10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

[X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For fiscal year ended December 31, 2002

OR

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transmission period from            to           

Commission file number 1-12080

Commission file number 0-28226

POST PROPERTIES, INC.

POST APARTMENT HOMES, L.P.

(Exact name of registrants as specified in their charters)

Georgia
Georgia
(State or other jurisdiction of
incorporation or organization) 58-1550675
58-2053632
(I.R.S. Employer
Identification No.)

4401 Northside Parkway, Suite 800, Atlanta, Georgia 30327

(Address of principal executive office – zip code)

(404) 846-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:

	Name of Each Exchange on
Title of each class	Which Registered
Common Stock, $.01 par value	New York Stock Exchange
8  1/2% Series A Cumulative Redeemable Preferred Shares, $.01 par value	New York Stock Exchange
7  5/8% Series B Cumulative Redeemable Preferred Shares, $.01 par value	New York Stock Exchange
7  5/8% Series C Cumulative Redeemable Preferred Shares, $.01 par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

	Name of Each Exchange on
Title of each class	Which Registered
Units of Limited Partnership	None

     Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

Post Properties, Inc.	Yes   [X]	No   [ ]
Post Apartment Homes, L.P.	Yes   [X]	No   [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this Form 10-K.    [ ]

     The aggregate market value of the shares of common stock held by non-affiliates (based upon the closing sale price on the New York Stock Exchange) on June 28, 2002 was approximately $1,054,937,898. As of March 14, 2003 there were 37,265,182 shares of common stock, $.01 par value, outstanding.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)

Post Properties, Inc.	Yes   [X]	No   [ ]
Post Apartment Homes, L.P.	Yes   [X]	No   [ ]

DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Registrant’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held May 22, 2003 are incorporated by reference in Part III.

POST PROPERTIES, INC.

POST APARTMENT HOMES, L.P.

TABLE OF CONTENTS

PART I
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT
PART II
	ITEM 5. MARKET PRICE OF THE REGISTRANT’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
	ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	ITEM 14. CONTROLS AND PROCEDURES
PART IV
	ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
EX-3.2 ARTICLES OF AMENDMENT
EX-3.3 ARTICLES OF AMENDMENT
EX-3.4 ARTICLES OF AMENDMENT
EX-3.6 BYLAWS OF THE COMPANY
EX-10.1 SECOND AMENDED AND RESTATED AGREEMENT
EX-10.2 FIRST AMENDMENT TO SECOND AMENDED
EX-10.3 SECOND AMENDMENT TO SECOND AMENDED
EX-10.9 AMENDMENT TO EMPLOYEE STOCK PLAN
EX-10.10 AMENDMENT NO. 2 TO EMPLOYEE STOCK PLAN
EX-10.11 AMENDMENT NO. 3 TO EMPLOYEE STOCK PLAN
EX-10.12 AMENDMENT NO. 4 TO EMPLOYEE STOCK PLAN
EX-10.19 FORM OF INDEMNIFICATION AGREEMENT
EX-10.21 AMENDMENT NUMBER ONE TO PROFIT SHARING
EX-10.22 AMENDMENT NUMBER TWO TO PROFIT SHARING
EX-10.23 AMENDMENT NUMBER THREE TO PROFIT SHARING
EX-10.24 AMENDMENT NUMBER FOUR TO PROFIT SHARING
EX-10.27 AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
EX-21 SUBSIDIARIES OF POST PROPERTIES, INC.
EX-23.1 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.2 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.3 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.4 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.5 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.6 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.7 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.8 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.9 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.10 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.11 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.12 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-23.13 CONSENT OF PRICEWATERHOUSECOOPERS LLP
EX-99.1 CERTIFICATION OF THE PRESIDENT AND C.E.O.
EX-99.2 CERTIFICATION OF THE EXECUTIVE VP AND CFO

TABLE OF CONTENTS

FINANCIAL INFORMATION

Item		Page
No.		No.
PART I
1.	Business		1
2.	Properties		13
3.	Legal Proceedings		17
4.	Submission of Matters to a Vote of Security Holders		17
X	Executive Officers of the Registrant		17
PART II
5.	Market Price of the Registrant’s Common Stock and Related Stockholder Matters		19
6.	Selected Financial Data		20
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
7A.	Quantitative and Qualitative Disclosures about Market Risk		44
8.	Financial Statements and Supplementary Data		45
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		45
PART III
10.	Directors and Executive Officers of the Registrant		46
11.	Executive Compensation		46
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		46
13.	Certain Relationships and Related Transactions		46
14.	Controls and Procedures		46
PART IV
15.	Exhibits, Financial Statements, Schedules and Reports on Form 8-K		47

PART I

ITEM 1.     BUSINESS

THE COMPANY

Post Properties, Inc. (the “Company”) is one of the largest developers and operators of upscale multifamily apartment communities in the United States. As of February 15, 2003, the Company owns 80 stabilized communities (the “Communities”) containing 29,320 apartment units located primarily in metropolitan Atlanta, Georgia; Dallas, Texas and Tampa Florida. In addition, the Company currently has under construction or in initial lease-up four new communities and an addition to one existing community in the Tampa, Florida; New York City, New York; Pasadena, California and Washington D.C. metropolitan areas that will contain an aggregate of 1,256 apartment units upon completion. An apartment community is generally considered by the Company to have achieved stabilized occupancy on the earlier to occur of (1) attainment of 95% physical occupancy on the first day of any month or (2) one year after completion of construction. For the year ended December 31, 2002, the average economic occupancy rate (defined as gross potential rent less vacancy losses, model expenses and bad debt divided by gross potential rent) of the 73 Communities stabilized for the entire year was 90.7%. The average monthly rental rate per apartment unit at these Communities for December 2002 was $1,003. The Company is a fully integrated organization with multifamily development, operation and asset management expertise. The Company has approximately 1,050 employees, none of whom is a party to a collective bargaining agreement.

Since its founding in 1971, the Company has pursued three distinctive core business strategies that have remained substantially unchanged:

Investment Building

Investment building means taking a long-term view of the assets the Company creates. The Company develops communities with the intention of operating them for periods that are relatively long by the standards of the apartment industry. Key elements of the Company’s investment building strategy include instilling a disciplined team approach to development decisions, selecting sites in urban infill locations in strong primary markets, consistently constructing new apartment communities with a uniformly high quality and conducting ongoing property improvements. From time to time, the Company sells its apartment communities in order to generate liquidity for funding new development activity and to repay outstanding debt.

Promotion of the Post® Brand Name

The Post® brand name strategy has been integral to the success of the Company and, to the knowledge of the Company, has not been successfully duplicated within the multifamily real estate industry in any major U.S. market. For such a strategy to work, a company must develop and implement systems to achieve uniformly high quality and value throughout its operations. As a result of the Company’s efforts in developing and maintaining its communities, the Company believes that the Post® brand name is synonymous with quality upscale apartment communities that are situated in desirable locations and provide superior resident service. Key elements in implementing the Company’s brand name strategy include extensively utilizing the trademarked brand name, adhering to quality in all aspects of the Company’s operations, developing and implementing leading edge training programs, and coordinating the Company’s advertising programs to increase brand name recognition.

Service Orientation

The Company’s mission statement is: “To provide the superior apartment living experience for our residents.” By striving to provide a superior product and superior service, the Company believes that it will be able to achieve its long-term goals. The Company believes that it provides its residents with superior product and superior service through its uniformly high quality construction, selective urban infill locations, award winning landscaping and landscaped courtyards with water features and numerous amenities, including on site business centers, on site courtesy officers, urban vegetable gardens and state of the art fitness centers. The Company believes that by implementing these strategies, multifamily properties in its primary markets have the potential over the long term to provide investment returns that exceed national averages.

The Company is a self-administrated and self-managed equity real estate investment trust (a “REIT”). In 1993, the Company completed an initial public offering of its Common Stock (the “Initial Offering”) and a business combination involving entities under varying common ownership. Proceeds from the Initial Offering were used by the Company, in part, to acquire a controlling interest in Post Apartment Homes, L.P. (the “Operating Partnership”), the Company’s principal operating subsidiary, which was formed to succeed to substantially all of the ownership interest in a portfolio of 40 Post® multifamily apartment communities, all of which were developed by the

Post Properties, Inc.

1

Post Apartment Homes, L.P.

Company and owned by affiliates of the Company, and to the development, leasing, landscaping and management business of the Company and certain other affiliates.

The Company, through wholly owned subsidiaries, is the sole general partner of, and controls a majority of the limited partnership interests in, the Operating Partnership. The Company conducts all of its business through the Operating Partnership and its subsidiaries.

The Company’s and the Operating Partnership’s executive officers are located at 4401 Northside Parkway, Suite 800, Atlanta, Georgia 30327 and their telephone number is (404) 846-5000. Post Properties, Inc., a Georgia corporation, was incorporated on January 25, 1984, and is the successor by merger to the original Post Properties, Inc., a Georgia corporation, which was formed in 1971. The Operating Partnership is a Georgia limited partnership that was formed in July 1993 for the purpose of consolidating the operating and development business of the Company and the Post® apartment portfolio described herein.

The Operating Partnership

The Operating Partnership, through the operating divisions and subsidiaries described below, is the entity through which all of the Company’s operations are conducted. At December 31, 2002, the Company, through wholly-owned subsidiaries, controlled the Operating Partnership as the sole general partner and as the holder of 88.5% of the common units in the Operating Partnership (“Common Units”) and 63.6% of the preferred Units (the “Perpetual Preferred Units”). The other limited partners of the Operating Partnership who hold Common Units, are those persons (including certain officers and directors of the Company) who, at the time of the Company’s initial public offering, elected to hold all or a portion of their interest in the form of Common Units rather than receiving shares of Common Stock. Each Common Unit may be redeemed by the holder thereof for either one share of Common Stock or cash equal to the fair market value thereof at the time of such redemption, at the option of the Operating Partnership. The Operating Partnership presently anticipates that it will cause shares of Common Stock to be issued in connection with each such redemption (as has been done in all redemptions to date) rather than paying cash. With each redemption of outstanding Common Units for Common Stock, the Company’s percentage ownership interest in the Operating Partnership will increase. In addition, whenever the Company issues shares of stock, the Company will contribute any net proceeds to the Operating Partnership and the Operating Partnership will issue an equivalent number of Units or Perpetual Preferred Units, as appropriate, to the Company.

As the sole shareholder of the Operating Partnership’s sole general partner, the Company has the exclusive power under the agreement of limited partnership of the Operating Partnership to manage and conduct the business of the Operating Partnership, subject to the consent of a majority of the outstanding Common Units in connection with the sale of all or substantially all of the assets of the Operating Partnership or in connection with a dissolution of the Operating Partnership. The board of directors of the Company manages the affairs of the Operating Partnership by directing the affairs of the Company. In general, the Operating Partnership cannot be terminated, except in connection with a sale of all or substantially all of the assets of the Company, until January 2044 without the approval of each limited partner who received Common Units of the Operating Partnership in connection with the Company’s initial public offering. The Company’s indirect limited and general partner interests in the Operating Partnership entitle it to share in cash distributions from, and in the profits and loss of, the Operating Partnership in proportion to the Company’s percentage interest therein and indirectly entitle the Company to vote on all matters requiring a vote of the Operating Partnership.

As part of the formation of the Operating Partnership, a holding company, Post Services, Inc. (“Post Services”) was organized as a separate corporate subsidiary of the Operating Partnership. Through Post Services and its subsidiaries, the Operating Partnership provides leasing, landscaping and property management services to third parties. Certain officers and directors of the Company own 99%, collectively, of the voting common stock of Post Services, and the Operating Partnership owns 1% of the voting common stock and 100% of the nonvoting common stock of Post Services. The voting and nonvoting common stock of Post Services held by the Operating Partnership represents 99% of the equity interests therein. The voting common stock held by officers and directors in Post Services is subject to an agreement that is designed to ensure that the stock will be held by one or more officers of Post Services. The by-laws of Post Services provide that a majority of the board of directors of Post Services must be persons who are not employees, members of management or affiliates of the Company or its subsidiaries. This by-law provision cannot be amended without the vote of 100% of the outstanding voting common stock of Post Services. Post Services currently has the same board of directors as the Company.

For taxable years ending on or before December 31, 2000, the Operating Partnership could not own more than 10% of the voting stock of Post Services without causing the Company to fail to qualify as a REIT for federal income tax purposes. This restriction no longer applies to the voting stock of a “taxable REIT subsidiary” as defined in the

Post Properties, Inc.

2

Post Apartment Homes, L.P.

Internal Revenue Code. The Company and Post Services have filed a joint election to have Post Services treated as a taxable REIT subsidiary of the Company. This will enable the Operating Partnership to acquire all of the voting stock of Post Services without jeopardizing the company’s status as a REIT. Management believes the Operating Partnership will acquire the remaining interest of Post Services in 2003.

Operating Divisions

The major operating divisions of the Operating Partnership include:

Post Apartment Management

Post Apartment Management is responsible for the day-to-day operations of all the Post® communities including community leasing, property management and personnel recruiting, training and development, maintenance and security. Post Apartment Management also conducts short-term corporate apartment leasing activities and is the largest division in the Company.

Post Apartment Development

Post Apartment Development conducts the development and construction activities of the Company. These activities include site selection, zoning and regulatory approvals, project design and the full range of construction management services.

Post Corporate Services

Post Corporate Services provides executive direction and control to the Company’s other divisions and subsidiaries and has responsibility for the creation and implementation of all Company financing and capital strategies. All accounting, management reporting, information systems, human resources, legal and insurance services required by the Company and all of its affiliates are centralized in Post Corporate Services.

Operating Subsidiaries

In periods prior to December 31, 2001, the Operating Partnership provided third party asset management and leasing services for multifamily properties not operated under the Post® name through RAM Partners, Inc. (“RAM”). Additionally in prior periods, the Operating Partnership provided landscape installation and maintenance services to third parties through Post Landscape Services, Inc. (“Post Landscape”). In the fourth quarter of 2001, the net assets and operating businesses of RAM and Post Landscape were sold to their respective management teams. The Company and the Operating Partnership no longer provide these services to unaffiliated third parties. Instead, the Operating Partnership will focus its continuing efforts on its core business of owning, developing and managing Post® brand multifamily real estate assets.

History of Post Properties, Inc.

During the five-year period from January 1, 1998 through December 31, 2002, the Company and affiliates have developed and completed 11,557 apartment units in 34 apartment communities, and sold 23 apartment communities containing an aggregate of 7,646 apartment units. Historically, the Company has primarily developed its apartment communities to the Company’s specifications as opposed to buying or refurbishing existing properties built by others. The Company did not acquire any apartment communities during the five-year period from January 1, 1998 through December 31, 2002. The Company and its affiliates have sold apartment communities after holding them for investment periods that typically have been seven to twelve years after development. The following table shows a summary of the Company’s development and sales activity during these periods.

	2002			2001			2000			1999			1998
Units completed		2,140			2,651			2,786			1,955			2,025
Units sold		(2,665	)		(2,799	)		(1,984	)		(198	)		—
Total units completed and owned by the Company and its affiliates		29,849			30,374			30,522			29,720			27,963
Total rental income (in thousands)	$	316,484		$	336,206		$	335,482		$	291,283		$	248,377

Post Properties, Inc.

3

Post Apartment Homes, L.P.

Current Development

At December 31, 2002, the Company has under construction or in initial lease-up five new communities and additions to one existing community that will contain an aggregate of 1,377 units upon completion. The Company’s communities under development or in initial lease-up are summarized in the following table:

			Estimated			Amount							Estimated
	Number		Construction			Spent			Quarter of		Quarter of		Quarter of		%		%
	of		Cost			As of			Construction		First Units		Stabilized		Leased		Occupied
Metropolitan Area	Units		($ in millions)			12/31/2002			Start		Available		Occupancy (1)		2/15/2003		2/15/2003
Wholly-Owned Construction/ Lease-up Communities
Tampa, FL
Post Harbour Place III		259	$	35		$	33			2Q ’01		2Q ’02		2Q ’03		79.5%		77.6%
New York City, NY
Post Toscana™		199		95			75			1Q ’02		1Q ’03		2Q ’04		1.5%		0.0%
Subtotal Wholly-Owned Construction/ Lease-up Communities		458	$	130		$	108
Co-Investment Construction/ Lease-up Communities
Atlanta, GA
Post Peachtree™(2)		121	$	31		$	31			2Q ’00		3Q ’01		1Q ’03		87.6%		86.0%
New York City, NY
Post Luminaria™(3)		138		51			50			3Q ’01		2Q ’02		2Q ’03		84.8%		81.9%
Pasadena, CA
Post Paseo Colorado(2)		391		76			75			2Q ’00		1Q ’02		2Q ’03		84.1%		80.1%
Washington D.C.
Post Massachusetts Avenue™ (2)		269		74			68			2Q ’01		4Q ’02		4Q ’03		24.5%		21.9%
Subtotal Co-Investment Construction/ Lease-up Communities		919	$	232		$	224
Construction Totals		1,377	$	362		$	332
Less Partners’ Portion			$	(133	)	$	(128	)
Post Properties’ Funding Commitment			$	229		$	204

(1)	The Company defines stabilized occupancy as the earlier to occur of (i) the attainment of 95% physical occupancy on the first day of any month or (ii) one year after completion of construction.
(2)	These communities are being developed as a joint venture (Company equity ownership is 35%).

(3)  This development is structured as a joint venture, with the Company owning approximately 70% of the equity and the landowner owning the balance.

Competition

All of the Communities are located in developed areas that include other upscale apartments. The number of competitive upscale apartment properties in a particular area could have a material effect on the Company’s ability to lease apartment units at the Communities or at any newly developed or acquired communities and on the rents charged. The Company may be competing with others that have greater resources than the Company. In addition, other forms of residential properties, including single family housing, provide housing alternatives to potential residents of upscale apartment communities.

Post Properties, Inc.

4

Post Apartment Homes, L.P.

Americans with Disabilities Act

The Company’s apartment communities and any newly acquired apartment communities must comply with Title III of the Americans with Disabilities Act (the “ADA”) to the extent that such properties are “public accommodations” and/or “commercial facilities” as defined by the ADA. Compliance with the ADA requirements could require removal of structural barriers to handicapped access in certain public areas of the Company’s Communities where such removal is readily achievable. The ADA does not, however, consider residential properties, such as apartment communities, to be public accommodations or commercial facilities, except to the extent portions of such facilities, such as the leasing office, are open to the public. The Company believes that its properties comply with all present requirements under the ADA and applicable state laws. Noncompliance could result in imposition of fines or an award of damages to private litigants. If required to make material additional changes, the Company’s results of operations could be adversely affected.

Environmental Regulations

The Company is subject to federal, state and local environmental laws, ordinances, and regulations that apply to the development of real property, including construction activities, the ownership of real property, and the operation of multifamily apartment communities.

The Company has instituted a policy that requires an environmental investigation of each property that it considers for purchase or that it owns and plans to develop. The environmental investigation is conducted by a qualified environmental consultant. The environmental investigation report is reviewed by the Company and counsel prior to purchase and/or development of any property. If the environmental investigation identifies evidence of potentially significant environmental contamination that merits additional investigation, sampling of the property is performed by the environmental consultant.

If necessary, remediation of contamination, including removal of underground storage tanks, is undertaken either prior to development or at another appropriate time. When performing remediation activities, the Company is subject to a variety of environmental requirements. In some cases, the Company obtains state approval of the selected remediation measures by entering into voluntary environmental cleanup programs administered by state agencies.

In developing properties and constructing apartments, the Company utilizes environmental consultants to determine whether there are any flood plains, wetlands or environmentally sensitive areas that are part of the property to be developed. If flood plains are identified, development and construction work is planned so that flood plain areas are preserved or alternative flood plain capacity is created in conformance with federal and local flood plain management requirements. If wetlands or other environmentally sensitive area are identified, the Company plans its development and construction activities and obtains the necessary permits and authorizations in compliance with applicable legal standards. In some cases, however, the presence of wetlands and/or other environmentally sensitive areas could preclude, severely limit, or otherwise alter the proposed site development and construction activities.

Storm water discharge from a construction site is subject to the storm water permit requirements mandated under the Clean Water Act. In most jurisdictions, the state administers the permit programs. The Company currently anticipates that it will be able to obtain and materially comply with any storm water permits required for new development. The Company has obtained and is in material compliance with the storm water permits required for its existing development activities.

The Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. sec. 9601 et seq. (“CERCLA”), and comparable state laws subject the owner or operator of real property or a facility to claims or liability for the costs of removal or remediation of hazardous substances that are released at, in, on, under, or from real property or a facility. In addition to claims for cleanup costs, the presence of hazardous substances on or the release of hazardous substances from a property or a facility could result in a claim by a private party for personal injury or property damage or could result in a claim from a governmental agency for other damages. Liability under CERCLA and comparable state laws can be imposed on the owner or the operator of real property or a facility without regard to fault or even knowledge of the release of hazardous substances on, at, in, under, or from the property or facility. Environmental liabilities associated with hazardous substances also could be imposed on the Company under other applicable environmental laws, such as the Resource Conservation and Recovery Act (and comparable state laws), or common-law principles. The presence of hazardous substances in amounts requiring response action or the failure to undertake necessary remediation may adversely affect the owner’s ability to use or sell real estate or borrow money using such real estate as collateral.

Post Properties, Inc.

5

Post Apartment Homes, L.P.

Various environmental laws govern certain aspects of the Company’s ongoing operation of the Communities. Such environmental laws include those regulating the existence of asbestos-containing materials in buildings, management of surfaces with lead-based paint (and notices to residents about the lead-based paint), use of active underground petroleum storage tanks, and waste-management activities. The failure to comply with such requirements could subject the Company to a government enforcement action and/or claims for damages by a private party.

The Company has not been notified by any governmental authority of any material noncompliance, claim, or liability in connection with any of the Communities. The Company has not been notified of a material claim for personal injury of property damage by a private party relating to any of the Communities in connection with environmental conditions. The Company is not aware of any environmental condition with respect to any of the Communities that could be considered to be material.

It is possible, however, that the environmental investigations of our properties might not have revealed all potential environmental liabilities associated with the Company’s real property and Communities or might have underestimated any potential environmental issues identified in the investigations. It is also possible that future environmental laws, ordinances, or regulations or new interpretations of existing environmental laws, ordinances, or regulations will impose material environmental liabilities on the Company; the current environmental conditions of properties that the Company owns or operates will be affected adversely by hazardous substances associated with other nearby properties or the actions of third parties unrelated to the Company; or our residents and/or commercial tenants may engage in activities prohibited by their leases or otherwise expose the Company to liability under applicable environmental laws, ordinances, or regulations. The costs of defending any future environmental claims, performing any future environmental remediation, satisfying any such environmental liabilities, or responding to any changed environmental conditions could materially adversely affect the Company’s financial conditions and results of operations.

Where You Can Find More Information

The Company makes its annual report on Form l0-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to such reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, available (free of charge) on or through its Internet website, located at http://postproperties.com, as soon as reasonably practicable after they are filed with or furnished to the SEC.

Post Properties, Inc.

6

Post Apartment Homes, L.P.

RISK FACTORS

The following risk factors apply to the Company and the Operating Partnership. All indebtedness described in the risk factors has been incurred by the Operating Partnership.

Unfavorable Changes in Apartment Markets and Economic Conditions Could Adversely Affect Occupancy Levels and Rental Rates.

Market and economic conditions in the various metropolitan areas of the United States where the Company operates may significantly affect occupancy levels and rental rates and therefore profitability. Factors that may adversely affect these conditions include the following:

•  the economic climate, which may be adversely impacted by a reduction in jobs, industry slowdowns and other factors;

•  local conditions, such as oversupply of, or reduced demand for, apartment homes;

•  continued or worsened weak economic and market conditions that simultaneously affect one or more of the Company’s geographic markets;

•  declines in household formation;

•  favorable residential mortgage rates;

•  rent control or stabilization laws, or other laws regulating rental housing, which could prevent the Company from raising rents to offset increases in operating costs; and

•  competition from other available apartments and other housing alternatives and changes in market rental rates.

Any of these factors could adversely affect the Company’s ability to achieve desired operating results from its communities.

Development and Construction Risks Could Impact the Company’s Profitability.

The Company intends to continue to develop and construct apartment communities. Development activities may be conducted through wholly-owned affiliated companies or through joint ventures with unaffiliated parties. The Company’s development and construction activities may be exposed to the following risks:

•  the Company may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy, and other required governmental permits and authorizations, which could result in increased development costs;

•  the Company may incur construction costs for a property that exceed original estimates due to increased materials, labor or other costs, which could make completion of the property uneconomical, and the Company may not be able to increase rents to compensate for the increase in construction costs;

•  the Company intends to concentrate its attention on fewer markets and reduce annual development expenditures, and it may abandon development opportunities that it has already begun to explore, and it may fail to recover expenses already incurred in connection with exploring those opportunities;

•  the Company has been and may continue to be unable to complete construction and lease-up of a community on schedule and meet financial goals for development projects;

•  because occupancy rates and rents at a newly developed community may fluctuate depending on a number of factors, including market and economic conditions, the Company may be unable to meet its profitability goals for that community; and

•  construction costs have been increasing in the Company’s existing markets, and may continue to increase in the future and, in some cases, the costs of upgrading acquired communities have, and may continue to, exceed original estimates and the Company may be unable to charge rents that would compensate for these increases in costs.

Post Properties, Inc.

7

Post Apartment Homes, L.P.

Failure to Succeed in New Markets May Limit the Company’s Growth.

The Company may from time to time commence development activity or make acquisitions outside of its existing market areas if appropriate opportunities arise. The Company’s historical experience in its existing markets does not ensure that it will be able to operate successfully in new markets. The Company may be exposed to a variety of risks if it chooses to enter new markets. These risks include, among others:

•  an inability to evaluate accurately local apartment market conditions and local economies;

•  an inability to obtain land for development or to identify appropriate acquisition opportunities;

•  an inability to hire and retain key personnel; and

•  lack of familiarity with local governmental and permitting procedures.

Members of the Company’s Board of Directors may have Conflicts of Interest because there could be Adverse Tax Consequences Upon the Sale or Refinancing of some of the Operating Partnership’s Apartment Communities.

Limited partners of the Operating Partnership may suffer different and more adverse tax consequences than the Company upon the sale or refinancing of some of the Operating Partnership’s apartment communities. These limited partners, including three of our directors, may have different objectives regarding the appropriate pricing and timing of any sale or refinancing of certain apartment communities. While the Company, through wholly-owned subsidiaries, has the exclusive authority as to whether and on what terms to sell or refinance any individual apartment community, these directors may influence the Company not to sell or refinance these apartment communities, even though a sale might otherwise be financially advantageous to the Company. In addition, these directors could influence the Company to refinance an apartment community with a high level of debt.

Possible Difficulty of Selling Apartment Communities Could Limit the Company’s Operational and Financial Flexibility.

Purchasers may not be willing to pay acceptable prices for apartment communities that the Company wishes to sell. A weak market may limit the Company’s ability to change its portfolio promptly in response to changing economic conditions. Also, if the Company is unable to sell apartment communities or if it can only sell apartment communities at prices lower than are generally acceptable, then the Company may have to take on additional leverage in order to provide adequate capital to execute its development and construction strategy. Furthermore, a portion of the proceeds from the Company’s overall property sales in the future may be held in escrow accounts in order for some sales to qualify as like-kind exchanges under Section 1031 of the Internal Revenue Code so that any related capital gain can be deferred for federal income tax purposes. As a result, the Company may not have immediate access to all of the cash flow generated from property sales.

Changing Interest Rates Could Increase Interest Costs and Could Affect the Market Price of the Company’s Securities.

The Company has incurred, and expects to continue to incur, debt bearing interest at rates that vary with market interest rates. Therefore, if interest rates increase, the Company’s interest costs will rise to the extent its variable rate debt is not hedged effectively. In addition, an increase in market interest rates may lead purchasers of the Company’s securities to demand a higher annual yield, which could adversely affect the market price of the Company’s common and preferred stock and debt securities.

Failure to Generate Sufficient Cash Flows Could Affect the Company’s Debt Financing and Create Refinancing Risk.

The Company is subject to the risks normally associated with debt financing, including the risk that its cash flow will be insufficient to make required payments of principal and interest. Although the Company may be able to use cash flow to make future principal payments, it cannot assure investors that sufficient cash flow will be available to make all required principal payments and still satisfy the distribution requirements that the Company must satisfy in order to maintain its status as a real estate investment trust or “REIT” for federal income tax purposes. The following factors, among others, may affect the cash flows generated by the Company’s apartment communities:

•  the national and local economies;

•  local real estate market conditions, such as an oversupply of apartment homes;

•  the perceptions by prospective residents of the safety, convenience and attractiveness of the Company’s communities and the neighborhoods in which they are located;

•  the Company’s ability to provide adequate management, maintenance and insurance; and

•  rental expenses, including real estate taxes and utilities.

Post Properties, Inc.

8

Post Apartment Homes, L.P.

Expenses associated with the Company’s investment in a community, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances cause a reduction in cash flows from operations from that community. If a community is mortgaged to secure payment of debt and the Company is unable to make the mortgage payments, the Company could sustain a loss as a result of foreclosure on the community or the exercise of other remedies by the mortgagee. The Company is likely to need to refinance at least a portion of its outstanding debt as it matures. There is a risk that the Company may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of the existing debt. As of December 31, 2002, the Company had outstanding mortgage indebtedness of approximately $510,186, senior unsecured debt of approximately $708,000 and outstanding indebtedness under its lines of credit aggregating $196,369.

The Company Could Become More Highly Leveraged Which Could Result in an Increased Risk of Default and in an Increase in its Debt Service Requirements.

The Company’s board of directors has adopted a policy of limiting indebtedness to approximately 60% of the undepreciated book value of its assets, but the Company’s organizational documents do not contain any limitation on the amount or percentage of indebtedness, funded or otherwise, that it might incur. If this policy were changed, the Company could become more highly leveraged, resulting in an increase in debt service that could adversely affect funds from operations and the Company’s ability to make expected distributions to its shareholders and the Operating Partnership’s ability to make expected distributions to its limited partners and in an increased risk of default on the obligations of the Company and the Operating Partnership. In addition, the Company’s and the Operating Partnership’s ability to incur debt is limited by covenants in bank and other credit agreements. The Company manages its debt to be in compliance with its stated policy and with these debt covenants, but subject to compliance with these covenants, the Company may increase the amount of outstanding debt at any time without a concurrent improvement in the Company’s ability to service the additional debt. Accordingly, the Company could become more leveraged, resulting in an increased risk of default on its obligations and in an increase in debt service requirements, both of which could adversely affect the Company’s financial condition and ability to access debt and equity capital markets in the future.

Debt Financing May Not be Available and Equity Issuances Could be Dilutive to the Company’s Shareholders.

The Company’s ability to execute its business strategy depends on its access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including common and preferred equity. Debt financing may not be available in sufficient amounts, or on favorable terms or at all. If the Company issues additional equity securities to finance developments and acquisitions instead of incurring debt, the interests of existing shareholders could be diluted.

Acquired Communities May Not Achieve Anticipated Results.

The Company may selectively acquire apartment communities that meet its investment criteria. The Company’s acquisition activities and their success may be exposed to the following risks:

•  an acquired community may fail to achieve expected occupancy and rental rates and may fail to perform as expected;

•  the Company may not be able to successfully integrate acquired properties and operations; and

•  the Company’s estimates of the costs of repositioning or redeveloping the acquired property may prove inaccurate, causing the Company to fail to meet its profitability goals.

Increased Competition Could Limit the Company’s Ability to Lease Apartment Homes or Increase or Maintain Rents.

The Company’s apartment communities compete with numerous housing alternatives in attracting residents, including other apartment communities and single-family rental homes, as well as owner occupied single- and multi-family homes. Competitive housing in a particular area could adversely affect the Company’s ability to lease apartment homes and increase or maintain rents.

Post Properties, Inc.

9

Post Apartment Homes, L.P.

Limited Investment Opportunities Could Adversely Affect the Company’s Growth.

The Company expects that other real estate investors will compete to acquire existing properties and to develop new properties. These competitors include insurance companies, pension and investment funds, developer partnerships, investment companies and other apartment REITs. This competition could increase prices for properties of the type that the Company would likely pursue, and competitors may have greater resources than the Company. As a result, the Company may not be able to make attractive investments on favorable terms, which could adversely affect its growth.

Interest Rate Hedging Contracts May be Ineffective and May Result in Material Charges.

From time to time when the Company anticipates issuing debt securities, it may seek to limit exposure to fluctuations in interest rates during the period prior to the pricing of the securities by entering into interest rate hedging contracts. The Company may do this to increase the predictability of its financing costs. Also, from time to time, the Company may rely on interest rate hedging contracts to limit its exposure under variable rate debt to unfavorable changes in market interest rates. If the pricing of new debt securities is not within the parameters of, or market interest rates produce a lower interest cost than the Company incurs under, a particular interest rate hedging contract, the contract is ineffective. Furthermore, the settlement of interest rate hedging contracts has involved and may in the future involve material charges. These charges are typically related to the extent and timing of fluctuations in interest rates. Despite the Company’s efforts to minimize its exposure to interest rate fluctuations, the Company cannot guarantee that it will maintain coverage for all of its outstanding indebtedness at any particular time. If the Company does not effectively protect itself from this risk, it may be subject to increased interest costs resulting from interest rate fluctuations.

