which our economic ownership interest is 20%.  The
business purpose of the venture is to develop, own and operate four multifamily
apartment communities comprising 1,077 apartment homes, located in three of our
four markets.  We serve as the managing member of the venture and have
responsibility for all day-to-day operating matters.  We also serve as the
property manager, developer and general contractor for construction
activities.  The capital budget for the development of the four communities is
$109 million which is expected to be funded with equity of $47 million and debt
of $62 million.  The equity component is being funded 80% by our venture partner and 20% by
us.  Our portion of the equity will be funded through contributions of cash
and property.  As of December 31, 2001, we had funded $7.7 million of our
budgeted $9.4 million equity commitment to the joint venture.

Apartment Portfolio.As of December 31, 2001, we owned 75 stabilized multifamily apartment communities
comprising 21,085 apartment homes, an indirect 25% interest in one stabilized
apartment community comprising 345 apartment homes, an indirect 20% interest
in four stabilized apartment communities comprising 1,359 apartment homes, and
an indirect 8.3% interest in three stabilized apartment communities comprising
1,118 apartment homes. We also owned seven multifamily apartment communities
under development or in lease-up at December 31, 2001 that are expected to
comprise 1,586 apartment homes upon completion and an indirect 20% interest in
five apartment communities under development or in lease-up at
December 31, 2001 that are expected to comprise 1,367 apartment homes upon
completion. In addition, as of December 31, 2001, we owned parcels of land
on which we intend to develop two apartment communities that we currently
expect will comprise an estimated 761 apartment homes. We also have rights to
acquire additional parcels of land on which we believe we could develop
communities. Any future development is subject to permits and other governmental
approvals, as well as our ongoing business review, and may not be undertaken or
completed.

Our apartment communities generate rental
revenue and other income through the leasing of apartment homes to a diverse
base of residents. We evaluate the performance of each of our apartment
communities on an individual basis. However, because each of our apartment
communities has similar economic characteristics, residents, and products and
services, they have been aggregated into one reportable segment which comprises
96%, 95%, and 95% of our total revenues for the years ended December 31,
2001, 2000, and 1999, respectively.

Management Structure.We have
been responsible for the development or acquisition of approximately 54,000
apartment homes since 1982 and our senior management team has, on average, in
excess of 13 years experience in the multifamily industry. We provide a
full range of integrated real estate services through a staff of approximately
1,210 employees who have expertise in property operations, development,
acquisition, disposition and construction. We maintain offices in Atlanta, Boca
Raton, Houston, Dallas and Washington, D.C., each with its own fully integrated organization,
including experienced in-house management, development, acquisition, and
disposition staffs with specific knowledge of the particular markets served. We
believe that our competitive strength and growth potential lie in our in-depth
knowledge of the changing opportunities available in each local market and in
our locally focused management structure, which enables highly experienced
development, acquisition, and disposition personnel to pursue opportunities in
each market and highly experienced on-site managers to make the day-to-day
decisions needed to maximize the performance of our existing properties. Our
finance, accounting and administrative functions are controlled by a central
staff located in Atlanta.

Competitive Advantages.We
believe that we have several competitive advantages.  These advantages include:

| |  | A fully integrated organization: a fully integrated
      organization with a track record of approximately 19 years in all
      phases of real estate property management, development, acquisition,
      disposition, construction, rehabilitation, financing and marketing.                                             
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Product focus: a portfolio concentration of
      Class AA/A apartment communities that are targeted toward the
      affluent renter-by-choice, are located primarily in in-fill locations and
      master-planned communities, and include garden, townhome and higher
      density apartment communities.               
|
| |  | Local presence in multiple markets: an established local
      presence in each of our markets, which we serve through an experienced
      staff with superior knowledge of local markets and a culture which
      provides incentives for outstanding performance at all levels.                                          
|
| |  | Strategic portfolio diversification: an established market
      presence in strategically selected major markets that are geographically
      independent, rely on diverse economic foundations, and have shown job
      growth substantially above national averages and resiliency to national
      economic downturns.
|
| |  | Brand recognition:a service-oriented philosophy which
      focuses on offering extensive resident amenities and services in high
      quality apartment homes to increase occupancy, rental rates and net
      operating income.                                                                                          

The Management Company

Our fee management operations are
conducted through Gables Residential Services, Inc., a wholly-owned subsidiary of the
Operating Partnership. Gables Residential Services also provides other services
to third parties, including construction, brokerage and corporate rental
housing. A portion of these services are, or may also be, provided by the
Operating Partnership directly, to the extent consistent with the gross income
requirements for REITs under the Internal Revenue Code (the
"Code").

Competition

All of our communities are located in
developed areas that include other apartment communities. The number of
competitive multifamily communities in a particular area could have a material
effect on our ability to lease apartment homes at our present communities or any
newly developed or acquired community, as well as on the rents charged. We may
be competing for development and acquisition opportunities with others that have
greater resources than we do, including other REITs. In addition, our
communities must compete for residents against new and existing homes and
condominiums. The home affordability index in all of our markets is above the
national average. This competitive environment is partially offset by the
propensity to rent for households in our markets which in all cases exceeds the
national average.

The fee management business is highly
competitive, and we face competition from a variety of local, regional and
national firms. We compete against these firms by stressing the quality and
experience of our employees, the services provided by us, and the market
presence and experience we have developed over the past 19 years. We may
nevertheless lose some of our third party management business, particularly when
such properties are sold.
Environmental Matters

Under various federal, state and local
environmental laws, ordinances and regulations, a current or previous owner or
operator of real property may be required to investigate and clean up hazardous
or toxic substances or petroleum product releases at such property, and may be
held liable to a governmental entity or to third parties for property damage and
for investigation and clean-up costs incurred by such parties in connection with
the contamination. Such laws, ordinances and regulations typically impose
clean-up responsibility and liability without regard to whether the owner knew
of or caused the presence of the contaminants, and the liability under such laws
has been interpreted to be joint and several unless the harm is divisible and
there is a reasonable basis for allocation of responsibility. The cost of
investigation, remediation or removal of such substances may be substantial, and
the presence of such substances or the failure to properly remediate the
contamination on such property may adversely affect the owner's ability to sell
or rent such property or to borrow using such property as collateral. Persons
who arrange for the disposal or treatment of hazardous or toxic substances may
also be liable for the costs of removal or remediation of such substances at the
disposal or treatment facility, whether or not such facility is owned or
operated by such person. In addition, some environmental laws create a lien on
the contaminated site in favor of the government for damages and costs it incurs
in connection with the contamination. Finally, the owner or operator of a site
may be subject to common law claims by third parties based on damages and costs
resulting from environmental contamination emanating from a site. In connection
with the ownership, operation, management and development of our communities and
other real properties, we may be potentially liable for such damages and costs.

Certain federal, state and local laws,
ordinances and regulations govern the removal, encapsulation and disturbance of
asbestos-containing materials ("ACMs") when such materials are in poor condition
or in the event of construction, remodeling, renovation or demolition of a
building. Such laws, ordinances and regulations may impose liability for release
of ACMs and may provide for third parties to seek recovery from owners or
operators of real properties for personal injury associated with ACMs. In
connection with the ownership, operation, management and development of our
communities and other real properties, we may be potentially liable for such
costs.

In addition, recent studies have linked
radon, a naturally-occurring substance, to increased risks of lung cancer. While
there are currently no state or federal requirements regarding the monitoring
for, presence of, or exposure to radon in indoor air, the U.S. Environmental
Protection Agency and the Surgeon General recommend testing residences for the
presence of radon in indoor air, and the EPA further recommends that
concentrations of radon in indoor air be limited to less than 4 picocuries per
liter of air (the "Recommended Action Level").  The presence of radon in concentrations equal to or greater than the Recommended Action Level in a
community may adversely affect our ability to rent apartment homes in that
community and the market value of the community.

Finally, recently-enacted federal
legislation will eventually require owners and landlords of residential housing
constructed prior to 1978 to disclose to potential tenants or purchasers any
known lead-paint hazards and will impose treble damages for failure to so
notify. In addition, lead-based paint in any of our communities may result in
lead poisoning in children residing in that community if chips or particles of
such lead-based paint are ingested, and we may be held liable under state laws
for any such injuries caused by ingestion of lead-based paint by children living
at our communities.
      Our assessments of our communities have
not revealed any environmental liability that we believe would have a material
adverse effect on our business, assets or results of operations, nor are we
aware of any such material environmental liability. Nevertheless, it is possible
that our assessments do not reveal all environmental liabilities or that there
are material environmental liabilities of which we are unaware. Moreover, there
can be no assurance that (1) future laws, ordinances or regulations will
not impose any material environmental liability, or (2) the current
environmental condition of our communities will not be affected by tenants, the
condition of land or operations in the vicinity of the properties, such as the
presence of underground storage tanks, or the actions of third parties unrelated
to us.

We believe that no ACMs were used in
connection with the construction of our communities or will be used in
connection with future construction. Our environmental assessments have revealed
the presence of  "potentially friable" ACMs at two of our communities. We have
programs in place to maintain and monitor ACMs. We believe our communities are
in compliance in all material respects with all federal, state and local laws,
ordinances and regulations regarding hazardous or toxic substances or petroleum
products. We have not been notified by any governmental authority and are not
otherwise aware of any material non-compliance, liability or claim relating to
hazardous or toxic substances or petroleum products in connection with any of
our present properties that would involve substantial expenditure, and we do not
believe that compliance with applicable environmental laws or regulations will
have an adverse material effect on us, our financial condition or results of
operations.
Costs of Compliance with Americans with Disabilities Act and
Similar Laws

Under the Americans with Disabilities Act
of 1990 (the "ADA"), all places of public accommodation are required to meet
certain federal requirements related to access and use by disabled persons.
These requirements became effective in 1992. We believe that our communities are
substantially in compliance with present requirements of the ADA as they apply
to multifamily dwellings. A number of additional federal, state and local laws
exist which also may require modifications to our communities or regulate
certain further renovations with respect to access by disabled persons. For
example, the Fair Housing Amendments Act of 1988 (the "FHAA") requires apartment
communities first occupied after March 13, 1990 to be accessible to the
handicapped. Non-compliance with the FHAA could result in the imposition of
fines or an award of damages to private litigants. We believe that our
communities that are subject to the FHAA are substantially in compliance with
this law.

Additional legislation may impose further
burdens or restrictions on owners with respect to access by disabled persons.
The ultimate amount of the cost of compliance with the ADA or related
legislation is not currently ascertainable, and while these costs are not
expected to have a material effect on us, they could be substantial. Limitations
or restrictions on the completion of certain renovations may limit application
of our investment strategy in certain instances or reduce overall returns on our
investments.

Insurance

We carry comprehensive liability, fire,
extended coverage and rental loss insurance with respect to all of our completed
communities, with policy specifications, insured limits and deductibles
customarily carried for similar properties. We carry similar insurance with
respect to our development properties, but with certain appropriate exceptions
given the undeveloped nature of these properties. There are, however, certain
types of losses, such as losses arising from acts of war, that are not generally
insured because they are either uninsurable or not economically insurable.
Should an uninsured loss or a loss in excess of insured limits occur, we could
lose our capital invested in a particular property as well as the anticipated
future revenues from the property and would continue to be obligated on any
mortgage indebtedness or other obligations related to the property. Any
uninsured loss or loss in excess of insured limits would adversely affect us.

Employees

We provide a full range of real estate
services through a staff of approximately 1,210 employees, including an
experienced management team. There are no collective bargaining agreements with
any of our employees. We believe relations with our employees are excellent.

Tax Matters

We have elected to be taxed as a REIT
under the Code.  To qualify as a REIT, we must meet a number of
organizational and operational requirements, including a requirement that we
currently distribute at least 90% of the REIT's ordinary taxable income to
shareholders.  It is our current intention to adhere to these requirements
and maintain our REIT status.  As a REIT, we generally will not be subject
to federal income tax on distributed taxable income.  Even if we qualify as
a REIT, we may be subject to certain state and local taxes on our income and
real estate assets, and to federal income and excise taxes on our undistributed
taxable income. 
       We utilize Gables Residential Services, a
taxable REIT subsidiary, to provide management and other services to third
parties that a REIT may be prohibited from providing. Taxable REIT subsidiaries
are subject to federal, state and local income taxes.

Policies with Respect to Significant Business Activities

The following is a discussion of our
investment, financing and other significant policies. These policies have been
determined by our board of trustees and may be amended or revised from time to
time by the board of trustees without a vote of the shareholders, except that
(1) we cannot change our policy of holding assets and conducting business
only through the Operating Partnership, Gables Residential Services and other
permitted subsidiaries without the consent of the holders of Units as provided
in the partnership agreement of the Operating Partnership, (2) changes in
policies with respect to conflicts of interest must be consistent with legal
requirements, and (3) we cannot take any action intended to terminate our
qualification as a REIT without the approval of the holders of two-thirds of our
common shares.
      Investment Policies. We will
conduct all of our investment activities through the Operating Partnership and
its subsidiaries. Our investment objectives are to provide quarterly cash
distributions and achieve long-term capital appreciation through increases in
our value. We may purchase income-producing multifamily apartments or other
types of properties for long-term investment, expand and improve the communities
presently owned or other properties purchased, or sell communities or other
properties, in whole or in part, when circumstances warrant. We may also
participate with third parties in apartment community ownership through joint
ventures or other types of co-ownership. Equity investments may be subject to
existing mortgage financing and other indebtedness or financing or indebtedness
incurred in connection with acquiring or refinancing these investments. Debt
service on such financing or indebtedness will have a priority over common
shares and any distributions thereon.
      While we emphasize equity real estate
investments in multifamily apartment communities, we may, at the discretion of
the board of trustees, invest in other types of equity real estate investments
and mortgages, including participating or convertible mortgages and other real
estate interests. We currently intend to invest in apartment communities in
specifically identified markets. However, future development or investment
activities will not be limited to any geographic area or product type or to a
specified percentage of our assets. We will not have any limit on the amount or
percent of our assets invested in one property. Subject to the percentage of
ownership limitations and gross income and asset tests necessary for REIT
qualification, we may also invest in securities of other REITs, other entities
engaged in real estate activities or which provide services to the real estate
industry, or securities of other issuers, including for the purpose of
exercising control over such entities. We may enter into joint ventures or
partnerships for the purpose of obtaining an equity interest in a particular
property in accordance with our investment policies. These investments may
permit us to own interests in larger assets without unduly restricting
diversification and, therefore, add flexibility in structuring our portfolio. We
will not enter into a joint venture or partnership to make an investment that
would not otherwise meet our investment policies. Investment in these securities
is also subject to our policy not to be treated as an investment company under
the Investment Company Act of 1940.

Financing Policies. Our debt
to total market capitalization ratio, defined as our total consolidated debt as
a percentage of the December 31, 2001 market value of our outstanding
common shares and Units plus total consolidated debt and preferred shares and
Units at liquidation value, was 45.0% at December 31, 2001.
Excluding construction-related indebtedness, this ratio was 40.5% at
December 31, 2001. This ratio will fluctuate with changes in the price of
our common shares and the number of outstanding common shares or other forms of
shares of beneficial interest, and differs from the debt-to-book capitalization
ratio, which is based upon book values. This percentage will increase as we use
financing to continue construction of our development communities and acquire
additional multifamily apartment communities. As the debt-to-book capitalization
ratio may not reflect the current income potential of a company's assets and
operations, we believe that, in most circumstances, the debt to total market
capitalization ratio may provide an alternate indication of leverage for a
company whose assets are primarily income-producing real estate and should be
evaluated along with the debt service coverage and underlying components of our
indebtedness.
      We currently have a policy of incurring
debt only if the ratio of debt to total market capitalization would be 60% or
less. Our declaration of trust and bylaws do not, however, limit the amount or
percentage of indebtedness that we may incur. In addition, we may from time to
time modify our debt policy in light of current economic conditions, relative
costs of debt and equity capital, market values of our communities, general
conditions in the market for debt and equity securities, fluctuations in the
market price of common shares, growth opportunities and other factors.
Accordingly, we may increase our debt to total market capitalization ratio
beyond the limits described above. To the extent that the board of trustees
decides to obtain additional capital, we may raise capital through asset
dispositions, additional equity offerings, debt financings or retention of funds
from operations as allowable under the Code in order to maintain REIT tax
status, or a combination of these methods. We presently anticipate that any
additional borrowings would be made through the Operating Partnership, although
we might incur indebtedness, the proceeds of which would be loaned to the
Operating Partnership. Borrowings may be unsecured or may be secured by any or
all of our assets, the Operating Partnership or any existing or new property
owning partnership, and may have full or limited recourse to all or any portion
of our assets, the Operating Partnership or any existing or new property owning
partnership. Indebtedness incurred by us may be in the form of bank borrowings,
tax-exempt bonds, purchase money obligations to sellers of apartment communities
or other properties, publicly or privately placed debt instruments or financing
from institutional investors or other lenders. The proceeds from any of our
borrowings may be used for working capital to refinance existing indebtedness
and to finance acquisitions, expansions or development of new communities and
other properties, and for the payment of distributions. We have not established
any limit on the number or amount of mortgages that may be placed on any single
property or on our portfolio as a whole. 
     We currently have a senior
unsecured debt rating of BBB from Standard and Poor's and Baa2 from Moody's
Investors Service.  Our Series A Preferred Shares currently have a rating
of BBB- from Standard and Poor's and baa3 from Moody's Investors Service. 
We intend to adhere to financing policies that will allow us to maintain these
investment grade credit ratings.

Conflict of Interest
Policies. As part of their employment agreements, each of Chris Wheeler
(Chairman, President and Chief Executive Officer), Mike Hefley (Chief Operating Officer), and Marvin Banks
(Chief Financial Officer) is bound by a non-competition covenant. These
non-competition covenants provide that, during the term of employment and for a
period of one year following termination of employment, under certain
circumstances, each individual is prohibited from directly or indirectly
competing with us with respect to any multifamily apartment residential real
estate property management, development, construction, acquisition or
disposition activities undertaken or being considered by us. These employment
agreements also contain certain non-solicitation covenants wherein each
individual subject to the agreement is prohibited, during the term of employment
and for a period of one year following employment, from directly or indirectly
(1) soliciting or inducing any of our present or future employees to accept
employment with such individual or any person or entity associated with such
individual, (2) employing, or causing any person or entity associated with
such individual to employ, any of our present or future employees without
providing us prior written notice of such proposed employment, or
(3) either for himself or for any other person or entity, competing for or
soliciting the third party owners with whom we have an existing property
management agreement. The employment agreements terminate on January 1,
2003, but are automatically extended for additional one-year periods unless
notice is given by us or the employee three months prior to the agreement's
expiration that the agreement will not be renewed.

In addition, trustees as well as officers
("Senior Management") are bound by a conflict of interest policy which narrowly
focuses on business activities of Senior Management which may compete directly
with our business in the multifamily sector. Under this policy, Senior
Management must refrain from engaging in activities such as serving as a
director, trustee, officer, employee, partner, consultant, agent, investor,
lender, or a significant financial stakeholder in an enterprise that engages, or
proposes to engage in the acquisition, development, management, ownership,
operation or disposition of multifamily residential real estate assets in any
market in which we are currently present or contemplating entering.

Senior Management may engage in certain
permissible competitive activities, although potentially competitive with us.
These activities which are similar to the activities described in the preceding
paragraph, include any proposed activity that is fully disclosed to and approved
by the chairman of the board, any proposed activity which involves either fewer
than 30 residential units or a total value of less than $3.0 million, and
relates to a property that is not located within a five mile radius of our
existing or proposed properties, and any activity by a trustee, if such activity
is an incidental or non-recurring part of the regular duties and
responsibilities associated with his or her employment.

We have adopted a policy that, without
the approval of a majority of our trustees who are neither officers nor
affiliated with us, we will not (1) acquire from or sell to any trustee, officer
or employee or any entity in which a trustee, officer or employee of our company
beneficially owns more than a 1% interest, or acquire from or sell to any
affiliate of any of the foregoing, any of our assets or other property,
(2) make any loan to or borrow from any of the foregoing persons, or
(3) engage in any other transaction with any of the foregoing persons.

Risk Factors

Before you invest in our securities,
you should be aware that there are various risks, including those described
below. You should consider carefully these risk factors together with all of the
information included or incorporated by reference in this document before you
decide to purchase our securities. This section includes certain forward-looking
statements.    Development and
  construction risks could impact our profitability.We intend to continue to develop and construct
  multifamily apartment home communities.  Our development activities may
  be exposed to the following risks:

We may be unable to obtain, or face
      delays in obtaining, necessary zoning, land-use, building, occupancy, and
      other required governmental permits and authorizations, which could result
      in increased costs and could require us to abandon our activities entirely
      with respect to the project for which we are unable to obtain permits or
      authorizations;We may abandon development
      opportunities that we have already begun to explore and as a result we may
      fail to recover expenses already incurred in connection with exploring
      such development opportunities;We may incur construction costs for
      a community which exceed our original estimates due to increased
      materials, labor or other costs, which could make completion of the
      community uneconomical and we may not be able to increase rents to
      compensate for the increase in construction costs;Occupancy rates and rents at a
      newly completed development may fluctuate depending on a number of
      factors, including market and economic conditions, and may result in the
      community not being profitable;We may not be able to obtain financing with favorable terms
    for the development of a community, which may make us unable to proceed with
    its development; andWe may be unable to complete
      construction and lease-up of a community on schedule, resulting in
      increased debt service expense and construction
costs.


Construction costs have been increasing
in our target markets, and the cost to update acquired communities has, in some
cases, exceeded our original estimates. We may experience similar cost increases
in the future. Our inability to charge rents that will be sufficient to offset
the effects of any increases in construction costs may impact our profitability.

Acquisitions may not yield anticipated
results.We intend to continue to acquire multifamily apartment home
communities on a select basis. Our acquisition activities and their success may
be exposed to the following risks:

| |  | The acquired property
      may fail to perform as we expected in analyzing our investment;
    and         
| |  | ------------------------------------------------------------------------------------------------------------
| |  | Our estimate of the costs of repositioning or
      redeveloping the acquired property may prove inaccurate.

Policy of limiting debt level may be
changed.While our current policy is not to incur debt that would make
our ratio of debt to total market capitalization greater than 60%, our
declaration of trust and bylaws do not contain any such limitations. Our ratio
of debt to total market capitalization as of December 31, 2001 was 45%.
Because we do not have any debt incurrence restrictions in our declaration of
trust or bylaws, we could increase the amount of outstanding debt at any time.
In the event that the price of our common shares increases, we could incur
additional debt without increasing the ratio of debt to total market
capitalization and without a concurrent increase in our ability to service such
additional debt.

Incurrence of additional debt and
related issuance of equity may be dilutive to shareholders.Future issuance
of equity may dilute the interest of existing shareholders. To the extent that
additional equity securities are issued to finance future developments and
acquisitions instead of incurring additional debt, the interests of our existing
shareholders could be diluted. Our ability to execute our business strategy
depends on our access to an appropriate blend of debt financing, including
unsecured lines of credit and other forms of secured and unsecured debt, and
equity financing, including common and preferred equity.

Insufficient cash flow could affect
our debt financing and create refinancing risk.We are subject to the risks
normally associated with debt financing, including the risk that our cash flow
will be insufficient to meet required payments of principal and interest. We
anticipate that only a small portion of the principal of our debt will be repaid
prior to maturity. Although we may be able to use cash flow to make future
principal payments, we cannot assure you that sufficient cash flow will be
available to make all required principal payments. Therefore, we are likely to
need to refinance at least a portion of our outstanding debt as it matures.
There is a risk that we may not be able to refinance existing debt or that the
terms of any refinancing will not be as favorable as the terms of the existing
debt.

Rising interest rates would increase
interest costs and could affect the market price of our securities.We
expect to incur variable rate debt under credit facilities in connection with
the acquisition, construction and reconstruction of multifamily apartment
communities in the future, as well as for other purposes. Accordingly, if
interest rates increase, so will our interest costs to the extent the variable
rate increase is not hedged effectively. In addition, an increase in market
interest rates may lead purchasers of our securities to demand a higher annual
yield, which could adversely affect the market price of our outstanding
securities.

Interest rate hedging contracts may
involve material changes and may not provide adequate protection.From time
to time when we anticipate offerings of debt securities, we may seek to decrease
our exposure to fluctuations in interest rates during the period prior to the
pricing of the securities by entering into interest rate hedging contracts. We
may do so to increase the predictability of our financing costs. Also, from time
to time we rely on interest rate hedging contracts to offset our exposure to
moving interest rates with respect to debt financing arrangements at variable
interest rates. The settlement of interest rate hedging contracts has in the
past and may in the future involve charges to earnings that may be material in
amount. Such charges are typically driven by the extent and timing of
fluctuations in interest rates. Despite our efforts to minimize our exposure to
interest rate fluctuations, there is no guarantee that we will be able to
maintain our hedging contracts at their existing levels of coverage or that the
amount of coverage maintained will cover all of our outstanding indebtedness at
any such time. If our efforts are unsuccessful, we may not meet our objective of
reducing the extent of our exposure to interest rate fluctuations.

