• national and local economic, business and real estate conditions, including, but not limited to, the effect of demand for multifamily units, office and retail rental space or the creation of new multifamily and commercial developments, the extent, strength and duration of the current recession or recovery, the availability and creditworthiness of tenants, the level of lease rents, and the availability of financing for both tenants and us;

• adverse changes in real estate markets, including, but not limited to, the extent of tenant bankruptcies, financial difficulties and defaults, the extent of future demand for multifamily units and office and retail space in our core markets and barriers of entry into new markets which we may seek to enter in the future, the extent of decreases in rental rates, competition, our ability to identify and consummate attractive acquisitions on favorable terms, our ability to consummate any planned dispositions in a timely manner on acceptable terms, and our ability to reinvest sales proceeds in a manner that generates favorable terms;

• increased exposure, as a multifamily focused real estate investment trust ("REIT"), to risks inherent in investments in a single industry;

• risks associated with having to perform under various financial guarantees that we have provided with respect to certain of our joint ventures and retail developments;

• ability to obtain financing at reasonable rates, if at all;

• actions, strategies and performance of affiliates that we may not control or companies, including joint ventures, in which we have made investments;

• changes in operating costs, including real estate taxes, utilities, and insurance;

• higher than expected construction costs;

• uncertainties associated with our ability to sell our existing inventory of condominium and for-sale residential assets, including timing, volume and terms of sales;

• uncertainties associated with the timing and amount of real estate dispositions and the resulting gains/losses associated with such dispositions;

• legislative or other regulatory decisions, including government approvals, actions and initiatives, including the need for compliance with environmental and safety requirements, and changes in laws and regulations or the interpretation thereof;

• effects of tax legislative action;

• the Trust's ability to continue to satisfy complex rules in order for it to maintain its status as a "REIT" for federal income tax purposes, the ability of CRLP to satisfy the rules to maintain its status as a partnership for federal income tax purposes, the ability of certain of our subsidiaries to maintain their status as taxable REIT

subsidiaries for federal income tax purposes, and our ability and the ability of our subsidiaries to operate effectively within the limitations imposed by these rules;

• price volatility, dislocations and liquidity disruptions in the financial markets and the resulting impact on availability of financing;

• effect of any rating agency actions on the cost and availability of new debt financing;

• level and volatility of interest rates or capital market conditions;

• effect of any terrorist activity or other heightened geopolitical crisis;

• other factors affecting the real estate industry generally; and

• other risks identified in the Trust's 2008 Annual Report on Form 10-K and CRLP's 2008 Annual Report on Form 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the "SEC") or in other documents that we publicly disseminate.

We undertake no obligation to publicly update or revise these forward-looking statements to reflect events, circumstances or changes in expectations after the date of this report.
General
We are a multifamily-focused self-administered equity REIT that owns, develops and operates multifamily apartment communities primarily located in the Sunbelt region of the United States. Also, we create additional value for our shareholders by managing commercial assets through joint venture investments and pursuing development opportunities. We are a fully-integrated real estate company, which means that we are engaged in the acquisition, development, ownership, management and leasing of multifamily apartment communities and other commercial real estate properties. Our activities include full or partial ownership and operation of 192 properties as of March 31, 2009, located in Alabama, Arizona, Florida, Georgia, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia, development of new properties, acquisition of existing properties, build-to-suit development and the provision of management, leasing and brokerage services for commercial real estate.
As of March 31, 2009, we owned or maintained a partial ownership in 117 multifamily apartment communities containing a total of 35,430 apartment units (consisting of 104 wholly-owned consolidated properties and 13 properties partially-owned through unconsolidated joint venture entities aggregating 31,529 and 3,901 units, respectively) (the "multifamily apartment communities"), 75 commercial properties, consisting of 48 office properties containing a total of approximately 16.3 million square feet of office space (consisting of three wholly-owned consolidated properties and 45 properties partially-owned through unconsolidated joint-venture entities aggregating 0.5 million and 15.8 million square feet, respectively) (the "office properties"), 27 retail properties containing a total of approximately 5.4 million square feet of retail space, excluding anchor-owned square-footage (consisting of five wholly-owned properties and 22 properties partially-owned through unconsolidated joint venture entities aggregating 1.0 million and 4.4 million square feet, respectively) (the "retail properties"), and certain parcels of land adjacent to or near certain of these properties (the "land"). The multifamily apartment communities, the office properties, the retail properties and the land are referred to herein collectively as the "properties". As of March 31, 2009, consolidated multifamily, office and retail properties that had achieved stabilized occupancy (which we have defined as having occurred once the property has attained 93% physical occupancy) were 94.7%, 87.6% and 91.4% leased, respectively.
The Trust is the direct general partner of, and as of March 31, 2009, held approximately 84.6% of the interests in CRLP. We conduct all of our business through CRLP, CPSLP, which provides management services for our properties and CPSI, which provides management services for properties owned by third parties, including unconsolidated joint venture entities. We perform all of our for-sale residential and condominium conversion activities through CPSI.
As a lessor, the majority of our revenue is derived from residents under existing leases at our properties. Therefore, our operating cash flow is dependent upon the rents that we are able to charge to our residents, and the ability of these residents to make their rental payments. We also receive third-party management fees generated from third party management agreements related to management of properties held in joint ventures.
The Trust was formed in Maryland on July 9, 1993. The Trust was reorganized as an Alabama real estate investment trust in 1995. Our executive offices are located at 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama, 35203 and our telephone number is (205) 250-8700.

