Colonial Properties Trust (NYSE: CLP) is a real estate investment trust that purchases and develops properties throughout the Sunbelt states, primarily North Carolina, Texas, Alabama, Georgia, and Florida. CLP manages 111 multifamily apartment communities for a total of 33,520 apartment units and 45 commercial properties with 12.8 million sq.ft. of office space.

The company invests in three types of real estate - office, retail, and multifamily residential housing. CLP is betting on continued economic and demographic growth in the Southern United States as more Americans migrate south. While this area is quickly growing, it is also a fiercely competitive real estate market, as cheaper real estate costs mean low barriers to entry for competitors to CLP. Another risk in CLP's new strategy is that while its residential real estate profit margins are higher than those of its competitors, they have been the lowest of the firm's three divisions in the last two years. Concentrating more heavily on this low-margin sector means the firm will have to cut costs in other areas.

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