Bond compliance requirements could
limit income and restrict use of communities and cause favorable financing to
become unavailable.Some of our multifamily apartment communities are
financed with obligations issued by various local government agencies or
instrumentalities, the interest on which is exempt from federal income taxation.
These obligations are commonly referred to as "tax-exempt bonds." The bond
compliance requirements for our current tax-exempt bonds, and the requirements
of any future tax-exempt bond financing, may have the effect of limiting our
income from communities subject to such financing. Under the terms of our
tax-exempt bonds, we must comply with various restrictions on the use of the
communities financed by such bonds, including a requirement that a percentage of
apartments be made available to low and middle income households. In addition,
some of our tax-exempt bond financing documents require that a financial
institution guarantee payment of the principal of, and interest on, the bonds.
The guarantee may take the form of a letter of credit, surety bond, guarantee
agreement or other additional collateral. If the financial institution defaults
in its guarantee obligations, or we are unable to renew the applicable guarantee
or otherwise post satisfactory collateral, a default will occur under the
applicable tax-exempt bonds and the community could be foreclosed upon.

Failure to generate sufficient revenue
could limit cash flow available for distribution shareholders.  If our communities do not generate revenues sufficient to meet our operating expenses,
including debt service and capital expenditures, our cash flow and ability to
pay distributions to our shareholders will be adversely affected. The following
factors, among others, may adversely affect the revenues generated by our
apartment communities:

the national
      and local economic climates;local real
      estate market conditions, such as oversupply of apartment homes;the
      perceptions by prospective residents of the safety, convenience and
      attractiveness of our communities and the neighborhoods where they are
      located;our ability
      to provide adequate management, maintenance and insurance; andincreased
      operating costs including real estate taxes, insurance and utilities.


Significant expenditures associated with
each investment such as debt service payments, if any, real estate taxes,
insurance and maintenance costs are generally not reduced when circumstances
cause a reduction in income from a community. For example, if we mortgage a
community to secure payment of debt and are unable to meet the mortgage
payments, we could sustain a loss as a result of foreclosure on the community or
the exercise of other remedies by the mortgagee.

Unfavorable changes in market and
economic conditions could hurt occupancy or rental rates.The market and
economic conditions in metropolitan areas of our current markets in the United
States may significantly affect apartment home occupancy or rental rates.
Occupancy and rental rates in those markets, in turn, may significantly affect
our profitability and our ability to satisfy our financial obligations. The
risks that may affect conditions in those markets include the following:

the economic climate which may be
      adversely impacted by plant closings, industry slowdowns and other
      factors;real estate conditions such as an
      oversupply of, or a reduced demand for, apartment homes;a decline in household formation
      that adversely affects occupancy or rental rates;the inability or unwillingness of
      residents to pay rent increases;the potential effect of rent
      control or rent stabilization laws, or other laws regulating housing, on
      any of our communities, which could prevent us from raising rents to
      offset increases in operating costs; andthe rental market which may limit
      the extent to which rents may be increased to meet increased expenses
      without decreasing occupancy rates.


Any of these risks could adversely affect
our ability to achieve our desired yields on our communities and to make
expected distributions to shareholders. Difficulty of selling apartment
communities could limit flexibility.Real estate in metropolitan areas of
the United States can be hard to sell, especially if market conditions are poor.
This may limit our ability to change our portfolio promptly in response to
changes in economic or other conditions. In addition, federal tax laws limit our
ability to sell communities that we have owned for fewer than four years, and
this may affect our ability to sell communities without adversely affecting
returns to our shareholders.

Increased competition could limit our
ability to lease apartment homes or increase or maintain rents.Our
apartment communities in metropolitan areas compete with numerous housing
alternatives in attracting residents, including other rental apartments and
single-family homes that are available for rent, as well as new and existing
single-family homes for sale. Competitive residential housing in a particular
area could adversely affect our ability to lease apartment homes and to increase
or maintain rents.
       Significant new operations and
acquired communities under management require integration with the existing
business and, if not properly integrated, could create inefficiencies.Our
ability to manage growth effectively will require us, among other things, to
successfully apply our experience in managing our existing portfolio of
multifamily apartment communities to a larger number of properties. In addition,
we must be able to successfully manage the integration of new management and
operations personnel as our organization grows in size and complexity.
      Failure to succeed in new markets may
limit growth.We may make selected acquisitions outside of our current
market areas from time to time, if appropriate opportunities arise. Our
historical experience in our current markets located in the United States does
not ensure that we will be able to operate successfully in other market areas
new to us. We may be exposed to a variety of risks if we choose to enter into
new markets. These risks include, among others:

| | a lack of market knowledge and understanding of
      the local economies;                 
| | -------------------------------------------------------------------------------------------
| | an inability to obtain land for development or
      to identify acquisition opportunities;
| | an inability to obtain construction
      tradespeople; and                                
| | an unfamiliarity with local governmental and
      permitting procedures.                  

Decrease of fee management business
would result in decrease in revenues.We manage properties owned by third
parties for a fee. Most of our management contracts are terminable upon 30-days
notice. There is a risk that the management contracts will be terminated and/or
that the rental revenues upon which management fees are based will decline and
management fee income will decrease accordingly.      Share ownership limit may prevent
takeovers beneficial to shareholders.For us to maintain our qualification
as a REIT for federal income tax purposes, not more than 50% in value of our
outstanding shares of beneficial interest may be owned, directly or indirectly,
by five or fewer individuals. As defined for federal income tax purposes, the
term "individuals" includes a number of specified entities. Our declaration of
trust includes restrictions regarding transfers of our shares of beneficial
interest and ownership limits that are intended to assist us in satisfying such
limitations. The ownership limit may have the effect of delaying, deferring or
preventing someone from taking control of us, even though such a change of
control could involve a premium price for our shareholders or otherwise could be
in our shareholders'   best interests.
      Limits on changes in control may
discourage takeover attempts beneficial to shareholders.Our declaration of
trust, our bylaws and Maryland law may have the effect of discouraging a third
party from attempting to acquire us which makes a change in control more
unlikely. The result may be a limitation on the opportunity for shareholders to
receive a premium for their common shares over then-prevailing market prices.
      Compliance or failure to comply with
Americans with Disabilities Act and other similar laws could result in
substantial costs.The ADA generally requires that public accommodations,
including office buildings and hotels be made accessible to disabled persons.
Noncompliance could result in imposition of fines by the federal government or
the award of damages to private litigants. If, pursuant to the ADA, we are
required to make substantial alterations and capital expenditures in one or more
of our properties, including the removal of access barriers, it could adversely
affect our financial condition and results of operations, as well as the amount
of cash available for distribution to our shareholders.
      A number of additional federal, state and
local laws exist that impact our communities with respect to access thereto by
disabled persons. For example, the FHAA requires that apartment communities
first occupied after March 13, 1990 be accessible to the handicapped.
Noncompliance with the FHAA could result in the imposition of fines or an award
of damages to private litigants.
      We cannot predict the ultimate cost of
compliance with the ADA or other similar legislation. The costs could be
substantial.
      Failure to qualify as a REIT would
cause us to be taxed as a corporation which would significantly lower funds
available for distribution to shareholders.If we fail to qualify as a REIT
for federal income tax purposes, we will be taxed as a corporation. We believe
that we are organized and qualified as a REIT and intend to operate in a manner
that will allow us to continue to qualify. However, we cannot assure you that we
are qualified as such, or that we will remain qualified as such in the future.
This is because qualification as a REIT involves the application of highly
technical and complex provisions of the Code as to which there are only limited
judicial and administrative interpretations, and involves the determination of
various factual matters and circumstances not entirely within our control. In
addition, future legislation, new regulations, administrative interpretations or
court decisions may significantly change the tax laws or the application of the
tax laws with respect to qualification as a REIT for federal income tax purposes
or the federal income tax consequences of such qualification.
      If, in any taxable year, we fail to
qualify as a REIT, we will be subject to federal income tax on our taxable
income at regular corporate rates, plus any applicable alternative minimum tax.
In addition, unless we are entitled to relief under applicable statutory
provisions, we would be disqualified from treatment as a REIT for the four
taxable years following the year in which we lose our qualification. The
additional tax liability resulting from the failure to qualify as a REIT would
significantly reduce or eliminate the amount of funds available for distribution
to our shareholders. Furthermore, we would no longer be required to make
distributions to our shareholders.
     Potential liability for environmental contamination
could result in substantial costs.We are in the business of acquiring, owning, operating and developing real estate properties. From time to
time we will sell to third parties some of our properties. Under various
federal, state and local environmental laws, we may be required, often
regardless of our knowledge or responsibility but solely because of our current
or previous ownership or operation of real estate, to investigate and remediate
the effects of hazardous or toxic substances or petroleum product releases at
those properties. We may also be held liable to a governmental entity or to
third parties for property damage and for investigation and clean-up costs
incurred by us in connection with any contamination. These costs could be substantial. The presence of such substances or the failure to properly
remediate the contamination may materially and adversely affect our ability to borrow
against, sell or rent the affected property. In addition, applicable
environmental laws create liens on contaminated sites in favor of the government
for damages and costs it incurs in connection with the contamination.

Finally, when excessive moisture
accumulates in buildings or on building materials, mold growth will often occur,
particularly if the moisture problem remains undiscovered or is not
addressed.  Some molds are known to produce potent toxins or
irritants.  Concern about indoor exposure to mold has been increasing as
exposure to mold can cause a variety of health effects and symptoms in certain
individuals, including
severe allergic or other reactions.  As a result, the presence of mold at a
property we own could require us to undertake a costly remediation program to
contain or remove the mold from the affected property.  Such a remediation
program could necessitate the temporary relocation of some or all of the
property's tenants or the complete rehabilitation of the property.

Potential liability for losses not covered by insurance could result in
substantial costs.We may incur casualty losses that are not covered
by insurance.  We carry insurance coverage on our properties of types and
in amounts that we believe are in line with coverage customarily obtained by
owners of similar properties.  We believe all of our properties are
adequately insured.  The property insurance that we maintain for our
properties has historically been on an "all risk" basis, including
losses covered by acts of terrorism.  However, following the recent
terrorist activity of September 11, 2001, and in light of the resulting
uncertainty in the insurance market, many insurance companies have indicated
that they will exclude insurance against acts of terrorism from their "all
risk" policies.  Our "all risk" insurance coverage in place
for the current policy year does not contain specific exclusions for losses attributable
to acts of terrorism; however, there is a high probability that such exclusions
will be present as we renew and replace existing insurance coverage.  The cost and limited availability of specific third
party insurance coverage for losses from acts of terrorism have made it
commercially unreasonable for us to secure such coverage in the future.  Further, there are other types of losses, such as from wars or catastrophic acts
of nature, for which we cannot obtain insurance at all or at a reasonable
cost.  In the event of an uninsured loss or a loss in excess of our
insurance limits, we could lose both the revenues generated from the affected
property and the capital we have invested in the affected property; depending on the
specific circumstances of the affected property it is possible that we could be
liable for any mortgage indebtedness or other obligations related to the
property.  Any such loss could materially and adversely affect our business
and financial condition and results of operations.









ITEM 2.  PROPERTIESAs of December 31,
2001, we owned or
had an interest in 83 stabilized communities consisting of 23,907 apartment
homes, and owned or had an interest in 12 development/lease-up communities
consisting of 2,953 apartment homes. The communities, comprising a total of 26,860 apartment homes, are located in Texas, Georgia, Florida,
Tennessee and Washington, D.C.   The following table shows the locations of the communities and the number of
apartment homes in each metropolitan area:

Number of Communities
    
    Number of
      Apartment HomesLocation
    Stabilized
    Development/Leaseup
    Total
    Stabilized
    Development/Leaseup
    Total
    Percent
       of Total 
      ApartmentHomes


Houston, TX (a)
      20
      2
      22
      
      6,222
      482
      6,704
      25.0%Atlanta, GA (b)
      19
      3
      22
      
      5,798
      537
      6,335
      23.6%Boca Raton, FL (c)
      18
      1
      19
      
      5,049
      290
      5,339
      19.9%Dallas, TX (d)
      8
      3
      11
      
      1,645
      712
      2,357
      8.8%Austin, TX
      7
      -
      7
      
      1,677
      -
      1,677
      6.2%Memphis, TN (e)
      3
      -
      3
      
      1,309
      -
      1,309
      4.9%Orlando, FL
      3
      1
      4
      
      959
      315
      1,274
      4.7%Nashville,  TN (f)
      4
      -
      4
      
      1,166
      -
      1,166
      4.3%Tampa, FL (g)
      -
      2
      2
      
      -
      617
      617
      2.3%Washington, D.C.
      1
      -
      1
      
      82
      -
      82
      0.3%Totals
      83
      12
      95
      
      23,907
      2,953
      26,860
      100.0%


|    |  |                                                                                                                                                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Includes a stabilized community comprising 382
      apartment homes and a development/lease-up community
      comprising 186 apartment homes in which we have a 20% interest.                         
|(b) |  | Includes a stabilized community comprising 435 apartment
      homes and a development/lease-up community comprising 274 apartment homes
      in which we have a 20% interest.                         
|(c) |  | Includes a stabilized community comprising
      320
      apartment homes and a development/lease-up community comprising 290
      apartment homes in which we have a 20% interest.                   
|(d) |  | Includes a stabilized community comprising 222
      apartment homes in which we have a 20% interest.                                                                                                   
|(e) |  | Includes a stabilized community comprising 345 apartment
      homes in which we have a 25% interest and a stabilized community
      comprising 500 apartment homes in which we have an 8.26% interest.
|(f) |  | Includes two stabilized communities comprising 618
      apartment homes in which we have an 8.26%
interest.                                                                                            
|(g) |  | Represents two development/lease-up communities
      comprising 617 apartment homes in which we have a 20% interest.                                                                                   

Stabilized Communities. We
developed 41 communities consisting of 12,004 apartment homes and acquired 42
communities consisting of 11,903 apartment homes. We manage and operate all of
the stabilized communities, which are typically two and three-story garden
apartments, townhomes and higher-density apartments. As of December 31, 2001, the communities had an average scheduled monthly rental rate per apartment
home of $973 or $0.96 per square foot and a physical occupancy rate of 94%. The
average age of the communities is approximately ten years.
       Most of our communities offer many
attractive features designed to enhance their market appeal, such as vaulted
ceilings, fireplaces, dishwashers, disposals, washer/dryer connections,
ice-makers, patios and decks. Recreational facilities include swimming pools,
fitness facilities, playgrounds, picnic areas and tennis and racquetball courts.
In many communities, we make amenities and services such as aerobic classes,
resident social events, dry cleaning pickup and delivery, and the use of fax,
computer and copy equipment available to residents. In-depth market research,
including periodic focus groups with residents and feedback from on-site
management personnel, is used to refine and enhance management services and
community design. Additional information regarding our stabilized communities at
December 31, 2001 follows:

Stabilized
Community Features as of December 31,  2001

Community   (a)
      
      No. of 
        Apt.Homes
      Approx.
        RentableSq. Ft.(b)
      Total Acreage
      Year
        Constructed/Renovated
      Year Acquired
      Average 
        Unit Size(Sq. Ft.)
      Occupancy
        at12/31/01
      Scheduled
        Rentat 12/31/01 Per
        Unit         Sq. Ft.


Houston, 
        TX
        Gables
        Austin Colony (c)
        Gables Bradford Place (c)
        Gables Bradford Pointe (c)
        Gables Champions
        Gables CityPlaza
        Gables Cityscape (c)
        Gables Citywalk/
          Waterford Sq. (c)
        Gables Edgewater
        Gables Lions Head (c)
        Gables Metropolitan Uptown
        Gables Meyer Park I
        Gables New Territory
        Gables of First Colony
        Gables Piney Point (c)
        Gables Pin Oak Green
        Gables Pin Oak Park
        Gables Raveneaux (d)
        Gables
        Rivercrest I (c)
        Gables
        Rivercrest II (c)
        Gables
        Windmill
           Landing (c)Totals/AveragesAtlanta, GA
        Briarcliff
        Gables
        Buckhead Gables
        Dunwoody Gables (c)
        Gables Cityscape
        Gables Metropolitan I (d)
        Gables Mill
        Gables Northcliff
        Gables Vinings
        Gables Walk
        Gables Wood Arbor (c)
        Gables Wood Crossing (c)
        Gables Wood Glen (c)
        Gables Wood Knoll (c)
        Lakes at Indian Creek (c)
        Rock Springs Estates (f)
        Roswell Gables I (c)
        Roswell Gables II (c)
        Spalding Gables (c)
        Wildwood Gables (c), (f)
        Totals/AveragesBoca Raton, FLCotton Bay (c)
        Gables Boca Place (c), (f)
        Gables Boynton Beach I
        Gables Boynton Beach II
        Gables Grand Isle (d)
        Gables Kings Colony (c)
        Gables Mizner on the Green
        Gables Palma Vista 
        Gables
        San Michele I
        Gables
        San Michele II 
        Gables San Remo
        Gables Town Colony (c)
        Gables Town Place (c)
        Gables Wellington
        Hampton Lakes (c)
        Hampton Place
        Mahogany Bay (c)
        
        Vinings at Hampton
           Village (c)
        Totals/ Averages
      237
        372
        360
        404
        246
        252
        317
        292
        277
        318
        345
        256
        324
        246
        581
        474
        382
        140
        1402596,222104
        162
        311
        182
        435
        438
        82
        315
        310
        140
        268
        380
        312
        603
        290
        384
        284
        2525465,798
        444
        180
        252
        296
        320
        480
        246
        189
        249
        343
        180
        172
        312
        222
        300
        368
        3281685,049
      231,621
        320,322
        276,417
        367,588
        217,374
        214,824
        255,823
        257,339
        233,796
        290,141
        297,054
        233,652
        321,848
        227,880
        592,709
        483,740
        401,327
        118,020
        118,020224,6895,684,184128,976
        122,548
        290,396
        150,610
        487,472
        406,676
        127,990
        336,735
        367,226
        127,540
        257,012
        377,340
        311,064
        552,384
        295,302
        417,288
        334,268
        249,333619,7105,959,870436,460
        175,812
        302,148
        357,653
        340,776
        426,590
        311,176
        273,606
        332,683
        475,506
        329,978
        147,724
        260,192
        297,138
        317,004
        352,528
        330,459202,7525,670,185
      11.0
        13.3
        13.5
        29.7
        7.5
        6.8
        8.7
        12.2
        10.3
        8.9
        11.0
        15.0
        13.3
        7.5
        14.4
        11.9
        20.9
        5.1
        5.09.8235.85.2
        3.5
        10.4
        5.5
        15.0
        36.1
        12.7
        15.2
        19.7
        9.9
        22.3
        23.8
        19.6
        49.8
        28.7
        28.3
        28.3
        11.237.9383.137.6
        9.4
        18.0
        15.9
        20.0
        18.8
        8.9
        12.0
        32.4
        32.4
        11.8
        10.0
        13.0
        12.7
        11.0
        14.1
        25.48.6312.0
      1984
        1991
        1990
        1995
        1995
        1991
        1990/
        1985
        1990
        1983
        1995
        1993
        1998
        1996
        1994
        1990
        1992
        2000
        1982
        1983
        1984
        1995
        1994
        1995
        1989
        2000
        1988
        1978
        1997
        1996-97
        1987
        1985-86
        1983
        1984
        1969-72
        1945-92
        1995
        1997
        1995
        1992-93
        1986
        1984
        1996
        1997
        2001
        1986
        1996
        2000
        1998
        2000
        1995
        1985
        1987
        1998
        1986
        1985
        1986
        1988
      (e)
        (e)
      1998
        --
        --
        1997
        --
        --
        --/
        1992
        --
        1998
        --
        --
        --
        1997
        --
        1996
        1996
        --
        1987
        1998
        1998
        --
        1994
        --
        1994
        --
        1997
        1997
        --
        1997
        --
        --
        --
        --
        1993
        1997
        --
        --
        --
        1991
        1998
        1998
        1998
        1998
        --
        1998
        1998
        --
        1998
        --
        1998
        1998
        1998
        1998
        1998
        1998
        1998
        1998
      977
        861
        768
        910
        884
        852
        807
        881
        844
        912
        861
        913
        993
        926
        1,020
        1,020
        1,051
        843
        8438689141,240
        756
        934
        827
        1,121
        928
        1,561
        1,069
        1,185
        911
        959
        993
        997
        916
        1,018
        1,087
        1,177
        9891,135
        1,028983
        977
        1,199
        1,208
        1,065
        889
        1,265
        1,448
        1,336
        1,386
        1,833
        859
        834
        1,338
        1,057
        958
        1,0071,2071,123
      98%
        97%
        93%
        99%
        99%
        98%
        97%
        95%
        98%
        91%
        95%
        94%
        98%
        98%
        94%
        94%
        95%
        99%
        96%95%96%95%
        94%
        93%
        96%
        91%
        91%
        93%
        92%
        91%
        84%
        87%
        88%
        92%
        91%
        94%
        94%
        94%
        90%94%
        92%97%
        90%
        95%
        93%
        96%
        98%
        92%
        93%
        93%
        95%
        94%
        93%
        95%
        96%
        96%
        95%
        96%97%
        95%
      $ 953
        710
        720
        835
        954
        997
        999
        858
        774
        1,114
        960
        938
        987
        1,002
        1,065
        1,097
        1,014
        768
        754729$ 928$1,196
        890
        915
        946
        1,217
        906
        1,285
        1,088
        1,161
        796
        777
        741
        773
        684
        936
        956
        956
        978993
        $    932$763
         1,045
        986
        981
        1,003
        890
        1,725
        1,608
        1,525
        1,505
        1,320
        904
        896
        1,049
        799
        785
        827877$1,048
      $0.98
        0.82
        0.94
        0.92
        1.08
        1.17
        1.24
        0.97
        0.92
        1.22
        1.12
        1.03
        0.99
        1.08
        1.04
        1.08
        0.97
        0.91
        0.890.84$1.02$0.96
        1.18
        0.98
        1.14
        1.09
        0.98
        0.82
        1.02
        0.98
        0.87
        0.81
        0.75
        0.78
        0.75
        0.92
        0.88
        0.81
        0.990.87
        $0.91$0.78
        1.07
        0.82
        0.81
        0.94
        1.00
        1.36
        1.11
        1.14
        1.09
        0.72
        1.05
        1.07
        0.78
        0.76
        0.82
        0.820.73$0.93


Stabilized
Community Features as of December 31,  2001

Community (a)
      
      No. of 
        Apt.Homes
      Approx.
        RentableSq. Ft.(b)
      Total Acreage
      Year
        Constructed/Renovated
      Year Acquired
      Average 
        Unit Size(Sq. Ft.)
      Occupancy
        at12/31/01
      Scheduled
        Rentat 12/31/01 Per
        Unit         Sq. Ft.


