capital redeployment effort

GlobeSt.com: Talk a bit about the capital redeployment.

Friedman: Tarragon was formed as a REIT and when we changed to an operating company and a developer, we kept our portfolio and grew both. At the end of last year we saw that the homebuilding operation had far eclipsed the investment portfolio in terms of generating income and revenue. We decided we could better use the capital in our investment portfolio to expand homebuilding and that would add more value for our shareholders. We decided to dispose of all our investment real estate. The choice was either to do that or to sell stock to raise additional capital. We needed more capital to grow as a homebuilder but we also needed more capital to have the kind of low-debt leverage that is appropriate for a company that is largely involved in real estate development and homebuilding. You have to be prepared for delays, material problems. The way you protect yourself is by having more capital. By selling the investment real estate, we not only generate capital, but we also eliminate debt. Over half of our debt in 2004 was mortgage debt on investment properties. Even though we've expanded the homebuilding by perhaps 100%, our debt will be significantly less and our capital has way over doubled.

GlobeSt.com: How far along is the effort?