Tarragon's capital redeployment strategy for its rental assets started in March. "It's still very early in the sales process and the offers we've been receiving fully meet our expectations and exceed the current value of the properties," Friedman added. The company is developing a disposition strategy for 39 rental properties with a market value of $275 million; 27 are being actively marketed for sale. "We anticipate one closing or more each month."

Tarragon has also identified a portfolio of 27 properties in Connecticut and the southeast that it hopes to refinance and contribute to a joint venture with a financial partner to free up approximately $150 million in capital and reduce consolidated debt by more than $190 million. The company expects to manage the proposed joint venture and retain a minority interest in it. The JV will acquire existing apartment communities within core markets and buy new rental properties to be developed by Tarragon. Eight rental properties comprising 2,500 apartments with a book value of $178 million will be retained for condo conversion with an estimated sellout exceeding $400 million.

Total consolidated revenues increased 57% to $80.6 million, from first-quarter 2004 revenues of $51.4 million. Consolidated homebuilding sales rose 76% to $63.6 million, from first-quarter 2004 homebuilding sales of $36.1 million. Total homebuilding revenue, including revenue from unconsolidated subsidiaries, grew 233% from $36.1 million in the first quarter of 2004 to $120 million this year. The pipeline of future developments nearly doubled over the past year from 2,600 homes, with a potential sales value of $880 million as of March 31, 2004, to more than 5,100 homes with an estimated sales value of $1.5 billion as of March 31 of this year.