Austin, TXGables
        at the Terrace
        Gables Barton Creek (c)
        Gables Bluffstone
        Gables Central Park
        Gables Great Hills
        Gables Park Mesa
        Gables Town LakeTotals/AveragesDallas, TX
        Gables at Pearl Street
        Gables CityPlace 
        Gables Green Oaks
        Gables Mirabella
        Gables San Raphael (d)
        Gables Spring Park
        Gables Turtle Creek
        Gables Valley Ranch (c)Totals/AveragesMemphis, TNArbors
        of Harbortown (g)
        Gables Cordova (c)
        Gables Stonebridge (h)Totals/AveragesNashville, TNBrentwood
        Gables (h)
        Gables Hendersonville (h)
        Gables Hickory Hollow I (c)
        Gables Hickory Hollow II (c)Totals/AveragesOrlando, FLGables
        Celebration
        Gables Chatham Square (i)
        The Commons at Little Lake
            Bryan (i)Totals/AveragesWashington D.C.Gables Dupont CircleTotals/Averages
      308
        160
        256
        273
        276
        1482561,677108
        232
        300
        126
        222
        188
        1503191,645345
        4645001,309254
        364
        2722761,166231
        4482809598282
      292,292
        185,846
        251,909
        257,043
        228,930
        161,540239,2641,616,824117,688
        244,056
        286,740
        114,902
        200,478
        198,178
        150,930325,5341,638,506341,258
        434,461439,6461,215,365287,594
        342,982
        247,322259,7041,137,602267,417
        503,263289,4361,060,11679,89579,895
      18.6
        11.6
        32.7
        6.9
        23.7
        24.312.0129.83.6
        7.1
        12.8
        1.4
        5.4
        12.3
        3.114.860.515.0
        32.234.081.214.5
        21.0
        19.018.072.58.8
        29.616.554.90.50.5
      1998
        1998
        1998
        1997
        1993
        1992
        1996
        1995
        1995
        1996
        1996
        1999
        1996
        1995
        1994
        1991
        1986
        1993-96
        1996
        1991
        1988
        1987
        1999
        2001
        1998
        1998
      1998
        2000
        --
        --
        --
        1997
        --
        --
        1997
        --
        1997
        --
        --
        1996
        ----
        --
        1996--
        --
        --
        ----
        --
        --
        2001
      949
        1,162
        984
        942
        829
        1,0919359641,090
        1,052
        956
        912
        903
        1,054
        1,0061,020996989
        9368799281,132
        942
        9099419761,158
        1,1231,0341,105974974
      88%
        91%
        88%
        100%
        91%
        93%93%92%97%
        96%
        91%
        97%
        95%
        97%
        97%97%95%88%
        94%93%92%91%
        91%
        91%91%91%85%
        100%100%96%99%99%
      $1,201
        1,561
        1,166
        1,318
        891
        1,2301,359$1,225$1,346
        1,381
        863
        1,196
        964
        981
        1,197956$1,069$856
        689689$733$894
        688
        649648$714$1,194
        ----$1,194$2,392
        $2,392
      $1.27
        1.34
        1.18
        1.40
        1.07
        1.131.45$1.27$1.24
        1.31
        0.90
        1.31
        1.07
        0.93
        1.190.94$1.07$0.87
        0.740.78$0.79$0.79
        0.73
        0.710.69$0.73$1.03
        ----$1.03$2.46$2.46Grand Totals/Averages
      23,907
      24,062,547
      1,330.3
      
      
      1,007
      94%
      $973
      $0.96


|(a) |  | Except as noted in notes
      (d), (g), and (h), we hold fee
      simple title to each of the communities. Except as noted in notes (c),
      (d), (g), and (h), the communities are unencumbered.                                                                               
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | In the Atlanta and Tennessee markets, rentable area is
      measured including any patio or balcony. In the Texas markets, rentable
      area is measured using only the heated area. In the Florida markets,
      rentable area is measured using only the air conditioned area.
|(c) |  | The denoted communities secure indebtedness totaling
      $379.4 million as of December 31, 2001.                                                                                                                                                                                  
|(d) |  | We hold an indirect 20% interest in these communities.
      These communities secure indebtedness totaling $58.4 million at
      December 31, 2001.                                                                                                                               
|(e) |  | Year renovated; these communities were originally
      constructed as follows: Buckhead Gables: 1964 and Wildwood Gables:
  1972.                                                                                                                                                  
|(f) |  | These communities are in renovation;
      therefore, occupancy is based on units available for lease.                                                                                                                                                                              
|(g) |  | We hold an indirect 25% interest in this
      community. This community secures indebtedness of $16.4 million at
      December 31, 2001.                                                                                                                                          
|(h) |  | We hold an indirect 8.26% interest in these communities.
      These communities secure indebtedness totaling $52.1 million at
      December 31, 2001.                                                                                                                             
|(i) |  | These communities
      are leased to a single user group pursuant
      to a triple net master lease. Accordingly, scheduled rent data is not
      reflected.                                                                                                                     

Development and Lease-up
Communities.The development communities have been designed to
generally resemble the stabilized communities we developed previously and to
offer similar amenities. The development communities and recently completed
communities reflect our continuing research of consumer preferences for upscale
multifamily rental housing and incorporate and emphasize garage parking,
increased privacy, high quality interiors, high speed internet access, and
private telephone and television systems. Additional information regarding our
development and lease-up communities at December 31, 2001 follows:

Percent atDecember
      31, 2001
  Actual or Estimated Quarter ofCommunity
    No. of
      Apt.Homes
    Total
      BudgetedCost
  
  Cost to Complete
  Complete
  Leased
  Occupied
  
  Constr-
    uctionStart
    InitialOccu-pancy.
  Constr-
    uctionEnd
  Stab-
    ilizedOccupancy(millions)
    (millions)
    
    
    
    
    
    
    (a)


Wholly-Owned
        Development/Lease-up Communities:Atlanta, GAGables Montclair
  
  183
  $ 24
  $ 
    5
  85%
  9%
  6%
  3 Q
    2000
  4 Q
    2001
  1 Q
    2002
  4 Q
    2002Gables Paces
    80
    23
    3
    91%
    4%
    --
    3 Q
      2000
    1 Q
      2002
    1 Q
      2002
    3 Q
      2002Dallas, TXGables Ellis
      Street
    245
    46
    26
    10%
    --
    --
    3 Q
      2001
    4 Q
      2002
    2 Q
      2003
    2 Q
      2004Gables State
      Thomas Ravello
    290
    44
    16
    64%
    --
    --
    4 Q
      2001
    4 Q
      2002
    2 Q
      2003
    2 Q
      2004Gables State
      Thomas
      Townhomes
  177
  36
  --
  100%
  88%
  84%
  4 Q
    1999
  3 Q
    2000
  2 Q
    2001
  2 Q
    2002Houston, TXGables Meyer Park
      II
  
  296
  27
  6
  83%
  17%
  10%
  4 Q
    2000
  3 Q
    2001
  2 Q
    2002
  4 Q
    2002Orlando, FLGables North
      Village
    
    315
    43
  
  3
  99%
  56%
  50%
  4 Q
    1999
  4 Q 2000
  1 Q
    2002
  4 Q
    2002Subtotals
    1,586
    $243
    $
      59Co-Investment Development/Lease-up Communities
      (b):Atlanta,
      GAGables
      Metropolitan II
    274
    $ 32
  
  $ 16
  43%
  --
  --
  1 Q 2001
  2Q 2002
  4 Q
    2002
  3 Q 2003Boca
      Raton, FLGables
      Crestwood
    290
    25
    --
    100%
    
    87%
    83%
    4 Q
      1999
    3 Q
      2000
    2 Q
      2001
    1 Q
      2002Houston,
      TXGables
      White Oak
    186
    15
  
  6
  62%
  7%
  2%
  2 Q
    2001
  4 Q
    2001
  2 Q
    2002
  3Q 2002Tampa,
      FLGables
      West Park
      Village I (c)
    320
    35
    6
    91%
    33%
    22%
    4 Q 2000
    3 Q
      2001
    
    2Q 2002
    4 Q
      2002Gables
      West Park
  Village II
    297
    27
  24
  --
  --
  --
  2 Q
    2002
  2 Q
    2003
  4 Q
    2003
  2
    Q 2004SubtotalsGrand totals
    1,367
      2,953
    $134$377
    $52$111
    (d)


(a) Stabilized occupancy is defined as the earlier to occur of
(i) 93% occupancy or (ii) one year after completion of construction.
(b) These communities were contributed into the GRAP JV or the GRAP JV Two, as
applicable.
(c) This development community includes 40,000 square feet of commercial space which was
85% leased at December 31, 2001.(d) Construction loan proceeds are expected to fund $43 million of these
costs. The remaining costs will be funded by capital 
 contributions to the
venture from our venture partner and us in a funding ratio of 80% and 20%,
respectively.
      Undeveloped Sites.As of
December 31, 2001, we owned the following two undeveloped sites on which
we intend to develop multifamily communities in the future. We also owned
additional sites at December 31, 2001 that are excluded from the table
below because we do not currently intend to develop apartment communities on
these sites in the foreseeable future.

Undeveloped Sites
      Metropolitan
        Area
      Estimated
        Number
        of ApartmentHomesGables Jupiter
          Gables Montecito
               Total
        South Florida
          South Florida
        311450761


There can be no assurance of when or if
the undeveloped sites will be developed.

Development Rights.As of
December 31, 2001, we had three development rights.

Development Rights
Metropolitan
  Area
Estimated
  Number
  of ApartmentHomesGables Stuart
          Gables West Park Village
               Phase II (a)
          Gables Rothbury Square
               Total
        South Florida
          Tampa, FL
          
          Washington, D.C.
        334
          300240874


(a) This land parcel is under
option.

There can be no assurance of when or if
the development rights will be exercised.

The following is a "Safe Harbor"
Statement under the Private Securities Litigation Reform Act of 1995 and
Section 21E of the Securities Exchange Act of 1934, as amended. The
projections contained in the tables above under the captions "Development and
Lease-up Communities," "Undeveloped Sites" and "Development Rights" are
forward-looking statements. These forward-looking statements involve risks and
uncertainties, and actual results may differ materially from those projected in
the forward-looking statements. Risks associated with our development,
construction and land acquisition activities, which could impact the
forward-looking statements made, include: development and acquisition
opportunities may be abandoned; construction costs of a community may exceed
original estimates, possibly making the community uneconomical; and construction
and lease-up may not be completed on schedule, resulting in increased debt
service and construction costs. Development of the undeveloped sites and
development rights is subject to permits and other governmental approvals as
well as our ongoing business review of the underlying real estate fundamentals
and the impact on our capital structure. There can be no assurance that we will
decide or be able to develop the undeveloped sites, complete development of all
or any of the communities subject to the development rights, or complete the
number of apartment homes shown above.ITEM 3.  LEGAL PROCEEDINGS     Neither we nor any of our communities is
presently subject to any material litigation or, to our knowledge, is any
litigation threatened against us or any of our communities other than routine
actions for negligence or other claims and administrative proceedings arising in
the ordinary course of business, some of which are expected to be covered by
liability insurance and all of which collectively are not expected to have a
material adverse effect on our business or financial condition. ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 
   Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON
      EQUITY AND RELATED SHAREHOLDER
MATTERSThere is no established public trading
market for the Operating Partnership's Units.  As of March 15, 2002, there
were 94 holders of records of Units.       The following table sets forth the
quarterly distributions per Unit to holders of Units for the periods indicated.

Quarter Ended
      DistributionDeclaredMarch 31, 2000
          June 30, 2000
          September 30, 2000
          December 31, 2000
          March 31, 2001
          June 30, 2001
          September 30, 2001
          December 31, 2001
          March 31, 2002
      
      $0.5300
          0.5300
          0.5675
          0.5675
          0.5675
          0.5675
          0.6025
          0.6025
          0.6025


The Operating Partnership currently intends to make quarterly
distributions to holders of its Units.  Distributions
are declared at the discretion of the board of directors of Gables GP, the
general partner of the Operating Partnership, and will depend on actual funds
from operations, its financial condition, capital requirements, annual
distribution requirements under the REIT provisions of the Code, and other
factors the board of directors may deem relevant.  The board of directors may modify the Operating Partnership's
distribution policy from time to time.
      Certain
of our debt agreements contain customary representations, covenants and events
of default, including covenants which restrict the ability of the Operating
Partnership to make distributions in excess of stated amounts, which in turn
restricts the Trust's discretion to declare and pay dividends. 
In general, during any fiscal year, the Operating Partnership may only
distribute up to 95% of its consolidated income that is available for
distribution, as defined in the related agreement, exclusive of distributions of
capital gains for such year.  The
applicable debt agreements contain exceptions to these limitations to allow the
Operating Partnership to make any distributions necessary to allow the Trust to
maintain its status as a REIT.  We
do not anticipate that this provision will adversely effect the ability of the
Operating Partnership to make distributions or the Trust's ability to declare
dividends, under our current dividend policy.  
       Each time the Trust issues
shares of beneficial interest, it contributes the proceeds of such issuance to
the Operating Partnership in return for a like number of Units with rights and
preferences analogous to the shares issued.  During the period commencing on October 1, 2001 and ending on December
31, 2001, in connection with issuances of common shares by the Trust during that
time period, the Operating Partnership issued an aggregate 60,346 Units to the
Trust.   Such Units were issued
in reliance on an exemption from registration under Section 4(2) of the
Securities Act and the rules and regulations promulgated thereunder. 
ITEM 6.  SELECTED FINANCIAL AND OPERATING INFORMATION
       The following table sets forth selected
financial and operating information which should be read in conjunction with our
financial statements and notes included elsewhere in this document. The
consolidated operating information for the years ended December 31, 2001,
2000 and 1999 has been derived from our financial statements audited by Arthur
Andersen LLP, independent public accountants, whose report is included in this
document. The consolidated operating information for the years ended
December 31, 1998 and 1997 has been derived from our audited financial
statements not included in Arthur Andersen's report.

GABLES REALTY LIMITED PARTNERSHIP 
 SELECTED FINANCIAL AND OPERATING INFORMATION(Amounts in Thousands, Except Property and Per Unit Data)2001
      2000
      1999
      1998
      1997Operating Information:Rental revenues
        Other property revenues
             Total property revenues
        Other revenues
             Total revenues
        Property operating and maintenance
           (exclusive of items shown separately below)
        Depreciation and amortization
        Property management (owned and third party)
        Interest expense and credit enhancement fees
        Amortization of deferred financing costs
        General and administrative
        Unusual items (a)
             Total expenses
        Gain on sale of real estate assets
        Income before extraordinary
        loss
        Extraordinary loss
        Net income
        Distributions to preferred unitholders
        Net income available to common
        unitholders
      $222,040 12,638234,678 10,502 
        245,18077,758 
        48,425 
        11,137 
        44,690 
        1,038 
        7,209 
         
        8,847 
        199,104 
         37,330 
        83,406 -83,406 (14,083)$69,323
      $217,384 12,405229,789 12,304 
        242,09375,444 
        44,500 
        10,007 
        45,539 
        895 
        7,154 
                 - 
        183,539
         29,467
        88,021 -88,021 (14,083)$73,938
      $221,689 12,121233,810 11,787 
        245,59778,689 
        46,073 
        8,893 
        44,259 
        919 
        5,796 2,800 
        187,429 
         8,86467,032 -67,032 (14,083)$52,949
      $199,292 9,988209,280 8,120 
        217,40070,502 
        40,650 
        7,977 
        39,974 
        984 
        6,242 5,637 
        171,966 
         -
        45,434 
        -
        45,434 (10,252)$35,182
      $132,371 6,322 
        138,693 5,436 
        144,129 
        47,592 
        25,194 
        5,696 
        25,313 
        992 
        3,248 1,178 
        109,213 
         5,349 
        40,265 
        (712)39,553 
        (4,163)$35,390Weighted average common Units outstanding
        - basic
        Weighted average common Units outstanding
        - diluted
      30,153 
        30,314
      30,365 
        30,439
      32,277 
        32,796
      30,212 
        30,340
      23,441 
        23,591Per Common Unit Information:Income before extraordinary
        loss -
        basic
        Net income - basic
        Income before extraordinary loss - diluted
        Net income - diluted
        Distributions paid
        Distributions declared
      $2.30 
        2.30 
        2.29 
        2.29 
        2.34 
        2.34
      $2.43 
        2.43 
        2.43 
        2.43 
        2.20 
        2.20
      $1.64 
        1.64 
        1.64 
        1.64 
        2.08 
        2.08
      $1.16 
        1.16 
        1.16 
        1.16 
        2.02 
        2.02
      $1.54 
        1.51 
        1.53 
        1.50 
        2.47 
        1.98Other Information:Cash flows provided by
        operating activities
        Cash flows (used in) provided by investing activities
        Cash flows provided by (used in) financing activities
        Funds from operations (b)
        Average monthly revenue per apartment home (c)
        Average physical occupancy
        Gross operating margin (d)
        Completed communities at year-end
        Apartment homes in completed communities at year-end
      $103,784 
        (126,638)
        22,833 
        84,526 
        880 
        94.6% 
        66.9% 
        85  
        24,374
      $106,062 
     18,694 
        (128,467)
        90,605 
        830 
        95.3% 
        67.2% 
        84 
        25,094
      $105,029 
        80,928 
        (185,048)
        89,775 
        810 
        94.3% 
        
        66.3% 
        81 
        23,941
      $90,555 
        (359,263)
        272,583 
        75,494 
        780  
        94.1% 
        66.3% 
        86 
        25,288
      $69,961 
        (229,411)
        158,244 
        56,179 
        755  
        94.6% 
        65.7% 
        61 
        18,479Balance Sheet Information:Real estate assets, before accumulated
        depreciation
        Total assets
        Notes payable
        Partners' capital and partners' capital interest
      $1,756,875 
        1,589,206 
        877,231 
         654,284
      $1,587,844 
        1,453,020 
        765,927 
        638,898
      $1,589,384 
        1,471,364 
        755,485 
        660,261
      $1,682,122 
        1,586,317 
        812,788 
        718,573
      $1,056,438 
        981,167 
        435,362 
        513,497Funds From Operations Reconciliation:Net income available to common
        unitholders
        Real estate asset depreciation and amortization (e)
        Extraordinary loss
        Gain on sale of previously depreciated real estate assets
        Funds from operations
      $69,323 
        49,313 
        -  (34,110)$84,526
      $73,938 
        45,289 
        -  
        (28,622)$90,605
      $52,949 
        45,942 
        -  
        (9,116) $89,775
      $35,182 
        40,312 
        -  
         -  $75,494
      $35,390 
        24,935 
        712 (4,858)$56,179


NOTES TO SELECTED FINANCIAL AND OPERATING INFORMATION
(Amounts in Thousands, Except Property Per Unit Data)



(a) Unusual items of $8,847 in 2001
are comprised of  (1) a $5,006 charge associated with the write-off of
building components at Gables State Thomas Ravello that will be replaced in
connection with a remediation program, (2) $2,200 of severance charges, (3) $920
in reserves associated with certain technology investments and (4) $721 of
abandoned real estate pursuit costs resulting from recent events which have
impacted the U.S. economy.  Unusual items of $2,800 in 1999 relate to
severance charges.   Unusual items of $5,637 in 1998 and $1,178 in
1997 relate to loss on treasury locks.

(b) We consider funds from
operations ("FFO") to be a useful performance measure of the operating
performance of an equity REIT because, together with net income and cash flows,
FFO provides investors with an additional basis to evaluate the ability of a
REIT to incur and service debt and to fund distributions and capital
expenditures. We believe that in order to facilitate a clear understanding of
our operating results, FFO should be examined in conjunction with net income as
presented in the financial statements and data included elsewhere in this
report. We compute FFO in accordance with standards established by the National
Association of Real Estate Investment Trusts ("NAREIT"). Effective
January 1, 2000, NAREIT amended its definition of FFO to include in FFO all
non-recurring items, except those defined as extraordinary items under GAAP and
gains and losses from sales of depreciable operating property. We are using the
amended definition of FFO in reporting our results for all periods on or after
January 1, 2000. In addition, we have restated FFO reported for prior
periods. FFO, as defined by NAREIT, represents net income (loss) determined
in accordance with generally accepted accounting principles ("GAAP"), excluding
extraordinary items as defined under GAAP and gains or losses from sales of
depreciable operating property, plus certain non-cash items, such as real estate
asset depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. FFO presented herein is not necessarily
comparable to FFO presented by other real estate companies due to the fact that
not all real estate companies use the same definition. However, our FFO is
comparable to the FFO of real estate companies that use the NAREIT definition.
FFO should not be considered an alternative to net income as an indicator of
our operating performance or an alternative to cash flows as a measure of
liquidity. FFO does not measure whether cash flow is sufficient to fund all of
our cash needs, including principal amortization, capital expenditures and
distributions to unitholders. Additionally, FFO does not
represent cash flows from operating, investing or financing activities as
defined by GAAP. Reference is made to "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital Resources"
for a discussion of our cash needs and cash flows.

(c) Average monthly revenue per
apartment home is equal to the average monthly rental revenue collected during
the period divided by the average monthly number of apartment homes occupied
during the period.   
       (d) Gross operating margin
represents (1) total property revenues less property operating and
maintenance expenses (exclusive of real estate asset depreciation expense) as a
percentage of (2) total property revenues.

(e) Includes our
share of depreciation of real estate assets owned by unconsolidated joint
ventures.MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

ITEM 7.MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSAll references to "we," "our" or "us" refer collectively to Gables
Realty Limited Partnership and its subsidiaries.

We are the entity through which Gables Residential Trust (the "Trust"), a
real estate investment trust (a "REIT"), conducts substantially all of its
business and owns, either directly or indirectly through subsidiaries,
substantially all of its assets.We are focused within the
multifamily industry in demand-driven markets throughout the United States that
have high job growth and are resilient to economic downturns. Our operating
performance relies predominantly on net operating income from our apartment
communities. Net operating income is determined by rental revenues and operating
expenses, which are affected by the demand and supply dynamics within our
markets. Our performance is also affected by the general availability and cost
of capital and our ability to develop and acquire additional apartment
communities with returns in excess of our blended cost of capital.Business Objectives and StrategyThe Trust's objective is to increase shareholder
value by producing consistent high quality earnings to sustain dividend growth
and annual total returns that exceed the multifamily sector average. To achieve
that objective, we employ a number of business strategies. First, our long-term
investment strategy is research-driven, with the objective of creating a
portfolio of high quality assets in approximately six to eight strategically
selected markets that are complementary through economic diversity and
characterized by high job growth and resiliency to national economic downturns.
We believe such a portfolio will provide predictable growth in operating cash
flow on a sustainable basis. Second, we adhere to a strategy of owning and
operating high quality, class AA/A apartment communities under the Gables
brand. We believe that such communities, when located in highly desirable areas
to live and supplemented with high quality service and amenities, attract the
affluent renter-by-choice who is willing to pay a premium for location
preference, superior service and high quality communities. The resulting
portfolio should maintain high levels of occupancy and rental rates. This,
coupled with more predictable operating expenses and reduced capital expenditure
requirements associated with high quality construction materials, should lead to
operating margins that exceed national averages for the multifamily sector and
sustainable growth in operating cash flow. Third, our aim is to be recognized as
the employer of choice within the industry. Our mission of Taking Care of the
Way People Liveis a cornerstone of our strategy, involving innovative human
resource practices that we believe will attract and retain the highest caliber
associates. Because of our long-established presence as a fully integrated
apartment management, development, construction, acquisition and disposition
company within our markets, we have the ability to offer multi-faceted career
opportunities among the various disciplines within the industry. Finally, our
capital strategy is to maximize return on invested capital while maintaining
financial flexibility through a conservative, investment grade credit profile.
We judiciously manage our capital and are able to recycle existing capital
through asset dispositions. We believe the successful execution of these
strategies will result in operating cash flow and dividend growth, producing
annual total returns that exceed the multifamily REIT sector average.
       We believe we are well positioned to
continue achieving our objectives because of our long-established presence as a
fully integrated real estate company in our markets. This local market presence
creates a competitive advantage in generating increased cash flow from
(1) property operations during different economic cycles and (2) new
investment opportunities that involve site selection, market information and
requests for entitlements and zoning petitions.
       Portfolio-wide occupancy levels have
remained high, but portfolio-wide rental rate growth slowed in 2001 as a result
of national economic weakness.   We expect portfolio-wide rental expenses to
increase at a rate ahead of both inflation and property revenues for the
upcoming year.  Our
ongoing evaluation of the growth prospects for a specific asset may result in a
determination to dispose of the asset. In that event, we would intend to sell
the asset and utilize the net proceeds from any such sale to invest in new
assets expected to have better growth prospects, reduce indebtedness or, in
certain circumstances with appropriate approval from the Trust's board of trustees,
repurchase outstanding common shares. We maintain staffing levels sufficient to
meet existing construction, acquisition and leasing activities.  When market
conditions warrant, we adjust staffing levels to mitigate a
negative impact on results of operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

Forward-Looking StatementsThis report contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Actual results or developments could differ materially from those
projected in such statements as a result of the risk factors set forth in the relevant paragraphs of
"Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this report. The following discussion and
analysis of our financial condition and results of operations should be read in
conjunction with our accompanying consolidated financial statements and notes
thereto.Common and Preferred Equity Activity

Secondary Common Share Offerings

Since the IPO, the Trust
has issued a total of
14,831 common shares in eight offerings, generating $347,771 in net proceeds
which were generally used (1) to reduce outstanding indebtedness under
interim financing vehicles utilized to fund our development and acquisition
activities and (2) for general working capital purposes, including funding
of future development and acquisition activities.

Preferred Share Offerings

On July 24, 1997,
the Trust issued 4,600
shares of 8.30% Series A Cumulative Redeemable Preferred Shares
(liquidation preference $25.00 per share). The net proceeds from this offering
of $111.0 million were used to reduce outstanding indebtedness under
interim financing vehicles. The Series A Preferred Shares may be redeemed
at $25.00 per share plus accrued and unpaid dividends on or after July 24,
2002. The Series A Preferred Shares have no stated maturity, sinking fund
or mandatory redemption, and are not convertible into any other securities of
the Trust.

On June 18, 1998,
the Trust issued 180
shares of 5.0% Series Z Cumulative Redeemable Preferred Shares (liquidation
preference $25.00 per share) in connection with the acquisition of a parcel of
land for future development. The Series Z Preferred Shares, which are
subject to mandatory redemption on June 18, 2018, may be redeemed at any time
for $25.00 per share plus accrued and unpaid dividends. The Series Z
Preferred Shares are not subject to any sinking fund or convertible into any
other securities of the Trust.

Issuances of Common Operating Partnership Units

Since the IPO, we have issued a total of 4,421 common units of limited partnership interest
("Units") in connection with the 1998 acquisition of the
real estate assets and operations of Trammell Crow Residential South Florida, the acquisition of other operating apartment
communities and the
acquisition of a parcel of land for future development.