Terrorist Attacks and the Possibility of Wider Armed Conflict May Have an Adverse Effect on the Company’s Business and Operating Results and Could Decrease the Value of the Company’s Assets.

Terrorist attacks and other acts of violence or war, such as those that took place on September 11, 2001, could have a material adverse effect on the Company’s business and operating results. There can be no assurance that there will not be further terrorist attacks against the United States or its businesses or interests. Attacks or armed conflicts that directly impact one or more of the Company’s apartment communities could significantly affect the Company’s ability to operate those communities and thereby impair its ability to achieve the Company’s expected results. Further, the Company’s insurance coverage may not cover any losses caused by a terrorist attack. In addition, the adverse effects that such violent acts and threats of future attacks could have on the U.S. economy could similarly have a material adverse effect on the Company’s business and results of operations. Finally, if the United States enters into a wider armed conflict, such as war with Iraq, the Company’s business and operating results could be adversely effected.

Losses from Natural Catastrophes May Exceed Insurance Coverage.

The Company carries comprehensive liability, fire, flood, extended coverage and rental loss insurance on its properties, which are believed to be of the type and amount customarily obtained on real property assets. The Company intends to obtain similar coverage for properties acquired in the future. However, some losses, generally of a catastrophic nature, such as losses from floods or earthquakes, may be subject to limitations. The Company exercises discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining appropriate insurance on its investments at a reasonable cost and on suitable terms. If the Company suffers a substantial loss, its insurance coverage may not be sufficient to pay the full current market value or current replacement value of the lost investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might make it infeasible to use insurance proceeds to replace a property after it has been damaged or destroyed.

Post Properties, Inc.

10

Post Apartment Homes, L.P.

Potential Liability for Environmental Contamination Could Result in Substantial Costs.

The Company is in the business of owning, operating, developing, acquiring and, from time to time, selling real estate. Under various federal, state and local environmental laws, as a current or former owner or operator, the Company could be required to investigate and remediate the effects of contamination of currently or formerly owned real estate by hazardous or toxic substances, often regardless of its knowledge of or responsibility for the contamination and solely by virtue of its current or former ownership or operation of the real estate. In addition, the Company could be held liable to a governmental authority or to third parties for property damage and for investigation and clean-up costs incurred in connection with the contamination. These costs could be substantial, and in many cases environmental laws create liens in favor of governmental authorities to secure their payment. The presence of such substances or a failure to properly remediate any resulting contamination could materially and adversely affect the Company’s ability to borrow against, sell or rent an affected property.

Compliance or Failure to Comply with Laws Requiring Access to the Company’s Properties by Disabled Persons Could Result in Substantial Cost.

The Americans with Disabilities Act, the Fair Housing Act of 1988 and other federal, state and local laws generally require that public accommodations be made accessible to disabled persons. Noncompliance could result in the imposition of fines by the government or the award of damages to private litigants. These laws may require the Company to modify its existing properties. These laws may also restrict renovations by requiring improved access to such buildings by disabled persons or may require the Company to add other structural features that increase construction costs. Legislation or regulations adopted in the future may impose further burdens or restrictions on the Company with respect to improved access by disabled persons. The Company cannot ascertain the costs of compliance with these laws, which may be substantial.

The Company May Fail to Qualify as a Reit for Federal Income Tax Purposes.

The Company’s qualification as a REIT for federal income tax purposes depends upon its ability to meet on a continuing basis, through actual annual operating results, distribution levels and diversity of stock ownership, the various qualification tests and organizational requirements imposed upon REITs under the Internal Revenue Code. The Company believes that it has qualified for taxation as a REIT for federal income tax purposes commencing with its taxable year ended December 31, 1993, and plans to continue to meet the requirements to qualify as a REIT in the future. Many of these requirements, however, are highly technical and complex. The Company cannot guarantee, therefore, that it has qualified or will continue to qualify in the future as a REIT. The determination that the Company qualifies as a REIT for federal income tax purposes requires an analysis of various factual matters that may not be totally within the Company’s control. Even a technical or inadvertent mistake could jeopardize the Company’s REIT status. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts might issue new decisions that make it more difficult, or impossible, for the Company to remain qualified as a REIT. The Company does not believe, however, that any pending or proposed tax law changes would jeopardize its REIT status.

If the Company were to fail to qualify for taxation as a REIT in any taxable year, and certain relief provisions of the Internal Revenue Code did not apply, the Company would be subject to tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates, leaving less money available for distributions to its shareholders. In addition, distributions to shareholders in any year in which the Company failed to qualify would not be deductible by the Company for federal income tax purposes nor would they be required to be made. Unless entitled to relief under specific statutory provisions, the Company also would be disqualified from taxation as a REIT for the four taxable years following the year during which it ceased to qualify as a REIT. It is not possible to predict whether in all circumstances the Company would be entitled to such statutory relief. The Company’s failure to qualify as a REIT likely would have a significant adverse effect on the value of its securities.

The Operating Partnership May Fail to be Treated as a Partnership for Federal Income Tax Purposes.

Management believes that the Operating Partnership qualifies, and has so qualified since its formation, as a partnership for federal income tax purposes and not as a publicly traded partnership taxable as a corporation. No assurance can be provided, however, that the IRS will not challenge the treatment of the Operating Partnership as a partnership for federal income tax purposes or that a court would not sustain such a challenge. If the IRS were successful in treating the Operating Partnership as a corporation for federal income tax purposes, then the taxable income of the Operating Partnership would be taxable at regular corporate income tax rates. In addition, the treatment of the Operating Partnership as a corporation would cause the Company to fail to qualify as a REIT. See “— The Company may fail to qualify as a REIT for federal income tax purposes” above.

Post Properties, Inc.

11

Post Apartment Homes, L.P.

The Company’s Shareholders May Not be Able to Effect a Change in Control.

The articles of incorporation and bylaws of the Company, the partnership agreement of the Operating Partnership, and the Georgia Business Corporation Code contain a number of provisions that could delay, defer or prevent a transaction or a change in control that might involve a premium price for the Company’s shareholders or otherwise be in their best interests, including the following:

Ownership Limit. One of the requirements for maintenance of the Company’s qualification as a REIT for federal income tax purposes is that no more than 50% in value of its outstanding capital stock may be owned by five or fewer individuals, including entities specified in the Internal Revenue Code, during the last half of any taxable year. Primarily to facilitate maintenance of its qualification as a REIT for federal income tax purposes, the ownership limit under the Company’s articles of incorporation prohibits ownership, directly or by virtue of the attribution provisions of the Internal Revenue Code, by any person or persons acting as a group of more than 6.0% of the issued and outstanding shares of the Company’s common stock, subject to an exception for shares of common stock held by Mr. Williams and Mr. Glover, the Company’s former Chairman and former Vice Chairman. Together, these limitations are referred to as the “ownership limit.” Further, the Company’s articles of incorporation include provisions allowing it to stop transfers of and redeem its shares that are intended to assist the Company in complying with these requirements. These provisions may have the effect of delaying, deferring or preventing someone from taking control, even though a change of control might involve a premium price for the Company’s shareholders or might otherwise be in the shareholders’ best interests.

Staggered Board. The Company’s articles of incorporation provide that the board of directors will consist of eight members and can be increased or decreased after that according to its bylaws, provided that the total number of directors is not less than three nor more than 15. Pursuant to the Company’s bylaws, the number of directors will be fixed by the board of directors within the limits in its articles of incorporation. The board of directors is divided into three classes of directors. Directors for each class are chosen for a three-year term. The size of the board of directors is currently set at eleven. The staggered terms for directors may affect the Company’s shareholders’ ability to effect a change of control, even if a change of control would be in the interest of the shareholders.

Preferred shares. The Company’s articles of incorporation provide that the Company has the authority to issue up to 20,000,000 shares of preferred stock, of which 4,9000,000 were outstanding as of December 31, 2002. The board of directors has the authority, without the approval of the shareholders, to issue additional shares of preferred stock and to establish the preferences and rights of such shares. The issuance of preferred stock could have the effect of delaying or preventing a change of the Company, even if a change of control were in the shareholders’ interest.

Consent rights of the Unitholders. Under the partnership agreement of the Operating Partnership, the Company may not merge or consolidate with another entity unless the merger includes the merger of the Operating Partnership, which requires the approval of the holders of a majority of the outstanding units of Operating Partnership. If the Company were to ever hold less than a majority of the units, this voting requirement might limit the possibility for an acquisition or a change of control.

Georgia Anti-Takeover Statutes. The Georgia Business Corporation Code generally restricts a company from entering into certain business combinations with an interested shareholder for a period of five years after the date on which the shareholder becomes an interested shareholder unless (1) the transaction is approved by the board of directors of the company prior to the date the person becomes an interested shareholder, (2) the interested shareholder acquires 90% of the company’s voting stock in the same transaction in which it exceeds 10% or (3) subsequent to becoming an interested shareholder, the shareholder acquires 90% of the company’s voting stock and the business combination is approved by the holders of a majority of the voting stock entitled to vote on the business combination. An interested shareholder is defined as any person or entity that is the beneficial owner of at least 10% of the company’s voting stock. This business combination statute will not apply unless the bylaws of the corporation specifically provide that the statute is applicable to the corporation. The Company has not elected to be covered by this statute, but it could so by action of the board of directors at any time.

Georgia Fair Price Statute. The Georgia Fair Price Statute imposes fair price and procedural requirements applicable to business combinations with any person who owns 10% or more of the common stock. These statutory requirements restrict business combinations with, and accumulations of shares of voting stock of, certain Georgia corporations. This fair price statute will not apply unless the bylaws of the corporation specifically provide that the statute is applicable to the corporation. The Company has not elected to be covered by this statute, but it could do so by action of the board of directors at any time.

Post Properties, Inc.

12

Post Apartment Homes, L.P.

ITEM 2.     PROPERTIES

At February 15, 2003, the Communities consisted of 80 stabilized Post® multifamily apartment communities located in the following metropolitan areas:

Metropolitan Area	Communities		# of Units		% of Total
Atlanta, GA		41		15,781		53.8%
Dallas, TX		21		5,657		19.3%
Tampa, FL		4		2,223		7.6%
Charlotte, NC		3		1,065		3.6%
Orlando, FL		2		985		3.4%
Houston, TX		2		981		3.3%
Fairfax, VA		2		700		2.4%
Denver, CO		1		696		2.4%
Washington, D.C.		1		504		1.7%
Phoenix, AZ		1		403		1.4%
Austin, TX		1		239		0.8%
Nashville, TN		1		86		0.3%
		80		29,320		100.0%

The Company or its predecessors developed all but 12 of the Post® Communities and currently manages all of the Communities. Fifty-one of the Communities have in excess of 300 apartment units, with the largest Community having a total of 916 apartment units. Seventy six of the eighty Communities, comprising approximately 95% of the Communities’ apartment units, were completed after January 1, 1986. The average age of the Communities is approximately eight years. The average economic occupancy rate was 90.9% and 94.4%, respectively, and the average monthly rental rate per apartment unit was $992 and $1,016, respectively, for communities stabilized for each of the entire years ended December 31, 2002 and 2001. See “Selected Financial Information.”

Post Properties, Inc.

13

Post Apartment Homes, L.P.

COMMUNITY INFORMATION

									December 2002		2002
					Average				Average		Average
				Year	Unit Size		No. of		Rental Rates		Economic
Communities		Location(1)		Completed	(Square Feet)		Units		Per Unit		Occupancy(2)
Georgia
Post Ashford®			Atlanta	1987		872		222		831		90.6	%
Post Biltmore™(3)			Atlanta	2001		777		276		1,105		N/A	(4)
Post Briarcliff™			Atlanta	1999		1,034		688		1,089		90.9	%
Post Bridge®			Atlanta	1986		847		354		698		91.3	%
Post Brookhaven®			Atlanta	1990-1992(5)		990		735		954		90.3	%
Post Canyon®			Atlanta	1986		899		494		729		90.3	%
Post Chase®			Atlanta	1987		938		410		693		85.8	%
Post Chastain®			Atlanta	1990		965		558		970		90.2	%
Post Collier Hills®			Atlanta	1997		984		396		1,047		92.5	%
Post Corners®			Atlanta	1986		860		460		694		88.2	%
Post Court®			Atlanta	1988		838		446		668		87.3	%
Post Crest®			Atlanta	1996		1,069		410		1,009		91.0	%
Post Crossing®			Atlanta	1995		1,027		354		1,057		92.1	%
Post Dunwoody®			Atlanta	1989-1996(5)		1,010		530		966		91.7	%
Post Gardens®			Atlanta	1998		1,068		397		1,144		88.6	%
Post Glen®			Atlanta	1997		1,117		314		1,171		91.7	%
Post Lane®			Atlanta	1988		840		166		766		89.7	%
Post Lenox Park®			Atlanta	1995		1,030		206		1,088		90.8	%
Post Lindbergh®			Atlanta	1998		956		396		1,029		91.2	%
Post Mill®			Atlanta	1985		952		398		746		91.8	%
Post Oak™			Atlanta	1993		1,003		182		1,058		91.4	%
Post Oglethorpe®			Atlanta	1994		1,218		250		1,287		89.3	%
Post Park®			Atlanta	1988-1990(5)		912		770		813		89.8	%
Post Parkside™			Atlanta	2000		903		188		1,343		93.5	%
Post Peachtree™(3)			Atlanta	2001		1,332		121		2,431		N/A	(4)
Post Peachtree Hills®			Atlanta	1992-1994(5)		971		300		1,066		93.0	%
Post Renaissance®(6)			Atlanta	1992-1994(5)		903		342		1,034		93.2	%
Post Ridge®			Atlanta	1998		1,061		434		1,018		93.2	%
Post Riverside®			Atlanta	1998		1,049		527		1,383		90.6	%
Post Spring™			Atlanta	2000		977		452		987		91.6	%
Post Stratford™(6)			Atlanta	2000		1,007		250		1,196		92.2	%
Post Summit®			Atlanta	1990		957		148		970		93.0	%
Post Valley®			Atlanta	1988		854		496		708		89.3	%
Post Village®			Atlanta							751		90.7	%
	The Arbors			1983		1,063		301
	The Fountains			1987		850		352
	The Gardens			1986		891		494
	The Hills			1984		953		241
	The Meadows			1988		817		350
Post Vinings®			Atlanta	1989-1991(5)		972		403		841		91.3	%
Post Walk®			Atlanta	1984-1987(5)		927		476		850		90.7	%
Post Woods®			Atlanta	1977-1983(5)		1,057		494		929		91.1	%
	Subtotal/Average — Georgia					970		15,781		942		90.8	%

Post Properties, Inc.

14

Post Apartment Homes, L.P.

COMMUNITY INFORMATION

								December 2002		2002
				Average				Average		Average
			Year	Unit Size		No. of		Rental Rates		Economic
Communities	Locations		Completed	(Square Feet)		Units		Per Unit		Occupancy(2)
Texas
Post Abbey™		Dallas	1996		1,275		34		1,930		90.4	%
Post Addison Circle™ — Phase I		Dallas	1998		895		460		964		89.0	%
Post Addison Circle™ — Phase II		Dallas	2000		898		610		1,004		87.7	%
Post Addison Circle™ — Phase III		Dallas	2000		806		264		869		86.3	%
Post American Beauty Mill™		Dallas	1998		993		80		1,026		88.3	%
Post Block 588™		Dallas	2000		1,570		127		1,721		82.2	%
Post Cole’s Corners™		Dallas	1998		819		186		986		92.6	%
Post Columbus Square™		Dallas	1996		863		218		1,138		93.0	%
Post Gallery™		Dallas	1999		2,307		34		2,873		78.4	%
Post Hackberry Creek®		Dallas	1988-1996(5)		865		432		814		90.3	%
Post Heights™		Dallas	1998-1099(5)		1,267		368		1,040		92.2	%
Post Legacy		Dallas	2000		843		384		873		87.3	%
Post Meridian™		Dallas	1991		835		133		1,065		91.4	%
Post Midtown Square™		Houston	1999-2000(5)		937		672		1,205		88.0	%
Post Rice Lofts™(6)		Houston	1998		964		309		1,378		84.0	%
Post Town Lake®		Dallas	1986-1987(5)		880		398		791		90.9	%
Post Uptown Village™		Dallas	1995-2000(5)		752		496		889		92.3	%
Post Vineyard™		Dallas	1996		733		116		955		92.0	%
Post Vintage™		Dallas	1993		783		161		941		93.5	%
Post West Avenue Lofts™(6)		Austin	2000		858		239		1,294		93.6	%
Post White Rock®		Dallas	1988		660		207		806		93.7	%
Post Wilson Building™(5)(6)		Dallas	1999		1,016		143		1,228		89.4	%
Post Windhaven™(8)		Dallas	1991		885		474		734		N/A	(4)
Post Worthington™		Dallas	1993		846		332		1,134		90.4	%
Subtotal/Average — Texas					981		6,877		1,021		89.3	%
Florida
Post Harbour Place™(7)		Tampa	1999-2001(5)		942		784		1,181		N/A	(4)
Post Hyde Park®		Tampa	1996		970		389		1,083		93.5	%
Post Lake®		Orlando	1988		850		740		669		93.8	%
Post Parkside™		Orlando	1999		873		245		1,124		94.1	%
Post Rocky Point®		Tampa	1996-1998(5)		1,070		916		1,021		93.7	%
Post Walk at Old Hyde Park Village™		Tampa	1997		889		134		1,303		93.9	%
Subtotal/Average — Florida					932		3,208		1,006		93.7	%

Post Properties, Inc.

15

Post Apartment Homes, L.P.

COMMUNITY INFORMATION

									December 2002		2002
					Average				Average		Average
			Year		Unit Size		No. of		Rental Rates		Economic
Communities		Locations	Completed		(Square Feet)		Units		Per Unit		Occupancy(2)
Arizona
Post Roosevelt Square(6)		Phoenix		2000		836		403		819		85.6	%
Virginia
Post Corners at Trinity Centre		Fairfax		1996		1,027		336		1,231		92.8	%
Post Forest®		Fairfax		1990		888		364		1,165		93.2	%
	Subtotal/Average — Virginia					958		700		1,197		93.0	%
North Carolina
Post Gateway Place™(7)		Charlotte		2000		698		436		912		N/A	(4)
Post Park at Phillips Place®		Charlotte		1998		1,136		402		1,181		90.4	%
Post Uptown Place™		Charlotte		2000		800		227		970		91.7	%
	Subtotal/Average — North Carolina					878		1,065		1,026		90.8	%
Colorado
Post Uptown Square™		Denver		1999-2001(4)		847		696		1,066		N/A	(4)
Tennessee
Post Bennie Dillion™		Nashville		1999		714		86		992		98.4	%
Washington, D.C.
Post Pentagon Row™(6)		D.C.		2001		855		504		1,804		N/A	(4)
	Total					886		29,320		993		90.7	%

(1)	Refers to greater metropolitan areas of cities indicated.
(2)	Average economic occupancy is defined as gross potential rent less vacancy losses, model expenses and bad debt divided by gross potential rent for the period, expressed as a percentage.
(3)	These communities are owned in joint ventures (Company equity ownership is 35%).
(4)	During 2002, this community or a phase in this community was in lease-up and, therefore, the average economic occupancy information for these communities is not included above.
(5)	These dates represent the respective completion dates for multiple phases of a community.
(6)	The Company has a leasehold interest in the land underlying these communities.
(7)	These communities are comprised of multiple phases. Not all phases of these communities were stabilized as of February 15, 2003.
(8)	Post Windhaven™ was under rehab in 2001 and in lease-up into 2002.

Post Properties, Inc.

16

Post Apartment Homes, L.P.

ITEM 3.     LEGAL PROCEEDINGS

A Temporary Restraining Order was issued by the Superior Court of Cobb County, Georgia on March 21, 2003 enjoining certain activities by the Company and its Board of Directors for a period of 30 days. The Order was issued as a result of a Complaint for Injunctive Relief and Damages filed by John A. Williams, Chairman Emeritus of the Board. The Board of Directors was to have voted on a number of resolutions that would have restricted Mr. Williams with respect to certain company matters, including restrictions on access to employees and information. The Order enjoins the Board from voting on any such resolutions during the 30-day period. The Company intends to vigorously defend itself in this matter.

The Company is involved in various other legal proceedings incidental to its business from time to time, most of which are expected to be covered by liability insurance. Management of the Company believes that any resolution of pending proceedings or liability to the Company which may arise as a result of these proceedings, including the Complaint for Injunctive Relief and Damages discussed above, will not have a material adverse effect on the Company’s results of operations or financial position.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM X.     EXECUTIVE OFFICERS OF THE REGISTRANT

The persons who are executive officers of the Company and its affiliates and their positions as of March 1, 2003 are as follows:

NAME	POSITIONS AND OFFICES HELD
David P. Stockert	President and Chief Executive Officer
Thomas L. Wilkes	President – Post Apartment Management and Chief Management Officer
R. Gregory Fox	Executive Vice President – Post Corporate Services and Chief Financial Officer
Sherry W. Cohen	Executive Vice President and Secretary – Post Corporate Services
Douglas S. Gray	Executive Vice President – Post Corporate Services
John Mears	Executive Vice President – Development
Arthur J. Quirk	Senior Vice President – Post Corporate Services and Chief Accounting Officer

The following is a biographical summary of the experience of the executive officers of the Company:

David P. Stockert. Mr. Stockert is the President and Chief Executive Officer of the Company. Mr. Stockert has been the Chief Executive Officer since July 2002. From January 2001 to June 2002, Mr. Stockert was President and Chief Operating Officer. From July 1999 to October 2000, Mr. Stockert was Executive Vice President of Duke Realty Corporation, a publicly traded real estate company. From June 1995 to July 1999, Mr. Stockert was Senior Vice President and Chief Financial Officer of Weeks Corporation, also a publicly traded real estate company that was a predecessor by merger to Duke Realty Corporation. From August 1990 to May 1995, Mr. Stockert was an investment banker in the Real Estate Group at Dean Witter Reynolds Inc. (now Morgan Stanley). Mr. Stockert is 40 years old.

Thomas L. Wilkes. Mr. Wilkes has been the President of Post Apartment Management and the Company’s Chief Management Officer since January 2001. From October 1997 through December 2000, he was an Executive Vice President and Director of Operations for Post Apartment Management responsible for the operations of Post communities in the Western United States. Mr. Wilkes was a Senior Vice President of Columbus Realty Trust from December 1993 through October 1997. Mr. Wilkes served as President of CRH Management Company, a member of the Columbus Group, since its formation in October 1990 to December 1993. Mr. Wilkes is a Certified Property Manager. Mr. Wilkes is 43 years old.

Post Properties, Inc.

17

Post Apartment Homes, L.P.

R. Gregory Fox. Mr. Fox has been with the Company since February 1996 and, since October 2000 has served as the Company’s Executive Vice President and Chief Financial Officer. From December 1998 through September 2000, he served as Executive Vice President of Post Corporate Services and the Company’s Chief Accounting Officer responsible for financial reporting and planning, accounting, management information systems and human resources. From February 1996 to December 1998, Mr. Fox was a Senior Vice President. Prior to joining the Company, he was a senior manager in the audit division of PriceWaterhouse LLP where he was employed for ten years. Mr. Fox is a Certified Public Accountant and is currently on the board of directors of Realeum, Inc. Mr. Fox is 43 years old.

Sherry W. Cohen. Ms. Cohen has been with the Company for eighteen years. Since October 1997, she has been an Executive Vice President of Post Corporate Services responsible for supervising and coordinating legal affairs and insurance. Since April 1990, Ms. Cohen had also been Corporate Secretary. She was a Senior Vice President with Post Corporate Services from July 1993 to October 1997. Prior thereto, Ms. Cohen was a Vice President of Post Properties, Inc. since April 1990. Ms. Cohen is 48 years old.

Douglas S. Gray. Mr. Gray joined the Company in December 1997 and, since January 2003, has been an Executive Vice President of Post Corporate Services responsible for dispositions and asset management. He was a Senior Vice President of Post Corporate Services from January 1999 through December 2002 and a Vice President of Post Corporate Services from December 1997 to December 1998. Prior to joining Post, Mr. Gray was Vice President of Dutch Institutional Holding Co. from July 1994 to November 1997. Prior thereto, he was Director of Property Services for The Landmarks Group from June 1988 to June 1994. Mr. Gray is a Certified Public Accountant and holds the CCIM designation. Mr. Gray is 43 years old.

John B. Mears. Mr. Mears has been with the Company since November 1993. Since March 2002, he has been an Executive Vice President of Development responsible for the oversight of all the Company’s new development and construction activities. From October 1997 to February 2002, he was an Executive Vice President of Post East Development, responsible for sourcing and executing new development opportunities in the Company’s primary markets outside of Atlanta, Georgia in the Eastern United States. From November 1993 through September 1997, he was a Senior Vice President of Post Apartment Development. Prior to joining the Company, Mr. Mears was an associate in the Real Estate Investment Banking Group at Merrill Lynch and Company. Mr. Mears is 39 years old.

Arthur J. Quirk. Mr. Quirk has been the Senior Vice President and Chief Accounting Officer of the Company since January 2003. Mr. Quirk served as the Company’s Vice President and Chief Accounting Officer from March 2001 to December 2002. From July 1999 to March 2001, Mr. Quirk was Vice President and Controller of Duke Realty Corporation, a publicly traded real estate company. From December 1994 to July 1999, Mr. Quirk was the Vice President and Controller of Weeks Corporation, also a publicly traded real estate company that was a predecessor by merger to Duke Realty Corporation. Mr. Quirk was Vice President-Controller and Chief Accounting Officer for Allegiant Physician Services, Inc., a physician management services company, from August 1993 to November 1994. From November 1991 to July 1993, Mr. Quirk was Chief Financial Officer and Controller for TransTel Group Inc., a start-up telecommunications company. Mr. Quirk is 45 years old.

Post Properties, Inc.

18

Post Apartment Homes, L.P.

PART II

ITEM 5. MARKET PRICE OF THE REGISTRANT’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Common Stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “PPS.” The following table sets forth the quarterly high and low prices per share reported on the NYSE, as well as the quarterly dividends declared per share:

					Dividends
Quarter End	High		Low		Declared
2001
First Quarter	$	39.2500	$	35.0000	$	0.780
Second Quarter		39.3400		35.2000		0.780
Third Quarter		38.9500		35.7600		0.780
Fourth Quarter		37.0800		32.5000		0.780
2002
First Quarter	$	35.9100	$	32.2000	$	0.780
Second Quarter		35.4000		30.0200		0.780
Third Quarter		30.8500		25.4100		0.780
Fourth Quarter		26.0500		22.4000		0.780

On March 14, 2003, the Company had 1,910 common shareholders of record.

The Company pays regular quarterly dividends to holders of shares of its common stock. Future dividend payments by the Company will be at the discretion of the board of directors and will depend on the actual funds from operations of the Company, the Company’s financial condition and capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended (the “Code”) and such other factors as the board of directors deems relevant. Beginning with the first quarter of 2003, the Company’s dividend will be reduced to $0.45 per share. For a discussion of the Company’s credit agreements and their restrictions on dividend payments, see Liquidity and Capital Resources at Management’s Discussion and Analysis of Financial Condition and Results of Operations.

During 2002, the Company did not sell any unregistered securities.

There is no established public trading market for the Common Units. As of March 14, 2003, the Operating Partnership had 99 holders of record of Common Units of the Operating Partnership.

For each quarter during 2002 and 2001, the Operating Partnership paid a cash distribution to holders of Common Units equal in amount to the dividends paid on the Company’s common stock for such quarter.

During 2002, the Operating Partnership did not sell any unregistered securities.

Post Properties, Inc.

19

Post Apartment Homes, L.P.

ITEM 6. SELECTED FINANCIAL DATA

Post Properties, Inc.

(Dollars in thousands, except per share and apartment unit data)

			Year Ended December 31,
			2002			2001			2000			1999			1998
OPERATING DATA
Revenues
	Rental		$	316,484		$	336,206		$	335,482		$	291,283		$	248,377
	Other			13,513			15,024			17,509			13,761			11,876
	Third-party services (1)			—			14,088			15,249			12,486			10,416
		Total revenues		329,997			365,318			368,240			317,530			270,669
Expenses
	Property operating and maintenance expense (exclusive of depreciation and amortization)			131,369			129,201			120,842			103,471			90,164
	Depreciation			85,681			69,680			65,732			52,988			41,976
	Interest expense			58,436			51,960			45,332			29,382			27,571
	Amortization of deferred loan costs			2,327			1,978			1,636			1,496			1,185
	General and administrative			14,431			13,256			10,066			7,788			8,495
	Other			694			—			—			—			—
	Project abandonment, employee severance and impairment charges			—			17,450			9,365			—			—
	Loss on unused treasury locks			—			—			—			—			1,944
	Minority interest in consolidated property partnerships			(2,055	)		(2,098	)		(1,695	)		511			397
	Third-party services(1)			—			13,023			13,092			10,829			8,763
		Total expenses		290,883			294,450			264,370			206,465			180,495
Income from continuing operations before equity in losses of unconsolidated entities, gains (losses) on property sales and minority interest				39,114			70,868			103,870			111,065			90,174
	Equity in losses of unconsolidated real estate entities			(1,590	)		(186	)		—			—			—
	Gains (losses) on property sales			13,275			23,942			3,208			(1,522	)		—
	Minority interest of preferred unitholders in Operating Partnership			(5,600	)		(5,600	)		(5,600	)		(1,851	)		—
	Minority interest of common unitholders in Operating Partnership			(4,073	)		(9,153	)		(10,441	)		(11,420	)		(10,178	)
		Income from continuing operations		41,126			79,871			91,037			96,272			79,996
Discontinued operations(2)
	Income from discontinued operations, net of minority interest			5,173			7,746			9,483			8,703			8,954
	Gains on property sales, net of minority interest			14,567			—			—			—			—
		Income from discontinued operations		19,740			7,746			9,483			8,703			8,954
Income before cumulative effect of accounting change and extraordinary items				60,866			87,617			100,520			104,975			88,950
	Cumulative effect of accounting change, net of minority interest(3)			—			(613	)		—			—			—
	Extraordinary items, net of minority interest(4)			(120	)		(77	)		—			(458	)		—
Net income				60,746			86,927			100,520			104,517			88,950
	Dividends to preferred shareholders			(11,449	)		(11,768	)		(11,875	)		(11,875	)		(11,473	)
Net income available to common shareholders			$	49,297		$	75,159		$	88,645		$	92,642		$	77,477
PER COMMON SHARE DATA
Income from continuing operations (net of preferred dividends) — basic			$	0.80		$	1.80		$	2.01		$	2.19		$	1.96
Income from discontinued operations — basic				0.53			0.20			0.24			0.23			0.25
Income before cumulative effect of accounting change and extraordinary items (net of preferred dividends) — basic				1.33			2.00			2.25			2.42			2.21
Net income available to common shareholders — basic				1.33			1.98			2.25			2.41			2.21

Post Properties, Inc.

20

Post Apartment Homes, L.P.

		Year Ended December 31,
		2002			2001			2000			1999			1998
Income from continuing operations (net of preferred dividends) — diluted		$	0.80		$	1.78		$	1.99		$	2.17		$	1.93
Income from discontinued operations — diluted			0.53			0.20			0.23			0.22			0.25
Income before cumulative effect of accounting change and extraordinary items (net of preferred dividends) — diluted			1.33			1.98			2.22			2.39			2.18
Net income available to common shareholders — diluted			1.33			1.96			2.22			2.38			2.18
Dividends declared			3.12			3.12			3.04			2.80			2.60
BALANCE SHEET DATA
Real estate, before accumulated depreciation		$	2,887,500		$	2,867,672		$	2,827,094		$	2,582,785		$	2,255,074
Real estate, net of accumulated depreciation			2,443,535			2,463,398			2,469,914			2,279,769			2,007,926
Total assets			2,508,151			2,538,351			2,551,237			2,350,173			2,066,713
Total debt			1,414,555			1,336,520			1,213,309			989,583			800,008
Shareholders’ equity			833,699			901,517			1,028,610			1,058,862			1,051,686
OTHER DATA
Cash flow provided by (used in):
	Operating activities	$	119,763		$	161,564		$	185,073		$	153,038		$	148,618
	Investing activities	$	(48,821	)	$	(51,213	)	$	(255,986	)	$	(317,960	)	$	(328,216	)
	Financing activities	$	(69,355	)	$	(113,007	)	$	72,502		$	149,638		$	189,873
Funds from operations (5)		$	110,381		$	133,133		$	163,411		$	162,581		$	134,202
Weighted average common shares outstanding — basic			36,939,144			38,052,673			39,317,725			38,460,689			35,028,596
Weighted average common shares and units outstanding — basic			42,020,759			43,211,834			44,503,290			43,663,373			40,244,351
Weighted average common shares outstanding — diluted			36,953,962			38,267,939			39,852,514			38,916,987			35,473,587
Weighted average common shares and units outstanding — diluted			42,035,577			43,427,100			45,038,079			44,119,671			40,689,342
Total stabilized communities (at end of period)			79			82			82			85			83
Total stabilized apartment units (at end of period)			29,199			27,710			28,736			29,032			27,568
Average economic occupancy (fully stabilized communities) (6)			90.9	%		94.9	%		96.8	%		96.4	%		96.5	%

(1)	Consists of revenues and expenses from property management and landscape services provided to properties owned by third parties. These businesses were sold in the fourth quarter of 2001.
(2)	Upon the implementation of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” on January 1, 2002, the operating results of real estate held for sale and sold are reported as discontinued operations for all periods presented. Additionally, all gains and losses on the sale of assets classified as held for sale subsequent to January 1, 2002 are included in discontinued operations. As the operating results and gains or losses from the sale of real estate assets prior to January 1, 2002 are included in continuing operations, the presentation of results are not comparable between periods.
(3)	The cumulative effect of accounting change results from the Company’s adoption of SFAS No. 133, effective January 1, 2001.
(4)	The extraordinary items resulted from costs associated with the early extinguishment of indebtedness.
(5)	The Company uses the National Association of Real Estate Investment Trusts (“NAREIT”) definition of funds from operations (“FFO”). FFO is a non-GAAP financial measure. Effective January 1, 2000, NAREIT amended its definition of FFO to include in FFO all non-recurring transactions, except those that are defined as extraordinary under generally accepted accounting principles (“GAAP”). The Company adopted this new definition effective January 1, 2000. FFO for any period means the Consolidated Net Income of the Company and its subsidiaries for such period excluding gains or losses from debt restructuring and sales of property plus depreciation of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures, all determined on a consistent basis in accordance with GAAP. FFO presented herein is not necessarily comparable to FFO presented by other real estate companies because not all real estate companies use the same definition. The Company’s FFO is comparable to the FFO of real estate companies that use the current NAREIT definition. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs or ability to service indebtedness or make distributions. FFO for 1998 has been restated to reflect the requirements of the new NAREIT definition. A reconciliation to net income available to common shareholders is included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(6)	Amounts represent average economic occupancy for communities stabilized for both the current and prior respective periods. Amounts for prior years exclude the impact of SFAS No. 144. Average economic occupancy is defined as gross potential rent less vacancy losses, model expenses and bad debt divided by gross potential rent for the period, expressed as a percentage. The calculation of average economic occupancy does not include a deduction for concessions and employee discounts (average economic occupancy, taking account of these amounts, would have been 89.1%, 93.8% ,94.9%, 95.0% and 94.9% for the years ended December 31, 2002, 2001, 2000, 1999 and 1998, respectively). Concessions were $4,215, $1,860, $3,250, $2,847 and $2,953 for the years ended December 31, 2002, 2001, 2000, 1999 and 1998, respectively. Employee discounts were $660, $895, $1,143, $583 and $465 for the years ended December 31, 2002, 2001, 2000, 1999 and 1998, respectively. A community is considered by the Company to have achieved stabilized occupancy on the earlier to occur of (i) attainment of 95% physical occupancy on the first day of any month, or (ii) one year after completion of construction.

