BIRMINGHAM, AL-Encouraged by improving fundamentals in the multifamily sector, Colonial Properties Trust is primed to begin development of apartment projects for a late 2011 or 2012 delivery. The REIT’s Chairman and CEO Thomas Lowder made the annoucement during the company’s first quarter earnings conference call.
“Should multifamily fundamentals continue to improve in markets where we have sites ready for development, we would be more likely to start selective multifamily development that we had previously postponed so we can deliver units in late 2011 or 2012 where we expect significant rent growth,” Lowder said.
During the first quarter, occupancy for Colonial Properties’ apartment portfolio increased 200 basis points to 96.7%. “Early signs of recovery are broad-based,” according to C. Reynolds Thompson III, president and CFO of Colonial Properties. In fact, the REIT saw occupancy improve in 11 out of 12 markets, and net rental income has trended positive for three months in a row, he notes.
In total, Colonial Properties has an apartment development pipeline totaling $74.6 million, according to its quarterly supplemental filings. During the first quarter, the REIT invested $25 million to $30 million in new development activity.
“We share the optimism of many in our industry and are pleased to see multifamily fundamentals stabilize earlier than originally anticipated,” Lowder said.
In addition to Colonial Properties’ multifamily development activity, the REIT is moving forward with Colonial Promenade Nord du Lac Phase I, a 261,000 square-foot retail development located in Covington, LA. Originally, the retail center was slated to be a lifestyle center, but the REIT postponed the project to transform it into a power center, Thompson said during the call.
The REIT broke ground on Colonial Promenade Nord du Lac Phase I during the first quarter. It will be will be anchored by Kohl's, Academy Sports + Outdoors and Hobby Lobby. Phase I, which has a total development cost of $27.1 million, is scheduled to open in October 2010.
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