Issuance of Preferred Operating Partnership Units

On November 12, 1998,
we issued 2,000 of our 8.625% Series B Preferred Units to an
institutional investor. The net proceeds from this issuance of
$48.7 million were used to reduce outstanding indebtedness under interim
financing vehicles. The Trust has the option to redeem the Series B Preferred
Units after November 14, 2003. These Units are exchangeable by the holder
into 8.625% Series B Cumulative Redeemable Preferred Shares of the Trust on a
one-for-one basis; however, this exchange right is generally not exercisable
until after November 14, 2008. The Series B Preferred Units have no
stated maturity, sinking fund or mandatory redemption.

Common Equity Repurchase ProgramWe
have a common equity repurchase program pursuant to which the Trust is
authorized to purchase up to $150 million of its outstanding common shares or
Units.  The Trust has repurchased
shares from time to time in open market and privately negotiated transactions,
depending on market prices and other conditions, using proceeds from sales of
selected assets.  Whenever the Trust
repurchases common shares from shareholders, we are required to redeem from the
Trust an equivalent number of Units on the same terms and for the same aggregate
price.  After redemption, the Units
redeemed by us are no longer deemed outstanding.  Units have also been repurchased for cash upon their
presentation
MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

for redemption
by unitholders.  As of December 31,
2001, we had redeemed 4,267 Units, for a total of $102,048, including 3,980
Units redeemed by the Trust.

Shelf Registration Statement

We have an effective shelf registration
statement on file with the Securities and Exchange Commission providing
$500 million of equity capacity and $300 million of debt capacity. We
believe it is prudent to maintain shelf registration capacity in order to
facilitate future capital-raising activities. To date, there have been no
issuances under this shelf registration statement other than the issuance of
$150 million of senior unsecured notes in February 2001.Portfolio and Other Financing ActivityCommunity and Land DispositionsDuring 2001, we sold an apartment
community located in Atlanta comprising 386 apartment homes, an apartment
community located in Houston comprising 776 apartment homes, an apartment
community located in Dallas comprising 536 apartment homes and a 2.5 acre
parcel of land adjacent to one of our development communities located in
Atlanta.  The net proceeds from these sales totaled $93.6 million, $9 million
of which was deposited into an escrow account and was used  to fund acquisition
activities.  The balance of the net proceeds was used to repay a $16 million note assumed in connection
with our September 2001 acquisition of the Gables State Thomas Ravello community
and to paydown
outstanding borrowings under interim financing vehicles.  The total gain from these
sales was $35.0 million, all of which was recognized in 2001.  In addition,
we recognized $0.7 million of deferred gain associated with a parcel of land we
sold in 2000 during the year ended December 31, 2001.
       During 2001, we contributed our interest in
certain land and development rights to the Gables Residential Apartment
Portfolio JV Two (the "GRAP JV Two") in return for (1) cash of $18.5 million
and (2) capital account credit of $4.6 million.  The $2.8 million of
gain we will record associated with this contribution is being recognized when
earned using the percentage of completion method since we serve as the developer
and general contractor for the joint venture.  We recognized $1.6 million
of this gain during the year ended December 31, 2001. 
       During 2000, we sold an apartment community
located in Dallas comprising 126 apartment homes, an apartment community located
in Houston comprising 228 apartment homes, two apartment communities located in
San Antonio comprising 544 apartment homes and a parcel of land adjacent to an
existing apartment community located in Atlanta.  In addition, on December
28, 2000, we sold substantially all of our interests in three apartment
communities located in Nashville and Memphis, comprising 1,118 apartment homes,
to the CMS Tennessee Multifamily JV.  The net proceeds from these
sales totaled $142.0 million, $30.2 million of which was deposited into an
escrow account and was used to fund development and acquisition activities.
The balance of the net proceeds was used to (1) repay an $18.6 million note that
encumbered one of the assets sold, (2) paydown outstanding borrowings under
interim financing vehicles and (3) purchase common shares and Units under the
Trust's common equity repurchase program.  The total gain recognized from these sales in
2000 was $29.5 million.  Gain of $0.8 million associated with the land sale
was deferred at December 31, 2000 and is being recognized when earned using the
percentage of completion method because we serve as the general contractor for
the construction of an apartment community on the parcel of land sold.

During 1999, we sold
three apartment communities located in Atlanta comprising 676 apartment homes,
two apartment communities located in Memphis comprising 490 apartment homes, an
apartment community located in Houston comprising 412 apartment  homes and an
outparcel of land from an existing development community located in Dallas. The
net proceeds from these sales totaled $96.7 million and were used to paydown outstanding borrowings under interim financing vehicles and
to purchase common
shares and Units under the Trust's common equity repurchase program. The total gain from
these sales was $8.9 million.
       During 1999, we contributed our interest in
certain land and development rights to the Gables Residential Apartment
Portfolio JV (the "GRAP JV") in return for (1) cash of $65.1 million and (2) capital
account credit of $16.4 million.  There was no gain or loss associated with
this contribution.Community AcquisitionsOn September 28, 2001, we acquired the
80% membership interest of our venture partner in the GRAP JV in the Gables State Thomas
Ravello apartment community located in Dallas comprising 290 apartment
homes.  In consideration for such community, we paid $12 million in cash and assumed a
$16 million secured variable-rate note.MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

This consideration was based on a
valuation of the asset of $31 million and is net of our $3 million share of the
venture distribution.  We recorded a $5 million charge to unusual items in
2001 associated with the
write-off of building components that will be replaced in connection with a
remediation program to address water infiltration issues plaguing the asset.On August 28, 2001, we acquired an
apartment community located in Washington, D.C. comprising 82 apartment homes
for approximately $25 million.On August 1, 2001, we acquired the 75%
interest of our venture partner in the Gables Metropolitan Uptown apartment community located in Houston
comprising 318 apartment homes.  The asset was valued at approximately $27
million.
       On March 30, 2001, we acquired the 80%
membership interests of our venture partner in the GRAP JV in the Gables Palma Vista and Gables
San Michelle II apartment communities located in South
Florida comprising 532 apartment homes for $66 million. This cash consideration
was based on a valuation of the assets of $75 million and is net of our $9
million share of the venture distribution.
       During the third quarter
of 2000, we acquired an apartment community located in Austin comprising 160
apartment homes. In consideration for such community, we paid $6 million in cash
and assumed a $14 million secured fixed-rate note.Other AcquisitionIn May 2001, we acquired a property
management company based in Washington, D.C. that manages approximately 3,600
units in 24 multifamily apartment communities located in Washington, D.C.
and the surrounding area (the "D.C. Management Co.").  The total
investment is approximately $1.6 million and is structured to be paid in three
installments based on results of the acquired business operations.

Senior Unsecured Note IssuanceIn February 2001, we issued $150
million of senior unsecured notes which bear interest at 7.25%, were priced to
yield 7.29% and mature in February 2006.  The net proceeds of $148.5
million were used to reduce borrowings under our unsecured credit facilities and
repay our $40 million term loan, which had a November 2001 maturity date.
Critical Accounting Policies and Recent Accounting Pronouncements
Our
financial statements are prepared in accordance with United States generally
accepted accounting principles (GAAP) and a summary of our significant
accounting policies is included in Notes 4 and 5 to the consolidated financial
statements.  Note 4 also includes a
summary of recent accounting pronouncements and their expected impact on our
financial statements.  Our
preparation of the financial statements requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of our financial
statements, and the reported amounts of revenue and expenses during the
reporting period.  There can be no
assurance that actual results will not differ from these estimates. 
As an owner, operator and developer of apartment communities, our
critical accounting policies relate to cost capitalization and asset impairment
evaluation.

Cost
Capitalization
As a
vertically integrated real estate company, we have in-house investment
professionals involved in development, construction and acquisition. 
We include direct costs associated with development and construction
activities in the capitalized development cost of wholly-owned assets. 
We charge direct costs associated with development and construction
activities for third parties and unconsolidated joint ventures against our
revenues from the services being provided.  
Such costs are ultimately reflected in net development revenues using the
percentage of completion method.  As
required by GAAP, we expense all internal costs associated with the acquisition
of operating apartment communities to general and administrative expense in the
period such costs are incurred.  We
maintain staffing levels sufficient to meet existing development, construction
and acquisition activities.  When
market conditions warrant, we adjust staffing levels to mitigate a negative
impact on results of operations.

MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

Comparison of operating results for the year ended
December 31, 2001 to the year ended December 31, 2000

Our net income is generated primarily
from the operation of our apartment communities. For purposes of evaluating
comparative operating performance, we categorize our operating communities based
on the period each community reaches stabilized occupancy. A community is
considered to have achieved stabilized occupancy on the earlier to occur of
(1) attainment of 93% physical occupancy or (2) one year after
completion of construction. The operating performance for all of our apartment
communities combined for the years ended December 31, 2001 and 2000 is
summarized as follows:

Years Ended December 31,2001
    2000
    $ Change
    % ChangeRental and other property revenues:Same store communities (a)
      Communities stabilized during 2001, but not 2000 (b)
      Development and lease-up communities (c)
      Renovation communities (d)
      Acquired communities (e)
      Sold communities (f)
         Total property revenues
    $195,331
      -
      7,759
      10,365
      12,0029,221
      $234,678
    $189,895
      -
      990
      10,412
      91427,578
      $229,789
    $ 5,436 
      - 
      6,769 
      (47)
      11,088 (18,357)
      $ 4,889
  2.9% 
      -% 
      683.7% 
      (0.5%)
      1,213.1% (66.6%)
         2.1%Property operating and maintenance expenses
      (exclusive of depreciation and amortization):Same store communities (a)
      Communities stabilized during 2001, but not 2000 (b)
      Development and lease-up communities (c)
      Renovation communities (d)
      Acquired communities (e)
      Sold communities (f)
         Total specified expenses$65,260
      -
      1,453
      3,452
      3,8273,766
      $77,758
    $62,123
      -
      77
      3,229
      3239,692$75,444
    $3,137 
      - 
      1,376 
      223 
      3,504 
      (5,926)
      $ 2,314
    5.0% 
      -% 
      1,787.0% 
      6.9% 
      1,084.8% (61.1%)
        3.1%Revenues in excess of specified expenses
    $156,920
    $154,345
    $2,575
    1.7%Revenues in excess of specified expenses
      as a 
 percentage of total property revenues
    66.9%
    67.2%
    -
    (0.3%)(a)
      Communities that were owned and stabilized throughout both 2001 and 2000 ("same store"). 
      (b) Communities that were stabilized during all of  2001, but
      not 2000. 
      (c) Communities in the development and/or lease-up phase that were not
      fully stabilized during all or any of 2001.
      (d) Communities that were in renovation subsequent to January 1, 2000. 
      (e) Communities that were acquired subsequent to January 1, 2000.
      (f) Communities that were sold subsequent to January 1, 2000.


Total property revenues increased
$4,889, or 2.1%, from $229,789 to
$234,678 due primarily to an increase in the number of
apartment homes resulting from the development and acquisition of additional
communities and an increase in rental rates on communities stabilized throughout
both periods ("same store").  This increase is offset by the sale
of one apartment community during the second quarter of 2001, two apartment
communities in the fourth quarter of 2001 and seven apartment communities in the
second half of 2000.   Following is additional data regarding the
increases in total property revenues for three of the six community categories
presented in the preceding table:
MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

Same store communities:

Market
      Number ofCommunities
      Number of
        ApartmentHomes
      Percent
 ofTotal
      Occupancy During 2001
      Change
        inOccupancy
      Change
        in
          Revenues
      
      Percent
        Change in
          Revenues


Houston
          Atlanta
          So. Florida
          Austin
          Dallas
          Other
            Total
      18
        16
        14
        6
        7465
      5,522
        4,527
        4,017
        1,517
        1,4231,24318,249
      30.3%
        24.8%
        22.0%
        8.3%
        7.8%6.8%100.0%
      95.2%
        93.6%
        95.0%
        93.5%
        96.2%92.4%94.6%
      (0.3%)
        (1.5%)
        (0.1%)
        (3.5%)
        1.3% 
        (0.7%)(0.8%)$2,007 
          383 
        1,831 
        280 
        841 
        (315)$5,027(a)3.8% 
        0.9% 
        4.3% 
        1.4% 
        4.9% 
        (2.9%)2.7%(a) This table excludes The Commons at
        Little Lake Bryan, a
        community comprising 280 apartment homes that is leased to a single user
        group pursuant to a triple net master lease. Revenues for
        this community increased $409, or 17.3%, in 2001 compared to 2000, and occupancy was 100% for both
        years.  This
        increase in revenues is the result of an amendment to the master lease
        agreement which extended the term of the lease by five years to December
        2007.


Development and lease-up communities:

Market
      Number ofCommunities
      Number of 
        ApartmentHomes
      Percent of
        Total
      OccupancyDuring 2001
      Change
        inRevenues


Orlando
        Houston
        Atlanta
        Dallas
          Total
      (a)
      2
        1
        115
    
    763
      296
      1831771,419
    53.7%
      20.9%
      12.9%12.5%100.0%
    61.4%
      4.3%
      14.1%62.0%55.6%
    $ 4,505
      65
      332,166$6,769(a)  One of these communities is
      leased to a single user group pursuant to a triple net master lease.


Renovation communities:

Market
      Number ofCommunities
      Number of 
        ApartmentHomes
      Percent of
        Total
      OccupancyDuring 2001
      Change
        inRevenues


Atlanta
        So. Florida
           Total
      213
    
    8361801,016
    82.3%17.7%100.0%
    93.5%90.3%93.0%
    $(27)(20)$(47)




MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)Property management
revenues increased $1,041, or 20.1%, from $5,172 to $6,213 due primarily to the
May 2001 acquisition of the D.C. Management Co.,  in addition to increased
joint venture activity for which we serve as the property manager.Development revenues,
net decreased $2,190, or 76.0%, from $2,883 to $693 due primarily to a portion
of our third-party projects nearing completion, coupled with fewer new project
starts in 2001.  In addition, a  $425 reduction in the
estimated net development revenues from the GRAP JV was recorded in  2001. 
       Equity in income of joint ventures decreased $157, or 39.3%, from $399 to $242 due primarily to the March 2001 acquisition of the
membership interests of our venture partner in two stabilized communities in the
GRAP JV and the August 2001 acquisition of our venture partner's 75% interest in Gables Metropolitan Uptown,
a stabilized community.  This decrease is also impacted by increased
property taxes at certain of the communities and the suspension of lease-up activities at Gables State Thomas
Ravello.
       Our share of the operating results for the apartment communities in which we
have a joint venture interest for 2001 and 2000 is as follows:

Stabilized

Development& Lease-up
Sales
Total2001
Total2000Gables' share of joint venture results:
  (a)
  (b)
  (c)Rental and other revenues
    Property operating and maintenance expenses
    (exclusive of depreciation and amortization)
       Revenues in excess of specified expenses
    Interest expense and credit enhancement fees
    Amortization of deferred costs
    Other
       Funds from operations
    Real estate asset depreciation
       Equity in income of joint ventures
    Number of operating communities
    Number of units in operating communities
    Average percent occupied during the period

$4,069 
  (1,642)2,427 
  (1,046)
  (38)151,358 
  (1,035)$  323
  7 
  2,502 
  93%
$1,137 
  (456)
   681 
  (276)
  (22)-383 
  (375)$   8
  4 
  1,116 
  41%
$1,106 
  (504)
     602 
  (386)
  (12)5209 
  (298)$(  89)
  4 
  1,140 
  74%
$6,312 
  (2,602)
  3,710 
  (1,708)
  (72)201,950 
  (1,708)$  242
  15 
  4,758 
  76%
$5,690 
  (2,068)
  3,622 
  (1,759)
  (70)661,859 
  (1,460)$   399
  10 
  3,134 
  67%
(a) Communities that were owned and fully stabilized
    throughout 2001.
    (b) Communities in the development and/or lease-up phase that were not
    fully stabilized during all or any of 2001.
    (c) Communities that were sold subsequent to January 1, 2001.


Interest income decreased
$282, or 27.4%, from $1,029 to $747 due
primarily to a decrease in interest rates.
       Other revenues decreased $214, or 7.6%, from
$2,821 to $2,607 due primarily to a
gain on sale of cable equipment to a cable service provider in 2000, which is
offset in part due to income earned during 2001 related to certain non-routine
items.
       Property operating and maintenance expense (exclusive of depreciation and
amortization) increased $2,314, or 3.1%, from $75,444 to $77,758 due
to the increase in the number of apartment homes resulting from the development
and acquisition of additional communities, as well as increased payroll,
property taxes, insurance, utilities and maintenance costs at our same store
communities.  This increase is offset in part by the sale of one apartment
community during the second quarter of 2001, two apartment
communities during the fourth quarter of  2001 and seven
apartment communities in the second half of 2000. 
       Real estate asset depreciation and amortization increased $3,776, or 8.6%,
from $43,829 to $47,605 due primarily to the impact of the development and
acquisition of additional communities and capital improvements made to existing
operating communities, offset by the sale of one apartment community during the
second quarter of 2001, two apartment communities during the fourth quarter of
2001 and seven apartment communities in the second half
of 2000.


MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

Property management expense for owned communities
and third-party properties on a combined basis increased $1,130, or 11.3%, from $10,007 to
$11,137 due primarily to the May 2001 acquisition of the D.C. Management Co. 
We allocate property management expenses to both owned communities and third-party properties based on the proportionate share of total apartment homes and
units managed.
       Interest expense and credit enhancement fees decreased $849, or 1.9%, from
$45,539 to $44,690 due primarily to a decrease in interest rates and a
decrease in outstanding indebtedness associated with the sale of one apartment
community in the second quarter of 2001, two apartment communities
during the fourth quarter of 2001 and seven apartment communities in the second
half of 2000.  This decrease is offset in part by an increase in operating
debt associated with the development and acquisition of additional communities.
       Amortization of deferred financing costs increased $143, or 16.0%, from $895 to
$1,038 due primarily to increased financing costs associated with the issuance
of $150 million of senior unsecured notes in February 2001.
       General and administrative expense increased $55, or 0.8%, from $7,154 to $7,209
due primarily to an increase in (1) internal acquisition costs associated with
the acquisition of operating apartment communities and the D.C. Management Co.,
(2) long-term compensation expense and (3) inflationary increases in
expenses.  Such increases were offset in part by a decrease in abandoned
real estate pursuit costs and marketing and branding campaign costs.
       Unusual items of $8,847 in 2001 are comprised of (1) a $5,006 charge associated
with the write-off of building components at Gables State Thomas Ravello that
will be replaced in connection with a remediation program, (2) $2,200 of
severance charges associated with organizational changes adopted in the fourth
quarter of 2001, (3) $920 in reserves associated with certain technology
investments and (4) $721 of abandoned real estate pursuit costs as a result of
recent events which have impacted the U.S. economy.
       Corporate asset depreciation and amortization increased $149, or 22.2%, from
$671 to $820 due primarily to an increase in amortization resulting from the
management contracts acquired in connection with the May 2001 acquisition of the
D.C. Management Co.
       Gain on sale of real estate assets of $37,330 in 2001 is comprised of (1)
$34,110 related to the 2001 sales of an apartment community in Atlanta
comprising 386 apartment homes, an apartment community in Houston comprising 776
apartment homes and an apartment community in Dallas comprising 536 apartment
homes, (2)  $934 associated with the 2001 sale of 2.5 acres of land in
Atlanta, (3) $1,590 associated with the 2001 contribution of land and
development rights into the GRAP JV Two and (4) recognition of $696 of deferred gain associated with a land sale
in 2000.

MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

Results of OperationsComparison of operating results for the year ended December 31, 2000 to the
year ended December 31, 1999Our net income is generated primarily from the operation of our apartment
communities.  For purposes of evaluating comparative operating performance,
we categorize our operating communities based on the period each community
reaches stabilized occupancy.  A community is considered to have achieved
stabilized occupancy on the earlier to occur of (1) attainment of 93% physical
occupancy or (2) one year after completion of construction.  The operating
performance for all of our apartment communities combined for the years ended
December 31, 2000 and 1999 is summarized as follows:

Years
        Ended December 31,2000
      1999
      $
        Change
      %
        ChangeRental and
        other property revenues:Same store communities (a)
        Communities stabilized during 2000, but not 1999 (b)
        Development and lease-up communities (c)
        Acquired communities (d)
        Sold communities (e)
             Total property revenues
      $199,124
        13,750
        991
        91415,010
        $229,789
      $193,019
        12,590
        -
        -28,201
        $233,810
      $6,105 
        1,160 
        991 
        914 
        (13,191)
        $(4,021)
      3.2% 
        9.2% 
        -% 
        -% (46.8%)
        (1.7%)Property
        operating and maintenance expenses
        (exclusive of real estate depreciation and amortization)Same store communities (a)
        Communities stabilized during 2000, but not 1999 (b)
        Development and lease-up communities (c)
        Acquired communities (d)
        Sold communities (e)
             Total specified expenses
      $65,460
        4,462
        77
        3235,122
        $75,444
      $64,370
        3,844
        -
        -10,475
        $78,689
      $1,090 
        618 
        77 
        323 (5,353)
        $(3,245)
      1.7% 
16.1% 
-% 
-% 
        (51.1%)
(4.1%)Revenues in excess
        of specified expenses
        Revenues in excess of  specified expenses as a 
           percentage of total property revenues
      $154,345
        67.2%
      $155,121
66.3%
      $ (776) 
                 
        -
      (0.5%)
        0.9%(a) 
        Communities that were owned and stabilized throughout both 2000
        and 1999 ("same store").
        (b)  Communities that were stabilized during all of 2000, but not 1999.
        (c)  Communities in the development and/or lease-up phase that were not
        fully stabilized during all or any of 2000.
        (d)  Communities that were acquired subsequent to
        January 1, 1999.
        (e)  Communities that were sold subsequent to January 1, 1999.


Total property revenues decreased
$4,021, or 1.7%, from $233,810
to $229,789 due primarily to the sale of seven apartment communities during the
second half of 2000 and six apartment communities during the second half of
1999.  This decrease is offset in part by an increase in rental rates on
communities stabilized throughout both periods ("same store") and an
increase in the number of apartment homes resulting from the development of
additional communities, as well as the acquisition of an apartment community in
Austin.  Following is additional data regarding the increases in total
property revenues for three of the five community categories presented in the
preceding table:

MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

Same store communities:

Market
      Number ofCommunities
      Number of
        ApartmentHomes
      Percent
        of Total
      Occupancy During 2000
      Change
        inOccupancy
      Change
        in
          Revenues
      
      Percent
        Change in
          Revenues


Houston
          Atlanta
          So. Florida
          Dallas
          Austin
          Other
            Total
      18
        18
        14
        8
        6367
      6,046
        5,378
        3,948
        1,959
        1,5171,01219,860
      30.4%
        27.1%
        19.9%
        9.9%
        7.6%5.1%100.0%
      95.6%
        95.0%
        95.2%
        95.0%
        97.0%94.5%95.4%
      1.4% 
        -% 
        (0.9%)
        1.6% 
        3.7% 1.8% 
        0.8%$424
          1,915
        992
        345
        2,140277$6,093(a)0.8%
        3.8%
        2.5%
        1.7%
        11.7%3.8%3.2%(a) This table excludes The Commons at Little Lake Bryan, a
        community comprising 280 apartment homes that is leased to a single user
        group pursuant to a triple net master lease. Revenues for this community increased  $12, or 0.5%, in 2000
        compared to 1999, and occupancy was 100% for both
        years.


Communities stabilized during 2000, but not 1999:

Market
      Number ofCommunities
      Number of 
        ApartmentHomes
      Percent of
        Total
      OccupancyDuring 2000
      Change
        inRevenues


Atlanta
        Houston
        So. Florida
        Orlando
           Total
      
      1
        1
        114
    
    386
      256
      2492311,122
    34.4%
      22.8%
      22.2%20.6%100.0%
    95.9%
      94.8%
      94.1%89.9%93.7%
    $   368
      213
      134445$1,160


Development and lease-up communities:

Market
      Number ofCommunities
      Number of 
        ApartmentHomes
      Percent of
        Total
      OccupancyDuring 2000
      Change
        inRevenues


Orlando (a)
        Dallas
           Total
      213
    
    763177940
    81.2%18.8%100.0%
    17.2%8.9%14.9%
    $850141 $991(a)  One of these communities is leased to a single
        user group pursuant to a triple net master lease.


MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

Interest
income increased $355, or 52.7%, from $674 to $1,029 due primarily to an increase
in interest-bearing cash deposits associated with escrowed sales proceeds.
       Other revenues increased $69, or 2.5%, from
$2,752 to $2,821 due primarily to a gain on sale of cable equipment to a cable
service provider in 2000 offset by income earned during 1999 related to certain
non-routine items.        
       Property operating and maintenance expense (exclusive of depreciation and
amortization) decreased $3,245, or 4.1%, from $78,689 to $75,444 due primarily
to the sale of seven apartment communities during the second half of 2000 and
six apartment communities during the second half of 1999.  This decrease is
offset by a $1,090, or 1.7%, increase in property operating and maintenance
expense for same store communities.  The same store increase represents
payroll costs, maintenance and property taxes offset by reduced marketing costs.
       Real estate asset depreciation and amortization decreased
$1,709,
or 3.8%, from $45,538 to $43,829 due primarily to the sale of seven apartment
communities during the second half of 2000 and six apartment communities during
the second half of 1999.