Post Properties, Inc.

21

Post Apartment Homes, L.P.

Post Apartment Homes, L.P.

(Dollars in thousands, except per unit and apartment unit data)

			Year Ended December 31,
			2002			2001			2000			1999			1998
OPERATING DATA
Revenues
	Rental		$	316,484		$	336,206		$	335,482		$	291,283		$	248,377
	Other			13,513			15,024			17,509			13,761			11,876
	Third-party services (1)			—			14,088			15,249			12,486			10,416
		Total revenues		329,997			365,318			368,240			317,530			270,669
Expenses
	Property operating and maintenance expense (exclusive of depreciation and amortization)			131,369			129,201			120,842			103,471			90,164
	Depreciation			85,681			69,680			65,732			52,988			41,976
	Interest expense			58,436			51,960			45,332			29,382			27,571
	Amortization of deferred loan costs			2,327			1,978			1,636			1,496			1,185
	General and administrative			14,431			13,256			10,066			7,788			8,495
	Other			694			—			—			—			—
	Project abandonment, employee severance and impairment charges			—			17,450			9,365			—			—
	Loss on unused treasury locks			—			—			—			—			1,944
	Minority interest in consolidated property partnerships			(2,055	)		(2,098	)		(1,695	)		511			397
	Third-party services (1)			—			13,023			13,092			10,829			8,763
		Total expenses		290,883			294,450			264,370			206,465			180,495
Income from continuing operations before equity in losses of unconsolidated entities and gains (losses) on property sales				39,114			70,868			103,870			111,065			90,174
	Equity in losses of unconsolidated real estate entities			(1,590	)		(186	)		—			—			—
	Gains (losses) on property sales			13,275			23,942			3,208			(1,522	)		—
		Income from continuing operations		50,799			94,624			107,078			109,543			90,174
Discontinued operations (2)
	Income from discontinued operations			5,885			8,796			10,733			9,881			10,287
	Gains on property sales			16,570			—			—			—			—
		Income from discontinued operations		22,455			8,796			10,733			9,881			10,287
Income before cumulative effect of accounting change and extraordinary items				73,254			103,420			117,811			119,424			100,461
	Cumulative effect of accounting change (3)			—			(695	)		—			—			—
	Extraordinary items (4)			(136	)		(88	)		—			(521	)		—
Net income				73,118			102,637			117,811			118,903			100,461
	Dividends to preferred unitholders			(17,049	)		(17,368	)		(17,475	)		(13,726	)		(11,473	)
Net income available to common unitholders			$	56,069		$	85,269		$	100,336		$	105,177		$	88,988
PER COMMON UNIT DATA
Income from continuing operations (net of preferred distributions) — basic			$	0.80		$	1.80		$	2.01		$	2.19		$	1.96
Income from discontinued operations — basic				0.53			0.20			0.24			0.23			0.25
Income before cumulative effect of accounting change and extraordinary items (net of preferred distributions) — basic				1.33			2.00			2.25			2.42			2.21
Net income available to common unitholders — basic				1.33			1.98			2.25			2.41			2.21
Income from continuing operations (net of preferred distributions) — diluted			$	0.80		$	1.78		$	1.99		$	2.17		$	1.93
Income from discontinued operations — diluted				0.53			0.20			0.23			0.22			0.25
Income before cumulative effect of accounting change and extraordinary items (net of preferred distributions) — diluted				1.33			1.98			2.22			2.39			2.18

Post Properties, Inc.

22

Post Apartment Homes, L.P.

		Year Ended December 31,
		2002			2001			2000			1999			1998
Net income available to common unitholders — diluted			1.33			1.96			2.22			2.38			2.18
Dividends declared			3.12			3.12			3.04			2.80			2.60
BALANCE SHEET DATA
Real estate, before accumulated depreciation		$	2,887,500		$	2,867,672		$	2,827,094		$	2,582,785		$	2,255,074
Real estate, net of accumulated depreciation			2,443,535			2,463,398			2,469,914			2,279,769			2,007,926
Total assets			2,508,151			2,538,351			2,551,237			2,350,173			2,066,713
Total debt			1,414,555			1,336,520			1,213,309			989,583			800,008
Partners’ equity			993,976			1,077,670			1,216,701			1,251,342			1,177,051
OTHER DATA
Cash flow provided by (used in):
	Operating activities	$	119,763		$	161,564		$	185,073		$	153,038		$	148,618
	Investing activities	$	(48,821	)	$	(51,213	)	$	(255,986	)	$	(317,960	)	$	(328,216	)
	Financing activities	$	(69,355	)	$	(113,007	)	$	72,502		$	149,638		$	189,873
Funds from operations (5)		$	110,381		$	133,133		$	163,411		$	162,581		$	134,202
Weighted average common units outstanding — basic			42,020,759			43,211,834			44,503,290			43,663,373			40,244,351
Weighted average common units outstanding — diluted			42,035,577			43,427,100			45,038,079			44,119,671			40,689,342
Total stabilized communities (at end of period)			79			82			82			85			83
Total stabilized apartment units (at end of period)			29,199			27,710			28,736			29,032			27,568
Average economic occupancy (fully stabilized communities) (6)			90.9%			94.9%			96.8%			96.4%			96.5%

(1)	Consists of revenues and expenses from property management and landscape services provided to properties owned by third parties. These businesses were sold in the fourth quarter of 2001.
(2)	Upon the implementation of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” on January 1, 2002, the operating results of real estate held for sale and sold are reported as discontinued operations for all periods presented. Additionally, all gains and losses on the sale of assets classified as held for sale subsequent to January 1, 2002 are included in discontinued operations. As the operating results and gains or losses from the sale of real estate assets prior to January 1, 2002 are included in continuing operations, the presentation of results are not comparable between periods.
(3)	The cumulative effect of accounting change results from the Company’s adoption of SFAS No. 133, effective January 1, 2001.
(4)	The extraordinary items resulted from costs associated with the early extinguishment of indebtedness.
(5)	The Operating Partnership uses the National Association of Real Estate Investment Trusts (“NAREIT”) definition of funds from operations (“FFO”). FFO is a non-GAAP financial measure. Effective January 1, 2000, NAREIT amended its definition of FFO to include in FFO all non-recurring transactions, except those that are defined as extraordinary under generally accepted accounting principles (“GAAP”). The Operating Partnership adopted this new definition effective January 1, 2000. FFO for any period means the Consolidated Net Income of the Operating Partnership and its subsidiaries for such period excluding gains or losses from debt restructuring and sales of property plus depreciation of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures, all determined on a consistent basis in accordance with GAAP. FFO presented herein is not necessarily comparable to FFO presented by other real estate companies because not all real estate companies use the same definition. The Operating Partnership’s FFO is comparable to the FFO of real estate companies that use the current NAREIT definition. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Operating Partnership’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Operating Partnership’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Operating Partnership’s needs or ability to service indebtedness or make distributions. FFO for 1998 has been restated to reflect the requirements of the new NAREIT definition. A reconciliation to net income available to common shareholders is included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(6)	Amounts represent average economic occupancy for communities stabilized for both the current and prior respective periods. Amounts for prior years exclude the impact of SFAS No. 144. Average economic occupancy is defined as gross potential rent less vacancy losses, model expenses and bad debt divided by gross potential rent for the period, expressed as a percentage. The calculation of average economic occupancy does not include a deduction for concessions and employee discounts (average economic occupancy, taking account of these amounts, would have been 89.1%, 93.8% ,94.9%, 95.0% and 94.9% for the years ended December 31, 2002, 2001, 2000, 1999 and 1998, respectively). Concessions were $4,215, $1,860, $3,250, $2,847 and $2,953 for the years ended December 31, 2002, 2001, 2000, 1999 and 1998, respectively. Employee discounts were $660, $895, $1,143, $583 and $465 for the years ended December 31, 2002, 2001, 2000, 1999 and 1998, respectively. A community is considered by the Company to have achieved stabilized occupancy on the earlier to occur of (i) attainment of 95% physical occupancy on the first day of any month, or (ii) one year after completion of construction.

Post Properties, Inc.

23

Post Apartment Homes, L.P.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except apartment unit data)

General

Post Properties, Inc. and its subsidiaries develop, own and manage upscale multifamily apartment communities in selected markets in the United States. As used in this report, the term “Company” includes Post Properties, Inc. and its subsidiaries, including Post Apartment Homes, L.P. (the “Operating Partnership”), unless the context indicates otherwise. The Company, through its wholly owned subsidiaries is the general partner and owns a majority interest in the Operating Partnership which, through its subsidiaries, conducts substantially all of the on-going operations of the Company. At December 31, 2002, the Company owned 30,317 apartment units in 84 apartment communities, including 1,377 apartment units current under development and lease up in five apartment communities and a phase of an existing community. At December 31, 2002, approximately 52.1%, 18.7% and 7.3% (on a unit basis) of the Company’s communities are located in the Atlanta, Dallas and Tampa metropolitan area, respectively.

The Company has elected to qualify and operate as a self-administrated and self-managed real estate investment trust (“REIT”) for federal income tax purposes. A REIT is a legal entity which holds real estate interests and, through payments of dividends to shareholders, in practical effect is not subject to federal income taxes at the corporate level.

At December 31, 2002, the Company owned approximately 88.5% of the common limited partnership interests (“Common Units”) in the Operating Partnership. Common Units held by persons (including certain officers and directors) other than the Company represented a 11.5% common minority interest in the Operating Partnership.

The following discussion should be read in conjunction with the selected financial data and with all of the accompanying consolidated financial statements appearing elsewhere in this report. This discussion is combined for the Company and the Operating Partnership as their results of operations and the financial condition are substantially the same except for the effect of the 11.5% common minority interest in the Operating Partnership. See the summary financial information in the section below titled, “Results of Operations”.

Disclosure Regarding Forward-Looking Statements

Certain statements made in this report, and other written or oral statements made by or on behalf of the Company, may constitute “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and the Company’s future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. Forward-looking statements include statements preceded by, followed by or that include the words “believes,” “expects,” “anticipates,” “plans,” “estimates,” or similar expressions. Examples of such statements in this report include our expectations with regard to: net operating income for 2003, occupancy levels and rental rates, operating expenses, stabilized community revenues in excess of specified expenses, accounting recognition and measurement of guarantees, employee severance charges and other accrued liabilities, debt maturities and financing needs, dividend payments, our ability to meet new construction, development and other long-term liquidity requirements, and our ability to execute asset sales. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise. Additional information concerning the risk and uncertainties listed above, and other factors that you may wish to consider, is contained elsewhere in the Company’s filings with the Securities and Exchange Commission.

The following are some of the factors that could cause the Company’s actual results to differ materially from the expected results described in the Company’s forward-looking statements:

•  future local and national economic conditions, including changes in job growth, interest rates, the availability of financing and other factors;

•  demand for apartments in the Company’s markets and the effect on occupancy and rental rates;

•  the impact of competition on the Company’s business, including competition for tenants and development locations;

•  the Company’s ability to obtain financing or self-fund the development of additional apartment communities;

Post Properties, Inc.

24

Post Apartment Homes, L.P.

•  the uncertainties associated with the Company’s current real estate development, including actual costs exceeding the Company’s budgets or development periods exceeding expectations;

•  conditions affecting ownership of residential real estate and general conditions in the multi-family residential real estate market;

•  the effects of changes in accounting policies and other regulatory matters detailed in the Company’s filings with the Securities and Exchange Commission and uncertainties of litigation; and

•  the Company’s ability to continue to qualify as a real estate investment trust under the Code.

Critical Accounting Policies and New Accounting Pronouncements

In the preparation of financial statements and in the determination of Company operating performance, the Company utilizes certain significant accounting polices and these accounting policies are discussed in Note 1 to the Company’s consolidated financial statements. Also discussed in Note 1 to the consolidated financial statements are several new accounting pronouncements issued in 2002 and 2003. The impact of the new pronouncements is discussed below and in the consolidated financial statements. As the Company is in the business of developing, owning and managing apartment communities, its critical accounting policies relate to cost capitalization, asset impairment evaluation and the asset classification and accounting for real estate assets held for sale.

The Company capitalizes those expenditures relating to acquiring new assets, developing new apartment communities and enhancing of the value of existing assets and that substantially extend the life of existing assets. All other expenditures necessary to maintain a community in ordinary operating condition are expensed as incurred. Additionally, for new development communities, carpet, vinyl and blind replacements are expensed as incurred during the first five years (which corresponds to their estimated depreciable lives). Thereafter, these replacements are capitalized. Further, the Company expenses as incurred all interior and exterior painting of communities.

For communities under development, the Company capitalizes interest, real estate taxes, and certain internal personnel and associated costs directly related to apartment communities under development and construction. Interest is capitalized to projects under development based upon the weighted average cumulative project costs for each period multiplied by the Company’s weighted average borrowing costs, expressed as a percentage. Weighted average borrowing costs include the costs of the Company’s fixed rate secured and unsecured borrowings and the variable rate unsecured borrowings under its line of credit facilities. The weighted average borrowing costs, expressed as a percentage, for the years ended December, 31, 2002, 2001 and 2000 were 7.55%, 7.41% and 6.80%, respectively. The weighted average borrowing costs used by the Company for interest capitalization generally increases as the Company’s variable rate unsecured debt decreases and decreases as the Company’s variable rate unsecured debt increases. The internal personnel and associated costs are capitalized to the projects under development based upon the effort identifiable with such projects. Should the Company reduce its development activities below a range of $50 million to $60 million annually, the Company would need to either reduce its internal personnel and associated costs related to development and construction activities or reflect such costs as current period expenses. The Company treats each unit in an apartment community separately for cost accumulation, capitalization and expense recognition purposes. Prior to the commencement of leasing activities, interest and other construction costs are capitalized and reflected on the balance sheet as construction in progress. The Company ceases the capitalization of such costs as the residential units in a community become substantially complete and available for occupancy. This results in a proration of these costs between amounts that are capitalized and expensed as the residential units in a development community become available for occupancy. In addition, prior to the completion of units, the Company expenses as incurred substantially all operating expenses (including pre-opening marketing as well as property management and leasing personnel expenses) of such communities.

Post Properties, Inc.

25

Post Apartment Homes, L.P.

The Company continually evaluates the recoverability of the carrying value of its real estate assets using the methodology prescribed in Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Factors considered by management in evaluating impairment of its existing real estate assets held for investment include significant declines in property operating profits, recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its fair value. The Company periodically classifies real estate assets as held for sale. An asset is classified as held for sale after the approval of the Company’s internal investment committee and after an actual program to sell the asset has commenced. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying consolidated balance sheets. Effective January 1, 2002 (through the implementation of SFAS No. 144), the operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying statements of operations. The income from discontinued operations includes the revenues and expenses including depreciation and allocated interest expense, associated with the assets. Interest expense is allocated to assets held for sale based on actual interest costs for assets with secured mortgage debt. Interest expense is allocated to unencumbered assets based on the ratio of unencumbered assets to unsecured debt multiplied by the weighted average interest rate on the Company’s unsecured debt for the period and further multiplied by the average book value of the assets sold. This classification of operating results as discontinued operations applies retroactively for all periods presented for assets designated as held for sale in 2002.

Additionally, gains and losses on assets designated as held for sale in 2002 are classified as part of discontinued operations.

In years prior to 2002, real estate assets held for sale were stated separately on the consolidated balance sheet in a manner consistent with approach discussed above. However, the operating results and gains or losses on the sale of such assets were included in continuing operations. As a result of this presentation, income from continuing operations and gains on property sales are not comparable between years.

In 2002 and 2003, the Financial Accounting Standards Board issued several new accounting pronouncements and the pronouncements with a potential impact on the Company are discussed in the following paragraphs.

SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections” was issued in May 2002. SFAS No. 145 rescinds SFAS No. 4, “Reporting Gains and Losses from Extinguishments of Debt,” which provided that gains and losses from early debt retirements be treated as extraordinary items. Under SFAS No. 145, gains and losses from early debt retirements will only be treated as extraordinary items if they meet the criteria for extraordinary items under APB No. 30. Since the definition of an extraordinary item is more restrictive under APB No. 30, SFAS No. 145 will generally cause the Company to treat gains or losses from early debt retirements as part of income before extraordinary items. This part of SFAS No. 145 is effective for fiscal years beginning after May 15, 2002 and requires the reclassification of prior period extraordinary items not meeting the APB No. 30 criteria. The Company expects to implement this requirement of SFAS No. 145 on January 1, 2003. Upon implementation, the Company will reclassify $120, net of minority interest, in 2002 and $77, net of minority interest, in 2001 from extraordinary items to expenses used in the determination of income from continuing operations. The Company believes this change is not significant to the Company’s results of operations or its financial position. The remaining provisions of SFAS No. 145 are generally not applicable to the Company.

SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” was issued in July 2002. This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002. The Company believes the provisions of this Statement will not have a significant effect on the Company’s results of operations or its financial position.

Post Properties, Inc.

26

Post Apartment Homes, L.P.

SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure,” was issued in December 2002. SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements in both annual and interim financial statements about the method of accounting for stock-based compensation and the effect of the method on reported results. The Company intends to voluntarily change to the fair value method of accounting under SFAS No. 123 using the prospective method prescribed in SFAS No. 148, effective January 1, 2003. The Company estimates the impact of this change on its projected 2003 results of operations to be a reduction of earnings per common share of approximately $0.01.

FASB Interpretation No. 45 (“FIN No. 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Guarantees of Indebtedness of Others” was issued in November 2002. FIN No. 45 clarifies disclosure requirements to be made by a guarantor in its interim and annual financial statements regarding its obligations under certain guarantees that it has issued. Additionally, it clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The disclosure requirements of FIN No. 45 are effective for interim and annual financial statements issued after December 15, 2002. The initial recognition and measurement provisions of FIN No. 45 are applicable for guarantees issued or modified after December 31, 2002. The Company has implemented the disclosure requirements of FIN No. 45 effective with these December 31, 2002 financial statements and the Company will implement the recognition and measurement provisions effective January 1, 2003. The Company does not expect the recognition and measurement provisions of FIN No. 45 to have a significant impact on the Company’s financial position or results of operations.

FASB Interpretation No. 46 (“FIN No. 46”), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” was issued in January 2003. FIN No. 46 requires consolidation of all legal entities in which the enterprise holds contractual, ownership or other monetary interests that change with changes in the entity’s net asset value (such entities being designated as variable interest entities) where the enterprise is deemed the primary beneficiary. The consolidation provisions of FIN No. 46 are applicable immediately to all variable interest entities created after January 31, 2003. For variable interest entities created prior to February 1, 2003 where the Company is deemed to be the primary beneficiary, consolidation of such entities will be required for the interim period ending September 30, 2003. Information required to be disclosed in 2003 pursuant to FIN No. 46 includes the nature, purpose, size and activities of all variable interest entities where it is reasonably possible that such entities will be required to be consolidated by the Company and the Company’s maximum exposure to loss from these entities. The Company currently does not have any interests in variable interest entities and believes that FIN No. 46 will not have a significant effect on its results of operations or financial position.

Results of Operations

The following discussion of results of operations should be read in conjunction with the consolidated statements of operations, the accompanying selected financial data and the community operations/segment performance information included below.

The Company’s revenues and earnings are generated primarily from the operation of its apartment communities. For purposes of evaluating comparative operating performance, the Company categorizes its operating communities based on the period each community reaches stabilized occupancy. A community is generally considered by the Company to have achieved stabilized occupancy on the earlier to occur of (1) attainment of 95% physical occupancy on the first day of any month or (2) one year after completion of construction.

At December 31, 2002, the Company’s portfolio of apartment communities consisted of the following: (1) 65 communities that were completed and stabilized for all of the current and prior year, (2) five communities that achieved full stabilization during 2001, and (3) 12 communities and additions to existing communities currently in the development or lease-up stage. Sold communities include communities sold in 2002, 2001 and 2000 that were not reflected in discontinued operations under SFAS No. 144 (see above).

The Company has adopted an accounting policy related to communities in the lease-up stage whereby substantially all operating expenses (including pre-opening marketing and management and leasing personnel expenses) are expensed as incurred. During the lease-up phase, the sum of interest expense on completed units and other operating expenses (including pre-opening marketing and management and leasing personnel expenses) will initially exceed rental revenues, resulting in a “lease-up deficit,” which continues until such time as rental revenues exceed such expenses. Lease up deficits for the years ended December 31, 2002, 2001 and 2000 were $1,533, $3,173 and $2,665, respectively. In order to evaluate the operating performance of its communities for the comparative years

Post Properties, Inc.

27

Post Apartment Homes, L.P.

listed below, the Company has presented financial information which summarizes the revenues in excess of specified expenses on a comparative basis for all of its operating communities.

Comparison of Year Ended December 31, 2002 to Year Ended December 31, 2001

The operating performance from continuing operations for all of the Company’s apartment communities summarized by segment for the years ended December 31, 2002 and 2001 is summarized as follows:

	2002		2001		% Change
Rental and other revenues:
Fully stabilized communities (1)	$	256,477	$	275,297		(6.8	)%
Communities stabilized during 2001.		17,535		14,946		17.3	%
Lease-up communities (2)		39,571		25,741		(53.7	)%
Sold communities (3)		745		19,659		(96.2	)%
Other revenue (4)		14,381		13,816		4.1	%
		328,709		349,459		(5.9	)%
Property operating and maintenance expense (exclusive of depreciation and amortization):
Fully stabilized communities (1)		89,252		89,210		0.0	%
Communities stabilized during 2001.		5,907		6,003		(1.6	)%
Lease-up communities (2)		16,379		10,429		57.1	%
Sold communities (3)		376		7,329		(94.9	)%
Other expense (5)		19,455		16,230		19.9	%
		131,369		129,201		1.7	%
Revenue in excess of specified expenses	$	197,340	$	220,258		(10.4	)%
Recurring capital expenditures: (6)
Carpet	$	2,433	$	2,400		1.4	%
Other		6,095		6,100		0.0	%
Total	$	8,528	$	8,500		0.3	%
Non recurring capital expenditures	$	3,374	$	2,124		58.9	%
Average apartment units in service		28,034		28,351		(1.1	)%

(1)	Communities which reached stabilization prior to January 1, 2001.
(2)	Communities in the “construction”, “development” or “lease-up” stage during 2002 and, therefore, not considered fully stabilized for all of the periods presented.
(3)	Includes results from two communities containing 540 units and one commercial property in 2002 and six communities containing 2,799 units and one commercial property sold in 2001.
(4)	Other revenue includes revenue from commercial properties, from furnished apartment rentals above the unfurnished rental rates and any revenue not directly related to property operations. Other revenue excludes interest income and third-party services revenues included in total revenues in the consolidated statements of operations.
(5)	Other expenses includes certain indirect central office operating expenses related to management, grounds maintenance, and costs associated with commercial properties and furnished apartment rentals.
(6)	In addition to those expenses which relate to property operations, the Company incurs recurring and non-recurring expenditures relating to acquiring and developing new assets, materially enhancing the value of an existing asset, or substantially extending the useful life of an existing asset, all of which are capitalized. Recurring capital expenditures are those that are generally expected to be incurred on an annual basis. Non-recurring capital expenditures are those that generally occur less frequently than on an annual basis.

The Operating Partnership reported net income available to common unitholders of $56,069 and $85,269 for the years ended December 31, 2002 and 2001, respectively, and the Company reported net income available to common shareholders of $49,297 and $75,159 for the years ended December 31, 2002 and 2001, respectively. The decline in Company operating performance in 2002 compared to 2001 reflects a decrease in fully stabilized community operating performance (see discussion below), reduced earnings resulting from the Company’s asset sale and capital reinvestment program, increased depreciation and interest expense relating to new communities completed in 2001 and 2002 and increased general and administrative expenses. The weaker operating performance in 2002 was somewhat offset by increased gains on asset sales between years and by the negative impact of severance and impairment charges in 2001. The impact of these items is discussed below.

Post Properties, Inc.

28

Post Apartment Homes, L.P.

Rental and other revenue decreased $20,750 or 5.9% from 2001 to 2002 primarily due to the $18,820 or 6.8% decline in revenues from fully stabilized communities discussed further below. The rental and other revenue increases from the Company’s newly stabilized and lease-up properties of $16,419 were offset by the revenue reduction of $18,914, from assets sold between years (see discussion under “Discontinued Operations” — comparisons of the impact of assets sold between 2002 and prior years is not comparable due to the implementation of SFAS No. 144). Property operating and maintenance expenses (exclusive of depreciation and amortization) increased $2,168 or 1.7% primarily due to increased central office management expenses as well as increased costs associated with a higher volume of corporate apartment rentals.

As discussed above and in Note 7 to the consolidated financial statements, the Company exited the third party property management and landscape service business in the fourth quarter of 2001 through the sale of the businesses to their respective management teams. These sales allowed the Company to simplify its operations through a reduced work force (from approximately 2,100 employees prior to the sale to approximately 1,050 employees as of December 31, 2002) and focus on its core business of owning, developing and managing multifamily real estate assets.

The net gain on property sales included in continuing operations of $23,942 for 2001 resulted from the sale of six communities containing 2,799 units, one commercial property and five land parcels. The net gain on property sales included in continuing operations of $13,275 for 2002 resulted from the sale of two communities containing 540 units and one commercial property. This gain excluded losses of $4,861 related to these assets that were written down to their estimated fair value at December 31, 2001. These assets were all classified as assets held for sale at December 31, 2001. The net gain on property sales of $20,068 ($17,818 net of minority interest) included in discontinued operations in 2002, under SFAS No. 144, resulted from the sale of six communities containing 2,125 units and one commercial property, less reserves of $3,698 ($3,251 net of minority interest) to write down to fair value certain land parcels designated as held for sale as of December 31, 2002. See the section titled “Discontinued Operations” below for further discussion.

Depreciation expense increased $16,001, or $23.0% from 2001 to 2002 primarily due to increased depreciation on newly stabilized and lease-up properties, partially offset by the cessation of depreciation on properties sold and currently held for sale.

Interest expense increased $6,476 or 12.5% from 2001 to 2002 primarily due to a $8,901 reduction in capitalized interest to development properties between years as the Company’s development pipeline transitioned to operating properties. Exclusive of the reduction in capitalized interest, the decrease in interest expense was a result of lower interest costs on the Company’s variable rate borrowings in 2002.

General and administrative expenses increased $1,175, or 8.9%, from 2001 to 2002 primarily due to reduced capitalization of certain costs associated with the Company’s development and construction efforts resulting from the reduced volume of development and construction activity between periods.

Other expenses of $694 in 2002 relates to the write down of a technology investment to its estimated fair value.

Equity in losses of unconsolidated real estate entities increased from $186 in 2001 to $1,590 in 2002. These losses reflect the Company’s share of earnings and losses from four single community limited liability companies (see note 4 to the consolidated financial statements). The losses increased in 2002 as the majority of the properties entered the lease-up phase in 2002. These lease-up phase communities are incurring “lease-up deficits,” as defined earlier in this section.

Post Properties, Inc.

29

Post Apartment Homes, L.P.

Stabilized Communities

The Company defines fully stabilized communities as those which have reached stabilization prior to the beginning of the previous year. For the 2002 to 2001 comparison, fully stabilized communities are defined as those communities which reach stabilization prior to January 1, 2001. This portfolio consisted of 65 communities with 22,618 units, including 37 communities with 14,162 units (62.6%) located in Atlanta, Georgia, 18 communities with 4,535 units (20.0%) located in Dallas, Texas, three communities with 1,439 units (6.4%) located in Tampa, Florida and seven communities with 2,482 units (11.0%) located in other markets. The operating performance of these communities is summarized as follows:

	Year Ended December 31,
	2002		2001		% Change
Rental and other revenue (1)	$	256,477	$	275,297		(6.8	)%
Property operating and maintenance expense (exclusive of depreciation and amortization) (2)		89,252		89,210		0.0	%
Revenue in excess of specified expense	$	167,225	$	186,087		(10.1	)%
Average economic occupancy (3)		90.9%		94.4%		(3.5	)%
Average monthly rental rate per apartment unit (4)	$	992	$	1,016		(2.4	)%
Apartment units in service		22,618		22,618

(1)	Communities which reached stabilization prior to January 1, 2001.
(2)	In addition to those expenses which relate to property operations, the Company incurs recurring and non-recurring expenditures relating to acquiring new assets, materially enhancing the value of an existing asset, or substantially extending the useful life of an existing asset, all of which are capitalized. For the years ended December 31, 2002 and 2001, recurring and non-recurring expenditures were $10,637 and $9,407, or $470 and $416 on a per unit basis, respectively.
(3)	Average economic occupancy is defined as gross potential rent less vacancy losses, model expenses and bad debt divided by gross potential rent for the period, expressed as a percentage. The calculation of average economic occupancy does not include a deduction for concessions and employee discounts. (Average economic occupancy, taking account of these amounts would have been 89.1% and 93.2% for the years ended December 31, 2002 and 2001, respectively). Concessions were $4,215 and $2,302 and employee discounts were $660 and $917 for the years ended December 31, 2002 and 2001, respectively.
(4)	Average monthly rental rate is defined as the average of the gross actual rental rates for leased units and the average of the anticipated rental rates for unoccupied units divided by total units.

Rental and other revenue decreased $18,820 or 6.8% from 2001 to 2002. This decrease resulted from a decline in the average economic occupancy of the portfolio from 94.4% in 2001 to 90.9% in 2002 and a 2.4% decline in the average monthly rental rate per apartment unit. The decline in average rental rate resulted in a revenue decrease of approximately $6,678 between years. The aggregate decline in revenues related to vacancy loss, up-front concessions and other property fees totaling approximately $8,871, $1,911 and $1,248, respectively. These declines in 2002 reflect the affect of the national recession on the Company’s primary markets coupled with a continuing supply of new apartment units. This was especially true for the Company’s largest market, Atlanta, Georgia, which experienced job losses in 2001 and 2002 as many major employers downsized their workforce in response to slow economic activity.

Property operating and maintenance expenses (exclusive of depreciation and amortization) were essentially flat between years. Increased insurance expenses of $1,588 or 55.4% were largely offset by decreased personnel expenses of $394 or 1.7%, decreased property tax expenses of $603 or 2.0% and decreased repairs and maintenance expenses of $694 or 4.2%. Insurance costs increased primarily due to the volatility in insurance markets caused by, among other things, increased terrorism risks. Property and liability coverage were both significantly higher for the 2002 renewal period. Personnel costs decreased due to both staff reductions and tighter control of wage levels between years. Property tax expenses decreased due to approximately $500 of tax reductions for 2001 property taxes received and recognized in 2002 and a focused effort to control 2002 property taxes resulting in effectively no increase between years. Repairs and maintenance expenses decreased due to reduced grounds and overall expenses resulting from intensive cost control efforts in 2002.

For 2003, management expects modest declines in rental and other revenues driven primarily by declining rental rates. Similar to 2002 results, management intends to continue its cost control efforts with an expectation of only modest increases in operating expenses in 2003 primarily due to projected increases in property taxes and insurance expenses offset by reductions in personnel and maintenance expenses. In light of an expectation of decreased revenues and slightly increased expenses in 2003, stabilized community revenues in excess of specified expenses could decline when compared to 2002.