Business Strategy and Outlook
We continue to experience a global financial and economic crisis, which has included, among other things, significant reductions and disruptions in available capital and liquidity from banks and other providers of credit, substantial reductions and/or volatility in equity values worldwide and concerns that the weakening U.S. and worldwide economies may enter into a prolonged recessionary period. These circumstances have materially impacted liquidity in the financial markets, making terms for certain financings less attractive, and in some cases, have resulted in the unavailability of financing even for companies who are otherwise qualified to obtain financing. In addition, the weakening economy and mounting job losses in the U.S., and the slowdown in the overall U.S. housing market, resulting in increased supply (and in some markets, oversupply), have led to deterioration in the multifamily market. The turmoil in the credit and capital markets, continuing job losses, the increased housing supply and our expectation that the economy will continue to remain weak or weaken further before we see any improvements have caused us to recalibrate our business plan.
As a result of the economic crisis, our outlook for the remainder of 2009 reflects a challenging year. In light of the ongoing recession and the credit crisis, we announced in early 2009 that our priorities are strengthening our balance sheet, improving liquidity, addressing our near term debt maturities, managing our existing properties and operating our portfolio efficiently, including reducing our overhead, and postponing future development activities. We have made significant progress in implementing this business strategy in the first three months of the year and will continue to execute on our strategic initiatives as outlined below.
Strengthen the Balance Sheet
Our primary method of strengthening the balance sheet will be through asset sales, particularly non-core assets. In February 2009, we closed on the sale of Colonial Promenade Fultondale, a 159,000 square-foot (excluding anchor-owned square footage) retail asset developed by us and located in Birmingham, Alabama, for $30.7 million (including $16.9 million of seller-financing), recognizing a gain of $4.5 million.
During the three months ended March 31, 2009, we executed a bulk sale of the remaining 17 units at Regent's Park, a for-sale residential community located in Atlanta, Georgia, for $16.3 million, resulting in our recording an impairment charge of $0.3 million. We also closed an additional 10 units at our for-sale residential projects and six units at our condominium conversion projects for sales proceeds of $3.0 million. Additionally, in April 2009, we closed on seven more units and have contracts in place on another 36 condominium units.
We also expect to strengthen our balance sheet through additional repurchases of CRLP's outstanding unsecured senior notes under our previously announced $500 million repurchase program. The purchases were made at an average 27.1% discount to par value, which represents a 12.6% yield to maturity and resulted in the recognition of net gains of $24.3 million. Since inception of the repurchase program through March 31, 2009, we had repurchased a total of $291.9 million of CRLP's outstanding unsecured senior notes, recognizing aggregate gains of approximately $40.3 million.
Improve Liquidity
As the global financial and economic crisis continues, ensuring adequate liquidity is critical. During the first quarter 2009, we closed a 10-year, $350 million collateralized loan with Fannie Mae (NYSE: FNM), as discussed further under "Liquidity and Capital Resources". The proceeds from this loan were used to repay a portion of the outstanding borrowings under our $675.0 million unsecured credit facility.
In April 2009, we locked an all-in fixed interest rate of 5.29% for a 10-year term with Fannie Mae on $145 million of additional financing that is expected to be collateralized by seven of our existing multifamily apartment communities. We are considering adding one additional property to this facility, which would bring total proceeds to $155 million. We expect to close this financing in the second quarter 2009, but the closing remains subject to the negotiation of final documentation and the satisfaction of all closing conditions. No assurance can be given that we will be able to consummate this financing.
Additionally, in April 2009, our Board of Trustees authorized management to issue up to $50 million of common shares under a continuous equity issuance program, which we expect to put in place during the second quarter of 2009, and declared a reduced quarterly cash dividend amount on common shares of $0.15 per common share, compared with $0.25 for the fourth quarter 2008. These actions are intended to help us further improve our liquidity position, enhance our ability to take advantage of opportunities and help protect against uncertainties in the capital markets.