       Property management expense for owned
communities and third-party properties on a combined basis increased $1,114, or
12.5%, from $8,893 to $10,007 due primarily to (1) increased staffing and
equipment support costs related to our strategic initiatives for enhanced
management information systems, (2) increased staffing costs related to regional
maintenance and other positions added to enhance the support infrastructure
necessary to provide our residents with high quality service and (3)  inflationary increases in expenses. We allocate property
management expenses to both owned communities and third-party properties based
on the proportionate share of total apartment homes and units managed.

Interest expense and credit enhancement
fees increased $1,280, or 2.9%, from $44,259 to $45,539 due to higher interest
rates and an increase in operating debt associated with the development of
additional communities, as well as the acquisition of an apartment community in
Austin.  This increase has been offset in part by the sale of apartment
communities in 2000 and 1999, the proceeds of which were partially used to
reduce outstanding indebtedness.
       General and administrative expense increased $1,358, or 23.4%, from $5,796 to $7,154
due primarily to (1) an increase in long-term compensation expense, (2) internal
acquisition costs related to the acquisition of an apartment community in
Austin, (3) an increase in abandoned real estate pursuit costs, (4) costs
associated with a new marketing and branding campaign and (5) inflationary
increases in expenses.
       Unusual items of $2,800 in 1999 relate to
severance charges associated with organizational changes adopted in 1999.
       Gain on sale of real estate assets of $29,467 in 2000 relates to the sale of an
apartment community located in Dallas comprising 126 apartment homes, an
apartment community located in Houston comprising 228 apartment homes, two
apartment communities located in San Antonio comprising 544 apartment homes, two
apartment communities located in Nashville comprising 618 apartment homes, one
apartment community located in Memphis comprising 500 apartment homes and a
parcel of land adjacent to an existing apartment community located in Atlanta.

Gain on sale of real estate assets of
$8,864 in 1999 relates to the sale of three apartment communities located in
Atlanta comprising 676 apartment homes, two apartment communities located in
Memphis comprising 490 apartment homes, one apartment community located in
Houston comprising 412 apartment homes and an outparcel of land from an
existing development community located in Dallas.

Liquidity and Capital Resources

       We had $103,784 of net cash provided by operating activities for the
year ended December 31, 2001, compared to $106,062 for the year
ended December 31, 2000.  The related decrease of $2,278 was due to (1) a
change in other assets between periods of $8,267 and (2) a change in
restricted cash between periods of $1,519.  Such decreases were
offset in part by (1) a change in other liabilities between periods of $6,660
and (2) an increase of $848 in income (a) before certain
non-cash or non-operating items, including depreciation, amortization, equity in
income of joint ventures, gain on sale of real estate assets, long-term compensation
expense
and unusual items and (b) after operating distributions received from joint
ventures. MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

We had $126,638 of net cash used in investing activities for the
year ended December 31, 2001, compared to $18,694 of net cash provided by
investing activities for the year ended December 31, 2000.  During the
year ended December 31, 2001,
we expended $215.6 million related to acquisition and  development
activities,  $11.8 million related to recurring, non-revenue enhancing
capital expenditures for operating apartment communities, $10.9 million related
to non-recurring, renovation/revenue enhancing capital expenditures,
$4.2 million related to our investment in joint ventures, and $4.2 million related to
other investments, including the D.C. Management Co., management information
systems and technology.  During the year ended December 31, 2001,
we received cash of (1) $18.5 million in connection with our contribution of
interests in certain land and development rights to the GRAP JV Two and (2)
$93.6
million in connection with the sale of three apartment communities, as well as the
sale of a parcel of land adjacent to one of our development communities.  In addition, during the
year ended December 31, 2001, $7.9 million of
the $8.5 million in sales proceeds held in escrow at December 31, 2000 was
released to fund development activities.  During the year ended December
31, 2000, we expended $90.4 million related to acquisition and
development activities,  $10.9 million related to recurring, non-revenue
enhancing capital expenditures for operating apartment communities, $9.6 million
related to non-recurring, renovation/revenue enhancing capital expenditures, $3.0 million related to our investment in
joint ventures and $0.9 million related to technology investments.  During the year ended
December 31, 2000, we received cash of $142.0 million in connection
with the sale of six apartment communities.  We deposited $30.2 million of
the cash received in connection with the sale of these apartment communities
into an escrow account to fund development and acquisition activities facilitated through a
like-kind exchange transaction, of which $0.6 million and $8.5 million remained in escrow at
December 31, 2001 and 2000, respectively.
We had $22,833 of net cash provided by financing
activities for the year ended December 31, 2001, compared to $128,467 of net cash used in financing activities for the
year ended December 31, 2000. During the year ended December 31, 2001, we
had net borrowings of  $94.9 million and proceeds from the exercise of share
options of $15.1 million. These net borrowings and share option proceeds were
offset by payments for distributions totaling $84.6 million, and
payments of deferred financing costs and principal escrow deposits totaling
$2.6 million. During the year ended December 31, 2000, we had payments for distributions totaling
$80.4 million and payments for treasury share purchases and Unit redemptions in
connection with the Trust's common equity repurchase program totaling $47.3 million, net
repayment of borrowings of $3.7 million and payments of deferred financing costs
and principal escrow deposits totaling $1.8 million.  These payments were
offset in part by proceeds from
the exercise of share options of $4.7 million.
          As of December 31, 2001, we had total indebtedness of $877,231, cash and cash
equivalents of $4,231, and principal escrow deposits reflected in restricted
cash of $4,087. Our indebtedness has an average of 4.1 years to maturity at
December 31, 2001. The aggregate maturities of notes payable at December 31,
2001 are as follows:

|2002
      2003
      2004
      2005
      2006
      2007 and thereafter
         Total | $86,072
      47,892
      212,460
      119,831
      206,241204,735$877,231
|----------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------

The maturities in 2002 include $83.3 million of unsecured
notes that mature in December 2002.  The indebtedness outstanding under
each of our credit facilities is reflected in the preceding table using the May
2004 maturity date of our $225 million credit facility.   We have an
option to extend the maturity date of our $225 million credit facility to May
2005, which is exercisable in May 2002.
       Distributions through the fourth quarter of 2001 have been paid from cash provided
by operating activities. We anticipate that distributions will continue to be paid
on a quarterly basis from cash provided by operating activities.

MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

budgeted expenditures for
improvements and renovations to our communities, in addition to monthly
principal amortization payments, are also expected to be funded from net cash
provided by operations. We anticipate that construction and development
activities, as well as land purchases, will be initially funded primarily through
borrowings under our credit facilities described below.
        We expect to meet certain of our long-term liquidity
requirements, such as scheduled debt maturities, repayment of short-term
financing of construction and development activities and possible property
acquisitions, through long-term secured and unsecured borrowings, the issuance
of debt securities or equity securities, private equity investments in the form
of joint ventures, or through the disposition of assets which, in our
evaluation, may no longer meet our investment requirements.$225 Million Credit FacilityWe have a $225 million unsecured revolving credit facility provided by a
consortium of banks. The facility currently has a maturity date of May 2004 with
a one-year extension option. Borrowings under the facility currently bear
interest at our option of LIBOR plus 0.85% or prime minus 0.25%. Such scheduled
interest rates may be adjusted up or down based on changes in our senior
unsecured credit ratings. We may also enter into competitive bid loans with
participating banks for up to $112.5 million at rates below the scheduled rates.
In addition, we pay an annual facility fee currently equal to 0.20% of the $225
million commitment. Availability under the facility, which is based on the value
of our unencumbered real estate assets as compared to
the amount of our unsecured indebtedness, was $219 million at December 31, 2001.  
As of December 31, 2001, we had $80.0 million in borrowings outstanding
under the facility and, therefore, had $139 million of remaining capacity on the
$219 million available. $75 Million Borrowing FacilityWe have a $75 million unsecured borrowing facility with a bank that matures
in April 2002.  The interest rate and maturity date related to each draw on
this facility is agreed to by both parties prior to each draw.  We expect
the facility to be renewed for an additional one-year term at
maturity.   At December
31, 2001, we had $52.2 million in borrowings outstanding under this
facility.$25 Million Credit FacilityWe have a $25 million unsecured revolving credit facility with a bank that
currently bears interest at LIBOR plus 0.85%. The facility currently has a
maturity date of October 2002 with unlimited one-year extension options. We had
$0.7 million in borrowings outstanding under this facility at December 31, 2001.Restrictive CovenantsCertain of our debt agreements contain customary representations, covenants
and events of default, including covenants which restrict our ability to make distributions in excess of stated amounts, which
in turn restricts the Trust's discretion to declare and pay dividends. In general,
during any fiscal year, we may only distribute up to 95%
of our consolidated income available for distribution (as defined in the related
agreement), exclusive of distributions of capital gains for such year. The
applicable debt agreements contain exceptions to these limitations to allow us to make any distributions necessary to allow
the Trust to
maintain its status as a REIT. We do not anticipate that this provision will
adversely effect our ability to make distributions
or the Trust's ability to declare dividends, under its current dividend policy.InflationSubstantially all leases at our communities are for a term of one year or
less, which may enable us to seek increased rents upon renewal of existing
leases or commencement of new leases in times of rising prices. The short-term
nature of these leases generally serves to lessen the impact of cost increases
arising from inflation.
MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

Certain Factors Affecting Future Operating ResultsThis report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The words "believe,"
"expect," "anticipate," "intend,"
"estimate," "assume" and other similar expressions, which are
predictions of or indicate future events and trends and which do not relate
solely to historical matters, identify forward-looking statements. These statements include, among other things, statements regarding our intent, belief
or expectations with respect to the following: (1) the declaration or payment of
distributions, (2) potential developments or acquisitions or dispositions ofproperties, assets or other entities, (3) our policies regarding investments,
indebtedness, acquisitions, dispositions, financings, conflicts of interest and
other matters, (4) the Trust's qualification as a REIT under the Internal Revenue Code, (5) the real
estate markets in which we operate, (6) in general, the
availability of debt and equity financing, interest rates and general economic
conditions and (7) trends affecting our financial condition or results of
operations.
       Reliance should not be placed on forward-looking statements because they involve
known and unknown risks, uncertainties and other factors that are, in some
cases, beyond our control and may cause our actual results, performance or
achievements to differ materially from anticipated future results, performance
or achievements expressed or implied by such forward-looking statements. Factors
that might cause such a difference include, but are not limited to, the
following: (1) we may abandon or fail to secure development opportunities, (2)
construction costs of a community may exceed original estimates, (3)
construction and lease-up may not be completed on schedule, resulting in
increased debt service expense and construction costs and reduced rental
revenues, (4) occupancy rates and market rents may be adversely affected by
local economic and market conditions that are beyond our control, (5) financing
may not be available or may not be available on favorable terms, (6) our cash
flow may be insufficient to meet required payments of principal and interest
and (7) existing indebtedness may mature in an unfavorable credit environment,
preventing such indebtedness from being refinanced or, if financed, causing such
refinancing to occur on terms that are not as favorable as the terms of existing
indebtedness. While forward-looking statements reflect our good faith beliefs,
they are not guarantees of future performance. We disclaim any obligation to
publicly update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise.



MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

Supplemental Discussion - Funds From Operations and Adjusted
Funds From OperationsWe consider funds from operations ("FFO")
to be a useful performance measure of the operating performance of an equity
REIT because, together with net income and cash flows, FFO provides investors
with an additional basis to evaluate the ability of a REIT to incur and service
debt and to fund distributions and capital expenditures. We believe that in
order to facilitate a clear understanding of our operating results, FFO should
be examined in conjunction with net income as presented in the financial
statements and data included elsewhere in this report. We compute FFO in
accordance with standards established by the National Association of Real Estate
Investment Trusts ("NAREIT"). Effective January 1, 2000, NAREIT amended its
definition of FFO to include in FFO all non-recurring items, except those
defined as extraordinary items under GAAP and gains and losses from sales of
depreciable operating property. We are using the amended definition of FFO in
reporting our results for all periods on or after January 1, 2000. In
addition, we have restated FFO reported for prior periods. FFO as defined by
NAREIT represents net income (loss) determined in accordance with GAAP,
excluding extraordinary items as defined under GAAP and gains or losses from
sales of depreciable operating property, plus certain non-cash items such as
real estate asset depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. FFO presented herein is not
necessarily comparable to FFO presented by other real estate companies due to
the fact that not all real estate companies use the same definition. However,
our FFO is comparable to the FFO of real estate companies that use the amended
NAREIT definition. Adjusted funds from operations ("AFFO") is defined as FFO
less recurring, non-revenue enhancing capital expenditures. FFO and AFFO should
not be considered alternatives to net income as indicators of our operating
performance or as alternatives to cash flows as measures of liquidity. FFO does
not measure whether cash flow is sufficient to fund all of our cash needs,
including principal amortization, capital expenditures and distributions to unitholders. Additionally, FFO does not represent cash flows
from operating, investing or financing activities as defined by GAAP. Reference
is made to "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" for a discussion of our
cash needs and cash flows. A reconciliation of FFO and AFFO follows:

|                                                                                                                                                                                                                                                                                                                                      | Years Ended December 31,                                 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                      | 2001                                                     
|Net income available to common
      unitholders
      Gain on sale of previously depreciated operating real estate assets
      Real estate asset depreciation and amortization:
         Wholly-owned real estate assets
         Joint venture real estate assets
           Total real estate asset depreciation and amortization | $ 69,323 
      (34,110)
      47,605 1,708 
      49,313
|Funds from operations - basic
      and diluted                                                                                                                                                                                                                                                                                       | $84,526                                                  
|Recurring, non-revenue enhancing
      capital expenditures:
         Carpet and flooring
         Appliances
         Other additions and improvements
           Total capital expenditures                                                                                                                                         | $5,966 
      671 5,160 11,797                           
|Adjusted funds from
      operations - basic and diluted                                                                                                                                                                                                                                                                              | $72,729                                                  
|Average Units outstanding - basic                                                                                                                                                                                                                                                                                                     | 30,153                                                   
|Average Units
      outstanding - diluted                                                                                                                                                                                                                                                                                             | 30,314                                                   

MANAGEMENT'S DISCUSSION AND ANALYSIS(Amounts in Thousands,
Except Property and Per Unit Data)

---

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

       Our capital structure includes the use of
variable-rate and fixed-rate indebtedness. As such, we are exposed to the impact
of changes in interest rates. We periodically seek input from third-party
consultants regarding market interest rate and credit risk in order to evaluate
our interest rate exposure. In certain situations, we may utilize derivative
financial instruments in the form of rate caps, rate swaps or rate locks to
hedge interest rate exposure by modifying the interest rate characteristics of
related balance sheet instruments and prospective financing transactions. We do
not utilize such instruments for trading or speculative purposes.  We did
not have any derivative instruments in place at December 31, 2001 or 2000.

We typically refinance maturing debt
instruments at then-existing market interest rates and terms which may be more
or less than the interest rates and terms on the maturing debt.

The following table provides information
about our derivative financial instruments and other financial instruments that
are sensitive to changes in interest rates and should be read in conjunction
with the accompanying consolidated financial statements and notes thereto. For
debt obligations, the table presents principal cash flows and related weighted
average interest rates in effect at December 31, 2001 by expected
maturity dates.   The indebtedness outstanding under each of our
credit facilities is reflected in the table using the May 2004 maturity date of
our $225 million credit facility.  The weighted average interest rates presented in this table are
inclusive of credit enhancement fees. There have been no substantial changes in our market
risk profile from the preceding year and the assumptions are consistent with
prior year assumptions.

Expected
Year of Maturity

2002
      2003
      2004
      2005
      2006
      2007 andThereafter
      2001Total
      2001Fair Value
      2000TotalDebt:Conventional fixed rate
        Average interest rate
      $85,882
        8.28%
      $  2,757
        7.79%
      $ 21,151
        7.22%
      $109,516
        6.83%
      $180,256
        7.29%
      $104,500
        8.13%
      $504,062
        7.53%
      $476,928
        5.78%
      $372,290
        7.61%Tax-exempt fixed rate
        Average interest rate
      $   
        190
        7.63%
      $    
        205
        7.63%
      $ 58,405
        6.26%
      $     
        230
        7.63%
      $     
        245
        7.63%
      $ 10,035
        7.63%
      $ 69,310
        6.47%
      $ 66,898
        4.56%
      $ 80,290
        6.38%Tax-exempt variable rate
        Average interest rate
      -
        -
      $44,930
        2.55%
      -
        -
      $ 10,085
        2.45%
      $ 25,740
        2.50%
      $ 90,200
        2.43%
      $170,955
        2.47%
      $170,955
        2.47%
      $160,155
        5.70%Credit facilities
        Average interest rate
      -
        -
      -
        -
      $132,904
        2.94%
      -
        -
      -
        -
      -
        -
      $132,904
        2.94%
      $132,904
        2.94%
      $108,617
        7.29%Variable-rate loans
        Average interest rate
      -
                   -
      -
                   -
      -
                    -
      -
                    
        -
      -
                    
        -
      -
                    
        -
      -
                    
        -
      -
                    
        -
      $ 44,575
           7.46%Total debt
           Average interest rate
      $86,072
        8.28%
      $47,892
        2.87%
      $212,460
        4.28%
      $119,831
        6.46%
      $206,241
        6.69%
      $204,735
        5.60%
      $877,231
        5.77%
      $847,685
        4.57%
      $765,927
        7.03%


The estimated fair value of our debt at
December 31, 2001 is based on a discounted cash flow analysis using
current borrowing rates for debt with similar terms and remaining maturities.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplementary data are listed under
Item 14(a) and filed as part of this report on the pages indicated. ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENot applicable.

PART III

Gables GP, the sole general partner of the Registrant, is a wholly-owned
subsidiary of Gables Residential Trust (the "Trust"). 
The members of the board of directors of Gables GP are the same as the
members of the board of trustees of the Trust. 
The "executive officers" of Gables GP are the same as the
"executive officers" of the Trust.  
Other than the Trust, which beneficially owns 80.6%
of the Registrant's outstanding common Units as of March 15, 2002, no person beneficially owns more
than 5% of the Registrant's outstanding common Units. 
All applicable information required by this Part III with respect to the
Registrant will be included in the Trust's Proxy Statement to be filed in
connection with its 2002 Annual Meeting of Shareholders.
ITEM 10.   DIRECTORS AND
EXECUTIVE OFFICERS OF THE REGISTRANT



        
The information concerning the Directors and Executive Officers of the
Registrant required by Item 10 shall be included in the Trust's
Proxy
Statement to be filed relating to the 2002 Annual Meeting of its Shareholders
and is incorporated herein by reference. ITEM 11.  EXECUTIVE COMPENSATION


         The information
concerning Executive Compensation required by Item 11 shall be included in the
Trust's Proxy Statement to be filed relating to the 2002 Annual Meeting of its
Shareholders and is incorporated herein by reference.ITEM 12.   SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The information concerning
Security Ownership of Certain Beneficial Owners and Management required by Item
12 shall be included in the Trust's Proxy Statement  to be filed relating to
the 2002 Annual Meeting of its Shareholders and is incorporated herein by
reference.
ITEM 13.  CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS

        The information concerning
Certain Relationships and Related Transactions required by Item 13 shall be
included in the Trust's Proxy Statement to be filed relating to the 2002
Annual Meeting of its Shareholders and is incorporated herein by reference.

PART
IV

ITEM 14.  EXHIBITS, FINANCIAL
STATEMENTS AND SCHEDULE AND REPORTS ON FORM 8-K

14(a)(1) and (2)  Financial Statements and ScheduleThe financial statements and schedule listed below are filed as part of this
annual report on the pages indicated.

Report of Independent Public AccountantsConsolidated Balance Sheets as of December 31, 2001 and December 31,
        2000Consolidated Statements of Operations for the years ended December 31,
        2001, 2000 and 1999Consolidated Statements of Partners' Capital for the years ended
        December 31, 2001, 2000 and 1999Consolidated Statements of Cash Flows for the years ended December 31,
        2001, 2000 and 1999Notes to Consolidated Financial StatementsSchedule III - Real Estate Investments and Accumulated Depreciation as
        of December 31, 2001
      45
        46
        47
        48
        49
        50
        67


14(a)(3)    ExhibitsCertain of the exhibits required by Item 601 of Regulation S-K have been
filed with previous reports by the Registrant, referred to herein as the Operating Partnership (File
No. 0-22683), or the Trust (File No. 1-12590) and are incorporated herein by
reference to the filing in the corresponding numbered footnote.

Exhibit No.
      Description3.1
        3.2
        3.3
        3.4
        3.5
        3.6
        3.7
        4.1
        4.2
        4.3
        4.4
        4.5
        
        10.1
        10.2
        10.3
        10.4
        10.5
        10.6
        21.1
        23.1
        99.1
      *
        *
        *
      ---
        ---
        ---
        ---
        ---
        ---
        ---
        
        ---
        ---
        ---
        ---
        ---
        ---
        ---
        ---
        
        ---
        
        ---
        ---
        
        ---
        ---
      Fourth Amended and Restated
        Agreement of Limited Partnership of the Operating Partnership (1)
        Amended and Restated Declaration of Trust of the Trust (2)
        Articles of Amendment to the Trust's Amended and Restated Declaration of
        Trust (3)
        Articles Supplementary to the Trust's Amended and Restated Declaration
        of Trust creating the 8.30% Series A Cumulative Redeemable Preferred
        Shares (4)
        Articles Supplementary to the Trust's Amended and Restated Declaration
        of Trust creating the 5.00% Series Z Cumulative Redeemable Preferred
        Shares (3)
        Articles Supplementary to the Trust's Amended and Restated Declaration
        of Trust creating the 8.625% Series B Cumulative Redeemable Preferred
        Shares (1)
        Second Amended and Restated Bylaws of the Trust (5)
        Indenture, dated March 23, 1998, between the Operating Partnership
        and First Union National Bank(6)
        Supplemental Indenture No. 1, dated March 23, 1998, between the
        Operating Partnership and First Union  National Bank (6)
        The Operating Partnership 6.80% Senior Note due 2005 (6)
        Supplemental Indenture No. 4, dated February 22, 2001, between the
        Operating Partnership and First Union National Bank (7)
        The Operating Partnership 7.25% Senior Notes due 2006 (7)
        Unsecured Note No. 1 for $86,346,000 dated August 13, 1997 between the
        Operating Partnership, Gables-Tennessee Properties and Teachers
        Insurance and Annuity Association of America (8)
        Unsecured Note No. 2 for $29,681,000 dated August 13, 1997 between the
        Operating Partnership, Gables-Tennessee Properties and Teachers
        Insurance and Annuity Association of America (8)
        Second Amended and Restated $225,000,000 Revolving Credit Facility, dated
        as of August 14, 2000, by and among Gables Realty Limited Partnership and
        Gables-Tennessee Properties, LLC (as the Borrowers) and Wachovia Bank,
        N.A., First Union National Bank, The Chase Manhattan Bank, AmSouth Bank,
        PNC Bank, National Association, SouthTrust Bank, and Bank of America,
        N.A. (collectively, as lenders) and Wachovia Bank, N.A. (as agent) (9)
        Third Amended and Restated $225,000,000 Revolving Credit Facility, dated
        May 14, 2001, by and among Gables Realty Limited Partnership and
        Gables-Tennessee Properties, LLC (as the Borrowers) and Wachovia
        Bank, N.A., First Union National Bank, The Chase Manhattan Bank, AmSouth
        Bank, PNC Bank, National Association, SouthTrust Bank, and Bank of
        America, N.A. (collectively, as Lenders) and Wachovia Bank, N.A. (as
        agent) (10)
        Contribution Agreement with an effective date of March 16, 1998 between
        the Trust, the Operating Partnership and specified representatives of
        Trammell Crow Residential executed in connection with Gables' April 1,
        1998 acquisition of the real estate assets and operations of South Florida
        (11)
        Amendment No. 1 to Contribution Agreement dated April 1, 1998 (12)
        Schedule of Subsidiaries of the Operating Partnership
        Consent of Arthur Andersen LLP
        Letter to Securities and Exchange Commission regarding representations
        received from Arthur Andersen LLP
        __________________
        * Filed herewith


|(1)
        (2)
        (3)
        (4)
        (5)
        (6)
        (7)
        (8)
        (9)
        (10)
        (11)
        (12) | The Trust's Current Report on
        Form 8-K dated November 12, 1998 (File No. 1-12590).
        The Trust's Registration Statement on Form S-11, as amended (File No.
        33-70570).
        The Trust's Quarterly Report on Form 10-Q for the quarter ended June 30,
        1998 (File No. 1-12590).
        The Trust's Current Report on Form 8-K dated July 24, 1997 (File No.
        1-12590).
        The Trust's Annual Report on Form 10-K for the fiscal year ended December
        31, 1999 (File No. 1-12590).
        The Operating Partnership's Current Report on Form 8-K dated March 23,
        1998 (File No. 0-22683).
        The Operating Partnership's Current Report on Form 8-K dated February
        22, 2001 (File No.0- 22683).
        The Trust's Quarterly Report on Form 10-Q for the quarter ended September
        30, 1997 (File No. 1-12590).
        The Trust's Quarterly Report on Form 10-Q for the quarter ended September
        30, 2000 (File No. 1-12590).
        The Trust's Quarterly Report on Form 10-Q for the quarter ended June 30,
        2001 (File No. 1-12590).
        The Trust's Current Report on Form 8-K dated March 16, 1998 (File No.
        1-12590).
        The Trust's Current Report on Form 8-K dated April 1, 1998, as amended (File
        No. 1-12590).
|------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Registrant's Proxy Statement is to be filed with the
Securities and Exchange Commission not later than 120 days after December 31,
2001 (the end of the fiscal year covered by this Annual Report on Form 10-K).14(b)     Reports on Form 8-KNone14(c)    ExhibitsSee Item 14(a)(3) above







SIGNATURES

Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, Gables Realty Limited Partnership
certifies that it has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

| |  |  |                                                                                                |  |  |                                                                                                                                        
| |  |  | ---------------------------------------------------------------------------------------------- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------
| |  |  | GABLES REALTY LIMITED
      PARTNERSHIP
      By:  Gables GP, Inc.
      Its:  General Partner
|
| |  |  | By                                                                                             |  |  | /s/ Chris D. Wheeler
      Chris D. Wheeler
      Chairman of the Board of Directors,
      President and Chief Executive
      Officer
| |  |  |                                                                                                |  | 
| |  |  |                                                                                                |  | 
| |  |  |                                                                                                |  | 
| |  |  |                                                                                                |  | 
| |  |  |                                                                                                |  |  | March 15, 2002                                                                                                                         

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of Gables
GP, Inc., as general partner of Gables Realty Limited Partnership, and in the
capacities and on the dates indicated.