Post Properties, Inc.

30

Post Apartment Homes, L.P.

Comparison of Year Ended December 31, 2001 to Year Ended December 31, 2000

For the purposes of comparative operating performance, the Company categorizes its operating communities based on the period each community reaches stabilized occupancy, as defined above. For the 2001 to 2000 comparison, the operating community categories were based on the status of each community as of December 31, 2001. As a result, these categories are different from the operating community categories used in the 2002 to 2001 comparison discussed earlier in this section. Further, the amounts reported in the table below have been adjusted from the amounts reported in the Company’s December 31, 2001 financial statements due to the restatement impact of reclassifying the operating results of assets sold or held for sale in 2002 to discontinued operations under SFAS No. 144 (see the related discussion under the caption, “Discontinued Operations”). The operating performance from continuing operations for all of the Company’s apartment communities combined for the years ended December 31, 2001 and 2000 is summarized as follows:

	2001		2000		% Change
Rental and other revenues:
Fully stabilized communities (1)	$	229,060	$	226,909		0.9	%
Communities stabilized during 2000.		46,237		39,556		16.9	%
Lease-up communities (2)		40,688		17,794		128.7	%
Sold communities (3)		19,659		52,883		(62.8	)%
Other revenue (4)		13,815		13,927		(0.8	)%
		349,459		351,069		(0.5	)%
Property operating and maintenance expense (exclusive of depreciation and amortization):
Fully stabilized communities (1)		72,962		68,277		6.9	%
Communities stabilized during 2000.		16,108		12,908		24.8	%
Lease-up communities (2)		16,406		8,252		98.8	%
Sold communities (3)		7,330		17,237		(57.5	)%
Other expense (5)		16,395		14,168		15.7	%
		129,201		120,842		6.9	%
Revenue in excess of specified expenses	$	220,258	$	230,227		(4.3	)%
Recurring capital expenditures: (6)
Carpet	$	2,400	$	2,248		6.8	%
Other		6,100		5,319		14.7	%
Total	$	8,500	$	7,567		12.3	%
Non recurring capital expenditures	$	2,124	$	3,940		(46.1	)%
Average apartment units in service		28,351		28,588		(0.8	)%

(1)	Communities which reached stabilization prior to January 1, 2000.
(2)	Communities in the “construction”, “development” or “lease-up” stage during 2002 and, therefore, not considered fully stabilized for all of the periods presented.
(3)	Includes results from six communities containing 2,799 units and one commercial property sold in 2001 and eight communities containing 1,984 units sold in 2000 for the applicable periods presented.
(4)	Other revenue includes revenue from commercial properties, from furnished apartment rentals above the unfurnished rental rates and other revenue not directly related to property operations. Other revenue excludes interest income and third-party services revenues included in the total revenues in the consolidated statements of operations.
(5)	Other expenses includes certain indirect central office operating expenses related to management, grounds maintenance, and costs associated with commercial properties and furnished apartment rentals.
(6)	In addition to those expenses which relate to property operations, the Company incurs recurring and non-recurring expenditures relating to acquiring and developing new assets, materially enhancing the value of an existing asset, or substantially extending the useful life of an existing asset, all of which are capitalized. Recurring capital expenditures are those that are generally expected to be incurred on an annual basis. Non-recurring capital expenditures are those that generally occur less frequently than on an annual basis.

The Operating Partnership reported net income available to common unitholders of $85,269 and $100,336 for the years ended December 31, 2001 and 2000, respectively, and the Company reported net income available to common shareholders of $75,159 and $88,645 for the years ended December 31, 2001 and 2000, respectively. The decrease in net income in 2001 as compared to 2000 reflects the weaker operating performance of fully stabilized communities (see discussion below), slower lease-up of new development communities, the dilutive impact of the Company’s fully implemented asset sales program, increased project abandonment, employee severance and impairment

Post Properties, Inc.

31

Post Apartment Homes, L.P.

charges and increased general and administrative expenses. This weaker operating performance in 2001 was offset by increased gains on asset sales between years. The impact of these items is discussed below.

Rental and other revenue decreased $1,610 or 0.5% from 2000 to 2001. The decrease was a result of the reduction in rental and other revenue of $33,224 from assets sold between years being in excess of the rental and other revenue increases from the Company’s newly stabilized and lease-up properties of $29,575 and from fully stabilized properties of $2,151. Property operating and maintenance expenses (exclusive of depreciation and amortization) increased $8,359 or 6.9% primarily due to the $7,885 or 9.7% increase at fully stabilized and newly stabilized properties.

Revenues in excess of specified expenses from third party services, principally landscape and property management, decreased $1,092 or 50.6% from 2000 to 2001 primarily due to a decrease in earnings from landscape services. This decrease was due to a reduction in new installation volume resulting from a slow down in commercial construction activity and due to the sale of the landscape operation to its management team effective October 31, 2001.

In addition to the sale of third party landscape business, the Company also sold its third party property management business to its respective management team on December 31, 2001. These sales were part of the Company’s strategy to focus on its core business of owning, developing and managing multifamily communities. As the sales were financed 100% by the Company, they were not recorded as sales under generally accepted accounting principles. The Company financed these transactions over five years with two one-year renewal options. The purchase money notes bear interest at 9% per annum. As more fully discussed in Note 8 to the consolidated financial statements, full sales recognition will not occur until the Company receives an adequate down payment on the notes. The estimated loss of $452 on the landscape business sale was included in the asset impairment charge in 2001. The gain of $510 was deferred on the sale of the property management business at December 31, 2001. Through the receipt of adequate initial payments on the notes receivable in 2002, the Company recognized the sales of both businesses. The impact of the sale recognitions was to record the notes receivable from the sales, to record a net gain of $510 and to remove the net assets and liabilities of these businesses from the Company’s financial statements. All payments of principal and interest due under the notes are current as of December 31, 2002.

Depreciation expense increased $3,948 or 6.0% from 2000 to 2001 primarily as a result of the increase in operating depreciable assets from the completion of development properties in 2001.

Interest expense increased $6,628 or 14.6% from 2000 to 2001 primarily due to increased borrowing levels in 2001 and a decrease of $3,302 in the amount of interest capitalized to a reduced amount of communities under construction between years.

General and administrative expenses increased $3,190 or 31.7% from 2000 to 2001 primarily due to reduced capitalization of certain costs associated with the Company’s development and construction efforts on a reduced amount of communities under construction, increased insurance costs and increased technology connectivity costs.

The net gain on sale of assets of $23,942 in 2001 resulted from the sale of six communities containing 2,799 units, one commercial property and six tracts of land, adjusted by the impact of write-downs to fair value less costs to sell of assets held for sale at December 31, 2001.

Post Properties, Inc.

32

Post Apartment Homes, L.P.

Fully Stabilized Communities

The Company defines fully stabilized communities as those which have reached stabilization prior to the beginning of the previous calendar year. For the 2001 to 2000 comparison, fully stabilized communities are defined as those communities which reached stabilization prior to January 1, 2000 (adjusted to reduce the portfolio for communities classified as discontinued operations under SFAS No. 144). This portfolio consisted of 56 communities with 19,610 units includes 33 communities with 12,509 units (63.8%) located in Atlanta, Georgia, 14 communities with 3,425 units (17.5%) in Dallas, Texas, three communities with 1,439 units (7.3%) located in Tampa, Florida and six communities with 2,237 units (11.4%) located in other markets. The operating performance of these communities is summarized as follows:

	Year Ended December 31,
	2001		2000		% Change
Rental and other revenue	$	229,060	$	226,909		0.9%
Property operating and maintenance expense (exclusive of depreciation and amortization) (1)		72,962		68,277		6.9%
Revenue in excess of specified expense	$	156,098	$	158,632		1.6%
Average economic occupancy (2)		94.8%		96.7%		1.9%
Average monthly rental rate per apartment unit (3)	$	979	$	957		2.3%
Apartment units in service		19,610		19,610

(1)	In addition to those expenses which relate to property operations, the Company incurs recurring and non-recurring expenditures relating to acquiring new assets, materially enhancing the value of an existing asset, or substantially extending the useful life of an existing asset, all of which are capitalized. For the years ended December 31, 2001 and 2000, recurring and non-recurring expenditures were $8,936 and $8,694 or $456 and $443 on a per unit basis, respectively.
(2)	Average economic occupancy is defined as gross potential rent less vacancy losses, model expenses and bad debt divided by gross potential rent for the period, expressed as a percentage. The calculation of average economic occupancy does not include a deduction for concessions and employee discounts. (Average economic occupancy, taking account of these amounts would have been 93.7% and 95.0% for the years ended December 31, 2001 and 2000, respectively). Concessions were $1,708 and $2,992 and employee discounts were $805 and $776 for the years ended December 31, 2001 and 2000, respectively.
(3)	Average monthly rental rate is defined as the average of the gross actual rental rates for leased units and the average of the anticipated rental rates for unoccupied units.

Rental and other revenue increased $2,151 or 0.9% from 2000 to 2001. Gross revenue less concessions increased by approximately $6,441 or 2.9% between years primarily due to a 2.3% increase in the average monthly rental rate per apartment unit. This increase was partially offset by an increased vacancy loss of $4,412 primarily resulting from the decrease in average economic occupancy from 96.7% in 2000 to 94.8% in 2001. The Company’s rental and other revenue growth between years began to slow in the third quarter of 2001 and declined in the fourth quarter as average occupancies declined and rental rate growth slowed. The decline in the second half of 2001 reflected the sharp decline in economic and market activity across most of the Company’s markets. This was especially true for the Company’s largest market, Atlanta, Georgia, which experienced job losses for the first time in many years as many major employers began downsizing their workforces as a result of a national recession.

Property operating maintenance expense (exclusive of depreciation and amortization) increased $4,685 or 6.9% from 2000 to 2001 primarily due to increased personnel costs of $1,362 or 7.3%, increased repairs and maintenance expenses of $1,184 or 9.3% and increased property insurance premiums of $1,387 or 143.5%. Insurance costs increased due to across the board increases in property and liability premiums primarily due to the favorably low rate structure the Company enjoyed in prior years and to a lesser extent unfavorable claims experience. Personnel costs increased due to annual salary increases and additional maintenance personnel based on an expectation of higher average occupancies and increased rental rates as the Company entered into 2001. Property repairs and maintenance reflects increased unit turnkey expenses as unit vacancies increased between years and an increase in expensed exterior painting between years.

Post Properties, Inc.

33

Post Apartment Homes, L.P.

Discontinued Operations

In accordance with the implementation provisions of SFAS No. 144, the operating results and gains and losses on property sales of real estate assets designated as held for sale subsequent to January 1, 2002 are included in discontinued operations in the consolidated statement of operations.

For the years presented, income from discontinued operations includes the results of operations through the earlier of the community sale date (if the community was sold between January 1, 2002 and December 31, 2002) or December 31, 2002, of eight apartment communities containing 3,134 units and one commercial property that were designated as held for sale in 2002. The revenues and expenses of these properties for the years ended December 31, 2002, 2001 and 2000 were as follows:

			2002		2001		2000
Revenues
	Rental		$	18,706	$	31,836	$	30,413
	Other			719		1,279		1,179
		Total revenues		19,425		33,115		31,592
Expenses
	Property operating and maintenance (exclusive of items shown separately below)			7,919		11,918		10,507
	Depreciation			2,246		6,431		5,381
	Interest			3,375		5,970		4,971
		Total expenses		13,540		24,319		20,859
Income from discontinued operations (before minority interest)			$	5,885	$	8,796	$	10,733

The decrease in revenues and expenses for the year ended December 31, 2002, results from 2002 including the results of operations of six communities and one commercial property through their actual sale dates (generally in the second and third quarters) and two communities for the full periods presented. The revenues and expenses for 2001 and 2000 include full year operating results for all eight of the communities and the commercial property.

For the year ended December 31, 2002, the Company recognized net gains of $20,268 ($17,818 net of minority interest) on the sale of real estate assets designated for sale subsequent to December 31, 2001, offset by reserves of $3,698 ($3,251 net of minority interest) to write down to fair market value of certain land parcels designated as held for sale as of December 31, 2002.

Project Abandonment, Employee Severance and Impairment Charges

The Company recorded project impairment and abandonment, employee severance and asset impairment charges for the years ended December 31, 2001 and 2000. No similar charges were recorded in 2002. The charges are summarized as follows:

	2001		2000
Project impairment and abandonment	$	8,122	$	4,389
Employee severance		3,560		3,066
Asset impairment		5,768		1,910
	$	17,450	$	9,365

In the fourth quarter of 2001, the Company recorded charges totaling $17,450. These charges, precipitated by the sharp decline in economic and market conditions, reflect management’s decision to focus its business and new development strategy on fewer markets, to focus on its core business of owning, developing and managing multifamily real estate assets and to do so with a smaller workforce and lower overhead expenses. The project impairment charge of $8,122 represents reserves on certain predevelopment and transaction pursuit costs in markets the Company will no longer pursue for development opportunities and for certain projects that will no longer be pursued due to economic and market conditions. The employee severance charge of $3,560 is primarily for severance costs related to approximately a 100 person senior management and staff workforce reduction plan initiated and completed in the fourth quarter of 2001. The asset impairment and disposition charge includes a loss of $2,831 related to the disposition of the Company’s corporate aircraft, a loss of $452 on the sale of the Company’s

Post Properties, Inc.

34

Post Apartment Homes, L.P.

third party landscape business discussed more fully below, impairment charges of $1,000 related to the Company’s exit from the for-sale housing business in all markets, and the write-down to estimated market value of certain internet and technology investments of $1,485. At December 31, 2002, approximately $688 of these charges, primarily employee severance costs, remained as an accrued liability on the consolidated balance sheet. These remaining amounts are expected to be paid in 2003.

In the fourth quarter of 2001, the Company sold substantially all of the net assets of Post Landscape Group, Inc., a subsidiary entity that provided landscape maintenance, design and installation services to third parties, and RAM Partners, Inc., a separate subsidiary entity that managed apartment communities for third parties. These businesses were sold to members of the respective former management teams of the subsidiaries. The Company financed 100% of the sales price of $5,767 (adjusted for working capital transfers at closing) through purchase money notes with a fixed interest rate of 9%. The notes require periodic interest, annual principal and final balloon principal payments in 2006. The notes can be extended for two one-year periods. Under generally accepted accounting principles, the transactions were not recorded as sales at December 31, 2001, as the conditions for sale recognition, primarily the receipt of an adequate down payment on the notes, were not met. The sale of the Post Landscape Group resulted in a loss of $452. Under generally accepted accounting principles, this loss was recognized in 2001 and included in the project abandonment, employee severance and impairment charges discussed above. In 2002, the Company recognized the sales of both businesses. The impact of the sales recognition was to record a net gain of $510 on the sale of RAM Partners, Inc. See note 7 to the consolidated financial statements for an additional discussion of these transactions.

During the first quarter of 2002, the Company transferred certain construction contracts of Post Construction Services Inc., its third party construction business, to Oxford Properties, LLC in exchange for Oxford Properties’ assumption of substantially all of Post Construction Service’s liabilities related to the transferred assets. In approving the transaction, the Company’s board of directors ascribed nominal value to the assets being transferred. The assets consisted principally of third party construction contracts for the construction of four garden style apartment, condominium and townhouse communities as well as related subcontracts, indemnities and guarantees. In connection with the transfer of Post Construction Services’ construction contracts, Oxford Properties had the right to receive a deferred fee upon completion of one of the construction projects in the amount of $500. Oxford Properties also agreed to employ 28 former Company and Post Construction Services employees. As a result, the Company was not responsible for costs that would have otherwise resulted from winding up the third party construction business. The Company recorded a charge of $500 in the fourth quarter of 2001 relating to its exit from the third party construction business. Oxford Properties, LLC is an entity owned by former officers of the Company and by the son of the Company’s former chairman and chief executive officer. The Company’s former chairman and chief executive officer does not own any of the outstanding equity interests in Oxford Properties and does not have any management role in Oxford Properties, LLC.

In the fourth quarter of 2000, the Company recorded charges of $9,365. These charges reflect management’s decision to restrict its development activities to fewer markets, refine its development investment and for-sale housing strategies and make changes in its executive management team. Project abandonment charges totaling $4,389 related to the write off of predevelopment and pursuit costs in markets in which the Company will no longer pursue development opportunities and on certain proposed development deals not consistent with management’s revised development strategy. Employee severance charges related to the termination costs of four executive positions and five staff personnel in the Company’s Dallas, Texas regional office. The asset impairment charge of $1,910 includes a charge of $1,503 related to the write off of the Company’s investment in a high speed internet provider that filed for bankruptcy protection and a charge of $407 related to the exit from the for-sale housing business in certain markets. As of December 31, 2001, all of the 2000 charges had been paid.

Subsequent Event

Subsequent to December 31, 2002, the Company’s board of directors elected a new chairman. The Company’s former chairman was elected chairmen emeritus and the Company’s vice-chairman relinquished his vice-chairman status. Both the former chairman and former vice-chairman will remain on the Company’s board of directors. Their change in roles from executive to non-executive status will result in the Company recording a non-cash charge in the first quarter of 2003 relating to payments provided to these individuals pursuant to their existing contractual arrangements with the Company. The Company estimates the charge will be approximately $12,000 to $14,000, plus an additional amount of up $8,000 that may be incurred as a result of the settlement of split-dollar life insurance obligations to the individuals under their contractual arrangements. These amounts represent the present value of the estimated payments and other costs to be incurred over the term of the contractual arrangements.

Post Properties, Inc.

35

Post Apartment Homes, L.P.

Liquidity and Capital Resources

The discussion in this Liquidity and Capital Resources section is the same for the Company and the Operating Partnership, except that all indebtedness described herein has been incurred by the Operating Partnership.

The Company’s net cash provided by operating activities decreased from $161,564 in 2001 to $119,763 in 2002 primarily due to lower net income (before depreciation and gain on sale of assets) resulting from the weaker operating performance of the Company’s fully stabilized properties and reduced earnings from the impact of the Company’s asset sale and capital recycling program. Net cash provided by operating activities decreased from $185,073 in 2000 to $161,564 in 2001 primarily due to lower net income (before depreciation and gain on sale of assets), resulting from the larger project abandonment, employee severance and impairment charges, weaker operating performance of the Company’s fully stabilized properties and the dilutive impact of the Company’s asset sale and capital recycling program.

Net cash used in investing activities decreased from $51,213 in 2001 to $48,821 in 2002 primarily due to reduced spending on the construction and acquisition of real estate assets offset by lower proceeds from asset sales. Net cash used in investing activities decreased from $255,986 in 2000 to $51,213 in 2001 primarily due to greater proceeds from the sale of apartment communities and other property and reduced spending on construction and acquisition of real estate assets.

Net cash used in financing activities decreased from $113,007 in 2001 to $69,355 in 2002 primarily due to the Company not acquiring any treasury stock in 2002, partially offset by reduced net borrowings between periods. Net cash provided by (used in) financing activities decreased from $72,502 in 2000 to $(113,007) in 2001 due to increased treasury stock purchases and reduced net borrowings between periods.

Since 1993, the Company has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Management currently intends to continue operating the Company as a REIT in 2003. As a REIT, the Company is subject to a number of organizational and operating requirements, including a requirement to distribute 90% of its taxable income to its shareholders. As a REIT, the Company generally will not be subject to federal income taxes on its taxable income.

In years prior to 2001, the Company met its short-term liquidity requirement of funding the payment of its current level of quarterly dividends to shareholders from its net cash flow provided by operating activities, less its annual recurring and nonrecurring property and corporate capital expenditures. Beginning in the fourth quarter of 2001 and for all of 2002, the Company’s net cash flow from operations, reduced by annual capital expenditures, was not sufficient to fully fund the Company’s current dividend payments to common shareholders. Throughout 2002, the additional funding required to pay the quarterly dividends was obtained through a combination of line of credit borrowings and proceeds from asset sales. In the fourth quarter of 2002, management announced that the Company intended to reduce its quarterly dividend payment rate to common shareholders from the current rate of $0.78 per share to $0.45 per share beginning in the first quarter of 2003, based on management’s expectation that the Company’s net cash flow provided by operating activities, reduced by annual capital expenditures, will be lower in 2003. The factors that led to the dividend reduction were the decline in economic and market conditions in the Company’s major markets resulting in lower cash flow from its operating property portfolio, the slower lease-up of its existing development community portfolio and the short-term negative cash flow impact of funding its current development portfolio through the sale of operating real estate assets. The Company’s net cash flow from operations continues to be sufficient to meet the dividend requirements necessary to maintain its REIT status under the Code.

Management expects the Company to meet its new construction and development and certain of its other long-term liquidity requirements, including the contractual obligations detailed below, and possible land and property acquisitions through the sale of operating properties and through long-term secured and unsecured borrowings. Management believes the Company has adequate borrowing capacity and accessibility to real estate sales markets to fund these requirements. Additionally, the Company has utilized equity joint ventures as a means of raising capital and reducing the size and exposure of its development property pipeline. During 2002 and 2001, the Company received equity capital through the joint ventures totaling $9,213 and $18,082, respectively. The Company may continue to use joint venture arrangements in future years as a source of capital and to reduce the exposure of its future development pipeline.

Post Properties, Inc.

36

Post Apartment Homes, L.P.

A summary of the Company’s future contractual obligations related to long-term debt, non-cancelable operating leases and other obligations at December 31, 2002, were as follows:

	Obligation Due Date
Contractual Obligations	Total		1 Year or Less		2-3 Years		4-5 Years		After 5 Years
Long-term debt	$	1,218,186	$	103,809	$	231,496	$	191,910	$	690,971
Lines of credit (1)		196,369		11,369		185,000		—		—
Operating leases (2)		163,040		1,363		2,573		2,634		156,470
Debt and equity commitments to unconsolidated entities (3)		23,310		23,310		—		—		—
	$	1,600,905	$	139,851	$	419,069	$	194,544	$	847,441

(1)	At December 31, 2002, the Company has issued letters of credit to third parties totaling $1,323 under its credit facility arrangements.
(2)	Includes eight ground leases relating to apartment communities owned by the Company.
(3)	At December 31, 2002, the Company is obligated to fund approximately $8,179 of construction financing and $15,131 of equity contributions to unconsolidated entities. In addition, the Company has guaranteed the timely construction completion and the final cost of certain construction cost categories of the underlying real estate projects. As a result of the completion of three of four real estate projects as of December 31, 2002, the maximum exposure under the cost guarantee provisions of these arrangements is approximately $5,200. At December 31, 2002, the Company estimates that it will have no additional funding obligations under these cost guarantee provisions. Further, the Company believes the final project will be completed on a timely basis, thus fully mitigating its cost exposure under the completion guarantee.

In addition to these contractual obligations, the Company has development projects in progress that will be completed over the next twelve months. At December 31, 2002, the Company’s share of the estimated future cash expenditures to complete these projects will approximate $25,000. Further at December 31, 2002, the Company had outstanding interest rate swap derivative financial instruments with a notional value of $129,000 with maturity dates ranging from 2005 to 2009. The contractual payment terms of these arrangements are summarized in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in this Form 10-K. Additional information regarding the accounting and disclosure of these arrangements is included in note 13 to the Company’s consolidates financial statements.

As previously discussed, the Company intends to use the proceeds from the sale of operating properties as the primary source of capital to fund these future development expenditures. The Company began an active asset sale and capital recycling program in 2000 as the primary means to fund its on-going development community program. Total funds raised in 2002 and 2001 were $182,216 and $220,122, respectively.

In 2002, the Company sold eight apartment communities containing 2,665 units for net proceeds of approximately $165,425. The communities sold were located in Dallas, Texas, Tampa Florida and Orlando, Florida. Additionally, the Company sold land in Phoenix, Arizona and two commercial properties located in Texas for aggregate net proceeds of $16,791. These sales resulted in net gains of $13,275 from continuing operations and $16,570 (14,567 net of minority interest) from discontinued operations. These net gains were net of reserves of $3,698 ($3,251 net of minority interest) to write down to fair value certain land parcels designated as held for sale in 2002 and excluded losses totaling $4,861 related to assets written down to their estimated fair value at December 31, 2001.

In 2001, the Company sold six apartment communities containing 2,799 units for net proceeds of approximately $210,443. The communities sold were located in Atlanta, Georgia, Dallas Texas and Nashville, Tennessee. Additionally, the Company sold land parcels in Dallas, Texas, Denver, Colorado and Charlotte, North Carolina and a commercial property in Dallas, Texas for aggregate net proceeds of $9,679. These sales resulted in net gains of approximately $16,365. For the year ended December 31, 2001, the aggregate net gain on the sale of assets of $23,942 included the impact of the estimated net losses totaling $11,490 on the write down to fair value of assets designated as held for sale at December 31, 2001 and excluded realized losses totaling $19,067 related to assets written down to their estimated fair value at December 31, 2000.

In 2000, the Company sold eight apartment communities containing 1,984 units for net proceeds of approximately $157,265, resulting in net gains of approximately $24,266. The communities sold were located in Atlanta, Georgia, Jackson, Mississippi and Nashville, Tennessee. For the year ended December 31, 2000, the aggregate net gain on the sale of assets of $3,208 included the estimated net losses totaling $21,058 on the write down to fair value of assets designated as held for sale at December 31, 2000.

Post Properties, Inc.

37

Post Apartment Homes, L.P.

At December 31, 2002, the Company had available credit facility borrowing capacity of approximately $269,000 under its existing credit facilities. The Company’s primary credit facility with total capacity of $320,000 matures in 2004 while a second incremental credit facility of $125,000 matures in April 2003. As a result of the decline in the Company’s development activities, management currently anticipates the renewal of the primary credit facility with a capacity of approximately $300,000. Management believes it will have adequate capacity under its facilities to execute its 2003 business plan without regard to a significant level of asset sales or other secured and unsecured debt financings.

In the first quarter of 2002, the Company’s unsecured public debt was downgraded from Baa1 to Baa2 by Moody’s Investor Services and from BBB+ to BBB by Standard & Poors. This change in the investment credit rating of the Company’s debt increased the pricing of its syndicated lines of credit by 10 to 12.5 basis points and may increase the pricing of new issuances of unsecured debt. In addition, certain of the financial covenants under the Company’s syndicated line of credit are tied to maintaining an investment grade credit rating. After the recent downgrade, the Company remains an investment grade rated company by both Moody’s Investors Services and Standard & Poors. Management does not anticipate this downgrade to affect the Company’s ability to obtain the anticipated level of debt financing. Should the Company not maintain its investment credit rating, its total dividend payout, exclusive of the portion of the dividend attributable to capital gains from asset sales up to $30,000, would be limited to 95% versus 100% of Consolidated Income Available for Distribution, as defined. Management believes the Company’s current business plan and financing strategy are consistent with the fundamentals of maintaining its investment grade ratings.

Unsecured Lines of Credit

The Company utilizes a $320,000 three-year syndicated revolving line of credit (the “Revolver”), for its short-term financing. At December 31, 2002, the stated interest rate for the Revolver was LIBOR plus 0.85% or prime minus 0.25%. The Revolver provides for the rate to be adjusted up or down based on changes in the credit ratings on the Company’s senior unsecured debt. The Revolver also includes a money market competitive bid option for short-term funds up to $160,000 at rates below the stated line rate. The credit agreement for the Revolver contains customary representations, covenants and events of default, including covenants which restrict the ability of the Operating Partnership to make distributions, in excess of stated amounts, which in turn restrict the discretion of the Company to declare and pay dividends. In general, during any fiscal year the Operating Partnership may only distribute up to 100% of the Operating Partnership’s consolidated income available for distribution (as defined in the credit agreement) exclusive of distributions of up to $30,000 of capital gains for such year. The credit agreement contains exceptions to these limitations to allow the Operating Partnership to make distributions necessary to allow the Company to maintain its status as a REIT. The Company does not anticipate that this covenant will adversely affect the ability of the Operating Partnership to make distributions, or the Company to declare dividends, at the Company’s current dividend level. The Revolver matures in April 2004, however, management expects to renew this facility in 2003.

The Company also has in place an additional $125,000 line of credit facility for general corporate purposes. This line matures in April 2003 and carries terms substantially equal to the Revolver. There were no outstanding borrowings under this facility at December 31, 2002. Management does not expect to renew this facility in April 2003 as the Company’s financing needs have reduced consistent with the Company’s reduced development spending.

Additionally, the Company has a $20,000 unsecured line of credit with Wachovia Bank of Georgia, N.A. (the “Cash Management Line”). The Cash Management Line bears interest at LIBOR plus 0.75% or prime minus .25% and matures in February, 2003. Subsequent to year end, the Cash Management Line was renewed through June 2003 with similar terms to its existing facility. At December 31, 2002, the Company has issued letters of credit to third parties totaling $1,323 under this facility.

Long-term Debt Issuances

In June 2002, the Company issued $25,000 of unsecured notes at par. These notes bear interest at 6.11% and mature June 18, 2007. Also in June 2002, the Company closed a $13,500 secured mortgage loan. The loan bears interest at 6.29% and monthly principal and interest payments are based on a 25-year amortization schedule. The loan matures on October 1, 2007.

In December 2002, the Company closed a $57,000 mortgage loan with a life insurance company. This loan is secured by an apartment community. This loan carries an interest rate of 5.5% and requires payments of interest only for five years. Thereafter, payments of principal and interest are required based upon a 30-year amortization schedule until the loan’s maturity in January 2013.

Post Properties, Inc.

38

Post Apartment Homes, L.P.

The net proceeds from these borrowings were used to repay amounts outstanding under the Company’s credit facility.

In February 2003, one of the Company’s unconsolidated equity joint ventures closed a $17,000 loan with a life insurance company. This loan is secured by the apartment community owned by the joint venture in which the Company has a 35% ownership interest. The Company received 100% of the proceeds from this loan in repayment of its outstanding construction loan to the joint venture. Payments of principal and interest will be based upon an interest rate of 4.28% per annum and a 30-year amortization schedule, with a balance due at maturity on March 10, 2008.

Stock Repurchase Program

The Company’s Board of Directors has approved the purchase of up to $200,000 of the Company’s common stock. Through December 31, 2001, the Company had acquired 3,127,600 shares of its common stock at an aggregate cost of $114,126 and had acquired 100,000 shares of preferred stock at an aggregate cost of $5,100. The Company acquired no common or preferred stock in 2002. Management has indicated it will be opportunistic with respect to additional share repurchases and intends to finance additional repurchases with asset sale proceeds rather than additional borrowings.

Schedule of Indebtedness

The following table reflects a summary of the Company’s indebtedness at December 31, 2002 and 2001:

								December 31,
			Interest			Maturity
Description	Payment Terms		Rate			Date(1)		2002		2001
Unsecured Notes
Senior Notes		Int.		6.11% – 7.70%			2003-2010	$	385,000	$	360,000
Medium Term Notes		Int.		6.69% – 8.12%	(2)		2004-2015		323,000		323,000
Northwestern Mutual Life		Int.		8.37%			2002		—		20,000
									708,000		703,000
Unsecured Lines of Credit & Other
Revolver		N/A		LIBOR + 0.85%	(3)		2004		185,000		155,000
Cash Management Line		N/A		LIBOR + 0.75%			2003		11,369		11,202
Other		N/A		5.00%			2021		—		2,000
									196,369		168,202
Conventional Fixed Rate (Secured)
FNMA		Prin. and Int.		6.975%	(4)		2029		101,100		102,200
Other		Prin. and Int.		5.5% – 7.69%			2007-2013		194,706		127,238
									295,806		229,438
Tax Exempt Floating Rate Bonds (Secured)		Int.		1.55%	(5)		2025		214,380		235,880
Total								$	1,414,555	$	1,336,520

(1)	All outstanding indebtedness can be prepaid at any time, subject to certain prepayment penalties.
(2)	Contains $100,000 of Mandatory Par Put Remarketed Securities. The annual interest rate on these securities to 2005 (the “Remarketing Date”) is 6.85%. On the Remarketing Date, they are subject to mandatory tender for remarketing.
(3)	Represents stated rate. At December 31, 2002, the weighted average interest rate was 2.23%.
(4)	Interest rate is fixed at 6.975%, inclusive of credit enhancement and other fees, to 2009 through an interest rate swap arrangement.
(5)	FNMA credit enhanced bond indebtedness. Interest based on FNMA “AAA” tax exempt rate plus credit enhancement and other fees of 0.639%. Interest rate represents rate at December 31, 2002 before credit enhancements. At December 31, 2002, the Company has outstanding interest rate cap arrangements that limit the Company’s exposure to increases in the base interest rate to 5%.

Post Properties, Inc.

39

Post Apartment Homes, L.P.

Capitalization of Fixed Assets and Community Improvements

The Company has a policy of capitalizing those expenditures relating to the acquisition of new assets and the development and construction of new apartment communities. In addition, the Company capitalizes expenditures that enhance the value of existing assets and expenditures that substantially extend the life of existing assets. All other expenditures necessary to maintain a community in ordinary operating condition are expensed as incurred. Additionally, for new development communities, carpet, vinyl and blind replacements are expensed as incurred during the first five years (which corresponds to the estimated depreciable life of these assets) after construction completion. Thereafter, these replacements are capitalized. Further, the Company expenses as incurred all interior and exterior painting of communities.