Address Near-Term Maturities
With $637.2 million available on our unsecured credit facility as of March 31, 2009, which reflects the proceeds received from the $350.0 million Fannie Mae financing, we believe that we have sufficient liquidity to address our capital needs through 2011. We have $30 million to $40 million in development spending committed for 2009 and no loans related to consolidated properties maturing in 2009 for which we are wholly responsible. Our share of joint venture indebtness that is expected to mature in 2009 is $88.3 million (80% of which can be extended by the joint venture).
As of March 31, 2009, we had $255.8 million of unsecured bonds maturing in 2010, after giving effect to the repurchase of $96.9 million of outstanding senior notes during the first quarter 2009 described above. In addition, on May 4, 2009, we completed a tender offer for $250.0 million of our unsecured bonds, including $211.4 million of unsecured bonds maturing in 2010. We believe the proceeds from our unsecured credit facility should provide adequate liquidity to allow us to continue with our previously announced $500 million unsecured note repurchase program in order to address the remaining $44.4 million in 2010 maturities, as well as bonds maturing after 2010.
Reduce Overhead
We have continued to reduce our organizational size and overhead costs. Since October 2008, we have aggressively cut overhead costs, primarily through the elimination of 135 employee positions (many of which were construction and development personnel), of which 30 were eliminated during the three months ended March 31, 2009. These actions resulted in our incurring an aggregate of $0.8 million in termination benefits and severance related charges in the three months ended March 31, 2009. With the staff reductions in 2009, we have now reduced our total workforce by 10% compared to the October 2008 workforce size, which we expect to generate approximately $15.4 million in annualized savings. Throughout the remainder of 2009, we intend to continue to explore additional ways to achieve overhead savings that will help preserve capital and improve liquidity.
Postpone Developments
As previously disclosed, in January 2009, we decided to postpone future development activities until we determine that the current economic environment has sufficiently improved. Our development expenditures during the three months ended March 31, 2009 were $21.4 million, and we anticipate total expenditures for 2009 to be approximately $30 to $40 million. Postponing future development activities will help us preserve capital and position us well until the current economic environment has sufficiently improved.
We believe that our current business strategy, the availability of borrowings under our credit facilities, limited debt maturities in 2009, the number of unencumbered properties in our multifamily portfolio and the additional financing through Fannie Mae expected to be obtained during the second quarter 2009 has us positioned to work through this challenging economic environment. However, the ongoing recession and continued uncertainty in the stock and credit markets may negatively impact our ability to access additional financing for capital needs at reasonable terms, or at all, which may negatively affect our business. A prolonged downturn in the financial markets may cause us to seek alternative sources of financing on less favorable terms. These events may also make it more difficult or costly for us to raise capital through the issuance of our common shares, preferred shares or subordinated notes or through private financings, and may require us to further adjust our business plan accordingly. Executive Summary of Results of Operations The following discussion of results of operations should be read in conjunction with the Consolidated Condensed Statements of Income of the Trust and CRLP and the Operating Results Summary included below.
For the three months ended March 31, 2009, the Trust reported net income available to common shareholders of $13.9 million, compared with net income available to common shareholders of $14.2 million for the comparable prior year period. For the three months ended March 31, 2009, CRLP reported net income available to common unitholders of $16.4 million, compared with net income available to common unitholders of $17.2 million for the comparable prior year period. In addition to our results from operating activities, results for the 2009 period include $24.3 million of gains from the repurchase of unsecured senior notes, $5.4 million of gains, net of income taxes from the disposition of assets, a reduction in capitalized interest of approximately $2.5 million and severance and impairment charges of $1.8 million.

In addition to the foregoing, the other principal factors that influenced our operating results for the three months ended March 31, 2009 are as follows:
• Completed the disposition of Colonial Promenade Fultondale, a 159,000 square-foot retail development located in Birmingham, Alabama, for sale proceeds of $30.7 million and a gain of $4.5 million.

• Completed the disposition of the remaining 17 unsold units at Regents Park for sale proceeds of $16.3 million.