Signatures
      Title
      Date/s/ Chris D. WheelerChris D. Wheeler/s/ Marvin R. Banks, Jr.Marvin R. Banks, Jr./s/ Dawn H. SevertDawn H. Severt/s/ Marcus E. BromleyMarcus E. Bromley/s/ C. Jordan ClarkC. Jordan Clark/s/ Lauralee E. MartinLauralee E. Martin/s/ John W. McIntyreJohn W. McIntyre/s/ Mike E. MilesMike E. Miles/s/ James D. MottaJames D. Motta
      Chairman of the Board of Directors, President and
        Chief Executive Officer 
        (Principal Executive Officer)
        Senior Vice President and Chief Financial Officer
        (Principal Financial Officer)
        Vice President and Chief Accounting Officer
        (Principal Accounting Officer)
        Director
        Director
        Director
        Director
        Director
        Director
      March 15, 2002
        March 15, 2002
        March 15, 2002
        March 15, 2002
        March 15, 2002
        March 15, 2002
        March 15, 2002
        March 15, 2002
        March 15, 2002




REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Gables Realty Limited Partnership:

We have audited the accompanying
consolidated balance sheets of Gables Realty Limited Partnership and subsidiaries as of
December 31, 2001 and 2000 and the related consolidated statements of
operations, partners' capital and cash flows for each of the three years in
the period ended December 31, 2001. These financial statements are the responsibility of the management of
Gables Realty Limited Partnership. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

We conducted our audits in accordance
with auditing standards generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects,
the financial position of Gables Realty Limited Partnership and subsidiaries as of
December 31, 2001 and 2000 and the results of their operations and their
cash flows for each of the three years in the period ended December 31,
2001 in conformity with accounting principles generally accepted in the United
States.

Our audits were made for
the purpose of forming an opinion on the basic financial statements taken as a
whole.  The schedule listed in the index to financial statements is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements.  This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.



/s/
Arthur Andersen  LLP

Atlanta, GeorgiaMarch 8,
2002



GABLES REALTY LIMITED PARTNERSHIPCONSOLIDATED BALANCE SHEETS
        (Amounts in Thousands, Except Per Unit Data)December 31, 2001
      December 31, 2000ASSETS:Real estate assets:
           Land
           Buildings
           Furniture, fixtures and equipment
           Construction in progress
           Investment in joint ventures
           Undeveloped land
             Real estate assets before accumulated
        depreciation
           Less: accumulated depreciation
             Net real estate assets
        Cash and cash equivalents
        Restricted cash
        Deferred financing costs, net of accumulated amortization of
         $5,450 and $4,341 at December 31, 2001 and 2000, respectively
        Other assets, net
           Total assets
    
    $248,955 
      1,204,680 
      109,324 
      158,340 
      20,898 14,678 
      1,756,875 (230,118)1,526,757 
      4,231 
      12,013 
      4,351 41,854 
      $1,589,206
    $   209,470 
      1,106,900 
      93,578 
      122,947 
      24,626 30,323 
      1,587,844 (195,706)
      1,392,138 
      4,252 
      17,902 
      3,981 34,747 $1,453,020LIABILITIES ANDPARTNERS'
        CAPITAL
        Notes payable
        Accrued interest payable
        Preferred distributions payable
        Real estate taxes payable
        Accounts payable and accrued expenses - construction
        Accounts payable and accrued expenses - operating
        Security deposits
           Total liabilities
        Limited partners' common capital interest (6,090 and 6,663 common
        Units), at
              redemption value
        Preferred partners' capital interest (180 Series Z preferred Units), at
        $25.00
              liquidation preference
        Commitments and contingencies
        Partners' capital:
           General partner (305 and 298 common Units)
           Limited partner (24,059 and 22,828 common Units)
           Preferred partners (4,600 Series A Preferred Units and
        2,000
             Series B Preferred Units), at $25.00
        liquidation preference
           Total partners' capital
             Total liabilities, partners' capital interest
        and partners' capital
      $877,231 
        8,384 
        1,412 
        17,065 
        9,082 
        16,914 4,834 
        934,922 180,467 
        4,500 4,766 
        299,551 165,000 
        469,317 $1,589,206
      $   765,927 
        5,140 
        1,187 
        15,650 
        10,082 
        11,825 4,312 
        814,122 
        185,362 
        4,500 
        4,567 
        279,469 165,000 449,036 $1,453,020
    The accompanying notes are an integral
        part of these consolidated balance sheets.




|GABLES REALTY LIMITED PARTNERSHIPCONSOLIDATED STATEMENTS OF OPERATIONS
      (Amounts in Thousands, Except Per Unit Data)                                                                                                                                                                                                                                                                                                                                              
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Revenues:Rental revenues
      Other property revenues
           Total property revenues
      Property management revenues
      Development revenues, net
      Equity in income of joint ventures
      Interest income
      Other
           Total other revenues
           Total revenues                                                                                                                                                                      
|Expenses:Property operating and maintenance
           (exclusive of items shown separately below)
      Real estate asset depreciation and amortization
      Property management - owned
      Property management - third party
      Interest expense and credit enhancement fees
      Amortization of deferred financing costs
      General and administrative
      Corporate asset depreciation and amortization
      Unusual items
           Total expenses
|Gain on sale of real estate assets                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Net income
      Distributions to preferred unitholders
      Net income available to common unitholders                                                                                                                                                                                                                                                                                                                                                               
|Weighted average number of common Units outstanding -
      basic
      Weighted average number of common Units outstanding - diluted                                                                                                                                                                                                                                                                                                                                  
|Per Common Unit Information:Net income - basic
      Net income - diluted                                                                                                                                                                                                                                                                                                                                                                                              
|The accompanying notes are an integral part of these consolidated
      statements.                                                                                                                                                                                                                                                                                                                                                                                    



GABLES REALTY LIMITED PARTNERSHIPCONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(Amounts in Thousands, Except Per Unit Data)

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | GeneralPartner                                                                             | Limited Partner                                                                                                  | PreferredPartners                                                  | Total
      Partners'Capital                                                                                   | Limited
      Partners'
      Common
      CapitalInterest                                           | Preferred
      Partners'
      CapitalInterest                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------
|Balance, December 31, 1998                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | $5,725                                                                                     | $385,685                                                                                                         | $165,000                                                           | $556,410                                                                                                       | $157,663                                                                                             | $4,500                                                                    
|Contributions from the Trust
      related to:
         Proceeds from the exercise of share options
         Proceeds from Share Builder Plan
         Issuance of shares for trustee compensation
         Issuance of share grants, net of forfeitures
           and deferred compensation
      Contributions related to property acquisitions
      Redemption of Units from the Trust for treasury
         share purchases
      Redemption of Units for cash
      Net income available to common unitholders
      Distributions declared and paid ($2.08 per Unit)
      Adjustments to reflect limited partners' redeemable
         capital at redemption value at balance sheet date | 12 
      77 
       1 
      17 
      9 
      (501)
      (59)
      529 
      (669)13 | 1,220 
      7,573 
      71 
      1,667 
      (9)
      (49,557)
      59 
      42,072 
      (53,126)13,195 | -
      -
      -
      -
      -
      -
      -
      -
      -- | 1,232 
      7,650 
      72 
      1,684 
      - 
      (50,058)
      - 
      42,601 
      (53,795)13,208 | - 
      - 
      - 
      - 
      919 
      - 
      (5,877)
      10,348 
      (13,088)(13,208) | -
      -
      -
      -
      -
      -
      -
      -
      -
       -
|Balance, December 31, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 5,154                                                                                      | 348,850                                                                                                          | 165,000                                                            | 519,004                                                                                                        | 136,757                                                                                              | 4,500                                                                     
|Contributions from the Trust
      related to:
         Proceeds from the exercise of share options
         Issuance of shares for trustee compensation
         Issuance of share grants, net of forfeitures
           and deferred compensation
      Contributions related to property acquisitions
      Redemption of Units from the Trust for treasury
         share purchases
      Redemption of Units for cash
      Net income available to common unitholders
      Distributions declared and paid ($2.20 per Unit)
      Adjustments to reflect limited partners' redeemable
         capital at redemption value at balance sheet date                                           | 47 
      1 
      22 
      104 
      (452)
      (9)
      739 
      (665)(374)        | 4,652 
      57 
      2,208 
      (104)
      (44,773)
      9 
      56,840 
      (51,244)(37,026)           | -
      -
      -
      -
      -
      -
      -
      --         | 4,699 
      58 
      2,230 
      - 
      (45,225)
      - 
      57,579 
      (51,909)(37,400)            | - 
      - 
      - 
      10,373 
      - 
      (888)
      16,359 
      (14,639)37,400           | -
      -
      -
      -
      -
      -
      -
      --                
|Balance, December 31, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 4,567                                                                                      | 279,469                                                                                                          | 165,000                                                            | 449,036                                                                                                        | 185,362                                                                                              | 4,500                                                                     
|Contributions from the Trust
      related to:
         Proceeds from the exercise of share options
         Issuance of shares for trustee compensation
         Issuance of share grants, net of forfeitures
           and deferred compensation
      Conversion of redeemable Units to common shares
      Net income available to common unitholders
      Distributions declared and paid ($2.34 per Unit)
      Adjustments to reflect limited partners' redeemable
         capital at redemption value at balance sheet date                                                                                                                                                            | 151 
      1 
      16 
      163 
      693 
      (707)(118)                             | 14,993 
      87 
      1,550 
      16,159 
      54,381 
      (55,447)(11,641)                                | -
      -
      -
      -
      -
      --                         | 15,144 
      88 
      1,566 
      16,322 
      55,074 
      (56,154)(11,759)                              | - 
      - 
      - 
      (16,322)
      14,249 
      (14,581)11,759                               | -
      -
      -
      -
      -
      -
       -                        
|Balance, December 31, 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | $4,766                                                                                     | $299,551                                                                                                         | $165,000                                                           | $469,317                                                                                                       | $180,467                                                                                             | $4,500                                                                    
|The
      accompanying notes are an integral part of these consolidated statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              



|GABLES REALTY LIMITED PARTNERSHIPCONSOLIDATED STATEMENTS OF CASH FLOWS
      (Amounts in Thousands, Except Per Unit Data)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Years
      Ended December 31,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|CASH FLOWS FROM OPERATING ACTIVITIES:Net income
      Adjustments to reconcile net income to net cash provided 
         by operating activities:
           Depreciation and amortization
           Equity in income of joint ventures
           Gain on sale of real estate assets
           Long-term compensation expense
           Amortization of discount on long-term liability
           Non-cash or non-operating unusual items
           Operating distributions received from joint
      ventures 
           Change in operating assets and liabilities:
              Restricted cash
              Other assets
              Other liabilities, net
                  Net cash provided
      by operating activities
|CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition and construction of real estate assets
      Restricted cash released from (held in) escrow, net
      Net proceeds from sale of real estate assets
      Investment in joint ventures
      Proceeds from contribution of real estate assets to joint venture
      Other
                Net cash (used
      in)  provided by investing activities                                                                                                                                                                                                                                                                                                                                      
|CASH FLOWS FROM FINANCING ACTIVITIES:Contributions from the Trust related to:
         Proceeds from the exercise of share options
         Share Builder Plan contributions
      Treasury share purchases and Unit redemptions
      Payments of deferred financing costs
      Notes payable proceeds
      Notes payable repayments
      Principal escrow deposits
      Preferred distributions paid
      Common distributions paid ($2.34, $2.20 and $2.08 per Unit, resp.)
             Net cash provided by (used in)
      financing activities
      Net change in cash and cash equivalents
      Cash and cash equivalents, beginning of year
      Cash and cash equivalents, end of year                                    
|Supplemental disclosure of cash flow information:Cash paid for interest
         Interest capitalized
         Cash paid for interest, net of amounts capitalized                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|The accompanying notes are an integral
      part of these consolidated statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

Unless the context otherwise requires, all references to "we,"
  "our" or "us" in this report refer collectively to Gables
  Realty Limited Partnership and its subsidiaries.1.ORGANIZATION AND FORMATIONGables Realty Limited Partnership
  (the "Operating Partnership") is the entity through which Gables
  Residential Trust (the "Trust"), a real estate investment trust (a
  "REIT"), conducts substantially all of its business and owns, either
  directly or indirectly through subsidiaries, substantially all of its assets. 
  The Trust was formed in 1993 under Maryland law to continue and expand
  the operations of its privately owned predecessor organization. 
  The Trust completed its initial public offering on January 26, 1994.  
         We are a fully integrated real estate
  company engaged in the multifamily apartment community management,
  development, construction, acquisition and disposition businesses. 
  We also provide related brokerage and corporate rental housing services. Substantially all of our third-party management businesses
  are conducted through a wholly-owned subsidiary, Gables Residential Services.
         As of December 31, 2001, the Trust was an
  80.0% economic owner of our common equity. 
  The Trust controls us through Gables GP, Inc. ("Gables GP"), a
  wholly-owned subsidiary of the Trust and our sole general partner. 
  This structure is commonly referred to as an umbrella partnership REIT
  or "UPREIT."  The board of
  directors of Gables GP, the members of which are the same as the members of
  the Trust's board of trustees, manages our affairs by directing the affairs
  of Gables GP.  The Trust's
  limited partnership and indirect general partnership interests in us entitle
  it to share in our cash distributions, and in our profits and losses in
  proportion to its ownership interest therein and entitles the Trust to vote on
  all matters requiring a vote of the limited partners. 
  Generally, our other limited partners are persons who contributed their
  direct or indirect interests in certain of our properties primarily in
  connection with the IPO and the 1998 acquisition of the real estate assets and
  operations of Trammell Crow Residential South Florida ("South
  Florida").  
  We are obligated to redeem each common unit of limited partnership interest
  ("Units") held by a person other than the Trust at the request of
  the holder for an amount equal to the fair market value of a share of the the
  Trust's common shares at the time of such redemption, provided that the
  Trust, at its option, may elect to acquire each Unit presented for redemption
  for one common share or cash.  Such
  limited partners' redemption rights are reflected in "limited partners'
  capital interest" in our accompanying consolidated balance sheets at the
  cash redemption amount at the balance sheet date. The Trust's percentage
  ownership interest in us will increase with each redemption. 
  In addition, whenever the Trust issues common shares or preferred
  shares, it is obligated to contribute any net proceeds to us and we are
  obligated to issue an equivalent number of common or preferred Units, as
  applicable, to the Trust.
         Distributions to holders of Units are
  made to enable distributions to be made to
  the Trust's shareholders under
  its dividend policy.  The Trust must currently distribute 90% of its ordinary
  taxable income to its shareholders.  We make distributions to the Trust to enable it to satisfy
  this requirement.

As of December
31, 2001, we managed a total of 156 multifamily apartment communities comprising 44,453
apartment homes for assets owned by us and our third-party clients.  At
December 31, 2001, we owned 75 stabilized multifamily apartment communities
comprising 21,085 apartment homes, an indirect 25% interest in one stabilized
apartment community comprising 345 apartment homes, an indirect 20% interest in
four stabilized apartment communities comprising 1,359 apartment homes, and an
indirect 8.3% interest in three stabilized apartment communities comprising
1,118 apartment homes.  We also owned seven multifamily apartment
communities under development or in lease-up at December 31, 2001 that are
expected to comprise 1,586 apartment homes upon completion and an indirect 20%
interest in five apartment communities under development or in lease-up at
December 31, 2001 that are expected to comprise 1,367 apartment homes upon
completion.  In addition, as of December 31, 2001, we owned parcels of land
on which we intend to develop two apartment communities that we currently expect
will comprise an estimated 761 apartment homes.  We also have rights to
acquire additional parcels of land on which we believe we could develop
communities.  Any future development is subject to permits and other
governmental approvals, as well as our ongoing business review, and may not be
undertaken or completed.
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

2. COMMON AND PREFERRED EQUITY ACTIVITY

Secondary Common Share Offerings

Since the IPO, the Trust
has issued a total of
14,831 common shares in eight offerings, generating $347,771 in net proceeds
which were generally used (1) to reduce outstanding indebtedness under
interim financing vehicles utilized to fund our development and acquisition
activities and (2) for general working capital purposes, including funding
of future development and acquisition activities.Preferred Share Offerings

On July 24, 1997, the
Trust issued 4,600
shares of 8.30% Series A Cumulative Redeemable Preferred Shares
(liquidation preference $25.00 per share). The net proceeds from this offering
of $111.0 million were used to reduce outstanding indebtedness under
interim financing vehicles. The Series A Preferred Shares may be redeemed
at $25.00 per share plus accrued and unpaid dividends on or after July 24,
2002. The Series A Preferred Shares have no stated maturity, sinking fund
or mandatory redemption, and are not convertible into any other securities of
  the Trust.

On June 18, 1998, the
Trust issued 180
shares of 5.0% Series Z Cumulative Redeemable Preferred Shares (liquidation
preference $25.00 per share) in connection with the acquisition of a parcel of
land for future development. The Series Z Preferred Shares, which are
subject to mandatory redemption on June 18, 2018, may be redeemed at any time
for $25.00 per share plus accrued and unpaid dividends. The Series Z
Preferred Shares are not subject to any sinking fund or convertible into any
other securities of the Trust.

Issuances of Common Operating Partnership Units

Since the IPO, we have issued a total of 4,421 Units in connection with the 1998 acquisition of the
real estate assets and operations of South Florida, the acquisition of other operating apartment
communities and the
acquisition of a parcel of land for future development. The 4,421 Units issued
include 470 Units valued at $10.4 million that were issued on January 1,
2000, related to a deferred portion of the South Florida acquisition purchase
price.

Issuance of Preferred Operating Partnership Units

On November 12, 1998,
we issued 2,000 of our 8.625% Series B Preferred Units to an
institutional investor. The net proceeds from this issuance of
$48.7 million were used to reduce outstanding indebtedness under interim
financing vehicles.  The Trust has the option to redeem the Series B Preferred
Units after November 14, 2003. These Units are exchangeable by the holder
into 8.625% Series B Cumulative Redeemable Preferred Shares of the Trust on a
one-for-one basis; however, this exchange right is generally not exercisable
until after November 14, 2008. The Series B Preferred Units have no
stated maturity, sinking fund or mandatory redemption.

Common Equity Repurchase Program

We
have a common equity repurchase program pursuant to which the Trust is
authorized to purchase up to $150 million of its outstanding common shares or
Units.  The Trust has repurchased
shares from time to time in open market and privately negotiated transactions,
depending on market prices and other conditions, using proceeds from sales of
selected assets.  Whenever the Trust
repurchases common shares from shareholders, we are required to redeem from the
Trust an equivalent number of Units on the same terms and for the same aggregate
price.  After redemption, the Units
redeemed by us are no longer deemed outstanding. 
Units have also been repurchased for cash upon their presentation for redemption
by unitholders.  As of December 31,
2001, we had redeemed 4,267 Units, for a total of $102,048, including 3,980
Units redeemed by the Trust.

Shelf Registration Statement

We have an effective shelf registration
statement on file with the Securities and Exchange Commission providing
$500 million of equity capacity and $300 million of debt capacity. We
believe it is prudent to maintain shelf registration capacity in order to
facilitate future capital-raising activities. To date, there have been no
issuances under this shelf registration statement other than the issuance of
$150 million of senior unsecured notes in February 2001.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

3. PORTFOLIO AND OTHER FINANCING ACTIVITY

Community and Land DispositionsDuring 2001, we sold an apartment
community located in Atlanta comprising 386 apartment homes, an apartment
community located in Houston comprising 776 apartment homes, an apartment
community located in Dallas comprising 536 apartment homes and a 2.5 acre
parcel of land adjacent to one of our development communities located in
Atlanta.  The net proceeds from these sales totaled $93.6 million, $9 million
of which was deposited into an escrow account and used  to fund acquisition
activities.  The balance of the net proceeds was used to repay a $16 million note assumed in connection
with our September 2001 acquisition of the Gables State Thomas Ravello community
and to paydown
outstanding borrowings under interim financing vehicles.  The total gain from these
sales was $35.0 million, all of which was recognized in 2001.  In addition,
we recognized $0.7 million of deferred gain associated with a parcel of land we
sold in 2000 during the year ended December 31, 2001.

       During 2001, we contributed our interest in
certain land and development rights to the Gables Residential Apartment
Portfolio JV Two (the "GRAP JV Two") in return for (1) cash of $18.5 million and (2)
capital account credit of $4.6 million (see Note 5).  The $2.8 million of
gain we will record associated with this contribution is being recognized when
earned using the percentage of completion method since we serve as the developer
and general contractor for the joint venture.  We recognized $1.6 million
of this gain during the year ended December 31, 2001. 
       During 2000, we sold an apartment community
located in Dallas comprising 126 apartment homes, an apartment community located
in Houston comprising 228 apartment homes, two apartment communities located in
San Antonio comprising 544 apartment homes and a parcel of land adjacent to an
existing apartment community located in Atlanta.  In addition, on December
28, 2000, we sold substantially all of our interests in three apartment
communities located in Nashville and Memphis, comprising 1,118 apartment homes, to
the CMS Tennessee Multifamily JV (see Note 5).  The net proceeds from these
sales totaled $142.0 million, $30.2 million of which was deposited into an
escrow account and used to fund development and acquisition activities.
The balance of the net proceeds was used to (1) repay an $18.6 million note that
encumbered one of the assets sold, (2) paydown outstanding borrowings under
interim financing vehicles and (3) purchase common shares and Units under the
Trust's common
equity repurchase program.  The total gain recognized from these sales in
2000 was $29.5 million.  Gain of $0.8 million associated with the land sale
was deferred at December 31, 2000 and is being recognized when earned using the
percentage of completion method because we serve as the general contractor for
the construction of an apartment community on the parcel of land sold.

During 1999, we sold
three apartment communities located in Atlanta comprising 676 apartment homes,
two apartment communities located in Memphis comprising 490 apartment homes, an
apartment community located in Houston comprising 412 apartment homes and an
outparcel of land from an existing development community located in Dallas. The
net proceeds from these sales totaled $96.7 million and were used to paydown outstanding borrowings under interim financing vehicles and purchase common
shares and Units under the Trust's common equity repurchase program. The total gain from
these sales was $8.9 million.
       During 1999, we contributed our interest in
certain land and development rights to the Gables Residential Apartment
Portfolio JV (the "GRAP JV") in return for (1) cash of $65.1 million and (2) capital
account credit of $16.4 million.  There was no gain or loss associated with
this contribution.Community AcquisitionsOn September 28, 2001, we acquired the
80% membership interest of our venture partner in the GRAP JV in the Gables State Thomas
Ravello apartment community located in Dallas comprising 290 apartment homes. 
In consideration for such community, we paid $12 million in cash and assumed a
$16 million secured variable-rate note.  This consideration was based on a
valuation of the asset of $31 million and is net of our $3 million share of the
venture distribution.  We recorded a $5 million charge to unusual items in
2001 associated with the
write-off of building components that will be replaced in connection with a
remediation program to address water infiltration issues plaguing the asset.On August 28, 2001, we acquired an
apartment community located in Washington, D.C. comprising 82 apartment homes
for approximately $25 million.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

On August 1, 2001, we acquired the 75%
interest of our venture partner in the Gables Metropolitan Uptown apartment community located in Houston
comprising 318 apartment homes.  The asset was valued at approximately $27
million.
       On March 30, 2001, we acquired the 80%
membership interests of our venture partner in the GRAP JV in the Gables Palma Vista and Gables
San Michelle II apartment communities located in South
Florida comprising 532 apartment homes for $66 million. This cash consideration
was based on a valuation of the assets of $75 million and is net of our $9
million share of the venture distribution.
       During the third quarter
of 2000, we acquired an apartment community located in Austin comprising 160
apartment homes. In consideration for such community, we paid $6 million in cash
and assumed a $14 million secured fixed-rate note.