The Company capitalizes interest, real estate taxes, and certain internal personnel and associated costs related to apartment communities under development and construction. The incremental personnel and associated costs are capitalized to the projects under development based upon the effort identifiable with such projects. The Company treats each unit in an apartment community separately for cost accumulation, capitalization and expense recognition purposes. Prior to the commencement of leasing activities, interest and other construction costs are capitalized and included in construction in progress. The Company ceases the capitalization of such costs as the residential units in a community become substantially complete and available for occupancy. This practice results in a proration of these costs between amounts that are capitalized and expensed as the residential units in a development community become available for occupancy. In addition, prior to the completion of units, the Company expenses as incurred substantially all operating expenses (including pre-opening marketing expenses) of such communities.

Acquisition of assets and community improvement and other capitalized expenditures for the years ended December 31, 2002 and 2001 are summarized as follows:

		2002		2001
New community development activity		$	152,163	$	232,569
Revenue generating additions and improvements(1)
	Property renovations		1,025		4,019
	Sub-metering of water service		1,010		207
Nonrecurring capital expenditures(2)
	Vehicle access control gates		431		749
	Other community additions and improvements		3,010		1,786
Recurring capital expenditures(3)
	Carpet replacements		2,755		2,935
	Other community additions and improvements		6,626		7,506
	Corporate additions and improvements		1,100		3,021
		$	168,120	$	252,792
Other Data
Capitalized interest		$	13,223	$	22,124
Capitalized internal personnel and associated costs(4)		$	5,196	$	13,833

(1)	Represents expenditures for major renovations of communities, water sub-metering equipment and other upgrade costs that enhance the rental value of such units.
(2)	Represents property improvement expenditures that generally occur less frequently than on an annual basis.
(3)	Represents property improvement expenditures of a type that are expected to be incurred on an annual basis.
(4)	Reflects internal personnel and associated costs capitalized to construction and development activities.

Post Properties, Inc.

40

Post Apartment Homes, L.P.

Current Development Activity

At December 31, 2002, the Company has under construction or in initial lease-up five new communities and an addition to one existing community that will contain an aggregate of 1,377 units upon completion. The Company’s communities under development or in initial lease-up are summarized in the following table:

				Estimated
				Construction			Amount							Estimated
				Cost			Spent			Quarter of		Quarter of		Quarter of		%			%
		Number of		($ in			As of			Construction		First Units		Stabilized		Leased			Occupied
Metropolitan Area		Units		millions)			12/31/2002			Start		Available		Occupancy(1)		2/15/2003			2/15/2003
Wholly Owned Construction/Lease-up Communities
Tampa, FL
Post Harbour Place III			259	$	35		$	33			2Q ’01		2Q ’02		2Q ’03		79.5	%		77.6	%
New York City, NY
Post Toscana™			199		95			75			1Q ’02		1Q ’03		2Q ’04		1.5	%		0.0	%
Subtotal Wholly-Owned
	Construction/Lease-up Communities		458	$	130		$	108
Co-Investment Construction/Lease-up Communities
Atlanta, GA
Post Peachtree™(2)			121	$	31		$	31			2Q ’00		3Q ’01		1Q ’03		87.6	%		86.0	%
New York City, NY
Post Luminaria™(3)			138		51			50			3Q ’01		2Q ’02		2Q ’03		84.8	%		81.9	%
Pasadena, CA
Post Paseo Colorado(2)			391		76			75			2Q ’00		1Q ’02		2Q ’03		84.1	%		80.1	%
Washington D.C.
Post Massachusetts Avenue™(2)			269		74			68			2Q ’01		4Q ’02		4Q ’03		24.5	%		21.9	%
Subtotal Co-Investment
	Construction/Lease-up Communities		919	$	232		$	224
Construction Totals			1,377	$	362		$	332
Less Partners’ Portion				$	(133	)	$	(128	)
Post Properties’ Funding Commitment				$	229		$	204

(4)	The Company defines stabilized occupancy as the earlier to occur of (i) the attainment of 95% physical occupancy on the first day of any month or (ii) one year after completion of construction.
(5)	These communities are being developed as a joint venture (Post equity ownership is 35%).
(6)	This development is structured as a joint venture, with Post owning approximately 70% of the equity and the landowner owning the balance.
(7)	The calculation represents the aggregate projected unlevered funds from operations to be earned by each community in its first year of stabilized operations divided by aggregate estimated construction costs of the communities. The Company uses funds from operations as a management tool to measure the operating performance of its communities.

Inflation

Substantially all of the leases at the Communities allow, at the time of renewal, for adjustments in the rent payable thereunder, and thus may enable the Company to seek increases in rents. The substantial majority of these leases are for one year or less and the remaining leases are for up to two years. At the expiration of a lease term, the Company’s lease agreements generally provide that the term will be extended unless either the Company or the lessee gives at least sixty (60) days written notice of termination. In addition, the Company’s policy generally permits the earlier termination of a lease by a lessee upon thirty (30) days written notice to the Company and the payment of an amount equal to two month’s rent as compensation for early termination. The short-term nature of these leases generally serves to reduce the risk to the Company of the adverse effect of inflation.

Post Properties, Inc.

41

Post Apartment Homes, L.P.

Funds from Operations and Cash Available for Distribution

Historical Funds from Operations

The Company considers funds from operations (“FFO”) a useful measure of performance of an equity REIT. FFO is a non-GAAP financial measure. FFO is defined to mean net income available to common shareholders determined in accordance with GAAP, excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Cash available for distribution (“CAD”) is defined as FFO less capital expenditures funded by operations. CAD is a non-GAAP financial measure. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO and CAD should be examined in conjunction with net income as presented in the consolidated financial statements and data included elsewhere in this report.

Post Properties, Inc.

42

Post Apartment Homes, L.P.

FFO and CAD for the years ended December 31, 2002, 2001 and 2000 presented on a historical basis are summarized in the following table:

	2002			2001			2000
Net income available to common shareholders	$	49,297		$	75,159		$	88,645
Cumulative effect of accounting change, net of minority interest		—			613			—
Extraordinary items, net of minority interest		120			77			—
Minority interest of common unitholders — continuing operations		4,073			9,153			10,441
Gains on property sales — continuing operations		(13,275	)		(23,942	)		(3,208	)
Gains on properties held for sale and sold, net of minority interest — discontinued operations		(14,567	)		—			—
Minority interest in discontinued operations		712			1,050			1,250
Adjusted net income		26,360			62,110			97,128
Depreciation on wholly-owned real estate assets, net		82,918			70,956			66,283
Depreciation on real estate assets held in unconsolidated entities		1,103			67			—
Funds from Operations (1)		110,381			133,133			163,411
Recurring capital expenditures (2)		(9,381	)		(10,441	)		(5,576	)
Non-recurring capital expenditures (3)		(3,441	)		(2,535	)		(9,157	)
Cash available for distribution	$	97,559		$	120,157		$	148,678
Revenue generating capital expenditures (4)	$	2,035		$	4,226		$	6,670
Cash flow provided by (used in):
Operating activities	$	119,763		$	161,564		$	185,073
Investing activities	$	(48,821	)	$	(51,213	)	$	(255,986	)
Financing activities	$	(69,355	)	$	(113,007	)	$	72,502
Weighted average shares outstanding — basic		36,939,144			38,052,673			39,317,225
Weighted average shares and units outstanding — basic		42,020,759			43,211,834			44,503,290
Weighted average shares outstanding — diluted		36,953,962			38,267,939			39,852,514
Weighted average shares and units outstanding — diluted		42,035,577			43,427,100			45,038,079

(1)	The Company uses the National Association of Real Estate Investment Trusts (“NAREIT”) definition of FFO. Effective January 1, 2000, NAREIT amended its definition of FFO to include in FFO all non-recurring transactions, except those that are defined as extraordinary under generally accepted accounting principles (“GAAP”). The Company adopted this new definition effective January 1, 2000. FFO for any period means the Consolidated Net Income of the Company and its subsidiaries for such period excluding gains or losses from debt restructuring and sales of property plus depreciation of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures, all determined on a consistent basis in accordance with GAAP. FFO presented herein is not necessarily comparable to FFO presented by other real estate companies because not all real estate companies use the same definition. The Company’s FFO is comparable to the FFO of real estate companies that use the current NAREIT definition. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs or ability to service indebtedness or make distributions.
(2)	Recurring capital expenditures consisted primarily of $2,755, $2,935 and $2,890 of carpet replacement and $6,626, $7,506 and $6,267 of other community additions and improvements to existing communities for the years ended December 31, 2002, 2001 and 2000, respectively. Since the Company does not add back the depreciation of non-real estate assets in its calculation of FFO, capital expenditures of $1,100, $3,021 and $3,441 are excluded from the calculation of CAD for the years ended December 31, 2002, 2001 and 2000, respectively.
(3)	Non-recurring capital expenditures consisted of the additions of vehicle access control gates to communities of $431, $749 and $403 and other community additions and improvements of $3,010, $1,786 and $5,173 for the years ended December 31, 2002, 2001 and 2000, respectively.
(4)	Revenue generating capital expenditures included major renovations of communities in the amount of $1,025, $4,019 and $6,638 for the years ended December 31, 2002, 2001 and 2000, respectively, and sub-metering of water service to communities in the amounts of $1,010, $207 and $32 for the years ended December 31, 2002, 2001 and 2000, respectively.

Post Properties, Inc.

43

Post Apartment Homes, L.P.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Sensitivity

The Company’s primary market risk exposure is interest rate risk. At December 31, 2002, the Company had $322,469 of variable rate debt tied to LIBOR. In addition, the Company had $214,380 in variable tax-exempt debt with interest based on the FNMA “AAA” tax exempt rate. In addition, the Company has interest rate risk associated with fixed rate debt at maturity. The discussion in this Interest Rate Sensitivity section is the same for the Company and the Operating Partnership, except that all indebtedness described herein has been incurred by the Operating Partnership.

Management has and will continue to manage interest rate risk as follows:

•  maintain a conservative ratio of fixed rate, long-term debt to total debt such that variable rate exposure is kept at an acceptable level;

•  fix certain long-term variable rate debt through the use of interest rate swaps or interest rate caps with appropriately matching maturities;

•  use treasury locks where appropriate to fix rates on anticipated debt transactions, and

•  take advantage of favorable market conditions for long-term debt and/or equity.

Management uses various financial models and advisors to achieve these objectives.

The tables below provide information about the Company’s fixed and floating rate debt and derivative financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For interest rate swap and cap arrangements, the table presents notional amounts and weighted average interest rates by (expected) contractual maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contract. Weighted average variable rates are based upon implied forward rates in the yield curve at the reporting date. The information is presented in U.S. dollar equivalents, which is the Company’s reporting currency.

				Expected Maturity Date
														There-
				2003		2004		2005		2006		2007		after		Total		Fair Value
				(in thousands)
Long-term Debt:
Fixed Rate				$	102,574	$	25,759	$	177,967	$	78,181	$	110,508	$	382,717	$	877,706	$	928,313
	Average interest rate				7.24%		7.25%		7.04%		7.05%		7.02%		6.66%		7.24%
Floating Rate (1)
	LIBOR-based:
		Cash Management Line (2)			11,369		—		—		—		—		—		11,369		11,369
		MTN (3)			—		—		25,000		—		—		—		25,000		25,000
		Revolver (2)			—		185,000		—		—		—		—		185,000		185,000
		FNMA (4)			1,235		1,335		1,435		1,550		1,670		93,875		101,100		101,100
			Total LIBOR-based		12,604		186,335		26,435		1,550		1,670		93,875		322,469		322,469
		Tax-exempt (5)			—		—		—		—		—		214,380		214,380		214,380
Total floating rate Debt					12,604		186,335		26,435		1,550		1,670		308,255		536,849		536,849
Total debt				$	115,178	$	212,094	$	204,402	$	79,731	$	112,178	$	690,972	$	1,414,555	$	1,465,162

(1)	Interest on these debt instruments is based on LIBOR ranging from LIBOR plus 0.75% to LIBOR plus 0.85%. At December 31, 2002, the one-month LIBOR rate was 1.44%. See Schedule of indebtedness in Management’s Discussion and Analysis for rates on individual debt instruments.
(2)	Assumes the Company’s Revolver and Cash Management Line are repaid at the maturity date. Management believes these lines will be renewed at maturity with similar terms.
(3)	Through an interest rate swap transaction, the interest rate on this note is fixed at 7.28%.
(4)	In December 2000, the Company entered into a swap transaction that fixed the rate on the note at 6.975%, inclusive of credit enhancement and other fees, from January 1, 2001 through July 31, 2009.
(5)	At December 31, 2001, the FNMA “AAA” tax exempt rate was 1.55%. Interest on these debt instruments is equal to the FNMA “AAA” tax exempt rate plus credit enhancement and other fees of 0.639%. The Company has purchased an interest rate cap that limits the Company’s exposure to increases in the base rate to 5.00%.

Post Properties, Inc.

44

Post Apartment Homes, L.P.

								Expected
				Average			Average	Settlement
Interest Rate Derivatives		Notional Amount		Pay Rate/Cap Rate			Receive Rate	Date		Fair Value
Interest Rate Swaps
	Variable to fixed		$104,000 amortizing to
			$ 90,270		6.04	%	1 month LIBOR		7/31/09	$	(14,444	)
	Variable to fixed		$ 25,000		6.53	%	3 month LIBOR		2/01/05		(2,405	)
Interest rate cap			$ 76,000		5.00	%	—		2/01/03		—
Interest rate cap			$141,230		5.00	%	—		2/01/03		—
Interest rate cap			$ 18,650		5.00	%	—		2/01/03		—
										$	(16,849	)

As more fully described in note 1 to the consolidated financial statements, the interest rate swap and cap arrangements are carried on the consolidated sheet at the fair value shown above in accordance with SFAS No. 133, as amended. If interest rates under the Company’s floating rate LIBOR-based and tax-exempt borrowings, in excess of the $101,100 FNMA borrowings and $25,000 medium-term notes effectively converted to fixed rates discussed above, fluctuated by 1.0%, interest costs to the Company, based on outstanding borrowings at December 31, 2002, would increase or decrease by approximately $4,100 on an annualized basis.

Subsequent to December 31, 2002, the Company entered into two interest rate cap arrangements with two financial institutions. The new interest rate cap arrangements replaced three expiring interest rate cap arrangements and were structured as cash flow hedges to provide a fixed ceiling at 5% for the Company’s variable rate, tax-exempt borrowings. The Company is required to maintain this interest rate exposure protection under the terms of the financing arrangements. The $2,720 cost of the arrangement will be amortized as additional expense over their five year term in accordance with SFAS No. 133.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements are listed under Item 15(a) and are filed as part of this report on the pages indicated. The supplementary data are included in note 17 of the Notes to Consolidated Financial Statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Post Properties, Inc.

45

Post Apartment Homes, L.P.

PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The sections under the headings “Election of Directors” entitled “Nominees for Election — Term Expiring 2006,” “Nominees for Election — Term Expiring 2005,” “Incumbent Directors — Term Expiring 2004,” and “Incumbent Directors — Term Expiring 2005” of the Proxy Statement for Annual Meeting of Shareholders to be held May 22, 2003 (the “Proxy Statement”) are incorporated herein by reference for information on Directors of the Registrant. See Item X in Part I hereof for information regarding executive officers of the Registrant. The section under the heading “Other Matters” entitled “Section 16(a) Beneficial Ownership Reporting Compliance” of the Proxy Statement is incorporated herein by reference.

ITEM 11.     EXECUTIVE COMPENSATION

The section under the heading “Election of Directors” entitled “Compensation of Directors” of the Proxy Statement and the sections under the heading titled “Executive Compensation” entitled “Summary Compensation Table,” “Option Grants Table,” “Fiscal Year-End Option Value Table,” “Long Term Incentive Plan Table,” “Noncompetition Agreements, Employee Agreements and Change of Control Agreements,” and “Compensation Committee Interlocks and Insider Participation” of the Proxy Statement are incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The sections under the heading “Common Stock Ownership by Management and Principal Shareholders” and “Equity Compensation Plan Information” of the Proxy Statement are incorporated herein by reference.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The section under the heading “Certain Relationships and Related Party Transactions” of the Proxy Statement is incorporated herein by reference.

ITEM 14.     CONTROLS AND PROCEDURES

As required by Securities and Exchange Commission rules, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures within 90 days of the filing date of this annual report. This evaluation was carried out under the supervision and with the participation of the Company’s management, including its principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded that the design and operation of the Company’s disclosure controls and procedures are effective. There were no significant changes to the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

Disclosure controls and procedures are the Company’s controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Post Properties, Inc.

46

Post Apartment Homes, L.P.

PART IV

ITEM 15.     EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. and 2. Financial Statements and Schedules

The financial statements and schedules listed below are filed as part of this annual report on the pages indicated.

INDEX TO FINANCIAL STATEMENTS

		Page
POST PROPERTIES, INC.
Consolidated Financial Statements:
	Report of Independent Accountants		48
	Consolidated Balance Sheets as of December 31, 2002 and 2001		49
	Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000		50
	Consolidated Statements of Shareholders’ Equity and Accumulated Earnings for the Years Ended December 31, 2002, 2001 and 2000		51
	Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000		52
	Notes to the Consolidated Financial Statements		53
POST APARTMENT HOMES, L.P.
Consolidated Financial Statements:
	Report of Independent Accountants		75
	Consolidated Balance Sheets as of December 31, 2002 and 2001		76
	Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000		77
	Consolidated Statements of Partners’ Equity for the Years Ended December 31, 2002, 2001 and 2000		78
	Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000		79
	Notes to the Consolidated Financial Statements		80
Schedule III:
	Real Estate and Accumulated Depreciation		101
All other schedules are omitted because they are either not applicable or not required
POST PROPERTIES, INC. — 1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
Financial Statements:
	Report of Independent Accountants		106
	Statement of Net Assets Available for Plan Benefits as of December 31, 2002 and 2001		107
	Statement of Changes in Net Assets Available for Plan Benefits for the Years Ended December 31, 2002 and 2001		108
	Notes to Financial Statements		109

Post Properties, Inc.

47

Post Apartment Homes, L.P.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Post Properties, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of shareholders’ equity and accumulated earnings, and of cash flows, present fairly, in all material respects, the financial position of Post Properties, Inc. and subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years then ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1, Post Properties, Inc. adopted Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by Statement of Financial Accounting Standards No. 138, on January 1, 2001.

PricewaterhouseCoopers LLP (signed)

Atlanta, Georgia

February 28, 2003

Post Properties, Inc.

48

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

				December 31,			December 31,
				2002			2001
Assets
	Real estate assets
		Land		$	273,058		$	277,146
		Building and improvements			1,976,809			1,794,658
		Furniture, fixtures and equipment			246,634			212,390
		Construction in progress			92,945			419,449
		Investments in and advances to unconsolidated real estate entities			182,285			89,692
		Land held for future development			24,879			23,658
					2,796,610			2,816,993
		Less: accumulated depreciation			(426,136	)		(393,014	)
		Assets held for sale			73,061			39,419
			Total real estate assets		2,443,535			2,463,398
		Cash and cash equivalents			6,390			4,803
		Restricted cash			1,369			1,315
		Deferred charges, net			15,584			18,203
		Other assets			41,273			50,632
			Total assets	$	2,508,151		$	2,538,351
Liabilities and shareholders’ equity
	Notes payable			$	1,414,555		$	1,336,520
	Accounts payable and accrued expenses				49,124			72,277
	Dividend and distribution payable				33,252			33,208
	Accrued interest payable				8,994			9,660
	Security deposits and prepaid rents				8,250			9,016
			Total liabilities		1,514,175			1,460,681
Minority interest of preferred unitholders in Operating Partnership					70,000			70,000
Minority interest of common unitholders in Operating Partnership					90,277			106,153
Commitments and contingencies
Shareholders’ equity
		Preferred stock, $.01 par value, 20,000,000 authorized:
		8 1/2% Series A Cumulative Redeemable Shares, liquidation preference $50 per share, 900,000 shares issued and outstanding			9			9
		7 5/8% Series B Cumulative Redeemable Shares, liquidation preference $25 per share, 2,000,000 shares issued and outstanding			20			20
		7 5/8% Series C Cumulative Redeemable Shares, liquidation preference $25 per share, 2,000,000 shares issued and outstanding			20			20
		Common stock, $.01 par value, 100,000,000 authorized:
		39,676,204 and 39,676,204 shares issued, 37,202,290 and 36,856,559 shares outstanding at December 31, 2002 and 2001, respectively			396			396
		Additional paid-in capital			940,122			1,010,954
		Accumulated earnings			—			—
		Accumulated other comprehensive income			(14,822	)		(5,864	)
		Deferred compensation			(639	)		(445	)
					925,106			1,005,090
		Less common stock in treasury, at cost, 2,473,914 shares and 2,819,645 shares at December 31, 2002 and 2001, respectively			(91,407	)		(103,573	)
			Total shareholders’ equity		833,699			901,517
			Total liabilities and shareholders’ equity	$	2,508,151		$	2,538,351

The accompanying notes are an integral part of these consolidated financial statements.

Post Properties, Inc.

49

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

			Year ended December 31,
			2002			2001			2000
Revenues
	Rental		$	316,484		$	336,206		$	335,482
	Other			12,225			13,253			15,587
	Interest			1,288			1,771			1,922
	Third party services			—			14,088			15,249
		Total revenues		329,997			365,318			368,240
Expenses
	Property operating and maintenance (exclusive of items shown separately below)			131,369			129,201			120,842
	Depreciation			85,681			69,680			65,732
	Interest			58,436			51,960			45,332
	Amortization of deferred loan costs			2,327			1,978			1,636
	General and administrative			14,431			13,256			10,066
	Other			694			—			—
	Project abandonment, employee severance and impairment charges			—			17,450			9,365
	Minority interest in consolidated property partnerships			(2,055	)		(2,098	)		(1,695	)
	Third party services			—			13,023			13,092
		Total expenses		290,883			294,450			264,370
Income from continuing operations before equity in losses of unconsolidated entities, gains on property sales and minority interest				39,114			70,868			103,870
	Equity in losses of unconsolidated real estate entities			(1,590	)		(186	)		—
	Gains on property sales			13,275			23,942			3,208
	Minority interest of preferred unitholders in Operating Partnership			(5,600	)		(5,600	)		(5,600	)
	Minority interest of common unitholders in Operating Partnership			(4,073	)		(9,153	)		(10,441	)
		Income from continuing operations		41,126			79,871			91,037
Discontinued operations
	Income from discontinued operations, net of minority interest			5,173			7,746			9,483
	Gains on property sales, net of minority interest			14,567			—			—
		Income from discontinued operations		19,740			7,746			9,483
Income before cumulative effect of accounting change and extraordinary items				60,866			87,617			100,520
	Cumulative effect of accounting change, net of minority interest			—			(613	)		—
	Extraordinary items, net of minority interest			(120	)		(77	)		—
Net income				60,746			86,927			100,520
	Dividends to preferred shareholders			(11,449	)		(11,768	)		(11,875	)
Net income available to common shareholders			$	49,297		$	75,159		$	88,645
Per common share data — basic
	Income from continuing operations (net of preferred dividends)		$	0.80		$	1.80		$	2.01
	Income from discontinued operations			0.53			0.20			0.24
	Income before cumulative effect of accounting change and extraordinary items (net of preferred dividends)			1.33			2.00			2.25
	Cumulative effect of accounting change, net of minority interest			—			(0.02	)		—
	Extraordinary items, net of minority interest			—			—			—
	Net income available to common shareholders		$	1.33		$	1.98		$	2.25
	Weighted average common shares outstanding — basic			36,939,144			38,052,673			39,317,725
Per common share data — diluted
	Income from continuing operations (net of preferred dividends)		$	0.80		$	1.78		$	1.99
	Income from discontinued operations			0.53			0.20			0.23
	Income before cumulative effect of accounting change and extraordinary items (net of preferred dividends)			1.33			1.98			2.22
	Cumulative effect of accounting change, net of minority interest			—			(0.02	)		—
	Extraordinary items, net of minority interest			—			—			—
	Net income available to common shareholders		$	1.33		$	1.96		$	2.22
	Weighted average common shares outstanding — diluted			36,953,962			38,267,939			39,852,514
	Dividends declared		$	3.12		$	3.12		$	3.04

The accompanying notes are an integral part of these consolidated financial statements.

Post Properties, Inc.

50

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND

ACCUMULATED EARNINGS

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

(Dollars in thousands, except per share data)

																Accumulated
										Additional						Other
					Preferred			Common		Paid-in			Accumulated			Comprehensive			Deferred			Treasury
					Stock			Stock		Capital			Earnings			Income			Compensation			Stock			Total
Shareholders’ Equity and Accumulated
	Earnings, December 31, 1999				$	50		$	388	$	1,058,424		$	—		$	—		$	—		$	—		$	1,058,862
		Net income				—			—		—			100,520			—			—			—			100,520
		Proceeds from dividend reinvestment and employee stock purchase plan				—			8		29,029			—			—			—			152			29,189
		Adjustment for minority interest of unitholders in Operating Partnership at dates of capital transactions				—			—		320			—			—			—			—			320
		Treasury stock acquisitions				—			—		—			—			—			—			(29,055	)		(29,055	)
		Dividends to preferred shareholders				—			—		—			(11,875	)		—			—			—			(11,875	)
		Dividends to common shareholders				—			—		(30,706	)		(88,645	)		—			—			—			(119,351	)
Shareholders’ Equity and Accumulated
	Earnings, December 31, 2000				$	50		$	396	$	1,057,067		$	—		$	—		$	—		$	(28,903	)	$	1,028,610
		Comprehensive income
			Net income			—			—		—			86,927			—			—			—			86,927
			Cumulative effect of adoption of SFAS 133, net of minority interest			—			—		—			—			(1,299	)		—			—			(1,299	)
			Net change in derivative value, net of minority interest			—			—		—			—			(4,565	)		—			—			(4,565	)
			Total comprehensive income																							81,063
		Proceeds from dividend reinvestment and employee stock purchase plans				—			—		(3,541	)		—			—			—			12,307			8,766
				Preferred Stock repurchase		(1	)		—		(5,099	)		—			—			—			—			(5,100	)
		Adjustment for minority interest of unitholders in Operating Partnership at dates of capital transactions				—			—		5,194			—			—			—			—			5,194
		Restricted stock issuances, net of forfeitures				—			—		46			—			—			(616	)		570			—
		Amortization of deferred compensation				—			—		—			—			—			171			—			171
		Treasury stock acquisitions				—			—		—			—			—			—			(87,547	)		(87,547	)
		Dividends to preferred shareholders				—			—		—			(11,768	)		—			—			—			(11,768	)
		Dividends to common shareholders				—			—		(42,713	)		(75,159	)		—			—			—			(117,872	)
Shareholders’ Equity and Accumulated Earnings, December 31, 2001					$	49		$	396	$	1,010,954		$	—		$	(5,864	)	$	(445	)	$	(103,573	)	$	901,517
		Comprehensive income
			Net income			—			—		—			60,746			—			—			—			60,746
			Net change in derivative value, net of minority interest			—			—		—			—			(8,958	)		—			—			(8,958	)
			Total comprehensive income																							51,788
		Proceeds from dividend reinvestment and employee stock purchase plans				—			—		(10,435	)		—			—			—			11,689			1,254
		Adjustment for minority interest of unitholders in Operating Partnership at dates of capital transactions				—			—		5,656			—			—			—			—			5,656
		Restricted stock issuances, net of forfeitures				—			—		(18	)		—			—			(459	)		477			—
		Amortization of deferred compensation				—			—		—			—			—			265			—			265
		Dividends to preferred shareholders				—			—		—			(11,449	)		—			—			—			(11,449	)
		Dividends to common shareholders				—			—		(66,035	)		(49,297	)		—			—			—			(115,332	)
Shareholders’ Equity and Accumulated
	Earnings, December 31, 2002				$	49		$	396	$	940,122		$	—		$	(14,822	)	$	(639	)	$	(91,407	)	$	833,699

The accompanying notes are an integral part of these consolidated financial statements.

Post Properties, Inc.

51

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands, except per share data)

			Year ended December 31,
			2002			2001			2000
Cash Flows From Operating Activities
	Net income		$	60,746		$	86,927		$	100,520
	Adjustments to reconcile net income to net cash provided by operating activities:
		Gains on property sales — continuing operations		(13,275	)		(23,942	)		(3,208	)
		Gains on property sales — discontinued operations, net of minority interest		(14,567	)		—			—
		Minority interest of preferred unitholders in Operating Partnership		5,600			5,600			5,600
		Minority interest of common unitholders in Operating Partnership		4,073			9,153			10,441
		Minority interest in discontinued operations		712			1,050			1,250
		Equity in losses of unconsolidated real estate entities		1,590			186			—
		Cumulative effect of accounting change, net of minority interest		—			613			—
		Extraordinary items, net of minority interest		120			77			—
		Depreciation		87,927			76,178			71,113
		Amortization of deferred loan costs		2,327			1,978			1,636
	Changes in assets, (increase) decrease in:
		Restricted cash		(54	)		(43	)		108
		Other assets		8,098			(1,626	)		(8,904	)
		Deferred charges		(1,362	)		(929	)		(1,591	)
	Changes in liabilities, increase (decrease) in:
		Accrued interest payable		(666	)		(1,091	)		1,591
		Accounts payable and accrued expenses		(20,740	)		7,824			6,133
		Security deposits and prepaid rents		(766	)		(391	)		384
	Net cash provided by operating activities			119,763			161,564			185,073
Cash Flows From Investing Activities
	Construction and acquisition of real estate assets, net of payables			(150,792	)		(220,297	)		(362,981	)
	Net proceeds from property sales			182,216			220,122			157,265
	Capitalized interest			(13,223	)		(22,124	)		(25,426	)
	Recurring capital expenditures			(9,381	)		(10,441	)		(9,157	)
	Corporate additions and improvements			(1,100	)		(3,021	)		(3,441	)
	Non-recurring capital expenditures			(3,441	)		(2,535	)		(5,576	)
	Revenue generating capital expenditures			(2,035	)		(4,226	)		(6,670	)
	Investments in and advances to unconsolidated entities			(51,065	)		(8,691	)		—
	Net cash used in investing activities			(48,821	)		(51,213	)		(255,986	)
Cash Flows From Financing Activities
	Proceeds from notes payable			95,500			50,000			440,001
	Payments on notes payable			(47,632	)		(70,066	)		(56,774	)
	Lines of credit proceeds (repayments), net			30,167			143,277			(159,501	)
	Payment of financing costs			(561	)		(300	)		(3,128	)
	Treasury stock acquisitions			—			(87,547	)		(24,912	)
	Preferred stock repurchases			—			(5,100	)		—
	Proceeds from dividend reinvestment and employee stock purchase plan			1,254			8,766			26,754
	Distributions to preferred unitholders			(5,600	)		(5,600	)		(5,600	)
	Distributions to common unitholders			(15,972	)		(16,018	)		(15,458	)
	Dividends paid to preferred shareholders			(11,449	)		(11,768	)		(11,875	)
	Dividends paid to common shareholders			(115,062	)		(118,651	)		(117,005	)
	Net cash provided by (used in) financing activities			(69,355	)		(113,007	)		72,502
Net increase (decrease) in cash and cash equivalents				1,587			(2,656	)		1,589
Cash and cash equivalents, beginning of period				4,803			7,459			5,870
Cash and cash equivalents, end of period			$	6,390		$	4,803		$	7,459

The accompanying notes are an integral part of these consolidated financial statements.

Post Properties, Inc.

52

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

Organization

Post Properties, Inc. and its subsidiaries develop, own and manage upscale multifamily apartment communities in selected markets in the United States. As used herein, the term “Company” includes Post Properties, Inc. and its subsidiaries, including Post Apartment Homes, L.P. (the Operating Partnership”), unless the context indicates otherwise. The Company, through its wholly owned subsidiaries is the general partner and owns a majority interest in the Operating Partnership which, through its subsidiaries, conducts substantially all of the on-going operations of the Company. At December 31, 2002, the Company owns 30,317 apartment units in 84 apartment communities, including 1,377 apartment units currently under development and lease up in five apartment communities and an addition to an existing community. At December 31, 2002, approximately 52.1%, 18.7% and 7.3% (on a unit basis) of the Company’s communities are located in the Atlanta, Dallas and Tampa metropolitan areas, respectively.

The Company has elected to qualify and operate as a self-administrated and self-managed real estate investment trust (“REIT”) for federal income tax purposes. A REIT is a legal entity which holds real estate interests and, through payments of dividends to shareholders, in practical effect is not subject to federal income taxes at the corporate level.

As of December 31, 2002, the Company had outstanding 37,202,290 shares of common stock and owned the same number of units of common limited partnership interests (“Common Units”) in the Operating Partnership, representing an 88.5% ownership interest in the Operating Partnership. Common Units held by persons (including certain Company directors) other than the Company totaled 4,829,425 as of December 31, 2002 and represented a 11.5% common minority interest in the Operating Partnership. Each Common Unit may be redeemed by the holder thereof for either one share of Company common stock or cash equal to the fair market value thereof at the time of redemption, at the option of the Company. The Company’s weighted average common ownership interest in the Operating Partnership was 87.9%, 88.1% and 88.3% for the years ended December 31, 2002, 2001 and 2000, respectively.