• Repurchased $96.9 million of outstanding unsecured senior notes in separate transactions at an average discount of 27.1% to par value, recognizing an aggregate gain of $24.3 million, net of costs.

• We completed the development of one multifamily apartment community adding 300 apartment homes to the portfolio.

Our multifamily portfolio physical occupancy for consolidated properties was 94.6% and 95.1% for the three months ended March 31, 2009 and 2008. Operating Results Summary
The following operating results summary is provided for reference purposes and is intended to be read in conjunction with the narrative discussion. This information is presented to correspond with the manner in which we analyze our operating results.

(amounts in thousands)

                                                            Three Months Ended March 31,
                                                             2009                   2008             Variance
Revenues:
Minimum rent                                            $       70,233         $       66,795        $   3,438
Tenant recoveries                                                1,066                    848              218
Other property related revenue                                   9,501                  8,107            1,394
Construction revenues                                               35                  7,879           (7,844 )
Other non-property related revenues                              3,455                  5,206           (1,751 )

Total revenue                                                   84,290                 88,835           (4,545 )


Expenses:
Property operating expenses                                     22,469                 19,678            2,791
Taxes, licenses and insurance                                   10,976                  9,589            1,387
Construction expenses                                               34                  7,266           (7,232 )
Property management expenses                                     1,918                  2,241             (323 )
General and administrative expenses                              4,383                  5,780           (1,397 )
Management fee and other expense                                 4,217                  3,591              626
Restructuring charges                                              812                      -              812
Investment and development                                         165                    769             (604 )
Depreciation & amortization                                     28,658                 24,016            4,642
Impairment                                                         736                      -              736

Total operating expenses                                        74,368                 72,930            1,438

Income from operations                                           9,922                 15,905           (5,983 )


Other income (expense):
Interest expense and debt cost amortization                    (21,735 )              (18,707 )         (3,028 )
Gains on retirement of debt                                     25,319                  5,471           19,848
Interest income                                                    301                    790             (489 )
Income (loss) from partially-owned unconsolidated
entities                                                          (650 )               10,269          (10,919 )
Loss on hedging activities                                      (1,063 )                    -           (1,063 )
Gains from sales of property, net of income taxes                5,380                  1,931            3,449
Income taxes and other                                           3,090                    874            2,216

Total other income (expense)                                    10,642                    628           10,014


Income from continuing operations                               20,564                 16,533            4,031


Trust
Income from continuing operations                               20,564                 16,533            4,031
Income from discontinued operations                                274                  5,278           (5,004 )
Noncontrolling interest, continuing operations:
Noncontrolling interest in CRLP - common
unitholders                                                     (1,813 )               (1,827 )             14
Noncontrolling interest in CRLP - preferred
unitholders                                                     (2,416 )               (2,069 )           (347 )
Noncontrolling interest of limited partners                     (1,009 )                 (123 )           (886 )
Noncontrolling interest, discontinued operations:
Noncontrolling interest in CRLP - common                          (115 )                 (947 )            832
Noncontrolling interest of limited partners                        468                    141              327

Income attributable to noncontrolling interest                  (4,885 )               (4,825 )            (60 )

Net income attributable to parent company                       15,953                 16,986           (1,033 )


Dividends to preferred shareholders                             (2,073 )               (2,488 )            415
Preferred share issuance costs write-off, net of
discount                                                            (5 )                 (271 )            266

Net income available to common shareholders             $       13,875         $       14,227        $    (352 )

CRLP
Income from continuing operations                               20,564                 16,533            4,031
Income from discontinued operations                                274                  5,278           (5,004 )
Noncontrolling interest, continuing operations:
Noncontrolling interest in CRLP - common
unitholders                                                     (1,813 )               (1,827 )             14
Noncontrolling interest of limited partners                     (1,009 )                 (123 )           (886 )
Noncontrolling interest, discontinued operations:
Noncontrolling interest of limited partners                        468                    141              327

Income attributable to noncontrolling interest                  (2,354 )               (1,809 )           (545 )

Net income attributable to CRLP                                 18,484                 20,002           (1,518 )

Dividends to preferred unitholders                              (2,073 )               (2,488 )            415
Preferred share issuance costs write-off, net of
discount                                                            (5 )                 (271 )            266

Net income available to common unitholders              $       16,406         $       17,243        $    (837 )

Results of Operations - Three Months Ended March 31, 2009 and 2008 Minimum rent
Minimum rent for the three months ended March 31, 2009 was $70.2 million, an increase of $3.4 million from the comparable prior year period. The increase in . . .