Other AcquisitionIn May 2001, we acquired a property
management company based in Washington, D.C. that manages approximately 3,600
units in 24 multifamily apartment communities located in Washington, D.C.
and the surrounding area (the "D.C. Management Co.").  The total
investment is approximately $1.6 million and is structured to be paid in three
installments based on results of the acquired business operations.Senior Unsecured Note IssuanceIn February 2001, we issued $150
million of senior unsecured notes which bear interest at 7.25%, were priced to
yield 7.29% and mature in February 2006.  The net proceeds of $148.5
million were used to reduce borrowings under our unsecured credit facilities and
repay our $40 million term loan, which had a November 2001 maturity date.
4. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Operations
       We are a fully integrated real estate
company engaged in the multifamily apartment community management, development,
construction, acquisition and disposition businesses. We also provide related
brokerage and corporate rental housing services. Our operating performance
relies predominantly on net operating income from the multifamily apartment
communities we own, which are located in major markets in Texas, Georgia,
Florida, Washington, D.C. and Tennessee.Basis of PresentationThe accompanying consolidated financial
  statements represent the consolidated accounts of Gables Realty Limited
  Partnership and its subsidiaries,
including Gables Residential Services. We
consolidate the financial statements of all entities in which we have a
controlling financial interest, as that term is defined under United States
generally accepted accounting principles ("GAAP"), through either majority
voting interest or contractual agreements.   Our investments in
non-majority owned and/or non-controlled joint ventures are accounted for using
the equity method.  Information regarding these unconsolidated joint
ventures is included in Note 5.  All significant intercompany accounts
and transactions have been eliminated in consolidation.ReclassificationsCertain amounts in the 2000 and 1999 financial
statements have been reclassified to conform to the 2001 presentation.Use of EstimatesThe preparation of financial statements
in conformity with GAAP requires us to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

Real Estate Assets and DepreciationReal estate assets are stated at the
lower of depreciated cost or fair value, if deemed impaired. The cost of
buildings and improvements includes interest, property taxes, insurance and
allocated development overhead incurred during the construction period. Ordinary
repairs and maintenance are expensed as incurred; major replacements and
betterments are capitalized and depreciated over their useful lives.
Depreciation is computed on a straight-line basis over the estimated useful lives of
20-40 years for buildings and improvements and 5 years for furniture, fixtures and equipment. We periodically evaluate our real estate assets to determine if
there has been any impairment in the carrying value of the assets in accordance
with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 121 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amounts. At December 31, 2001, we
did not own any real estate assets that meet the impairment criteria of SFAS
No. 121.Revenue RecognitionRental: We lease our
residential properties under operating leases with terms generally equal to one
year or less. Rental income is recognized when earned, which materially
approximates revenue recognition on a straight-line basis.
      Property management: We
provide property management services for properties in which we do not own a
controlling interest. Income is recognized when earned.
      Development and construction
services: We provide development and construction services for
properties in which we do not own a controlling interest. Income is recognized
when earned using the percentage of completion method.Cash and Cash Equivalents
For purposes of the statements of cash
flows, all investments purchased with an original maturity of three months or
less are considered to be cash equivalents.Restricted CashRestricted cash is primarily comprised of
residential security deposits, tax escrow funds, repairs and maintenance reserve
funds and principal escrow bond funds. In certain situations, we have deposited sales proceeds into
escrow accounts to fund development
and acquisition activities.   At December 31, 2001 and 2000, we had
$0.6 million
and $8.5 million, respectively, of such escrowed sales proceeds included in
restricted cash in the accompanying balance sheets.Deferred Financing Costs and AmortizationDeferred financing costs include fees and
costs incurred to obtain financing and are capitalized and amortized over the
terms of the related notes payable.Interest Rate Protection AgreementsIn the ordinary course of business, we
are exposed to interest rate risks. We periodically seek input from third party
consultants regarding market interest rate and credit risk in order to evaluate
our interest rate exposure. In certain situations, we may utilize derivative
financial instruments in the form of rate caps, rate swaps or rate locks to
hedge interest rate exposure by modifying the interest rate characteristics of
related balance sheet instruments and prospective financing transactions. We do
not utilize such instruments for trading or speculative purposes. Derivatives
used as hedges must be effective at reducing the risk associated with the
exposure being hedged; correlate in nominal amount, rate, and term with the
balance sheet instrument being hedged and be designated as a hedge at the
inception of the derivative contract.
      Lump sum payments made or received at the
inception or settlement of derivative instruments designated as hedges are
capitalized and amortized as an adjustment to interest expense over the life of
the associated balance sheet instrument. Monthly amounts paid or received under
rate cap and rate swap hedge agreements are recognized as adjustments to
interest expense as incurred. In the event that circumstances arise that
indicate that an existing

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

derivative instrument no longer meets the hedge
criteria described above, the derivative is marked to market in the statements of
operations.

Property Management Expenses

We manage owned properties as well as
properties owned by third parties for which we provide services for a fee.
Property management expenses have been allocated between owned and third-party
properties in the accompanying statements of operations based on the
proportionate number of owned and third-party apartment homes managed by us
during the applicable periods.

Income Taxes
       No federal or state income taxes are
reflected in the accompanying financial statements since we are a partnership
and our partners are required to include their respective share of profits and
losses in their income tax returns.  We provide management and other
services through Gables Residential Services.  The taxable income of this
subsidiary, if any, is subject to tax at regular corporate rates.  The tax
attributes of this subsidiary are immaterial to the accompanying consolidated
financial statements.Recent Accounting Pronouncements

In June 1998, SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," was issued,
establishing accounting and reporting standards requiring that every derivative
instrument, including certain derivative instruments embedded in other
contracts, be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the statements of operations, and requires that a company must formally
document, designate, and assess the effectiveness of transactions that receive
hedge accounting. SFAS No. 133, as amended by SFAS No. 137, was
effective for us beginning January 1, 2001. The impact of SFAS No. 133 on
our financial statements will depend on the  extent, type and effectiveness of our hedging activities. SFAS No. 133
could increase volatility in net income and other comprehensive income. We had
no derivative instruments in place at December 31, 2001 or for the year
then ended.      
        In June 2001, SFAS No.
141, "Business Combinations," (effective for us July 1, 2001) and SFAS
No. 142, "Goodwill and Other Intangible Assets," (effective for us January
1, 2002) were issued.  SFAS No. 141 prohibits pooling-of-interests
accounting for acquisitions.  SFAS No. 142 specifies that goodwill and some
intangible assets will no longer be amortized but instead will be subject to
periodic impairment testing.  We believe that the adoption of SFAS No. 141
and SFAS No. 142 will not have a significant impact on our financial statements.
       In  August 2001, SFAS No. 143, "Accounting for Asset Retirement
Obligations," (effective for us January 1, 2003) was issued.   SFAS No. 143 requires that
entities recognize the fair value of a liability for an asset retirement
obligation in the period in which it is incurred if a reasonable estimate of
fair value can be made.   We believe that the adoption of SFAS No. 143
will not have a significant impact on our financial statements.

In August 2001, SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets,"
(effective for us January 1, 2002) was issued.  SFAS No. 144 addresses financial accounting and
reporting for the impairment of long-lived assets and for long-lived assets to
be disposed of.  The statement supersedes SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
  Of," and among other factors, establishes criteria beyond that previously
specified in SFAS No. 121 to determine when a long-lived asset is to be
considered as held for sale.  We currently believe that the implementation of 
SFAS No. 144 will require operating results of real
estate assets sold to be included in discontinued operations in the statements of
operations.  We believe that the impairment provisions of SFAS No. 144 are
similar to SFAS No. 121 and that the adoption thereof will not have a
significant impact on our financial statements.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

5.  
  INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Our interests in the following
unconsolidated joint ventures are accounted for using the equity method of
accounting:

Ownership Interest 
 as of December
        31,Joint Venture
      2001
      2000Arbors of Harbortown JV
        ("Harbortown JV")
      25.00%
      25.00%Gables Residential Apartment Portfolio JV
        ("GRAP JV")
      20.00%
      20.00%Gables Residential Apartment Portfolio JV
        Two ("GRAP JV Two")
      20.00%
      --CMS Tennessee Multifamily JV
        ("CMS JV")
      8.26%
      9.00%Metropolitan Apartments JV
      --
      25.00%


Condensed
financial information of the unconsolidated joint ventures is as follows:

Balance Sheet Summary:
      December
        31, 2001
      December
        31,
          2000Harbor-
        town
      GRAP
      GRAP Two
      CMS
      Total
    TotalReal estate assets
      Less: accumulated depreciation
           Net real estate assets
      Other assets
           Total assets
    $15,895 
      (4,272)
      11,623 2,956 
      $14,579
    $141,696 
      (9,763)
      131,933 3,059 
      $134,992
    $63,022 
      (114)
      62,908 892 
      $63,800
    $63,270 
      (2,541)
      60,729 3,120 
      $63,849
    $283,883 
      (16,690)
      267,193 10,027 
      $277,220
    $337,535 
      (13,815)
      323,720 10,422 
      $334,142Mortgage debt
      Other liabilities
      Partners' capital
         Total liabilities and partners' capital
    $16,350 
      444 
      (2,215)
      $14,579
    $71,275 
      2,005 61,712 
      $134,992
    $18,062 
      6,935 38,803 
      $63,800
    $52,100 
      1,739 10,010 
      $63,849
    $157,787 
      11,123 108,310 
      $277,220
    $198,042 
      7,616 128,484 
      $334,142Gables' share of mortgage debt
    $4,088
    $14,255
    $3,612
    $4,303
    $26,258
    $35,620Gables' investment in JV
    $ 523
    $13,136
    $7,337
    $ (98)
    $20,898
    $24,626


Years
        Ended December 31,Income Statement Summary:
      2001
      2000
      1999Revenues
        Property operating and maintenance expense
        Interest expense
        Depreciation and amortization expense
        Other expense
             Total expenses
      $35,732 
        
        14,832 
        10,709 
        10,556 900 
        36,997
      $27,137
        9,866
        8,337
        7,372103
        25,678
      $9,991
        
        3,582
        2,610
        1,85441
        8,087Net income (loss) before gain on sale
        Gain on sale of real estate assets
        Net income
        Gables' equity in income of  JV
      (1,265)12,170 
        
        $10,905 $242
      1,459-
        $1,459
        $399
      1,904-
        $1,904
        $478


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

Arbors of Harbortown JV       The Arbors of Harbortown JV was formed
in May 1990 to develop, own and operate the Arbors of Harbortown community
located in Memphis comprising 345 apartment homes.  We have a 25% ownership interest in this venture.   
The Arbors of Harbortown apartment community is secured by a $16.4 million
tax-exempt bond obligation which bears interest at a variable low-floater
rate.  The credit enhancement for the bond obligation is provided by our
venture partner and expires in May 2006.  The maturity date of the
underlying bond issue is April 2013.  The bond obligation is recourse to us
up to $1.0 million. The recourse amount is fully cash-collateralized and held by
the venture.Gables Residential Apartment Portfolio JV       The Gables Residential Apartment
Portfolio JV was formed in March 1999 to develop, own and operate eight
multifamily apartment communities comprising 2,471 apartment homes located in
four of our markets.  Since inception, our economic ownership interest in
the venture has been 20%.  During 1999, we contributed our interest in the land
and development rights associated with these eight communities to the venture in
return for (1) cash of $65.1 million and (2) capital account credit of $16.4
million.    We serve as the managing member of the venture and have
responsibility for all day-to-day operating matters.  We also serve as the
property manager, developer and general contractor for construction
activities.  The $238 million capital budget for the development of the
eight communities was funded with 50% equity and 50% debt.  The equity
component was funded 80% by our venture partner and 20% by us.  Our portion
of the equity was funded through contributions of cash and property.  As of
December 31, 2001, we had funded our total equity commitment of $23.8 million to
the joint venture. 
      On March 30, 2001, we acquired the
membership interests of our venture partner in two of the stabilized communities
comprising 532 apartment homes.  In April 2001, development and lease-up
activities at Gables State Thomas Ravello comprising 290 apartment homes were
suspended due to water infiltration issues, and all residents were subsequently
relocated.  On September 28, 2001, we acquired the membership interest of
our venture partner in this community.   At December 31, 2001, construction was
complete with respect to the remaining five owned communities and all but one of the
completed communities had reached a stabilized occupancy level.Each of the five communities owned by
the venture is secured by a construction loan.  The construction loans have
an initial maturity of March 25, 2002, with two one-year extension options. 
We expect the construction loans to be extended for a one-year period prior to
maturity.   As of December 31, 2001, there was an aggregate $71.3 million of indebtedness
outstanding under these construction loans which currently bears interest at
spreads over LIBOR ranging from 1.45% to 1.65%.Gables Residential Apartment Portfolio JV Two       The Gables Residential Apartment Portfolio JV Two
was formed in March 2001 to develop, own and operate four multifamily apartment
communities comprising 1,077 apartment homes, located in three of our
markets.  Since inception, our economic ownership interest in the venture
has been 20%.  During 2001, we contributed our interest in the land and
development rights associated with these four communities in return for (1) cash
of $18.5 million and (2) capital account credit of $4.6 million. 
       We serve as the managing member of the
venture and have responsibility for all day-to-day operating matters.  We
also serve as the property manager, developer and general contractor for
construction activities.  The capital budget for the development
of the four communities is $109 million which is expected to be funded with
equity of $47 million and debt of $62 million.  The equity component is
being funded 80% by our venture partner and 20% by us.  Our portion of the
equity will be funded through contributions of cash and property.  As of
December 31, 2001, we had funded $7.7 million of our budgeted $9.4 million
equity commitment to the joint venture.
      Three of the four
development communities owned by the venture is secured by a construction
loan.  We expect to close on the construction loan for the fourth
development community in the second quarter of 2002.  The construction loans have an initial maturity of April 1, 2004,
with two one-year extension options.  As of December 31, 2001, there was an
aggregate $18.1 million of indebtedness outstanding under these construction
loans which currently bears interest at a spread over LIBOR of 1.60%.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

CMS Tennessee Multifamily JV      In December 2000, we sold substantially
all of our interests in three apartment communities located in Nashville and
Memphis, comprising 1,118 apartment homes, to the CMS Tennessee Multifamily JV
which was created to own and operate these apartment communities.  At inception, we had a 1% general partner interest and an 8%
limited partner interest in this venture.  Our venture partner contributed
additional capital to the venture in 2001 which diluted our limited partner
interest to 7.26%.  Our initial capital investment in the joint venture of
$1.0 million has been substantially offset by $1.0 million in deferred gain
associated with our minority interest ownership in the underlying assets sold.  Each of the three apartment communities owned by the venture is
secured by a conventional fixed-rate loan with a maturity of January
2011.  As of December 31, 2001, there was an aggregate $52.1 million of
indebtedness outstanding under these loans which bears interest at a rate of
7.22%.Metropolitan Apartments JV       The Metropolitan Apartments JV was
formed in December 1993 to develop, own and operate the Gables Metropolitan Uptown
community located in Houston comprising 318 apartment homes.  We held a 25%
ownership interest in this venture through July 31, 2001.  On August 1,
2001, we acquired the 75% interest of our venture partner in the Gables
Metropolitan Uptown community.Related-Party Transactions and Relevant Accounting PoliciesManagement fees for services provided
to these unconsolidated joint ventures totaled $1,204, $886 and $347 for the
years ended December 31, 2001, 2000 and 1999, respectively.  We provide
development and construction services to the GRAP JV and GRAP JV Two in return
for development and construction fees.  We calculate our net development
profit associated with these services based on the fees contractually owed 
us by the venture and the amount of internal overhead associated with the
provision of such services that will be charged
against those fees.  We then recognize into income 80% of the net
development profit when earned using the percentage of completion method. 
The remaining 20% is deferred and classified as a reduction to our investment in
joint venture account.  As general contractor, we are responsible
for funding any construction cost overruns.  As general contractor and
venture partner, we are entitled to an incentive fee on any construction cost
savings.  During 1999, we had accrued $425 in incentive fees from the
GRAP JV that were reversed in 2001 as a result of the cost overruns associated
with the water infiltration issues at Gables State Thomas Ravello.  We
recognized net development revenues into income of $(132), $699 and $2,495 for
the years ended December 31, 2001, 2000 and 1999, respectively.       We generated a gain of $3.5 million
associated with our contribution of land and development rights to the GRAP JV
Two.  We will recognize 80% or $2.8 million of the gain into income when
earned using the percentage of completion method.  The $0.7 million in
deferred gain has been classified as a reduction to our investment in joint
venture account.  During the year ended December 31, 2001, we recognized
$1.6 million of the $2.8 million gain.  We generated a gain of $10.9
million associated with the sale of our real estate asset interests to the CMS
JV.  We recognized 91% or $9.9 million of the gain into income on the
December 2000 sale date.  The $1.0 million in deferred gain has been
classified as a reduction to our investment in joint venture account. 
There was no gain or loss associated with the contribution of land and
development rights to the GRAP JV.       We record our share of income from
unconsolidated joint ventures based on our economic ownership interest therein,
after making any necessary adjustments to conform to our accounting policies.
The gain on sale of real estate assets at the joint venture level of $12,170 in
2001 pertains entirely to sales from the venture to us.  We eliminated our
share of the gain on sale in consolidation and, as a result, our equity in income
of joint ventures of $242 in 2001 excludes our share of the gain.       Our investment in joint ventures is
based on the fair value of our cash and real estate asset contributions thereto
and includes capitalized interest on our investment account during the
construction period of the underlying real estate assets.  Deferrals of any development and construction fees and gains, as applicable, associated
with our minority ownership interest in the joint ventures are classified as a reduction
to our investment in joint ventures.       The initial basis in the real estate
assets we acquired from our joint ventures is equal to the purchase price paid
to the venture or venture partner, as applicable, after elimination of our share
of any underlying gain.  In addition, other outside basis differences
associated with capitalized interest and the 20% development and construction
fee deferrals are included in real estate assets.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

6.  NOTES PAYABLE
Notes payable consist of the following:

December
    31,2001
2000Unsecured
    senior notes
    Tax-exempt variable-rate notes payable
    Secured conventional fixed-rate notes payable
    Unsecured variable-rate credit facilities
    Unsecured conventional fixed-rate notes payable
    Tax-exempt fixed-rate notes payable
    Unsecured variable-rate term loan
    Secured variable-rate loan
             Total notes payable
  
  $250,000
    170,955
    139,143
    132,904
    114,919
    69,310
    --$877,231
  
  $115,000
    160,155
    141,100
    108,617
    116,190
    80,290
    40,0004,575$765,927


Unsecured Senior NotesIn March 1998, we issued $100,000 of
senior unsecured notes which bear interest at 6.80%, were priced to yield 6.84%,
and mature in March 2005. In October 1998, we issued (1) $50,000 of
senior unsecured notes which bore interest at
6.55%, were priced to yield 6.59%, and matured in October 2000 and (2) $15,000 of senior unsecured notes
which bore interest at 6.60%, were priced at par, and matured in
October 2001. We repaid the $50,000 and $15,000 notes at maturity.  In February 2001, we issued
$150,000 of
senior unsecured notes which bear interest at 7.25%, were priced to yield 7.29%
and mature in February 2006.

Tax-Exempt Variable-Rate Notes Payable Totaling $44,930
      At December 31, 2001 and 2000, the
variable-rate mortgage notes payable securing tax-exempt bonds totaling $44,930
were comprised of four loans, each of which is collateralized by an apartment
community included in real estate assets. These bonds bear interest at variable
rates of interest, adjusted weekly based upon a negotiated rate. The interest
rates in effect at December 31, 2001 and 2000 were 1.6% and 4.9%, respectively. 
Effective interest rates were 2.7%, 4.2% and
3.3% for the years ended December 31, 2001, 2000 and 1999, respectively.
The bonds are currently enhanced by four letters of credit provided by a letter
of credit facility entered into in October 1997. The fee for the letters of
credit under this facility is 0.95% per annum. The letter of credit facility has
an initial term of five years with unlimited one-year extension options. We have
exercised the first of our one-year extension options resulting in a maturity
date for the facility of October 2003. Three of the underlying bond issues
mature in December 2007 and the fourth matures in August 2024.
Tax-Exempt Variable-Rate Notes Payable Totaling
$126,025 and $115,225, respectively

On April 1, 1998, we assumed five
variable-rate bond issues totaling $105,140 in connection with the South Florida
acquisition. On August 15, 2000, we refunded a $10,085 bond issue that we
assumed in connection with the South Florida acquisition from a fixed rate of
4.75% to a variable rate.   On April 1, 2001, we refunded a $10,800
bond issue that we assumed in connection with the South Florida acquisition from
a fixed rate of 4.75% to a variable rate.  At December 31, 2001 and 2000, the interest rates on
these variable-rate bonds ranged from 1.4% to 1.5% (weighted average of 1.5%)
and 4.5% to 4.7% (weighted average of 4.6%), respectively.   Effective interest rates averaged 2.7%,
4.2% and 3.3% for the
years ended December 31, 2001, 2000 and 1999, respectively.   These bond issues are enhanced by
letters of credit provided by a letter of credit facility entered into on
April 1, 1998 (the "South Florida Enhancement Facility"). The fee for the
letters of credit is 1.0% per annum. The South Florida Enhancement Facility has
an initial term of ten years with three five-year extension options and is
collateralized by (1) each apartment community induced for tax-exempt financing
for which a letter of credit is issued and outstanding and (2) two
additional communities. The maturity dates of the underlying bond issues range
from December 2005 to April 2036.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

Secured Conventional Fixed-Rate Notes Payable      At December 31, 2001 and 2000, the fixed-rate
notes payable were comprised of nine loans collateralized by 12 apartment
communities included in real estate assets.  The interest rates on these
notes payable range from 6.75% to 8.77% (weighted average of 7.71%) and the
maturity dates range from February 2004 to December 2015.  Principal
amortization payments are required for eight of the nine loans based on
amortization schedules ranging from 25 to 30 years.$225 Million Credit FacilityWe have a $225 million unsecured
revolving credit facility that is provided by a consortium of banks. The
facility currently has a maturity date of May 2004 with a one-year
extension option. Borrowings under the facility currently bear interest at our
option of LIBOR plus 0.85% or prime minus 0.25%. Such scheduled interest rates
may be adjusted up or down based on changes in our senior unsecured credit
ratings. We may also enter into competitive bid loans with participating banks
for up to $112.5 million at rates below the scheduled rates. In addition,
there is an annual facility fee currently equal to 0.20% of the $225 million
commitment.  Availability under the facility,  which  is based on the value of our
unencumbered real estate assets as compared to the amount of our unsecured
indebtedness, was $219 million at December 31, 2001.  As of December 31, 2001, we had
$80,000 in borrowings
outstanding under the facility and, therefore, had $139,000 of remaining
capacity on the $219 million commitment. As of December 31, 2000, we
had $70,000 in borrowings outstanding under the facility.$75 Million Borrowing FacilityAt December 31, 2000, we had a $50 million unsecured borrowing facility with a bank. In connection with
the extension of the April 2001 maturity date to April 2002, the
availability under the facility was increased to $75 million. The interest rate
and maturity date related to each draw on this facility is agreed to by both
parties prior to each draw. We expect the facility to be renewed for an
additional one-year term at maturity. At December 31, 2001 and 2000, we had
$52,192 and $38,194, respectively, in borrowings outstanding under this
facility at an interest rate of 2.7% and 7.3%, respectively.$25 Million Credit FacilityWe have a $25 million unsecured
revolving credit facility with a bank that currently bears interest at LIBOR
plus 0.85%.   The facility currently has a maturity date of October
2002 with unlimited one-year extension options.  We had
$712 and $423 in borrowings outstanding under this facility at December 31,
2001 and 2000, respectively.Unsecured Conventional Fixed-Rate Notes PayableAt December 31, 2001 and 2000, the
unsecured fixed-rate notes payable totaling $114,919 and $116,190, respectively, were comprised of four loans. The interest
rates on these notes payable range from 5.25% to 8.62% (weighted average of
8.32%) and the maturity dates range from December 2002 to
November 2018. Principal amortization payments are required based on
amortization schedules ranging from 20 to 30 years.Tax-Exempt Fixed-Rate Notes PayableAt December 31, 2001 and 2000, the
tax-exempt fixed-rate indebtedness was comprised of three and four loans,
respectively. One loan outstanding at December 31, 2001 and 2000 has a
principal balance of $48,365 and is collateralized by three communities induced
for tax-exempt financing and three additional communities. Principal
amortization payments based on a 30-year amortization schedule are required on a
monthly basis. These payments are retained in an escrow account and are not
applied to reduce the outstanding principal balance of the loan. Principal
payments through December 31, 2001 and 2000 are included in restricted cash
in the accompanying balance sheets. The note payable bears interest at 6.38% and
matures in August 2004. The three underlying tax-exempt bond issues mature
in August 2024. The second loan, with an outstanding principal balance of
$11,120 and $11,300 as of December 31, 2001 and 2000, respectively,
represents a tax-exempt bond financing secured by one apartment community. The
bond issue, which has a maturity of January 2025, was credit enhanced for
an annual fee of 0.60% and bears interest at 7.03%. Monthly escrow payments are
required each year based on the annual principal payment due to the bondholders.
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

On April 1, 1998, we assumed three
bond issues totaling $30,710 in connection with the South Florida acquisition.
One of these bond issues for $10,085 was refunded on August 15, 2000 from a
fixed rate of 4.75% to a variable rate. The second bond issue for $10,800 was
refunded on April 1, 2001 from a fixed rate of 4.75% to a variable rate and is
enhanced by a letter of credit provided by the South Florida Enhancement
Facility previously described.  The third bond issue, which initially
bore interest at 5.75%, was refunded in May 1999 to a fixed rate of 4.65%
and is now enhanced by the South Florida Enhancement Facility. The maturity date of the
remaining fixed-rate bond issue at December 31, 2001 is
February 2004.   The bonds do not require principal
amortization payments.Unsecured Variable-Rate Term LoanAt December 31, 2000, we
had a $40,000 unsecured variable-rate term loan which bore interest at our
option of LIBOR plus 0.80% or prime minus 0.25%. This loan was repaid in
February 2001 with proceeds of the $150,000 senior unsecured note issuance.Maturities
  The aggregate maturities of
notes payable at December 31, 2001 are as follows:

2002
        2003
        2004
        2005
        2006 
        2007 and thereafter
           Total
    
    $86,072
      47,892
      212,460
      119,831
      206,241204,735$877,231


The indebtedness outstanding under each of our credit facilities is reflected in
the preceding table using the May 2004 maturity date of our $225 million credit
facility.  We have an option to extend the maturity date of our $225
million credit facility to May 2005, which is exercisable in May 2002.Restrictive Covenants

Certain of our debt agreements contain
customary representations, covenants and events of default, including covenants which restrict
our ability to make distributions in
excess of stated amounts, which in turn restricts the Trust's discretion to declare and
pay dividends. In general, during any fiscal year, we may
only distribute up to 95% of our consolidated income available for distribution
(as defined in the related agreement), exclusive of distributions of capital
gains for such year. The applicable debt agreements contain exceptions to these
limitations to allow us to make any distributions
necessary to allow the Trust to maintain its status as a REIT. We do not anticipate
that this provision will adversely effect our ability to make distributions or
the Trust's ability to declare dividends, under its
current dividend policy.