Basis of presentation

The accompanying consolidated financial statements include the consolidated accounts of the Company and the Operating Partnership. The Company’s investments in non-majority owned entities in which it does not exercise unilateral control, but has the ability to exercise significant influence over operating and financial policies, are accounted for on the equity method of accounting. Accordingly, the Company’s share of the net earnings or losses of these entities is included in consolidated net income. All significant intercompany accounts and transactions have been eliminated in consolidation. The minority interest of unitholders in the operations of the Operating Partnership is calculated based on the weighted average unit ownership during the period.

Certain items in the 2001 and 2000 consolidated financial statements were reclassified for comparative purposes with the 2002 consolidated financial statements.

Cost capitalization

The Company capitalizes those expenditures relating to the acquisition of new assets, the development and construction of new apartment communities, the enhancement of the value of existing assets and expenditures that substantially extend the life of existing assets. All other expenditures necessary to maintain a community in ordinary operating condition are expensed as incurred. Additionally, for new development communities, carpet, vinyl, and blind replacements are expensed as incurred during the first five years (which corresponds to their estimated depreciable life). Thereafter, these replacements are capitalized. The Company expenses as incurred all interior and exterior painting of communities.

For communities under development, the Company capitalizes interest, real estate taxes, and certain internal personnel and associated costs directly related to apartment communities under development and construction. Interest is capitalized to projects under development based upon the weighted average cumulative project costs for each month multiplied by the Company’s weighted average borrowing costs, expressed as a percentage. Weighted average borrowing costs include the costs of the Company’s fixed rate secured and unsecured borrowings and the

Post Properties, Inc.

53

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

variable rate unsecured borrowings under its line of credit facilities. The weighted average borrowing costs, expressed as a percentage, for the years ended December, 31, 2002, 2001 and 2000 were 7.55%, 7.41% and 6.80%, respectively. Internal personnel and associated costs are capitalized to projects under development based upon the effort identifiable with such projects. The Company treats each unit in an apartment community separately for cost accumulation, capitalization and expense recognition purposes. Prior to the commencement of leasing activities, interest and other construction costs are capitalized and reflected on the balance sheet as construction in progress. The Company ceases the capitalization of such costs as the residential units in a community become substantially complete and available for occupancy. This results in a proration of these costs between amounts that are capitalized and expensed as the residential units in a development community become available for occupancy. In addition, prior to the completion of units, the Company expenses as incurred substantially all operating expenses (including pre-opening marketing as well as property management and leasing personnel expenses) of such communities.

Real estate assets, depreciation and impairment

Real estate assets are stated at the lower of depreciated cost or fair value, if deemed impaired. Major replacements and betterments are capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis over the useful lives of the properties (buildings and components and related land improvements — 20-40 years; furniture, fixtures and equipment — 5-10 years).

The Company continually evaluates the recoverability of the carrying value of its real estate assets using the methodology prescribed in Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Factors considered by management in evaluating impairment of its existing real estate assets held for investment include significant declines in property operating profits, recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its fair value. The Company periodically classifies real estate assets as held for sale. An asset is classified as held for sale after the approval of the Company’s internal investment committee and after an actual program to sell the asset has commenced. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded.

Real estate assets held for sale are stated separately on the accompanying consolidated balance sheets. Effective January 1, 2002 (through the implementation of SFAS No. 144), the operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying statements of operations. The income (loss) from discontinued operations includes the revenues and expenses including depreciation and allocated interest expense, associated with the assets. Interest expense is allocated to assets held for sale based on actual interest costs for assets with secured mortgage debt. Interest expense is allocated to unencumbered assets based on the ratio of unencumbered assets to unsecured debt multiplied by the weighted average interest rate on the Company’s unsecured debt for the period and further multiplied by the average book value of the assets sold. This classification of operating results as discontinued operations applies retroactively for all periods presented for assets designated as held for sale in 2002. Additionally, gains and losses on assets designated as held for sale in 2002 are classified as part of discontinued operations.

In years prior to 2002, real estate assets held for sale were stated separately on the consolidated balance sheet in a manner consistent with approach discussed above. However, the operating results and gains or losses on the sale of such assets were included in continuing operations. As a result of this presentation, income from continuing operations and gains on property sales are not comparable between years.

Revenue recognition

Residential properties are leased under operating leases with terms of generally one year or less. Rental income is recognized when earned, which is not materially different from revenue recognition on a straight-line basis.

Post Properties, Inc.

54

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

Stock-based compensation

Through December 31, 2002, the Company accounted for stock-based compensation under the intrinsic value method prescribed by Accounting Principles Board (“APB”) Opinion 25, “Accounting for Stock Issued to Employees”. Under APB Opinion 25, compensation expense was generally not recognized for stock options granted at the Company’s current stock price on the grant date. In addition to the information summarized below, the Company provides the additional disclosures relating to stock options prescribed by SFAS No. 123, “Accounting for Stock-based Compensation,” as amended, in note 9 to these consolidated financial statements.

In December 2002, SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure,” was issued. SFAS No. 148 amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements in both annual and interim financial statements about the method of accounting for stock-based compensation and the effect of the method on reported results. Effective January 1, 2003, the Company intends to voluntarily change to the fair value method of accounting under SFAS No. 123 using the prospective method prescribed in SFAS No. 148. The Company estimates the impact of this change on its projected 2003 results of operations to be a reduction of earnings per common share of approximately $0.01.

The following table reflects the Company’s net income and earnings per common share had the fair value method of accounting under SFAS No. 123 been applied for each year.

		2002			2001			2000
Net income available to common shareholders
	As reported	$	49,297		$	75,159		$	88,645
	Stock based compensation determined under the fair value method		(499	)		(1,148	)		(1,952	)
	Pro forma	$	48,798		$	74,011		$	86,693
Net income per common share — basic
	As reported	$	1.33		$	1.98		$	2.25
	Pro forma	$	1.32		$	1.94		$	2.20
Net income per common share — diluted
	As reported	$	1.33		$	1.96		$	2.22
	Pro forma	$	1.32		$	1.93		$	2.18

Accounting for derivative financial instruments

Effective January 1, 2001, the Company accounts for derivative financial instruments at fair value under the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended by SFAS No. 138, “Accounting for Certain Derivative and Hedging Activities”.

The Company uses derivative financial instruments, interest rate swap and interest rate cap arrangements, to manage or hedge its exposure to interest rate changes. The Company designates each derivative instrument as a hedge of specific interest expense cash flow exposure. Under SFAS 133, as amended, derivative instruments qualifying as hedges of specific cash flows are generally recorded on the balance sheet at fair value with an offsetting increase or decrease to accumulated other comprehensive income, a shareholders’ equity account, until the hedged transactions are recognized in earnings. Any ineffective portion of cash flow hedges are recognized immediately in earnings.

Post Properties, Inc.

55

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

Cash and cash equivalents

For purposes of the statement of cash flows, all investments purchased with an original maturity of three months or less are considered to be cash equivalents.

Restricted cash

Restricted cash generally is comprised of resident security deposits for communities located in Florida and Tennessee and required maintenance reserves for communities located in DeKalb County, Georgia.

Deferred financing costs

Deferred financing costs are amortized using the interest method over the terms of the related debt.

Per share data

Basic earnings per common share is computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted average number of shares outstanding during the period, including the dilutive effect of outstanding stock options.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

New accounting pronouncements

In 2002 and 2003, the Financial Accounting Standards Board issued several new accounting pronouncements and the pronouncements with a potential impact on the Company are discussed herein.

SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections” was issued in May 2002. SFAS No. 145 rescinds SFAS No. 4, “Reporting Gains and Losses from Extinguishments of Debt,” which provided that gains and losses from early debt retirements be treated as extraordinary items. Under SFAS No. 145, gains and losses from early debt retirements will only be treated as extraordinary items if they meet the criteria for extraordinary items under APB No. 30. Since the definition of an extraordinary item is more restrictive under APB No. 30, SFAS No. 145 will generally cause the Company to treat gains or losses from early debt retirements as part of income before extraordinary items. This part of SFAS No. 145 is effective for fiscal years beginning after May 15, 2002 and requires the reclassification of prior period extraordinary items not meeting the APB No. 30 criteria. The Company expects to implement this requirement of SFAS No. 145 on January 1, 2003. Upon implementation, the Company will reclassify $120, net of minority interest, in 2002 and $77, net of minority interest in 2001 from extraordinary items to expenses used to determine income from continuing operations. The Company believes this change is not significant to the Operating Company’s results of operations or its financial position. The remaining provisions of SFAS No. 145 are generally not applicable to the Company.

SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” was issued in July 2002. This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002. The Company believes the provisions of this Statement will not have a significant effect on the Company’s results of operations or its financial position.

Post Properties, Inc.

56

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

FASB Interpretation No. 45 (“FIN No. 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Guarantees of Indebtedness of Others” was issued in November 2002. FIN No. 45 clarifies disclosure requirements to be made by a guarantor in its interim and annual financial statements regarding its obligations under certain guarantees that it has issued. Additionally, it clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The disclosure requirements of FIN No. 45 are effective for interim and annual financial statements issued after December 15, 2002. The initial recognition and measurement provisions of FIN No. 45 are applicable for guarantees issued or modified after December 31, 2002. The Company has implemented the disclosure requirements of FIN No. 45 effective with these December 31, 2002 financial statements and the Company will implement the recognition and measurement provisions effective January 1, 2003. The Company does not expect the recognition and measurement provisions of FIN No. 45 to have a significant impact on the Company’s financial position or results of operations.

FASB Interpretation No. 46 (“FIN No. 46”), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” was issued in January 2003. FIN No. 46 requires consolidation of all legal entities in which the enterprise holds contractual, ownership or other monetary interests that change with changes in the entity’s net asset value (such entities being designated as variable interest entities) where the enterprise is deemed the primary beneficiary. The consolidation provisions of FIN No. 46 are applicable immediately to all variable interest entities created after January 31, 2003. For variable interest entities created prior to February 1, 2003 where the Company is deemed to be the primary beneficiary, consolidation of such entities will be required for the interim period ending September 30, 2003. Information required to be disclosed in 2003 pursuant to FIN No. 46 includes the nature, purpose, size and activities of all variable interest entities where it is reasonably possible that such entities will be required to be consolidated by the Company and the Company’s maximum exposure to loss from these entities. The Company currently does not have any interests in variable interest entities and believes that FIN No. 46 will not have a significant effect on its results of operations or financial position.

2. DEFERRED CHARGES

Deferred charges consist of the following:

	December 31,
	2002			2001
Deferred financing costs	$	37,037		$	35,817
Other		3,532			4,527
		40,569			40,344
Less: accumulated amortization		(24,985	)		(22,141	)
	$	15,584		$	18,203

Post Properties, Inc.

57

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

3. NOTES PAYABLE

At December 31, 2002 and 2001, the Company’s indebtedness consisted of the following:

								December 31,
			Interest			Maturity
Description	Payment Terms		Rate			Date(1)		2002		2001
Unsecured Notes
Senior Notes		Int		6.11% -  7.70%			2003-2010	$	385,000	$	360,000
Medium Term Notes		Int		6.69% -   8.12%	(2)		2004-2015		323,000		323,000
Other		Int		8.37%			2002		—		20,000
									708,000		703,000
Unsecured Lines of Credit & Other
Revolver		N/A		LIBOR +  0.85%	(3)		2004		185,000		155,000
Cash Management Line		N/A		LIBOR +  0.75%			2003		11,369		11,202
Other		N/A		5.00%			2021		—		2,000
									196,369		168,202
Conventional Fixed Rate (Secured)
FNMA		Prin. and Int		6.975%	(4)		2029		101,100		102,200
Other		Prin. and Int		5.50% -  7.69%			2007-2013		194,706		127,238
									295,806		229,438
Tax Exempt Floating Rate Bonds
(Secured)		Int		1.55%	(5)		2025		214,380		235,880
Total								$	1,414,555	$	1,336,520

(1)	All outstanding indebtedness can be prepaid at any time, subject to certain prepayment penalties.
(2)	Contains $100,000 of Mandatory Par Put Remarketed Securities. The annual interest rate on these securities to 2005 (the “Remarketing Date”) is 6.85%. On the Remarketing Date, they are subject to mandatory tender for remarketing.
(3)	Represents stated rate. At December 31, 2002, the weighted average interest rate was 2.23%.
(4)	Interest rate is fixed at 6.975%, inclusive of credit enhancement and other fees, to 2009 through an interest rate swap arrangement.
(5)	FNMA credit enhanced bond indebtedness. Interest based on FNMA “AAA” tax exempt rate plus credit enhancement and other fees of 0.639%. Interest rate represents rate at December 31, 2002 before credit enhancements. At December 31, 2002, the Company has outstanding interest rate cap arrangements that limit the Company’s exposure to increases in the base interest rate to 5%.

Post Properties, Inc.

58

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

New debt issuances

In June 2002, the Company issued $25,000 of unsecured notes at par. These notes bear interest at 6.11% and mature June 2007. Also in June 2002, the Company closed a $13,500 secured mortgage loan.. This loan bears interest at 6.29% and requires monthly principal and interest payments on a 25-year amortization schedule. The loan matures on October 2007.

In December 2002, the Company closed a $57,000 mortgage loan with a life insurance company. This loan carries an interest rate of 5.5% and requires payments of interest only for the first five years. Thereafter, payments of principal and interest are required based upon a 30-year amortization schedule until the loan’s maturity in January 2013.

Debt maturities

The aggregate maturities of the Company’s indebtedness are as follows (1):

2003	$	103,809
2004		27,094
2005		204,402
2006		79,732
2007		112,178
Thereafter		690,971
	$	1,218,186

(1)  Excludes outstanding balances on lines of credit discussed below.

Unsecured lines of credit

The Company utilizes a $320,000 three-year syndicated revolving line of credit (the “Revolver”), for its short-term financing requirements. At December 31, 2002, the stated interest rate for the Revolver was LIBOR plus 0.85% or prime minus 0.25%. The Revolver provides for the rate to be adjusted up or down based on changes in the credit ratings on the Company’s senior unsecured debt. The Revolver also includes a money market competitive bid option for short-term funds up to $160,000 at rates below the stated line rate. The credit agreement for the Revolver contains customary representations, covenants and events of default, including covenants which restrict the ability of the Operating Partnership to make distributions, in excess of stated amounts, which in turn restrict the discretion of the Company to declare and pay dividends. In general, during any fiscal year the Operating Partnership may only distribute up to 100% of the Operating Partnership’s consolidated income available for distribution (as defined in the credit agreement) exclusive of distributions of up to $30,000 of capital gains for such year. The credit agreement contains exceptions to these limitations to allow the Operating Partnership to make distributions necessary to allow the Company to maintain its status as a REIT. The Company does not anticipate that this covenant will adversely affect the ability of the Operating Partnership to make distributions, or the Company to declare dividends, at the Company’s current dividend level. The Revolver matures in April 2004. Management expects to renew this facility in 2003 with a total capacity of approximately $300,000.

The Company also has in place an additional $125,000 line of credit facility for general corporate purposes. This line bears interest at LIBOR plus 0.90% and matures in April 2003. Management does not expect to renew this facility in April 2003 as the Company’s financing needs have reduced consistent with the Company’s reduced development spending.

Post Properties, Inc.

59

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

Additionally, the Company has a $20,000 unsecured line of credit with Wachovia Bank of Georgia, N.A. (the “Cash Management Line”). The Cash Management Line bears interest at LIBOR plus 0.75% or prime minus .25% and matures in February 2003. Subsequent to year end, the Cash Management Line was renewed through June 2003 with similar terms to its existing facility. At December 31, 2002, the Company has issued letters of credit to third parties totaling $1,323 under this facility.

Interest paid

Interest paid (including capitalized amounts of $13,223, $22,124 and $25,426 for the years ended December 31, 2002, 2001 and 2000, respectively), aggregated $79,115, $82,383 and $74,419 for the years ended December 31, 2002, 2001 and 2000, respectively.

Pledged assets

The aggregate net book value at December 31, 2002 of property pledged as collateral for indebtedness amounted to approximately $497,473.

Extraordinary items

The extraordinary losses for the years ended December 31, 2002 and 2001 of $136 ($120, net of minority interest) and $88 ($77, net of minority interest), respectively, resulted from costs associated with the early extinguishment of indebtedness.

Post Properties, Inc.

60

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

4. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

The Company holds investments in four individual limited liability companies (the “Property LLCs”) with an institutional investor. Each Property LLC owns a newly developed or under development apartment community. At December 31, 2002, all of the apartment communities had commenced rental operations. The Company holds a 35% equity interest in the Property LLCs. The total estimated development cost of the apartment communities of $219,000 is being funded through member equity contributions proportionate to the members’ ownership interests and through construction financing provided by the Company. The Company accounts for its investments in these Property LLCs using the equity method of accounting. The excess of the Company’s investment over its equity in the underlying net assets of the Property LLCs was approximately $9,070 at December 31, 2002. This excess investment is being amortized as a reduction to earnings on a straight-line basis over the lives of the related assets. The Company provides real estate services (development, construction and property management) to the Property LLCs.

The operating results of the Company include its proportionate share of net income (loss) from the investments in the Property LLCs. A summary of financial information for the Property LLCs in the aggregate is as follows:

		December 31,
		2002		2001
Real estate assets, net		$	198,854	$	115,664
Cash and other			2,330		533
	Total assets		201,184	$	116,197
Construction notes payable to Company		$	160,294	$	77,019
Other liabilities			3,975		11,892
	Total liabilities		164,269		88,911
Members’ equity			36,915		27,286
	Total liabilities and members’ equity	$	201,184	$	116,197
Company’s equity investment		$	21,991	$	12,673

			Year ended
			December 31,
			2002			2001
Revenues
	Rental		$	5,661		$	136
	Other			381			50
		Total revenues		6,042			186
Expenses
	Property operating and maintenance			4,655			416
	Depreciation			3,153			192
	Interest			2,778			110
		Total expenses		10,586			718
Net loss			$	(4,544	)	$	(532	)
Company’s share of net loss			$	(1,590	)	$	(186	)

The Company has committed construction financing to the Property LLCs totaling $168,473 ($160,294 funded at December 31, 2002). These loans earn interest at LIBOR plus 1.75% and are secured by the apartment communities. The loans mature on dates ranging from February 2003 to November 2004 and are expected to be repaid from the proceeds of permanent project financings. As of December 31, 2002, the institutional investor’s share of these notes was $104,191. Subsequent to December 31, 2002, one of the Property LLCs repaid its outstanding construction note payable to the Company of $24,071. The note was repaid through the proceeds from a third-party non-recourse permanent mortgage note totaling $17,000 and from member equity contributions totaling $7,132. The Company issued a limited guarantee and indemnity to the lender regarding certain customary recourse liabilities and environmental matters up to a maximum potential exposure of $5,000. The other member of the Property LLC is obligated to reimburse the Company for up to its 65% share ($3,250) of the maximum potential exposure under these arrangements.

Post Properties, Inc.

61

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

As part of the development and construction services agreements entered into between the Company and the Property LLCs, the Company guaranteed the maximum total amount for certain construction cost categories subject to aggregate limits (approximately $19,000). At December 31, 2002, the Company had substantially completed three of the communities and had funded approximately $845 under the guarantee provisions of the agreements. The amounts funded were accounted for as part of the Company’s investment in the Property LLCs. The Company’s remaining maximum exposure for the fourth Property LLC totals approximately $5,200. The Company does not currently expect to be required to fund any guarantees relating to this Property LLC. Additionally, under these agreements, the Company is subject to project completion requirements, as defined. At December 31, 2002, the Company had met and believes that it will meet the remaining completion date requirements and not be subject to any additional costs.

5. REAL ESTATE ASSETS HELD FOR SALE / DISCONTINUED OPERATIONS

The Company classifies real estate assets as held for sale after the approval of its internal investment committee and after the Company has commenced an active program to sell the assets. At December 31 2002, the Company has two apartment communities and certain tracts of land classified as held for sale. These real estate assets are classified separately in the accompanying consolidated balance sheet at $73,061, which represented the lower of cost or fair value, less costs to sell. The Company expects the sale of these assets to occur in the next twelve months.

Under SFAS No. 144, the operating results of assets designated as held for sale subsequent to January 1, 2002 are included in discontinued operations for all periods presented. Additionally, all gains and losses on the sale of these assets are included in discontinued operations. In the year ended December 31, 2002, the Company designated and classified eight apartment communities, one commercial property and six tracts of land as held for sale. Income from discontinued operations includes the results of operations through the earlier of the community sale date (if the community was sold between January 1, 2002 and December 31, 2002) or December 31, 2002 of eight apartment communities containing 3,134 units and one commercial property designated as held for sale in 2002. The revenues and expenses of these communities for the years ended December 31, 2002, 2001 and 2000 were as follows:

			2002		2001		2000
Revenues
	Rental		$	18,706	$	31,836	$	30,413
	Other			719		1,279		1,179
		Total revenues		19,425		33,115		31,592
Expenses
	Property operating and maintenance (exclusive of item shown separately below)			7,919		11,918		10,507
	Depreciation			2,246		6,431		5,381
	Interest			3,375		5,970		4,971
		Total expenses		13,540		24,319		20,859
Income from discontinued operations (before minority interest)			$	5,885	$	8,796	$	10,733

The Company recognized net gains of $20,268 ($17,818 net of minority interest) on the sale of real estate assets designated for sale in 2002, offset by reserves of $3,698 ($3,251 net of minority interest) to write down to fair market value certain land parcels designated as held for sale in 2002. These sales generated net proceeds of approximately $140,823.

Under prior accounting pronouncements, operating results and net gains or losses on the sale of assets classified as held for sale prior to December 31, 2001 are included in continuing operations. As a result of this presentation, income from continuing operations and gains on property sales are not comparable between periods. The discussion below relates to the gains on sale of assets reported in continuing operations in the consolidated statements of operations for the years ended December 31, 2002, 2001 and 2000.

Post Properties, Inc.

62

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

For the year ended December 31, 2002, the Company sold two apartment communities containing 540 units and one commercial property for net proceeds of $41,393. The communities were located in Tampa, Florida and Clearwater, Florida and the commercial property was located in Grand Prairie, Texas. These sales resulted in net gains of approximately $13,275. These gains excluded losses of $4,861 related to these assets that were written down to their estimated fair value at December 31, 2001. For the years ended December 31, 2002, 2001 and 2000, the consolidated statement of operations included net income from these properties of $369, $3,227 and $3,132, respectively. For the years ended December 31, 2001 and 2000, net income reflected above includes depreciation expense of $844 and $886, respectively. No depreciation expense was recorded in 2002.

In 2001, the Company sold six apartment communities containing 2,799 units for net proceeds of approximately $210,443. The communities sold were located in Atlanta, Georgia, Dallas, Texas and Nashville, Tennessee. Additionally, the Company sold land parcels in Dallas, Texas, Denver, Colorado and Charlotte, North Carolina and a commercial property in Dallas, Texas for aggregate net proceeds of $9,679. These sales resulted in net gains of approximately $16,365. For the year ended December 31, 2001, the aggregate net gain on the sale of assets of $23,942 included the impact of estimated net losses totaling $11,490 on the write down to fair value of assets designated as held for sale at December 31, 2001 and excluded realized losses totaling $19,067 related to assets written down to their estimate fair value at December 31, 2000.

In 2000, the Company sold eight apartment communities containing 1,984 units for net proceeds of approximately $157,265, resulting in net gains of approximately $24,266. The communities sold were located in Atlanta, Georgia, Jackson, Mississippi and Nashville, Tennessee. For the year ended December 31, 2000, the aggregate net gain on the sale of assets of $3,208 included the estimated net losses totaling $21,058 on the write down to fair value of assets designated as held for sale at December 31, 2000.

6. SHAREHOLDERS’ EQUITY / MINORITY INTEREST

Preferred Stock

At December 31, 2002 and 2001, the Company had issued three series of preferred stock with the following characteristics:

	Liquidation		Optional		Redemption		Stated
	Preference		Redemption		Price		Dividend
Description	(per share)		Date (1)		(per share) (1)		Rate
Series A	$	50.00		10/01/26	$	50.00		8.5	%
Series B	$	25.00		10/28/07	$	25.00		7.625	%
Series C	$	25.00		02/09/03	$	25.00		7.625	%

(1)  The preferred stock is redeemable, at the Company’s option, for cash.

Post Properties, Inc.

63

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

Computation of Earnings Per Common Share

For the years ended December 31, 2002, 2001 and 2000, basic and diluted earnings per common share for income from continuing operations available to common shareholders, before cumulative effect of accounting change and extraordinary items, has been computed as follows:

	Year ended December 31, 2002
	Income			Shares		Per-Share
	(Numerator)			(Denominator)		Amount
Income from continuing operations	$	41,126
Less: Preferred stock dividends		(11,449	)
Basic EPS
Income from continuing operations available to common shareholders before extraordinary item		29,677			36,939,144	$	0.80
Effect of dilutive securities
Stock options		—			14,818
Diluted EPS
Income from continuing operations available to common shareholders before extraordinary item + assumed conversions	$	29,677			36,953,962	$	0.80

	Year ended December 31, 2001
	Income			Shares		Per-Share
	(Numerator)			(Denominator)		Amount
Income from continuing operations	$	79,871
Less: Preferred stock dividends		(11,768	)
Basic EPS
Income from continuing operations available to common shareholders before cumulative effect of accounting change and extraordinary item		68,103			38,052,673	$	1.80
Effect of dilutive securities
Stock options		—			215,266
Diluted EPS
Income from continuing operations available to common shareholders before cumulative effect of accounting change and extraordinary item + assumed conversions	$	68,103			38,267,939	$	1.78

	Year ended December 31, 2000
	Income			Shares		Per-Share
	(Numerator)			(Denominator)		Amount
Income from continuing operations	$	91,037
Less: Preferred stock dividends		(11,875	)
Basic EPS
Income from continuing operations available to common shareholders		79,162			39,317,725	$	2.01
Effect of dilutive securities
Stock options		—			534,789
Diluted EPS
Income from continuing operations available to common shareholders + assumed conversions	$	79,162			39,852,514	$	1.99

Post Properties, Inc.

64

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

Preferred Units

The Operating Partnership has outstanding 2,800,000, 8% Series D cumulative redeemable preferred units (the “Series D Preferred Units”). The Series D Preferred Units have a liquidation preference of $25.00 per unit and are redeemable by the Operating Partnership on or after September 3, 2004, at a redemption price of $25.00 per unit. The Series D Preferred Units are exchangeable into authorized, but unissued Series D preferred stock of the Company, with identical terms and preferences, on or after September 2, 2009, at the option of the holders. Under certain circumstances, as defined in the agreement, the Series D Preferred Units may be exchanged prior September 2, 2009, at the option of the holders. These Series D Preferred Units are reflected in the accompanying consolidated balance sheets as preferred minority interests at their liquidation preference of $70,000.

7. PROJECT ABANDONMENT, EMPLOYEE SEVERANCE AND IMPAIRMENT CHARGES

The Company recorded project impairment and abandonment, employee severance and asset impairment charges in the years ended December 31, 2001 and 2000. The charges were as follows:

	2001		2000
Project impairment and abandonment	$	8,122	$	4,389
Employee severance		3,560		3,066
Asset impairment		5,768		1,910
	$	17,450	$	9,365

In the fourth quarter of 2001, the Company recorded charges totaling $17,450. These charges, precipitated by the sharp decline in economic and market conditions, reflect management’s decision to focus its business and new development strategy on fewer markets, to focus on its core business of owning, developing and managing multifamily real estate assets and to do so with a smaller workforce and lower overhead expenses. The project impairment and abandonment charge of $8,122 represents reserves on certain predevelopment and transaction pursuit costs in markets the Company will no longer pursue for development opportunities and for certain projects that will no longer be pursued due to economic and market conditions. The employee severance charge of $3,560 is primarily for severance costs related to approximately a 100 person senior management and staff workforce reduction plan initiated and completed in the fourth quarter of 2001. The asset impairment and disposition charge includes a loss of $2,831 related to the disposition of the Company’s corporate aircraft, a loss of $452 on the sale of the Company’s third party landscape business discussed more fully below, impairment charges of $1,000 related to the Company’s exit from the for-sale housing business in all markets and the write-down to estimated market value of certain internet and technology investments of $1,485. At December 31, 2002, approximately $688 of these charges, primarily employee severance costs, remained as an accrued liability on the consolidated balance sheet. These amounts are expected to be paid in 2003.

In the fourth quarter of 2001, the Company sold substantially all of the net assets of Post Landscape Group, Inc. (“PLG”) a subsidiary entity that provided landscape maintenance, design and installation services to third parties. As the business was sold to the former management team and initially financed 100% by the Company, the transaction was not reflected as a sale at December 31, 2001. As the transaction resulted in a net loss, the net loss was recognized in the fourth quarter of 2001 and included in the asset impairment charge discussed above. In the first quarter of 2002, the Company received payments representing approximately 26% of the outstanding note balance. As these payments constituted adequate initial principal payments under the notes, the sale was recognized in the first quarter of 2002. The impact of the sale recognition was to record the note receivable (outstanding balance of $2,750 at December 31, 2002) and to remove the net assets and liabilities of the former PLG from the Company’s financial statements. No further gain or loss was recognized in 2002.

The Company also sold substantially all of the net assets of RAM Partners, Inc. (“RAM”), a separate subsidiary entity that managed apartment communities for third parties, in the fourth quarter 2001. This business was sold to the former management team of RAM and the sale was 100% financed by the Company. Through the second quarter of 2002, the Company had received payments under the notes representing approximately 10% of the original outstanding note balance. As these payments constituted adequate initial principal payments under the notes, the sale was recognized in the second quarter of 2002. The impact of the sale recognition was to record the note receivable (outstanding balance of $1,183 at December 31, 2002), record a net gain of $510 and to remove the net assets and liabilities of the former RAM from the Company’s financial statements.

Post Properties, Inc.

65

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

During the first quarter of 2002, the Company transferred certain construction contracts of Post Construction Services Inc., its third party construction business, to Oxford Properties, LLC in exchange for Oxford Properties’ assumption of substantially all of Post Construction Service’s liabilities related to the transferred assets. In approving the transaction, the Company’s board of directors ascribed nominal value to the assets being transferred. The assets consisted principally of third party construction contracts for the construction of four garden style apartment, condominium and townhouse communities as well as related subcontracts, indemnities and guarantees. In connection with the transfer of Post Construction Services’ construction contracts, Oxford Properties had the right to receive a deferred fee upon completion of one of the construction projects in the amount of $500. Oxford Properties had also agreed to employ 28 former Company and Post Construction Services employees. As a result, the Company was not responsible for costs that would have otherwise resulted from winding up the third party construction business. The Company recorded a charge of $500 in the fourth quarter of 2001 relating to its exit from the third party construction business. Oxford Properties, LLC is an entity owned by former officers of the Company and by the son of the Company’s former chairman and chief executive officer. The Company’s former chairman and chief executive officer does not own any of the outstanding equity interests in Oxford Properties and does not have any management role in Oxford Properties, LLC.

In the fourth quarter of 2000, the Company recorded charges of $9,365. These charges reflect management’s decision to restrict its development activities to fewer markets, refine its development investment and for-sale housing strategies and make changes in its executive management team. Project abandonment charges totaling $4,389 related to the write off of predevelopment and pursuit costs in markets in which the Company will no longer pursue development opportunities and on certain proposed development deals not meeting management’s revised development strategy. Employee severance charges related to the termination costs of four executive positions and five staff personnel in the Company’s Dallas, Texas regional office. The asset impairment charge of $1,910 includes a charge of $1,503 related to the write off of the Company’s investment in a high speed internet provider that filed for bankruptcy protection and a charge of $407 related to the exit from the for-sale housing business in certain markets. As of December 31, 2001, all of the 2000 charges had been paid.

8. INCOME TAXES

The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). To qualify as a REIT, the Company must distribute annually at least 90% of its adjusted taxable income, as defined in the Code, to its shareholders and satisfy certain other organizational and operating requirements. It is management’s current intention to adhere to these requirements and maintain the Company’s REIT status. As a REIT, the Company generally will not be subject to federal income tax at the corporate level on the taxable income it distributes to its shareholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. The Company may be subject to certain state and local taxes on its income and property, and to federal income taxes and excise taxes on its undistributed taxable income.

The Company utilizes taxable REIT subsidiaries to perform such non-REIT activities as asset management, leasing and landscaping services for third parties. These taxable REIT subsidiaries are subject to federal, state and local income taxes. For the three years in the period ended December 31, 2002, the impact of these taxable REIT subsidiaries’ income taxes and their related tax attributes were not material to the accompanying consolidated financial statements.

Post Properties, Inc.

66

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

Reconciliation of net income to taxable income

As discussed in Note 1, the Company conducts substantially all of its operations through its majority-owned subsidiary, the Operating Partnership. For income tax reporting purposes, the Company receives an allocable share of the Operating Partnership’s ordinary income and capital gains based on its weighted average ownership, adjusted for certain specially allocated items. All adjustments to net income in the table below are net of amounts attributable to minority interests and taxable REIT subsidiaries. A reconciliation of net income to taxable income for the years ended December 31, 2002, 2001 and 2000 is detailed below.