The tax-exempt bonds contain certain
covenants which require a certain percentage of the apartments in such
communities be rented to individuals based upon income levels specified by U.S.
government programs, as defined.

Pledged Assets

The aggregate net book value at
December 31, 2001 of real estate assets pledged as collateral for
indebtedness was $485,188.

7. COMMITMENTS AND CONTINGENCIES

Office Leases

We are party to office operating leases
with various terms. Future minimum lease payments and rent expense for such
leases are not material.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

Contingencies

The various entities comprising Gables
are subject to various legal proceedings and claims that arise in the ordinary
course of business. These matters are generally covered by insurance. While the
resolution of these matters cannot be predicted with certainty, we believe that
the final outcome of such matters will not have a material adverse effect on our
financial position or results of our operations.

8.   DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Disclosure about the estimated fair value
of financial instruments is based on pertinent information available to us as of
December 31, 2001 and 2000.   Such amounts have not been comprehensively revalued for
purposes of these financial statements since those dates and current estimates of
fair value may differ significantly from the amounts presented herein.
Cash Equivalents

We estimate that the fair value of cash
equivalents approximates carrying value due to the relatively short maturity of
these instruments.

Notes Payable

Notes payable with an aggregate
carrying value of $877,231 and $765,927 had an estimated fair value of $847,685
and $749,515 at December 31, 2001 and 2000, respectively.   The estimated fair value of our notes
payable is based on a discounted cash
flow analysis using current borrowing rates for notes payable with similar terms
and remaining maturities.

9. EARNINGS PER UNITBasic earnings per Unit are computed
based on net income available to common unitholders and the weighted average
number of common Units outstanding. Diluted earnings per Unit reflect the
assumed issuance of common Units under the Trust's share option and incentive plan and
upon settlement of long-term liability, as applicable. The numerator and denominator used for both basic and
diluted earnings per Unit computations are as follows:

Years Ended December 31,2001
      2000
      1999Basic and diluted income available to
        common unitholders (numerator):Net income - basic
        Amortization of discount on long-term liability settled in January 2000
        Net income - diluted
      $69,323
         -  $69,323
      $73,938
         -  $73,938
      $52,949
         686 $53,635Common Units (denominator):Average Units outstanding - basicUnits issuable upon settlement of long-term liability in January
        2000Incremental Units from assumed conversions of:
           Share options
           Other
        Average Units outstanding - diluted
      30,153
        - 
        155630,314
      30,365
        - 
        70430,439
      32,277
        470
        41832,796


Options to
purchase 1,130 and 1,557 shares were outstanding at December 31, 2000 and 1999,
  respectively, but were
not included in the computation of diluted earnings per Unit because the effect
was anti-dilutive.  There were no anti-dilutive options outstanding at
  December 31, 2001.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Amounts in
Thousands, Except Property and Per Unit Data)

---

10. SEGMENT REPORTING

Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. Our chief operating decision maker is our senior
management group.

We own, operate and develop multifamily
apartment communities in major markets located in Texas, Georgia, Florida,
Washington, D.C.  and
Tennessee.  Such apartment communities generate rental revenue and other income
through the leasing of apartment homes to a diverse base of residents. We
evaluate the performance of each of our apartment communities on an individual
basis. However, because each of the apartment communities has similar economic
characteristics, residents, and products and services, they have been aggregated
into one reportable segment. This segment comprises 96%, 95% and 95% of our
total revenues for the years ended December 31, 2001, 2000 and 1999,
respectively.

The primary financial measure for our
reportable business segment is net operating income ("NOI"), which represents
total property revenues less property operating and maintenance expenses (as
reflected in the accompanying statements of operations). Accordingly, NOI
excludes certain expenses included in the determination of net income.  Current
year NOI is compared to prior year NOI and current year budgeted NOI as a
measure of financial performance. The NOI yield or return on total capitalized
costs is an additional measure of financial performance. NOI from apartment
communities totaled $156,920, $154,345 and $155,121 for the years ended
December 31, 2001, 2000 and 1999, respectively. All other segment
measurements are disclosed in our consolidated financial statements.

We also provide management, brokerage,
corporate apartment home and development and construction services to third
parties. These operations, on an individual and aggregate basis, do not meet the
quantitative thresholds for segment reporting per SFAS No. 131.

11.   PROFIT SHARING PLAN

Eligible employees may
participate in a profit sharing plan pursuant to Section 401(k) of the
Internal Revenue Code. Under the plan, employees may defer a portion of their
salary on a pre-tax basis. We also have the discretion to make matching
contributions, currently equal to 50% of an employee's first 4% salary deferral
contribution. Expenses under this plan for the years ended December 31,
2001, 2000 and 1999 were not material.

During January 1996,
we added the Gables Residential Trust Stock Fund as an investment option for the
plan. The fund is comprised of the Trust's' common shares. In connection with the
addition of this fund to the plan, 100 common shares were registered for
issuance under the plan. The plan trustee will purchase the Trust's common shares
for the fund at the direction of the plan investment committee, either on the
open market or directly from the Trust.12.   DISTRIBUTIONS AND SHARE BUILDER PLANWe have declared and paid distributions
to common unitholders for the years ended December 31, 2001, 2000 and 1999 as
follows:

Year
      Per UnitDistributions2001
          2000
          1999
      
      $2.340
          2.195
          2.080


In January 1995,
the Trust adopted a dividend reinvestment and share purchase program pursuant to which
shareholders could elect to reinvest dividends in additional common shares at a
2% discount to the then current market price of common shares, and purchase
additional common shares for cash (up to $20 per quarter) at 100% of the then
current market price (the "Share Builder Plan").

As of December 31,
1999, the Trust had issued all of the 500 shares registered for issuance under
the
Share Builder Plan. Given the Trust's capital market strategy to repurchase shares under
its common equity repurchase program, the Trust resolved not to establish a new Share
Builder Plan at that time. Accordingly, effective with the first quarter
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands, Except Property and Per Unit Data)

---

dividend payable on March 31, 2000, shareholders no longer had a dividend
reinvestment option available.

13. 1994 SHARE OPTION AND INCENTIVE PLAN AND
OTHER SHARE GRANTS

The Trust adopted the 1994 Share
Option and Incentive Plan to provide incentives to officers, employees and
non-employee trustees. The plan provides for the grant of options to purchase a
specified number of common shares or the grant of restricted or unrestricted
  common shares. The total number of shares reserved for issuance under the plan,
as amended, is the greater of 2,953 shares or 9% of the total number of
outstanding common shares and Units. At December 31, 2001, the number of
shares reserved for issuance was 2,953. The number of common shares which may be
issued as restricted or unrestricted shares is equal to 50% of the number of
shares available for issuance under the plan at such time.  The Operating
  Partnership will issue a Unit for each common share of the Trust under the
  plan.

To date,
options have been granted with an exercise price equal to the fair value of the
Trust's' common shares on the dates the options were granted. The options granted
are generally exercisable in installments over three years, beginning one year
after the date of grant. At December 31, 2001, 1,196 common shares are
subject to outstanding options granted to the Trust's officers, employees and
trustees. These outstanding options have exercise prices ranging from $19.125 to
$27.95 and a weighted average remaining contractual life of 6.3 years at
December 31, 2001.

A summary of the options
activity for the years ended December 31, 2001, 2000 and 1999 is as
follows:

2001
    
    
    2000
    1999Shares
      Weighted
        Average
        ExercisePrice
      
      Shares
      Weighted
        Average
        ExercisePrice
      
      Shares
      Weighted
        Average
        ExercisePriceOutstanding at
        beginning of year
        Granted
        Forfeited
        Exercised
        Outstanding at end of year
        Exercisable at end of year
      1,794 
        13 
        (13)(598)1,196716
    
    $25.52
      27.95
      26.0225.34$25.64
      $25.14
    2,051 
      20 
      (71)(206)1,794
      1,129
    $25.29
      24.50
      26.4522.77$25.52
      $25.10
    
    2,022 
      210 
      (125)(56)2,051 
      926
    $25.39
      23.88
      26.0821.96$25.29
      $24.06


We account for share
options issued under the plan in accordance with APB Opinion No. 25,
"Accounting for Stock Issued to Employees," under which no compensation
cost has been recognized since all options have been granted with an exercise
price equal to the fair value of the Trust's common shares on the date of grant. Had
compensation cost for these plans been determined consistent with SFAS  No.
123,  "Accounting for Stock-Based Compensation," our net income
and earnings per Unit would have been reduced to the following pro forma
amounts:

2001
      
      2000
      
      1999Net income available to common
        unitholders:
      As Reported
        Pro Forma
      $69,323
        68,772
      
      $73,938
        73,121
      
      $52,949
        52,086Basic earnings per Unit:
      As Reported
        Pro Forma
      $2.30
        2.29
      
      $2.43
        2.40
      
      $1.64
        1.61Diluted earnings per Unit:
      As Reported
        Pro Forma
      $2.29
        2.27
      
      $2.43
        2.40
      
      $1.64
        1.61


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands, Except Property and Per Unit Data)

---

Because the SFAS No. 123
method of accounting has not been applied to options granted prior to January 1,
1995, the resulting pro forma compensation cost may not be representative of
that to be expected in future years.
       The weighted average fair
value of options granted is $3.18, $2.62 and $2.36 for 2001, 2000 and 1999,
respectively. The fair value of each option grant as of the date of grant has
been estimated using the Black-Scholes option pricing model with the following
weighted average assumptions for grants in 2001, 2000 and 1999, respectively:
risk-free interest rates of 5.12%, 6.71% and 5.69%; expected lives of 5.20, 5.83
and 6.86; dividend yields of 8.62%, 9.27% and 8.88% and expected volatility of
27%, 25% and 25%.
       The Trust has made the following grants of unrestricted shares and restricted shares:

GrantDate
      Unrestricted
        SharesGranted
      Restricted
        SharesGranted
      Per Share
        GrantValue
    
    Vesting Period for Restricted Shares02-97
      02-98
      04-98
      02-99
      02-99
      04-99
      11-99
      01-00
      03-00
      03-00
      10-00
      02-01
      02-01
      10-01
      02-02
    23
      13
      3
      11
      5
      9
      2
      12
      6
      3
      2
      12
      1
      2
      24
    46
      40
      9
      34
      9
      19
      16
      36
      20
      5
      13
      36
      2
      13
      47
    $25.8750
      26.6875
      27.0625
      23.2500
      23.2500
      21.9375
      24.6250
      22.6250
      21.8750
      21.8750
      25.8125
      27.3000
      27.3000
      26.9500
      29.7500
    Two equal annual installments,
      beginning 1-1-98
      Three equal annual installments, beginning 1-1-99
      Three equal annual installments, beginning 4-1-99
      Three equal annual installments, beginning 1-1-00
      Two equal annual installments, beginning 1-1-00
      Two equal annual installments, beginning 4-1-00
      One installment, on 12-1-02
      Three equal annual installments, beginning 1-1-01
      Three equal annual installments, beginning 1-1-01
      Two equal annual installments, beginning 1-1-01
      One installment, on 12-1-03
      Three equal annual installments, beginning 1-1-02
      Two equal annual installments, beginning 1-1-02
      One installment, on 12-1-04
      Three equal installments, beginning 1-1-03


All of the share grants have been made under
the plan with the exception of the February 2001 and February 2002 grants,
which were satisfied with shares acquired by the Trust pursuant to its common equity
repurchase program.

The value of the
unrestricted shares granted is accrued as long-term compensation expense in the
year the related service was provided. Upon issuance of the share grants,
the value of the shares issued is recorded to the partners' capital and the
value of the restricted shares is recorded as a reduction to partners' capital
as deferred compensation. Such deferred compensation is
amortized ratably over the term of the vesting period.

14.  UNUSUAL ITEMSUnusual items of $8,847 in 2001 are
comprised of  (1) a $5,006 charge associated with the write-off of building
components at Gables State Thomas Ravello that will be replaced in connection
with a remediation program, (2) $2,200 of severance charges, (3) $920 in
reserves associated with certain technology investments and (4) $721 of
abandoned real estate pursuit costs resulting from recent events which have
impacted the U.S. economy.  Unusual items of $2,800 in 1999 relate to
severance charges.      
       The $2,200 severance charge in 2001 is
associated with organizational changes adopted in the fourth quarter of 2001,
including (1) the departure of the chief investment officer effective January 1,
2002, who became entitled to severance benefits in accordance with the terms of
his employment agreement and (2) the departure of two senior vice presidents
effective in early 2002.  These severance costs will be paid in 2002 and
include approximately $400 of deferred compensation related to the accelerated vesting of
restricted shares unvested at the effective date of separation and approximately
$700 related
to the modification of certain outstanding share options to extend the exercise
period and accelerate the vesting thereof.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands, Except Property and Per Unit Data)

---

The $2,800 severance charge in 1999 
is associated with organizational changes resulting from management succession
directives, including the departure of the former chairman and chief executive
officer effective January 1, 2000 and the departure of the former chief
operating officer effective May 21, 1999, who became entitled to severance
benefits in accordance with the terms of their employment agreements. 
Severance costs paid in 1999 and 2000 totaled $1,440 and $1,360, respectively,
and included $214 and $336, respectively, of deferred compensation related to
the accelerated vesting of restricted shares unvested at the effective date of
separation.15. RELATED-PARTY TRANSACTIONSTransactions with our unconsolidated joint
ventures are disclosed in Note 5.

During the third
quarter of 2000, we acquired an apartment community located in Austin comprising
160 apartment homes from a partnership in which our chairman, president and
chief executive officer held a 15% limited partnership interest. In
consideration for such community, we paid $5.7 million in cash and assumed a
$14.1 million secured fixed-rate note. The purchase price and other terms
of this transaction were negotiated at arms' length between us and
representatives of the seller.

16. QUARTERLY FINANCIAL INFORMATION
(Unaudited)

Quarterly financial
information for the years ended December 31, 2001 and 2000 is as follows:

Year
        Ended December 31, 2001FirstQuarter
      SecondQuarter
      ThirdQuarter
      FourthQuarterTotal revenues
        Gain on sale of real estate assets
        Unusual items
        Net income
        Net income available to common unitholders
        Net income per common Unit - basic 
        Net income per common Unit - diluted
      $58,155
        1,638
        400
        14,845
        11,324
        0.38
        0.38
      $61,578
        7,966
        -
        22,401
        18,881
        0.63
        0.62
      $63,179
        515
        6,247
        8,276
        4,755
        0.16
        0.16
      $62,268
        27,211
        2,200
        37,884
        34,363
        1.13
        1.13


Year
        Ended December 31, 2000FirstQuarter
      SecondQuarter
      ThirdQuarter
      FourthQuarterTotal revenues
        Gain on sale of real estate assets
        Net income
        Net income available to common unitholders
        Net income per common Unit - basic (a)
        Net income per common Unit - diluted (a)
      $60,526
        -
        15,025
        11,504
        0.37
        0.37
      $60,633
        -
        14,877
        11,357
        0.37
        0.37
      $60,257
        19,310
        33,394
        29,873
        1.00
        1.00
      $60,677
        10,157
        24,725
        21,204
        0.71
        0.71(a) 
        The total of the four quarterly amounts for net income per Unit does
        not equal the net income per Unit for the year ended December 31,
        2000. The difference results from the use of a weighted average to
        compute the number of Units outstanding for each quarter and for the
        year.


17.  SUBSEQUENT EVENTS

In January 2002, we sold
two apartment communities in Houston comprising 502 apartment homes and a parcel
of land adjacent to one of the communities sold.  The net proceeds from these sales totaled $38
million and were used to paydown outstanding borrowings under our credit
facilities.  The total gain from these sales was $11 million.

Gables Realty Limited PartnershipReal Estate Investments and Accumulated Depreciation as of December 31, 2001
(Dollars in Thousands)

Schedule III



Initial Costs
      Costs
        Capitalized
        SubsequentTo Acquisition
      Gross
        Amount at WhichCarried at Close of Period
      
      Year
        Original
        ConstructionCompleteProperty
        Typeand Location
      RelatedEncumbrances
      Land
      Buildings andImprovements
      Land
      Buildings
        andImprovements
      Total
      AccumulatedDepreciation
      YearAcquired


Completed Apartment Communities:
      
      (a)
      
      (b)Boca Raton, FL
        Houston, TX
        Atlanta, GA
        Dallas, TX
        Austin, TX
        Orlando, FL
        Memphis,  TN
        Nashville, TN
        Washington, D.C.
           Total
      $135,850
        79,275
        99,211
        14,802
        13,953
        -  
        10,167
        26,150-$379,408
      $ 
        69,417
         62,664
        59,016
        25,009
        12,388
        10,035
        1,865
        2,001
         6,560$248,955
    
    $361,141
      158,992
      86,145
      38,234
      49,878
      - 
      - 
                   
      -  18,037$712,427
    $  
      17,178
      130,310
      177,261
      80,379
      64,748
      78,279
      26,796
      26,610
          16 $601,577
    $   
      69,417
      62,664
      59,016
      25,009
      12,388
      10,035
      1,865
      2,0016,560$248,955
    $    
      378,319
      289,302
      263,406
      118,613
      114,626
      78,279
      26,796
      26,61018,053$1,314,004
    $ 
      447,736
      351,966
      322,422
      143,622
      127,014
      88,314
      28,661
      28,61124,613$1,562,959
    
    $ 
      40,633
      60,273
      63,321
      18,888
      16,038
      6,668
      10,533
      12,820167$229,341
    1984-2000
      1981-1998
      1945-1997
      1995-2001
      1992-1998
      1998-2001
      1986
      1987-1988
      1988
    1998-2001
      1987-2001
      1983-1997
      1993-1998
      1992-2000
      1996-1998
      1985
      1985
      2001Apartment
        Communities Under Construction or Lease Up:Dallas, TX
        Atlanta, GA
        Orlando, FL
        Houston, TX
           Total
      $        
        - 
        -
        -- 
        $          -
      $16,036
        3,205
        4,8694,062$28,172
      $22,612
        - 
        - 
           -  $22,612
      $10,514
        36,844
        37,18918,914$103,461
      $16,036
        3,205
        4,8694,062$28,172
      $ 
        33,126
        36,844
        37,189
          18,914$126,073
      $  
        49,162
        40,049
        42,05822,976$154,245
      
      $      -
        31
        70541$777
      n/a
        n/a
        n/a
        n/a
      1998-2001
        1991-1998
        1998
        1998Apartment
        Communities Under Renovation (c):Atlanta, GA
        Boca Raton, FL
           Total
      $        
        --$-
      $        
        --$-
    
    $        
      --$-
    $2,8491,246$4,095
    $         
      --$-
    $2,8491,246$4,095
    $2,8491,246$4,095
    
    $        
      --$-
    n/a
      n/a
    n/a
      n/aUndeveloped
        Land:Boca Raton, FL
        Houston, TX
        San Antonio, TX
        Memphis,  TN
        Dallas, TX
           Total
      $          
        -
        -
        -
        --$          
        -
      $
        11,007
        1,273
        1,192
        606600$14,678
      $          
        -
        -
        -
            -- $          -
      $          
        -
        -
        -
            -- $          -
      $
        11,007
        1,273
        1,192
        606600$14,678
      $          
        -
        -
        -
            -- $          -
      $
        11,007
        1,273
        1,192
        606600$14,678
      
      $          
        -
        -
        -
        -- $          -
      n/a
        n/a
        n/a
        n/a
        n/a
      2001
        1998
        1994
        1996
        1994Grand Totals
      $379,408
      $291,805
      $735,039
      $705,038
      $291,805
      $1,444,172
      $1,735,977
      (d)
      $230,118


(a)  Depreciation of apartment communities
is calculated on a straight-line basis over an estimated useful life ranging
      from 20 to 40 years for buildings and
improvements and an estimated useful life of 5 years for  furniture, 
fixtures,
      and equipment.
(b)  The year acquired represents the year we acquired a completed
community or the year we acquired the real estate for
       the development of an apartment community.
(c)  Represents renovation costs incurred to date on three completed
communities; the remaining information applicable
       to these communities is included in the
Completed Apartment Communities category above.
(d)  Excludes our investment in joint ventures totaling $20,898.



Schedule III

Gables Realty Limited Partnership
        Real Estate Investments and Accumulated Depreciation as of December 31,
        2001 
        (Dollars in Thousands)A summary of activity for real
        estate investments and accumulated depreciation is as follows:Years ended December 31,2001
    2000
    1999Real estate investments:Balance, beginning of year
      Additions:
         Operating apartment community acquisitions
         Development costs incurred, including related acquisitions
         Non-recurring revenue enhancing capital expenditures   
         Recurring, non-revenue enhancing capital expenditures 
           Total additions
      Contribution to GRAP JV Two and GRAP JV, respectively
      Sales
      Balance, end of year (a)
    $1,563,218 
       
      99,206 
      134,911 
      10,916 11,797 256,830 
      (18,020)
        (66,051)
      $1,735,977
    $1,565,913 
      20,036 
      87,749 
      9,609 10,910 128,304 
      - 
      (130,999)
      $1,563,218
    $1,681,961 
      -  
      41,829 
      7,660 10,037 59,526 
      (76,280)
      (99,294)
      $1,565,913Accumulated depreciation:Balance, beginning of year
      Depreciation
      Sales
      Balance, end of year
    $195,706 
      47,521 (13,109)
      $230,118
    $  172,247 
      43,745 
      (20,286)
      $  195,706
    $138,239 
      45,454 
      (11,446)
      $172,247Reconciliation of
      depreciation above to statements of operations:Depreciation in rollforward of accumulated depreciation above
      Amortization of prepaid land lease payments (b)
         Real estate asset depreciation and amortization expense
      reflected
            in the accompanying statements of
      operations
    $47,521 84 $47,605
    $43,745 
          84  $43,829
    $45,454 84  $45,538(a)  Excludes our investment in joint ventures totaling $20,898,
      $24,626, and $23,471 for the years ended December 
             31, 2001, 2000, and 1999, 
      respectively.
      (b)  We have leased two parcels of land pursuant to long-term land
      lease agreements which required the lease
             payments to be made upfront. 
      The prepaid lease payments, net of accumulated amortization, are included
      in 
             other assets in the accompanying
      balance sheets.