		2002			2001			2000
		(Estimate)			(Actual)			(Actual)
Net income		$	60,746		$	86,927		$	100,520
Add net loss (income) of taxable REIT subsidiaries			(759	)		9,491			1,279
Adjusted net income			59,987			96,418			101,799
	Book/tax depreciation difference		(8,372	)		(20,931	)		(19,741	)
	Book/tax difference on gains from real estate sales		14,545			35,763			38,015
	Other book/tax differences, net		(3,524	)		(8,057	)		(8,497	)
Taxable income before allocation of taxable capital gains			62,636			103,193			111,576
Income taxable as capital gains			(34,819	)		(50,364	)		(38,060	)
Taxable ordinary income		$	27,817		$	52,829		$	73,516

Income tax characterization of dividends

For income tax purposes, dividends to common shareholders are characterized as ordinary income, capital gains or as a return of a shareholder’s invested capital. A summary of the income tax characterization of the Company’s dividends paid per common share were as follows for the years ended December 31, 2002, 2001 and 2000:

	2002				2001				2000
	Amount		%		Amount		%		Amount		%
Ordinary income	$	0.93		29.9%	$	1.58		51.1%	$	2.10		70.3%
Capital gains		0.41		13.1%		0.55		17.8%		0.59		20.0%
Unrecaptured Section 1250 gains		0.39		12.6%		0.64		20.5%		0.29		9.6%
Return of capital		1.39		44.4%		0.33		10.6%		0.00		0.1%
	$	3.12		100.0%	$	3.10		100.0%	$	2.98		100.0%

The income tax characterization of dividends to common shareholders is based on the calculation of Taxable Earnings and Profits, as defined in the Code. Taxable Earnings and Profits differ from regular taxable income due primarily to differences in the estimated useful lives and methods used to compute depreciation and in the recognition of gains and losses on the sale of real estate assets.

As of December 31, 2002, the net basis for federal income tax purposes taking into account the special allocation of gain to the partners contributing property to the Operating Partnership and including minority interest in the Operating Partnership was higher than the net assets as reported in the Company’s consolidated financial statements by $2,204.

Post Properties, Inc.

67

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

9. STOCK-BASED COMPENSATION PLANS

Stock Compensation Plans

At December 31, 2002, the Company had two stock-based compensation plans, the Employee Stock Plan (the “Stock Plan”) and the Employee Stock Purchase Plan (the “ESPP”) as described below. As discussed in note 1, the Company accounts for stock based compensation under APB Opinion 25. Accordingly, no compensation cost is required to be recognized for stock options granted at the current stock price under the Stock Plan and for purchases of stock under the ESPP. For purposes of the pro forma presentation of net income and earnings per share under SFAS No. 123, as summarized in note 1, the fair value of each option grant is estimated as of the date of grant using the Black-Scholes option-pricing model. The weighted-average of all assumptions used in the calculation for various grants under all of the Company’s plans during 2002, 2001 and 2000 were as follows:

	2002		2001		2000
Dividend yield		7.2%		8.4%		8.0%
Expected volatility		22.7%		15.1%		24.8%
Risk-free interest rate		2.7% to 5.3%		3.7% to 5.3%		6.7% to 6.9%
Expected option life		5 to 7 years		5 to 7 years		5 to 7 years

Employee Stock Plan

Under the Stock Plan, the Company may grant to its employees and directors options to purchase up to 6,000,000 shares of common stock. Of this amount, 550,000 shares are available for grants of restricted stock. Options granted to any key employee or officer cannot exceed 100,000 shares a year (500,000 shares if such key employee or officer is a member of the Company’s Executive Committee). The exercise price of each option may not be less than the market price on the date of grant and all options have a maximum term of ten years from the grant date.

A summary of the status of stock option activity under the Stock Plan for the years ended December 31, 2002, 2001 and 2000, is presented below.

	2002					2001					2000
				Weighted					Weighted
				Average					Average					Weighted Average
	Share			Exercise Price		Shares			Exercise Price		Share			Exercise Price
Outstanding at beginning of year		4,228,218		$	36		4,271,608		$	35		4,054,876		$	34
Granted		18,323			24		415,529			37		740,538			38
Exercised		(15,000	)		31		(262,332	)		30		(334,194	)		32
Forfeited		(142,048	)		38		(196,587	)		38		(189,612	)		38
Outstanding at end of year		4,089,493			35		4,228,218			36		4,271,608			35
Options exercisable at year-end		3,464,759					2,962,245					2,413,595
Weighted-average fair value of options granted during the year	$	2.13				$	1.44				$	4.76

At December 31, 2002, the range of exercise prices for options outstanding was $23.90 — $44.13 and the weighted-average remaining contractual life was 5 years.

In 2002 and 2001, the Company granted 15,353 and 17,566 shares of restricted stock, respectively, to company officers. The restricted shares granted in 2002 vest ratably over a three year period. The restricted shares granted in 2001 vest ratably over a five year period. For both years, the total value of the restricted share grants was initially reflected in shareholders’ equity as additional paid-in capital and as deferred compensation, a contra shareholders’ equity account. Such deferred compensation is amortized ratably into compensation expense over the vesting period. Total compensation expense relating to the restricted stock was $265 and $171 in 2002 and 2001, respectively.

Post Properties, Inc.

68

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

10. EMPLOYEE BENEFIT PLANS

The employees of the Company are participants in a defined contribution plan pursuant to Section 401 of the Internal Revenue Code. Beginning in 1996, Company contributions, if any, to this plan are based on the performance of the Company and are allocated to each participant based on the relative contribution of the participant to the total contributions of all participants. For purposes of allocating the Company contribution, the maximum employee contribution included in the calculation is 3% of salary. Company contributions of $452, $638 and $514 were made to this plan in 2002, 2001 and 2000, respectively.

The Company maintains an Employee Stock Purchase Plan (“ESPP”) to encourage stock ownership by eligible directors and employees. To participate in the ESPP, (i) directors must not be employed by the Company or the Operating Partnership and must have been a member of the Board of Directors for at least one month and (ii) an employee must have been employed full or part-time by the Company or the Operating Partnership for at least one month. The purchase price of shares of Common Stock under the ESPP is equal to 85% of the lesser of the closing price per share of Common Stock on the first or last day of the trading period, as defined.

11. COMMITMENTS AND CONTINGENCIES

Land, office and equipment leases

The Company is party to two ground leases with terms expiring in years 2040 and 2043 relating to a single operating community and six ground leases expiring in 2012, 2038, 2060, 2066, 2069 and 2074 for six separate operating communities and to office, equipment and other operating leases with terms expiring in years 2003 through 2006. Future minimum lease payments for non-cancelable land, office, equipment and other leases at December 31, 2002, are as follows:

2003	$	1,363
2004		1,286
2005		1,288
2006		1,306
2007		1,328
2008 and thereafter		156,470

The Company incurred $5,223, $5,998 and $5,935 of rent expense for the years ended December 31, 2002, 2001 and 2000, respectively.

Contingencies

The Company is party to various legal actions which are incidental to its business. Management believes that these actions will not have a material adverse affect on its financial condition or results or operations.

12. RELATED PARTY TRANSACTIONS

In 2002 and 2001, the Company invested in four Property LLCs accounted for under the equity method of accounting (see note 4). In 2002 and 2001, the Company recorded, before elimination of the Company’s equity interests, development fees, general construction contract billings, management fees and expense reimbursements (primarily personnel costs) of approximately $11,916 and $15,202, respectively, from these related companies. Additionally in 2002 and 2001, the Company earned interest under the construction loans to the Project LLCs totaling $4,482 and $1,024, respectively.

The Company provides landscaping services for executive officers, employees, directors and other related parties. For the years ended December 31, 2002, 2001 and 2000, the Company received landscaping revenue of $ 775, $705 and $667, respectively, for such services. Such revenue includes reimbursement of direct and indirect expenses. Additionally, the Company provides accounting and administrative services to entities controlled by certain directors of the Company. Fees under this arrangement aggregated $25 for each of the years ended December 31, 2002, 2001 and 2000. Also, the Company was contracted to assist in the development of apartment complexes constructed by a

Post Properties, Inc.

69

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

former executive and current shareholder. Fees under this arrangement were $0, $7 and $29 for the years ended December 31, 2002, 2001 and 2000, respectively.

At December 31, 2002 and 2001, the Company had outstanding loan balances to certain current and former company executives totaling $7,600 and $9,250, respectively. These loans mature ten years from the issue date and bear interest at a rate of 6.32% per annum. Proceeds from these loans were used by these executives to acquire the Company’s common shares on the open market. Additionally, at December 31, 2002 and 2001, the Company had outstanding additional loans to certain company executives totaling $1,140 and $1,300, respectively. The loans bear interest at 6.32% per annum. If the executives continue to be employed by the Company, the loans will be forgiven annually over five to ten year periods, as defined in the agreements. The annual loan forgiveness of $160 is recorded as compensation expense.

13. DERIVATIVE FINANCIAL INSTRUMENTS

At December 31, 2002, the Company had outstanding interest rate swap agreements with a notional value of $129,000 with maturity dates ranging from 2005 to 2009. For the years ended December 31, 2002 and 2001, the Company recorded unrealized net losses of $8,958, net of minority interest, and $4,565, net of minority interest, respectively, on these cash flow hedges as a decrease in accumulated other comprehensive income, a shareholders’ equity account, in the accompanying consolidated balance sheet. In addition, the Company recorded the change in fair value of the ineffective component of its outstanding interest rate cap agreements in the statement of operations for the years ended December 31, 2002 and 2001. This charge against earnings during these years and the fair value of the interest rate cap agreements as of December 31, 2002 were not significant to the Company’s financial position or results of operations. Within the next twelve months, the Company expects to reclassify out of accumulated other comprehensive income approximately $5,879.

Upon the adoption of SFAS No. 133 in 2001, the Company recorded a net transition loss of $613, net of minority interest, relating to the write down of the book value of its interest rate cap agreements to their fair value. This loss was reflected as a cumulative effect of accounting change in the consolidated statement of operations for the year ended December 31, 2001.

Subsequent to December 31, 2002, the Company entered into two interest rate cap arrangements with two financial institutions. The new interest rate cap arrangements replaced three expiring interest rate cap arrangements and were structured as cash flow hedges to provide a fixed ceiling at 5% for the Company’s variable rate, tax-exempt borrowings. The Company is required to maintain this interest rate exposure protection under the terms of the financing arrangements. The $2,720 cost of the arrangement will be amortized as additional expense over their five year term in accordance with SFAS No. 133.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosures of estimated fair value were determined by management using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash equivalents, rents and accounts receivables, accounts payable, accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values because of the short-term nature of these instruments. The fair value of fixed rate debt was approximately $928,313 (carrying value of $877,706) and the fair value of floating rate debt approximated its carrying value due to the adjustable nature of the arrangements at December 31, 2002.

In order to manage the impact of interest rate changes on earnings and cash flow, the Company entered into and has outstanding interest rate swap and interest rate cap arrangements. As more fully described in note 1, these interest rate cap and interest rate swap agreements are carried on the consolidated balance sheet at fair market value in accordance with SFAS No. 133. At December 31, 2002, the carrying amounts related to these arrangements represented net liabilities totaling approximately $16,849 ($14,822, net of minority interest).

Post Properties, Inc.

70

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2002. Although management is not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

15. SEGMENT INFORMATION

Segment Description

In accordance with SFAS No. 131, “Disclosure About the Segments of an Enterprise and Related Information,” the Company presents segment information based on the way that management organizes the segments within the enterprise for making operating decisions and assessing performance. The segment information is prepared on substantially the same basis as the internally reported information used by the Company’s chief operating decision makers to manage the business.

The Company’s chief operating decision makers focus on the Company’s primary sources of income from property rental operations. Property rental operations are broken down into four segments based on the various stages in the property ownership lifecycle. These segments are described below. All other ancillary service and support operations, including the third party service businesses (see note 7), are aggregated in the accompanying segment information. The segment information presented below reflects the segment categories based on the lifecycle status of each community as of December 31, 2002. The segment information for the years ended December 31, 2001 and 2000 have been adjusted due to the restatement impact of reclassifying the operating results of the assets designated as held for sale in 2002 to discontinued operations under SFAS No. 144 (see note 5).

•  Fully stabilized communities — those apartment communities which have been stabilized (the earlier of the point at which a property reaches 95% occupancy or one year after completion of construction) for both the current and prior year.

•  Communities stabilized during prior year — communities which reached stabilized occupancy in the prior year.

•  Development and lease up communities — those communities that are in lease-up but were not stabilized by the beginning of the current year, including communities that stabilized during the current year.

•  Sold communities — communities which were sold in the current or prior year and not reflected as discontinued operations (see notes 1 and 5).

Segment Performance Measure

Management uses contribution to funds from operations (“FFO”) as the performance measure for its segments. FFO is defined by the National Association of Real Estate Investment Trusts as net income available to common shareholders determined in accordance with generally accepted accounting principles (“GAAP”), excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.

Post Properties, Inc.

71

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

Segment Information

The following table reflects each segment’s contribution to consolidated revenues and FFO together with a reconciliation of segment contribution to FFO, total FFO and income from continuing operations. Additionally, substantially all of the Company’s assets relate to the Company’s property rental operations. Asset cost, depreciation and amortization by segment are not presented because such information at the segment level is not reported internally.

	2002			2001			2000
Revenues
Fully stabilized communities	$	256,477		$	275,297		$	266,465
Communities stabilized during prior year		17,535			14,946			3,538
Development and lease-up communities		39,571			25,741			14,256
Sold communities		745			19,659			52,883
Other		15,669			29,675			31,098
Consolidated revenues	$	329,997		$	365,318		$	368,240
Contribution to Funds from Operations
Fully stabilized communities	$	167,225		$	186,087		$	185,106
Communities stabilized during prior year		11,628			8,943			932
Development and lease-up communities		23,192			15,312			8,569
Sold communities		369			12,330			35,956
Other		—			1,065			1,354
Contribution to FFO		202,414			223,737			231,917
FFO — discontinued operations		5,885			8,796			10,733
Other operating income, net of expense		(10,651	)		(20,158	)		(7,857	)
Depreciation on non-real estate assets		(1,985	)		(2,378	)		(1,962	)
Minority interest in consolidated property partnerships		2,055			2,098			(511	)
Interest expense		(58,436	)		(51,960	)		(45,332	)
Amortization of deferred loan costs		(2,327	)		(1,978	)		(1,636	)
General and administrative expense		(14,431	)		(13,256	)		(10,066	)
Other expenses		(694	)		—			—
Dividends to preferred shareholders		(11,449	)		(11,768	)		(11,875	)
Total FFO		110,381			133,133			163,411
Depreciation on wholly-owned real estate assets		(82,918	)		(70,956	)		(66,283	)
Depreciation on real estate assets held in unconsolidated entities		(1,103	)		(67	)		—
Gains on property sales — continuing operations		13,275			23,942			3,208
Minority interest of common unitholders in Operating Partnership		(4,073	)		(9,153	)		(10,441	)
Income from discontinued operations		(5,885	)		(8,796	)		(10,733	)
Dividends to preferred shareholders		11,449			11,768			11,875
Income from continuing operations	$	41,126		$	79,871		$	91,037

16. SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash investing and financing activities for the years ended December 31, 2002, 2001 and 2000 were as follows:

(a) In 2002, 2001 and 2000, holders of 289,463, 62,523 and 12,014 Common Units in the Operating Partnership, respectively, exercised their option to convert their Common Units to shares of the Company on a one-for-one basis. The net effect of the capital allocated to the unitholders of the Operating Partnership on the dates of the offerings, the subsequent conversion of Common Units of the Operating Partnership to shares of the Company, and the adjustments to minority interest for the dilutive impact of the Dividend Reinvestment and Employee Stock Purchase Plans, decreased minority interest and increased shareholders’ equity in the amounts of $5,656, $5,194 and $320 for the years ended December 31, 2002, 2001 and 2000, respectively.

Post Properties, Inc.

72

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

(b) The Operating Partnership committed to distribute $32,785, $32,741 and $33,466 for the quarters ended December 31, 2002, 2001 and 2000, respectively. As a result, the Company declared dividends of $29,018, $28,748 and $29,528 for the quarters ended December 31, 2002, 2001 and 2000, respectively. The remaining distributions from the Operating Partnership in the amount of $3,767, $3,993 and $3,938 for the quarters ended December 31, 2002, 2001 and 2000, respectively, are distributed to minority interest unitholders in the Operating Partnership.

17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The operating results of eight apartment communities and one commercial property classified as held for sale under SFAS No. 144 in 2002 were included in discontinued operations in the accompanying statements of operations for all periods presented, as further discussed in note 5. To conform with this presentation, the quarterly financial information presented below reflects the reclassification of the operating results of these assets to discontinued operations, which differs from the presentation of discontinued operations in the Company’s previously issued financial statements included in its quarterly reports on Form 10-Q. Quarterly financial information for the years ended December 31, 2002 and 2001, as revised to reflect the changes discussed above, was as follows:

	Year Ended December 31, 2002
	First			Second			Third			Fourth
Revenues	$	81,981		$	80,727		$	83,952		$	83,337
Income from continuing operations		21,442			7,983			7,131			4,570
Income (loss) from discontinued operations		(4,422	)		17,200			(978	)		7,940
Income before cumulative effect of accounting change and extraordinary item		17,020			25,183			6,153			12,510
Cumulative effect of accounting change		—			—			—			—
Extraordinary item, net of minority interest		—			(120	)		—			—
Net income		17,020			25,063			6,153			12,510
Dividends to preferred shareholders		(2,862	)		(2,863	)		(2,862	)		(2,862	)
Net income available to common shareholders	$	14,158		$	22,200		$	3,291		$	9,648
Earnings per common share:
Income before accounting change and extraordinary item — basic	$	0.38		$	0.60		$	0.09		$	0.26
Income before accounting change and extraordinary item — diluted		0.38			0.60			0.09			0.26
Net income available to common shareholders — basic		0.38			0.60			0.09			0.26
Net income available to common shareholders — diluted		0.38			0.60			0.09			0.26

Post Properties, Inc.

73

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share data)

	Year Ended December 31, 2001(1)
	First			Second			Third			Fourth(2)
Revenues	$	94,341		$	93,776		$	90,729		$	86,472
Income (loss) from continuing operations		21,307			33,995			25,615			(1,046	)
Income from discontinued operations		2,141			2,196			1,774			1,635
Income before cumulative effect of accounting change and extraordinary item		23,448			36,191			27,389			589
Cumulative effect of accounting change		(613	)		—			—			—
Extraordinary item, net of minority interest		—			(77	)		—			—
Net income		22,835			36,114			27,389			589
Dividends to preferred shareholders		(2,969	)		(2,969	)		(2,969	)		(2,861	)
Net income (loss) available to common shareholders	$	19,866		$	33,145		$	24,420		$	(2,272	)
Earnings per common share:
Income (loss) before accounting change and extraordinary item — basic	$	0.53		$	0.86		$	0.64		$	(0.06	)
Income (loss) before accounting change and extraordinary item — diluted		0.53			0.85			0.64			(0.06	)
Net income (loss) available to common shareholders — basic		0.51			0.86			0.64			(0.06	)
Net income (loss) available to common shareholders — diluted		0.51			0.85			0.64			(0.06	)

(1)	The total of the four quarterly amounts for net income and earnings per share does not equal the total for the year. These differences result from the use of a weighted average to compute minority interest in the Operating Partnership and to compute the number of shares outstanding for the purpose of calculating the Company’s earnings per share.
(2)	Reflects the impact of project abandonment, employee severance and impairment charges of $17,450.

18. SUBSEQUENT EVENT

Subsequent to December 31, 2002, the Company’s board of directors elected a new chairman. The Company’s former chairman was elected chairmen emeritus and the Company’s vice-chairman relinquished his vice-chairman status. Both the former chairman and former vice-chairman will remain on the Company’s board of directors. Their change in roles from executive to non-executive status will result in the Company recording a non-cash charge in the first quarter of 2003 relating to payments provided to these individuals pursuant to their existing contractual arrangements with the Company. The Company estimates the charge will be approximately $12,000 to $14,000, plus an additional amount of up $8,000 that may be incurred as a result of the settlement of split- dollar life insurance obligations to the individuals under their contractual arrangements. These amounts represent the present value of the estimated payments and other costs to be incurred over the term of the contractual arrangements.

Post Properties, Inc.

74

Post Apartment Homes, L.P.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of Post Apartment Homes, L.P.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of partners’ equity and of cash flows, present fairly, in all material respects, the financial position of Post Apartment Homes, L.P. and subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1, Post Apartment Homes, L.P. adopted Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by Statement of Financial Accounting Standards No. 138, on January 1, 2001.

PricewaterhouseCoopers LLP (signed)

Atlanta, Georgia

February 28, 2003

Post Properties, Inc.

75

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per unit data)

				December 31,
				2002			2001
ASSETS
	Real estate assets
		Land		$	273,058		$	277,146
		Building and improvements			1,976,809			1,794,658
		Furniture, fixtures and equipment			246,634			212,390
		Construction in progress			92,945			419,449
		Investments in and advances to unconsolidated real estate entities			182,285			89,692
		Land held for future development			24,879			23,658
					2,796,610			2,816,993
		Less: accumulated depreciation			(426,136	)		(393,014	)
		Assets held for sale			73,061			39,419
		Total real estate assets			2,443,535			2,463,398
	Cash and cash equivalents				6,390			4,803
	Restricted cash				1,369			1,315
	Deferred charges, net				15,584			18,203
	Other assets				41,273			50,632
		Total assets		$	2,508,151		$	2,538,351
LIABILITIES AND PARTNERS’ EQUITY
	Notes payable			$	1,414,555		$	1,336,520
	Accounts payable and accrued expenses				49,124			72,277
	Dividend and distribution payable				33,252			33,208
	Accrued interest payable				8,994			9,660
	Security deposits and prepaid rents				8,250			9,016
		Total liabilities			1,514,175			1,460,681
	Commitments and contingencies
	Partners’ equity
		Preferred units			215,000			215,000
		Common units
			General partner		9,143			9,877
			Limited partners		786,682			859,438
		Accumulated other comprehensive income			(16,849	)		(6,645	)
		Total partners’ equity			993,976			1,077,670
		Total liabilities and partners’ equity		$	2,508,151		$	2,538,351

The accompanying notes are an integral part of these consolidated financial statements.

Post Properties, Inc.

76

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per unit data)

			Year Ended December 31,
			2002			2001			2000
REVENUES
	Rental		$	316,484		$	336,206		$	335,482
	Other			12,225			13,253			15,249
	Interest			1,288			1,771			1,922
	Third-party services			—			14,088			15,587
		Total revenues		329,997			365,318			368,240
EXPENSES
	Property operating and maintenance (exclusive of items shown separately below)			131,369			129,201			120,842
	Depreciation			85,681			69,680			65,732
	Interest			58,436			51,960			45,332
	Amortization of deferred loan costs			2,327			1,978			1,636
	General and administrative			14,431			13,256			10,066
	Other			694			—			—
	Project abandonment, employee severance and impairment charges			—			17,450			9,365
	Minority interest in consolidated property partnerships			(2,055	)		(2,098	)		(1,695	)
	Third-party services			—			13,023			13,092
		Total expenses		290,883			294,450			264,370
Income from continuing operations before equity in losses of unconsolidated entities and gains on property sales				39,114			70,868			103,870
	Equity in losses of unconsolidated real estate entities			(1,590	)		(186	)		—
	Gains on property sales			13,275			23,942			3,208
		Income from continuing operations		50,799			94,624			107,078
Discontinued operations
	Income from discontinued operations			5,885			8,796			10,733
	Gains on property sales			16,570			—			—
		Income from discontinued operations		22,455			8,796			10,733
Income before cumulative effect of accounting change and extraordinary items				73,254			103,420			117,811
	Cumulative effect of accounting change			—			(695	)		—
	Extraordinary items			(136	)		(88	)		—
Net income				73,118			102,637			117,811
	Distributions to preferred unitholders			(17,049	)		(17,368	)		(17,475	)
Net income available to common unitholders			$	56,069		$	85,269		$	100,336
Per common unit data — basic
	Income from continuing operations (net of preferred distributions)		$	0.80		$	1.80		$	2.01
	Income from discontinued operations			0.53			0.20			0.24
	Income before cumulative effect of accounting change and extraordinary items (net of preferred distributions)			1.33			2.00			2.25
	Cumulative effect of accounting change			—			(0.02	)		—
	Extraordinary items			—			—			—
	Net income available to common unitholders		$	1.33		$	1.98		$	2.25
	Weighted average common units outstanding			42,020,759			43,211,834			44,503,290
Per common unit data — diluted
	Income from continuing operations (net of preferred distributions)		$	0.80		$	1.78		$	1.99
	Income from discontinued operations			0.53			0.20			0.23
	Income before cumulative effect of accounting change and extraordinary items (net of preferred distributions)			1.33			1.98			2.22
	Cumulative effect of accounting change			—			(0.02	)		—
	Extraordinary items			—			—			—
	Net income available to common unitholders		$	1.33		$	1.96		$	2.22
	Weighted average common units outstanding			42,035,577			43,427,100			45,038,079
	Distributions declared		$	3.12		$	3.12		$	3.04

The accompanying notes are an integral part of these consolidated financial statements.

Post Properties, Inc.

77

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

(Dollars in thousands, except per unit data)

						Common Units						Accumulated
												Other
			Preferred			General			Limited			Comprehensive
			Units			Partner			Partners			Income			Total
Partners’ Equity, December 31, 1999			$	220,000		$	10,332		$	1,021,010		$	—		$	1,251,342
	Net income			17,475			1,003			99,333			—			117,811
	Contributions from the Company related to dividend reinvestment and employee stock purchase plans			—			290			28,747			—			29,037
	Purchase of Common Units			—			—			(28,903	)		—			(28,903	)
	Distributions to preferred Unitholders			(17,475	)		—			—			—			(17,475	)
	Distributions to common Unitholders			—			(1,351	)		(133,760	)		—			(135,111	)
Partners’ Equity, December 31, 2000			$	220,000		$	10,274		$	986,427		$	—		$	1,216,701
	Comprehensive income
		Net income		17,368			853			84,416			—			102,637
		Cumulative effect of adoption of SFAS 133		—			—			—			(1,472	)		(1,472	)
		Net change in derivative value		—			—			—			(5,173	)		(5,173	)
		Total comprehensive income														95,992
	Contributions from the Company related to dividend reinvestment and employee stock purchase plans			—			88			8,678			—			8,766
	Preferred Unit repurchases			(5,000	)		(1	)		(99	)		—			(5,100	)
	Purchase of Common Units			—			—			(87,547	)		—			(87,547	)
	Distributions to preferred Unitholders			(17,368	)		—			—			—			(17,368	)
	Distributions to common Unitholders			—			(1,339	)		(132,606	)		—			(133,945	)
	Contributions from the Company related to shares issued for restricted stock, net of deferred compensation			—			2			169			—			171
Partners’ Equity, December 31, 2001			$	215,000		$	9,877		$	859,438		$	(6,645	)	$	1,077,670
	Comprehensive income
		Net income		17,049			561			55,508			—			73,118
		Net change in derivative value		—			—			—			(10,204	)		(10,204	)
		Total comprehensive income														62,914
	Contributions from the Company related to dividend reinvestment and employee stock purchase plans			—			13			1,241			—			1,254
	Distributions to preferred Unitholders			(17,049	)		—			—			—			(17,049	)
	Distributions to common Unitholders			—			(1,311	)		(129,767	)		—			(131,078	)
	Contributions from the Company related to shares issued for restricted stock, net of deferred compensation			—			3			262			—			265
Partners’ Equity, December 31, 2002			$	215,000		$	9,143		$	786,682		$	(16,849	)	$	993,976

The accompanying notes are an integral part of these consolidated financial statements.

Post Properties, Inc.

78

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousand, except per unit data)

			Year Ended December 31,
			2002			2001			2000
Cash Flows From Operating Activities
	Net income		$	73,118		$	102,637		$	117,811
	Adjustments to reconcile net income to net cash provided by operating activities:
		Gains on property sales — continuing operations		(13,275	)		(23,942	)		(3,208	)
		Gains on property sales — discontinuing operations		(16,570	)		—			—
		Equity in losses of unconsolidated real estate entities		1,590			186			—
		Cumulative effect of accounting change		—			695			—
		Extraordinary items		136			88			—
		Depreciation		87,927			76,178			71,113
		Amortization of deferred loan costs		2,327			1,978			1,636
	Changes in assets, (increase) decrease in:
		Restricted cash		(54	)		(43	)		108
		Other assets		8,098			(1,626	)		(8,904	)
		Deferred charges		(1,362	)		(929	)		(1,591	)
	Changes in liabilities, increase (decrease) in:
		Accrued interest payable		(666	)		(1,091	)		1,591
		Accounts payable and accrued expenses		(20,740	)		7,824			6,133
		Security deposits and prepaid rents		(766	)		(391	)		384
	Net cash provided by operating activities			119,763			161,564			185,073
Cash Flows From Investing Activities
	Construction and acquisition of real estate assets, net of payables			(150,792	)		(220,297	)		(362,981	)
	Net proceeds from property sales			182,216			220,122			157,265
	Capitalized interest			(13,223	)		(22,124	)		(25,426	)
	Recurring capital expenditures			(9,381	)		(10,441	)		(9,157	)
	Corporate additions and improvements			(1,100	)		(3,021	)		(3,441	)
	Non-recurring capital expenditures			(3,441	)		(2,535	)		(5,576	)
	Revenue generating capital expenditures			(2,035	)		(4,226	)		(6,670	)
	Investments in and advances to unconsolidated entities			(51,065	)		(8,691	)		—
	Net cash used in investing activities			(48,821	)		(51,213	)		(255,986	)
Cash Flows From Financing Activities
	Proceeds from notes payable			95,500			50,000			440,001
	Payments on notes payable			(47,632	)		(70,066	)		(56,774	)
	Lines of credit proceeds (repayments), net			30,167			143,277			(159,501	)
	Payment of financing costs			(561	)		(300	)		(3,128	)
	Purchase of Preferred Units			—			(5,100	)		—
	Purchase of Common Units			—			(87,547	)		(24,912	)
	Proceeds from dividend reinvestment and employee stock purchase plans			1,254			8,766			26,754
	Distributions to preferred unitholders			(17,049	)		(17,368	)		(17,475	)
	Distributions to common unitholders			(131,034	)		(134,669	)		(132,463	)
	Net cash provided by (used in) financing activities			(69,355	)		(113,007	)		72,502
Net increase (decrease) in cash and cash equivalents				1,587			(2,656	)		1,589
Cash and cash equivalents, beginning of period				4,803			7,459			5,870
Cash and cash equivalents, end of period			$	6,390		$	4,803		$	7,459

The accompanying notes are an integral part of these consolidated financial statements.

Post Properties, Inc.

79

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

________________________________________________________________________________

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

Organization

Post Apartment Homes, L.P. (the “Operating Partnership”), a Georgia limited partnership, and its subsidiaries develop, own and manage upscale multi-family apartment communities in selected markets in the United States. Post Properties, Inc. (the “Company”) through its wholly owned subsidiaries is the sole general partner, a limited partner and owns a majority interest in the Operating Partnership. The Operating Partnership, through its operating divisions and subsidiaries conducts substantially all of the on-going operations of Post Properties, Inc., a publicly traded company which operates as a self-administered and self-managed real estate investment trust.

At December 31, 2002, the Company owned 88.5% of the common limited partnership interests (“Common Units”) in the Operating Partnership and 63.6% of the preferred limited partnership interests (“Preferred Units”). The Company’s weighted average common ownership interest in the Operating Partnership was 87.9%, 88.1% and 88.3% for the years ended December 31, 2002, 2001 and 2000 respectively. Common Units held by persons (including certain Company directors) other than the Company represented a 11.5% ownership interest in the Operating Partnership. Each Common Unit may be redeemed by the holder thereof for either one share of Company common stock or cash equal to the fair market value thereof at the time of such redemptions, at the option of the Operating Partnership. The Operating Partnership presently anticipates that it will cause shares of common stock to be issued in connection with each such redemption rather than paying cash (as has been done in all redemptions to date). With each redemption of outstanding Common Units for Company common stock, the Company’s percentage ownership interest in the Operating Partnership will increase. In addition, whenever the Company issues shares of common stock, the Company will contribute any net proceeds therefrom to the Operating Partnership and the Operating Partnership will issue an equivalent number of Common Units to the Company.

At December 31, 2002, the Operating Partnership owns 30,317 apartment units in 84 apartment communities, including 1,377 apartment units currently under development and lease-up in five apartment communities and an addition to an existing community. At December 31, 2002, approximately 52.1%, 18.7% and 7.3% (on a unit basis) of the Company’s communities are located in the Atlanta, Dallas and Tampa metropolitan areas, respectively.

Under the provisions of the limited partnership agreement, as amended, Operating Partnership net profits, net losses and cash flow (after allocations to preferred ownership interests) are allocated to the partners in proportion to their common ownership interests. Cash distributions from the Operating Partnership shall be, at a minimum, sufficient to enable the Company to satisfy its annual dividend requirements to maintain its REIT status under the Code.

Basis of presentation

The accompanying consolidated financial statements include the consolidated accounts of the Operating Partnership. The Operating Partnership’s investments in non-majority owned entities in which it does not exercise unilateral control, but has the ability to exercise significant influence over the operating and financial policies, are accounted for on the equity method of accounting. Accordingly, the Operating Partnership’s share of the net earnings or losses of these entities is included in consolidated net income. All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain items in the 2001 and 2000 consolidated financial statements were reclassified for comparative purposes with the 2002 consolidated financial statements.

Cost capitalization

The Operating Partnership capitalizes those expenditures relating to the acquisition of new assets, the development and construction of new apartment communities, the enhancement of the value of existing assets and expenditures that substantially extend the life of existing assets. All other expenditures necessary to maintain a community in ordinary operating condition are expensed as incurred. Additionally, for new development communities, carpet, vinyl, and blind replacements are expensed as incurred during the first five years (which corresponds to their estimated depreciable life). Thereafter, these replacements are capitalized. The Operating Partnership expenses as incurred all interior and exterior painting of communities.

Post Properties, Inc.

80

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

For communities under development, the Operating Partnership capitalizes interest, real estate taxes, and certain internal personnel and associated costs directly related to apartment communities under development and construction. Interest is capitalized to projects under development based upon the weighted average cumulative project costs for each period multiplied by the Operating Partnership’s weighted average borrowing costs, expressed as a percentage. Weighted average borrowing costs include the costs of the Operating Partnership’s fixed rate secured and unsecured borrowings and the variable rate unsecured borrowings under its line of credit facilities. The weighted average borrowing costs, expressed as a percentage, for the years ended December 31, 2002, 2001 and 2000 were 7.55%, 7.41% and 6.80%, respectively. The weighted average borrowing costs used by the Operating Partnership for interest capitalization generally increases as the Operating Partnership’s variable rate unsecured debt decreases and decreases as the Operating Partnership’s variable rate unsecured debt increases. Internal personnel and associated costs are capitalized to projects under development based upon the effort identifiable with such projects. The Operating Partnership treats each unit in an apartment community separately for cost accumulation, capitalization and expense recognition purposes. Prior to the commencement of leasing activities, interest and other construction costs are capitalized and reflected on the balance sheet as construction in progress. The Operating Partnership ceases the capitalization of such costs as the residential units in a community become substantially complete and available for occupancy. This results in a proration of these costs between amounts that are capitalized and expensed as the residential units in a development community become available for occupancy. In addition, prior to the completion of units, the Operating Partnership expenses as incurred substantially all operating expenses (including pre-opening marketing as well as property management and leasing personnel expenses) of such communities.

Real estate assets, depreciation and impairment

Real estate assets are stated at the lower of depreciated cost or fair value, if deemed impaired. Major replacements and betterments are capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis over the useful lives of the properties (buildings and components and related land improvements — 20-40 years; furniture, fixtures and equipment — 5 — 10 years).

The Operating Partnership continually evaluates the recoverability of the carrying value of its real estate assets using the methodology prescribed in Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Factors considered by management in evaluating impairment of its existing real estate assets held for investment include significant declines in property operating profits, recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its fair value. The Operating Partnership periodically classifies real estate assets as held for sale. An asset is classified as held for sale after the approval of the Operating Partnership’s internal investment committee and after an actual program to sell the asset has commenced. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded.

Real estate assets held for sale are stated separately on the accompanying consolidated balance sheets. Effective January 1, 2002 (through the implementation of SFAS No. 144), the operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying statements of operations. The income (loss) from discontinued operations includes the revenues and expenses including depreciation and allocated interest expense, associated with the assets. Interest expense is allocated to assets held for sale based on actual interest costs for assets with secured mortgage debt. Interest expense is allocated to unencumbered assets based on the ratio of unencumbered assets to unsecured debt multiplied by the weighted average interest rate on the Operating Partnership’s unsecured debt for the period and further multiplied by the average book value of the assets sold. This classification of operating results as discontinued operations applies retroactively for all periods presented for assets designated as held for sale in 2002. Additionally, gains and losses on assets designated as held for sale in 2002 are classified as part of discontinued operations.

In years prior to 2002, real estate assets held for sale were stated separately on the consolidated balance sheet in a manner consistent with approach discussed above. However, the operating results and gains or losses on the sale of

Post Properties, Inc.

81

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

such assets were included in continuing operations. As a result of this presentation, income from continuing operations and gains on property sales are not comparable between years.

Revenue recognition

Residential properties are leased under operating leases with terms of generally one year or less. Rental income is recognized when earned, which is not materially different from revenue recognition on a straight-line basis.

Stock-based compensation

Through December 31, 2002, the Operating Partnership accounted for stock-based compensation under the intrinsic value method prescribed by Accounting Principles Board (“APB”) Opinion 25, “Accounting for Stock Issued to Employees”. Under APB Opinion 25, compensation expense was generally not recognized for stock options granted at the Company’s current stock price on the grant date. In addition to the information summarized below, the Operating Partnership provides the additional disclosures relating to the impact of Company stock options prescribed by SFAS No. 123, “Accounting for Stock-based Compensation,” as amended, in note 9 to these consolidated financial statements.

In December 2002, SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure,” was issued. SFAS No. 148 amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements in both annual and interim financial statements about the method of accounting for stock-based compensation and the effect of the method on reported results. Effective January 1, 2003, the Operating Partnership intends to voluntarily change to the fair value method of accounting under SFAS No. 123 using the prospective method prescribed in SFAS No. 148. The Operating Partnership estimates the impact of this change on its projected 2003 results of operations to be a reduction of earnings per common unit of approximately $0.01.

The following table reflects the effect on the Operating Partnership’s net income and earnings per common share had the fair value method of accounting under SFAS No. 123 been applied for each year.

		2002			2001			2000
Net income available to common unitholders
	As reported	$	56,069		$	85,269		$	100,336
	Stock based compensation determined under the fair value method		(568	)		(1,287	)		(2,182	)
	Pro forma	$	55,501		$	83,982		$	98,154
Net income per common unit — basic
	As reported	$	1.33		$	1.98		$	2.25
	Pro forma	$	1.32		$	1.94		$	2.21
Net income per common unit — diluted
	As reported	$	1.33		$	1.96		$	2.22
	Pro forma	$	1.32		$	1.93		$	2.17

Accounting for derivative financial instruments

Effective January 1, 2001, the Operating Partnership accounts for derivative financial instruments at fair value under the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended by SFAS No. 138, “Accounting for Certain Derivative and Hedging Activities”.

The Operating Partnership uses derivative financial instruments, interest rate swap and interest rate cap arrangements, to manage or hedge its exposure to interest rate changes. The Operating Partnership designates each derivative instrument as a hedge of specific interest expense cash flow exposure. Under SFAS 133, as amended, derivative instruments qualifying as hedges of specific cash flows are generally recorded on the balance sheet at fair value with an offsetting increase or decrease to accumulated other comprehensive income, a shareholder’s equity account, until the hedged transactions are recognized in earnings. Any ineffective portion of cash flow hedges are recognized immediately in earnings.

Post Properties, Inc.

82

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

Cash and cash equivalents

For purposes of the statement of cash flows, all investments purchased with an original maturity of three months or less are considered to be cash equivalents.

Restricted cash

Restricted cash generally is comprised of resident security deposits for communities located in Florida and Tennessee and required maintenance reserves for communities located in DeKalb County, Georgia.

Deferred financing costs

Deferred financing costs are amortized using the interest method over the terms of the related debt.

Per unit data

Basic earnings per Common Unit is computed by dividing net income by the weighted average number of Common Units outstanding during the period. Diluted earnings per Common Unit is computed by dividing net income by the weighted average number of Common Units outstanding during the period, including the dilutive effect of the potential issuance of additional Common Units if outstanding stock options were exercised and converted into common stock of the Company.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

New accounting pronouncements

In 2002 and 2003, the Financial Accounting Standards Board issued several new accounting pronouncements and the pronouncements with a potential impact on the Operating Partnership are discussed herein.

SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections” was issued in May 2002. SFAS No. 145 rescinds SFAS No. 4, “Reporting Gains and Losses from Extinguishments of Debt,” which provided that gains and losses from early debt retirements be treated as extraordinary items. Under SFAS No. 145, gains and losses from early debt retirements will only be treated as extraordinary items if they meet the criteria for extraordinary items under APB No. 30. Since the definition of an extraordinary item is more restrictive under APB No. 30, SFAS No. 145 will generally cause the Operating Partnership to treat gains or losses from early debt retirements as part of income before extraordinary items. This part of SFAS No. 145 is effective for fiscal years beginning after May 15, 2002 and requires the reclassification of prior period extraordinary items not meeting the APB No. 30 criteria. The Operating Partnership expects to implement this requirement of SFAS No. 145 on January 1, 2003. Upon implementation, the Operating Partnership will reclassify $136 in 2002 and $88 in 2001 from extraordinary items to expenses used to determine income from continuing operations. The Operating Partnership believes this change is not significant to the Operating Partnership’s results of operations or its financial position. The remaining provisions of SFAS No. 145 are generally not applicable to the Operating Partnership.

SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” was issued in July 2002. This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002. The Operating Partnership believes the provisions of this Statement will not have a significant effect on the Operating Partnership’s results of operations or its financial position.

Post Properties, Inc.

83

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

FASB Interpretation No. 45 (“FIN No. 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Guarantees of Indebtedness of Others” was issued in November 2002. FIN No. 45 clarifies disclosure requirements to be made by a guarantor in its interim and annual financial statements regarding its obligations under certain guarantees that it has issued. Additionally, it clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The disclosure requirements of FIN No. 45 are effective for interim and annual financial statements issued after December 15, 2002. The initial recognition and measurement provisions of FIN No. 45 are applicable for guarantees issued or modified after December 31, 2002. The Operating Partnership has implemented the disclosure requirements of FIN No. 45 effective with these December 31, 2002 financial statements and the Operating Partnership will implement the recognition and measurement provisions effective January 1, 2003. The Operating Partnership does not expect the recognition and measurement provisions of FIN No. 45 to have a significant impact on the Operating Partnership’s financial position or results of operations.

FASB Interpretation No. 46 (“FIN No. 46”), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” was issued in January 2003. FIN No. 46 requires consolidation of all legal entities in which the enterprise holds contractual, ownership or other monetary interests that change with changes in the entity’s net asset value (such entities being designated as variable interest entities) where the enterprise is deemed the primary beneficiary. The consolidation provisions of FIN No. 46 are applicable immediately to all variable interest entities created after January 31, 2003. For variable interest entities created prior to February 1, 2003 where the Operating Partnership is deemed to be the primary beneficiary, consolidation of such entities will be required for the interim period ending September 30, 2003. Information required to be disclosed in 2003 pursuant to FIN No. 46 includes the nature, purpose, size and activities of all variable interest entities where it is reasonably possible that such entities will be required to be consolidated by the Operating Partnership and the Operating Partnership’s maximum exposure to loss from these entities. The Operating Partnership currently does not have any interests in variable interest entities and believes that FIN No. 46 will not have a significant effect on its results of operations or financial position.

2. DEFERRED CHARGES

Deferred charges consist of the following:

	December 31,
	2002			2001
Deferred financing costs	$	37,037		$	35,817
Other		3,532			4,527
		40,569			40,344
Less: accumulated amortization		(24,985	)		(22,141	)
	$	15,584		$	18,203

Post Properties, Inc.

84

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

3. NOTES PAYABLE

At December 31, 2002 and 2001, the Operating Partnership’s indebtedness consisted of the following:

									December 31,
				Interest			Maturity
Description		Payment Terms		Rate			Date (1)		2002		2001
Unsecured Notes
Senior Notes			Int		6.11% -  7.70%			2003-2010	$	385,000	$	360,000
Medium Term Notes			Int		6.69% -   8.12%	(2)		2004-2015		323,000		323,000
Other			Int		8.37%			2002		—		20,000
										708,000		703,000
Unsecured Lines of Credit & Other
Revolver			N/A		LIBOR + 0.85%	(3)		2004		185,000		155,000
Cash Management Line			N/A		LIBOR +  0.75%			2003		11,369		11,202
Other			N/A		5.00%			2021		—		2,000
										196,369		168,202
Conventional Fixed Rate (Secured)
FNMA			Prin. and Int		6.975%	(4)		2029		101,100		102,200
Other			Prin. and Int		5.50% - 7.69%			2007-2013		194,706		127,238
										295,806		229,438
Tax Exempt Floating Rate Bonds (Secured)			Int		1.55%	(5)		2025		214,380		235,880
	Total								$	1,414,555	$	1,336,520

(1)	All outstanding indebtedness can be prepaid at any time, subject to certain prepayment penalties.
(2)	Contains $100,000 of Mandatory Par Put Remarketed Securities. The annual interest rate on these securities to 2005 (the “Remarketing Date”) is 6.85%. On the Remarketing Date, they are subject to mandatory tender for remarketing.
(3)	Represents stated rate. At December 31, 2002, the weighted average interest rate was 2.23%.
(4)	Interest rate is fixed at 6.975%, inclusive of credit enhancement and other fees, to 2009 through an interest rate swap arrangement.
(5)	FNMA credit enhanced bond indebtedness. Interest based on FNMA “AAA” tax exempt rate plus credit enhancement and other fees of 0.639%. Interest rate represents rate at December 31, 2002 before credit enhancements. At December 31, 2002, the Company has outstanding interest rate cap arrangements that limit the Company’s exposure to increases in the base interest rate to 5%.

New debt issuances

In June 2002, the Operating Partnership issued $25,000 of unsecured notes at par. These notes bear interest at 6.11% and mature June 2007. Also in June 2002, the Operating Partnership closed a $13,500 secured mortgage loan. This loan bears interest at 6.29% and requires monthly principal and interest payments on a 25-year amortization schedule. The loan matures on October 2007.

In December 2002, the Operating Partnership closed a $57,000 mortgage loan with a life insurance company. This loan carries an interest rate of 5.5% and requires payments of interest only for the first five years. Thereafter, payments of principal and interest are required based upon a 30-year amortization schedule until the loan’s maturity in January 2013.

Post Properties, Inc.

85

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

Debt maturities

The aggregate maturities of the Operating Partnership’s indebtedness are as follows (1):

2003	$	103,809
2004		27,094
2005		204,402
2006		79,732
2007		112,178
Thereafter		690,971
	$	1,218,186

(1)  Excludes outstanding balances on lines of credit discussed below.

Unsecured lines of credit

The Operating Partnership utilizes a $320,000 three-year syndicated revolving line of credit (the “Revolver”), for its short-term financing requirements. At December 31, 2002, the stated interest rate for the Revolver was LIBOR plus 0.85% or prime minus 0.25%. The Revolver provides for the rate to be adjusted up or down based on changes in the credit ratings on the Operating Partnership’s senior unsecured debt. The Revolver also includes a money market competitive bid option for short-term funds up to $160,000 at rates below the stated line rate. The credit agreement for the Revolver contains customary representations, covenants and events of default, including covenants which restrict the ability of the Operating Partnership to make distributions, in excess of stated amounts, which in turn restrict the discretion of the Company to declare and pay dividends. In general, during any fiscal year the Operating Partnership may only distribute up to 100% of the Operating Partnership’s consolidated income available for distribution (as defined in the credit agreement) exclusive of distributions of up to $30,000 of capital gains for such year. The credit agreement contains exceptions to these limitations to allow the Operating Partnership to make distributions necessary to allow the Company to maintain its status as a REIT. The Operating Partnership does not anticipate that this covenant will adversely affect the ability of the Operating Partnership to make distributions, or the Company to declare dividends, at the Company’s current dividend level. The Revolver matures in April 2004. Management expects to renew this facility in 2003 with a total capacity of approximately $300,000.

The Operating Partnership also has in place an additional $125,000 line of credit facility for general corporate purposes. This line bears interest at LIBOR plus 0.90% and matures in April 2003. Management does not expect to renew this facility in April 2003 as the Operating Partnership’s financing needs have reduced consistent with the Operating Partnership’s reduced development spending.

Additionally, the Operating Partnership has a $20,000 unsecured line of credit with Wachovia Bank of Georgia, N.A. (the “Cash Management Line”). The Cash Management Line bears interest at LIBOR plus 0.75% or prime minus .25% and matures in February 2003. Subsequent to year end, the Cash Management Line was renewed through June 2003 with similar terms to its existing facility. At December 31, 2002, the Operating Partnership has issued letters of credit to third parties totaling $1,323 under this facility.

Post Properties, Inc.

86

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

Interest paid

Interest paid (including capitalized amounts of $13,223, $22,124 and $25,426 for the years ended December 31, 2002, 2001 and 2000, respectively), aggregated $79,115, $82,383 and $74,419 for the years ended December 31, 2002, 2001 and 2000, respectively.

Pledged assets

The aggregate net book value at December 31, 2002 of property pledged as collateral for indebtedness amounted to approximately $497,473.

Extraordinary items

The extraordinary losses for the years ended December 31, 2002 and 2001 of $136 and $88, respectively, resulted from costs associated with the early extinguishment of indebtedness.

4. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

The Operating Partnership holds investments in four individual limited liability companies (the “Property LLCs”) with an institutional investor. Each Property LLC owns a newly developed or under development apartment community. At December 31, 2002, all of the apartment communities had commenced rental operations. The Operating Partnership holds a 35% equity interest in the Property LLCs. The total estimated development cost of the apartment communities of $219,000 is being funded through member equity contributions proportionate to the members’ ownership interests and through construction financing provided by the Operating Partnership. The Operating Partnership accounts for its investments in these Property LLCs using the equity method of accounting. The excess of the Operating Partnership’s investment over its equity in the underlying net assets of the Property LLCs was approximately $9,070 at December 31, 2002. This excess investment is being amortized as a reduction to earnings on a straight-line basis over the lives of the related assets. The Operating Partnership provides real estate services (development, construction and property management) to the Property LLCs.

The operating results of the Operating Partnership include its proportionate share of net income (loss) from the investments in the Property LLCs. A summary of financial information for the Property LLCs in the aggregate is as follows:

		December 31,
		2002		2001
Real estate assets, net		$	198,854	$	115,664
Cash and other			2,330		533
	Total assets		201,184	$	116,197
Construction notes payable to Operating Partnership		$	160,294	$	77,019
Other liabilities			3,975		11,892
	Total liabilities		164,269		88,911
Members’ equity			36,915		27,286
	Total liabilities and members’ equity	$	201,184	$	116,197
Operating Partnership’s equity investment		$	21,991	$	12,673

Post Properties, Inc.

87

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

			Year ended
			December 31,
			2002			2001
Revenues
	Rental		$	5,661		$	136
	Other			381			50
		Total revenues		6,042			186
Expenses
	Property operating and maintenance			4,655			416
	Depreciation			3,153			192
	Interest			2,778			110
		Total expenses		10,586			718
Net loss			$	(4,544	)	$	(532	)
Operating Partnership’s share of net loss			$	(1,590	)	$	(186	)

The Operating Partnership has committed construction financing to the Property LLCs totaling $168,473 ($160,294 funded at December 31, 2002). These loans earn interest at LIBOR plus 1.75% and are secured by the apartment communities. The loans mature on dates ranging from February 2003 to November 2004 and are expected to be repaid from the proceeds of permanent project financings. As of December 31, 2002, the institutional investor’s share of these notes was $104,191. Subsequent to December 31, 2002, one of the Property LLCs repaid its outstanding construction note payable to the Operating Partnership of $24,071. The note was repaid through the proceeds from a third-party non-recourse permanent mortgage note totaling $17,000 and from member equity contributions totaling $7,132. The Operating Partnership issued a limited guarantee and indemnity to the lender regarding certain customary recourse liabilities and environmental matters up to a maximum potential exposure of $5,000. The other member of the Property LLC is obligated to reimburse the Operating Partnership for up to its 65% share ($3,250) of this maximum potential exposure under these arrangements.

As part of the development and construction services agreements entered into between the Operating Partnership and the Property LLCs, the Operating Partnership guaranteed the maximum total amount for certain construction cost categories subject to aggregate limits (approximately $19,000). At December 31, 2002, the Operating Partnership had substantially completed three of the communities and had funded approximately $845 under the guarantee provisions of the agreements. The amounts funded were accounted for as part of the Operating Partnership’s investment in the Property LLCs. The Operating Partnership’s remaining maximum exposure for the fourth Property LLC totals approximately $5,200. The Operating Partnership does not currently expect to be required to fund any guarantees relating to this Property LLC. Additionally, under these agreements, the Operating Partnership is subject to project completion requirements, as defined. At December 31, 2002, the Operating Partnership had met and believes that it will meet the remaining completion date requirements and not be subject to any additional costs.

5.  REAL ESTATE ASSETS HELD FOR SALE / DISCONTINUED OPERATIONS

The Operating Partnership classifies real estate assets as held for sale after the approval of its internal investment committee and after the Operating Partnership has commenced an active program to sell the assets. At December 31 2002, the Operating Partnership has two apartment communities and certain tracts of land classified as held for sale. These real estate assets are classified separately in the accompanying consolidated balance sheet at $73,061, which represented the lower of cost or fair value, less costs to sell. The Operating Partnership expects the sale of these assets to occur in the next twelve months.

Under SFAS No. 144, the operating results of assets designated as held for sale subsequent to January 1, 2002, are included in discontinued operations for all periods presented. Additionally, all gains and losses on the sale of these assets are included in discontinued operations. In the year ended December 31, 2002, the Operating Partnership designated and classified eight apartment communities, one commercial property and six tracts of land as held for sale. Income from discontinued operations includes the results of operations through the earlier of the community

Post Properties, Inc.

88

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

sale date (if the community was sold between January 1, 2002 and December 31, 2002) or December 31, 2002 of eight apartment communities containing 3,134 units and one commercial property designated as held for sale in 2002. The revenues and expenses of these communities for the years ended December 31, 2002, 2001 and 2000 were as follows:

			Years ended December 31,
			2002		2001		2000
Revenues
	Rental		$	18,706	$	31,836	$	30,413
	Other			719		1,279		1,179
		Total revenues		19,425		33,115		31,592
Expenses
	Property operating and maintenance (exclusive of item shown separately below)			7,919		11,918		10,507
	Depreciation			2,246		6,431		5,381
	Interest			3,375		5,970		4,971
		Total expenses		13,540		24,319		20,859
Income from discontinued operations			$	5,885	$	8,796	$	10,733

The Operating Partnership recognized net gains of $20,268 on the sale of real estate assets designated for sale in 2002, offset by reserves of $3,698 to write down to fair market value certain land parcels designated as held for sale in 2002. These sales generated net proceeds of approximately $140,823.

Under prior accounting pronouncements, operating results and net gains or losses on the sale of assets classified as held for sale prior to December 31, 2001 are included in continuing operations. As a result of this presentation, income from continuing operations and gains on property sales are not comparable between periods. The discussion below relates to the gains on sale of assets reported in continuing operations in the consolidated statements of operations for the years ended December 31, 2002, 2001 and 2000.

For the year ended December 31, 2002, the Operating Partnership sold two apartment communities containing 540 units and one commercial property for net proceeds of $41,393. The communities were located in Tampa, Florida and Clearwater, Florida and the commercial property was located in Grand Prairie, Texas. These sales resulted in net gains of approximately $13,275. The gains excluded losses of $4,861 related to these assets that were written down to their estimated fair value at December 31, 2001. For the years ended December 31, 2002, 2001 and 2000, the consolidated statement of operations included net income from these properties of $369, $3,227 and $3,132, respectively. For the years ended December 31, 2001 and 2000, net income reflected above includes depreciation expense of $844 and $886, respectively. No depreciation expense was recorded in 2002.

In 2001, the Operating Partnership sold six apartment communities containing 2,799 units for net proceeds of approximately $210,443. The communities sold were located in Atlanta, Georgia, Dallas, Texas and Nashville, Tennessee. Additionally, the Operating Partnership sold land parcels in Dallas, Texas, Denver, Colorado and Charlotte, North Carolina and a commercial property in Dallas, Texas for aggregate net proceeds of $9,679. These sales resulted in net gains of approximately $16,365. For the year ended December 31, 2001, the aggregate net gain on the sale of assets of $23,942 included the impact of estimated net losses totaling $11,490 on the write down to fair value of assets designated as held for sale at December 31, 2001 and excluded realized losses totaling $19,067 related to assets written down to their estimate fair value at December 31, 2000.

In 2000, the Operating Partnership sold eight apartment communities containing 1,984 units for net proceeds of approximately $157,265, resulting in net gains of approximately $24,266. The communities sold were located in Atlanta, Georgia, Jackson, Mississippi and Nashville, Tennessee. For the year ended December 31, 2000, the aggregate net gain on the sale of assets of $3,208 included the estimated net losses totaling $21,058 on the write down to fair value of assets designated as held for sale at December 31, 2000.

Post Properties, Inc.

89

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

6. PARTNERS’ EQUITY

Common and Preferred Units

At December 31, 2002 and 2001, the Operating Partnership had outstanding Common Units totaling 42,031,715 and 41,975,447, respectively.

At December 31, 2002, the Operating Partnership had outstanding four separate series of cumulative redeemable preferred partnership units as more fully described below. The preferred partnership units are reflected in the accompanying financial statements at their liquidation value.

The Operating Partnership has outstanding 900,000 8.5% Series A cumulative redeemable preferred partnership units (the “Series A Preferred Units”). The Series A Preferred Units have a liquidation preference of $50.00 per unit and are redeemable at the option of the Operating Partnership on or after October 1, 2026, at a redemption price of $50.00 per unit. The Series A Preferred Units are owned by the Company.

The Operating Partnership has outstanding 2,000,000, 7.625% Series B cumulative redeemable preferred partnership units (the “Series B Preferred Units”). The Series B Preferred Units have a liquidation preference of $25.00 per unit and are redeemable at the option of the Operating Partnership on or after October 28, 2007, at a redemption price of $25.00 per unit. The Series B Preferred Units are owned by the Company.

The Operating Partnership has outstanding 2,000,000, 7.625% Series C cumulative redeemable preferred partnership units (the “Series C Preferred Units”). The Series C Preferred Units have a liquidation preference of $25.00 per unit and are redeemable at the option of the Operating Partnership on or after February 9, 2003, at a redemption price of $25.00 per unit. The Series C Preferred Units are owned by the Company.

The Operating Partnership has outstanding 2,800,000, 8% Series D cumulative redeemable preferred partnership units (the “Series D Preferred Units”). The Series D Preferred Units have a liquidation preference of $25.00 per unit and are redeemable by the Operating Partnership on or after September 3, 2004, at a redemption price of $25.00 per unit. The Series D Preferred Units are exchangeable into authorized, but unissued Series D Preferred Stock of the Company, with identical terms and preferences, on or after September 2, 2009, at the option of the holders. Under certain circumstances, as defined in the agreement, the Series D Preferred Units may be exchanged prior to September 2, 2009, at the option of the holders.

Computation of Earnings per Common Unit

For the years ended December 31, 2002, 2001 and 2000, basic and diluted earnings per Common Unit for income from continuing operations available to common unitholders before cumulative effect of accounting change and extraordinary items has been computed as follows:

	Year ended December 31, 2002
	Income			Units		Per-Unit
	(Numerator)			(Denominator)		Amount
Income from continuing operations	$	50,799
Less: Preferred Unit distributions		(17,049	)
Basic EPS
Income from continuing operations available to common unitholders before extraordinary item		33,750			42,020,759	$	0.80
Effect of dilutive securities
Stock options		—			14,818
Diluted EPS
Income from continuing operations available to common unitholders before extraordinary item + assumed conversions	$	33,750			42,035,577	$	0.80

Post Properties, Inc.

90

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

	Year ended December 31, 2001
	Income			Units		Per-Unit
	(Numerator)			(Denominator)		Amount
Income from continuing operations	$	94,624
Less: Preferred Unit distributions		(17,368	)
Basic EPS
Income from continuing operations available to common unitholders before cumulative effect of accounting change and extraordinary item		77,256			43,211,834	$	1.80
Effect of dilutive securities
Stock options		—			215,266
Diluted EPS
Income from continuing operations available to common unitholders before cumulative effect of accounting change and extraordinary items + assumed conversions	$	77,256			43,427,100	$	1.78

	Year ended December 31, 2000
	Income			Units		Per-Unit
	(Numerator)			(Denominator)		Amount
Income from continuing operations	$	107,078
Less: Preferred Unit distributions		(17,475	)
Basic EPS
Income from continuing operations available to common unitholders		89,603			44,503,290	$	2.01
Effect of dilutive securities
Stock options		—			534,789
Diluted EPS
Income from continuing operations available to common unitholders + assumed conversions	$	89,603			45,038,079	$	1.99

7. PROJECT ABANDONMENT, EMPLOYEE SEVERANCE AND IMPAIRMENT CHARGES

The Operating Partnership recorded project impairment and abandonment, employee severance and asset impairment charges in the years ended December 31, 2001 and 2000. The charges were as follows:

	2001		2000
Project impairment and abandonment	$	8,122	$	4,389
Employee severance		3,560		3,066
Asset impairment		5,768		1,910
	$	17,450	$	9,365

In the fourth quarter of 2001, the Operating Partnership recorded charges totaling $17,450. These charges, precipitated by the sharp decline in economic and market conditions, reflect management’s decision to focus its business and new development strategy on fewer markets, to focus on its core business of owning, developing and managing multifamily real estate assets and to do so with a smaller workforce and lower overhead expenses. The project impairment and abandonment charge of $8,122 represents reserves on certain predevelopment and transaction pursuit costs in markets the Operating Partnership will no longer pursue for development opportunities and for certain projects that will no longer be pursued due to economic and market conditions. The employee severance charge of $3,560 is primarily for severance costs related to approximately a 100 person senior management and staff workforce reduction plan initiated and completed in the fourth quarter of 2001. The asset

Post Properties, Inc.

91

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

impairment and disposition charge includes a loss of $2,831 related to the disposition of the Operating Partnership’s corporate aircraft, a loss of $452 on the sale of the Operating Partnership’s third party landscape business discussed more fully below, impairment charges of $1,000 related to the Operating Partnership’s exit from the for-sale housing business in all markets and the write-down to estimated market value of certain internet and technology investments of $1,485. At December 31, 2002, approximately $688 of these charges, primarily employee severance costs, remained as an accrued liability on the consolidated balance sheet. These amounts are expected to be paid in 2003.

In the fourth quarter of 2001, the Operating Partnership sold substantially all of the net assets of Post Landscape Group, Inc. (“PLG”) a subsidiary entity that provided landscape maintenance, design and installation services to third parties. As the business was sold to the former management team and initially financed 100% by the Operating Partnership, the transaction was not reflected as a sale at December 31, 2001. As the transaction resulted in a net loss, the net loss was recognized in the fourth quarter of 2001 and included in the asset impairment charge discussed above. In the first quarter of 2002, the Operating Partnership received payments representing approximately 26% of the outstanding note balance. As these payments constituted adequate initial principal payments under the notes, the sale was recognized in the first quarter of 2002. The impact of the sale recognition was to record the note receivable (outstanding balance of $2,750 at December 31, 2002) and to remove the net assets and liabilities of the former PLG from the Operating Partnership’s financial statements. No further gain or loss was recognized in 2002.

The Operating Partnership also sold substantially all of the net assets of RAM Partners, Inc. (“RAM”), a separate subsidiary entity that managed apartment communities for third parties, in the fourth quarter 2001. This business was sold to the former management team of RAM and the sale was 100% financed by the Operating Partnership. Through the second quarter of 2002, the Operating Partnership had received payments under the notes representing approximately 10% of the original outstanding note balance. As these payments constituted adequate initial principal payments under the notes, the sale was recognized in the second quarter of 2002. The impact of the sale recognition was to record the note receivable (outstanding balance of $1,183 at December 31, 2002), record a net gain of $510 and to remove the net assets and liabilities of the former RAM from the Operating Partnership’s financial statements.

During the first quarter of 2002, the Operating Partnership transferred certain construction contracts of Post Construction Services Inc., its third party construction business, to Oxford Properties, LLC in exchange for Oxford Properties’ assumption of substantially all of Post Construction Service’s liabilities related to the transferred assets. In approving the transaction, the Company’s board of directors ascribed nominal value to the assets being transferred. The assets consisted principally of third party construction contracts for the construction of four garden style apartment, condominium and townhouse communities as well as related subcontracts, indemnities and guarantees. In connection with the transfer of Post Construction Services’ construction contracts, Oxford Properties had the right to receive a deferred fee upon completion of one of the construction projects in the amount of $500. Oxford Properties had also agreed to employ 28 former Operating Partnership and Post Construction Services employees. As a result, the Operating Partnership was not responsible for costs that would have otherwise resulted from winding up the third party construction business. The Operating Partnership recorded a charge of $500 in the fourth quarter of 2001 relating to its exit from the third party construction business. Oxford Properties, LLC is an entity owned by former officers of the Operating Partnership and by the son of the Company’s former chairman and chief executive officer. The Company’s former chairman and chief executive officer does not own any of the outstanding equity interests in Oxford Properties and does not have any management role in Oxford Properties, LLC.

In the fourth quarter of 2000, the Operating Partnership recorded charges of $9,365. These charges reflect management’s decision to restrict its development activities to fewer markets, refine its development investment and for-sale housing strategies and make changes in its executive management team. Project abandonment charges totaling $4,389 related to the write off of predevelopment and pursuit costs in markets in which the Operating Partnership will no longer pursue development opportunities and on certain proposed development deals not meeting management’s revised development strategy. Employee severance charges related to the termination costs of four executive positions and five staff personnel in the Operating Partnership’s Dallas, Texas regional office. The asset impairment charge of $1,910 includes a charge of $1,503 related to the write off of the Operating Partnership’s investment in a high speed internet provider that filed for bankruptcy protection and a charge of $407 related to the

Post Properties, Inc.

92

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

exit from the for-sale housing business in certain markets. As of December 31, 2001, all of the 2000 charges had been paid.

8. INCOME TAXES

Income or losses of the Operating Partnership are allocated to the partners of the Operating Partnership for inclusion in their respective income tax returns. Accordingly, no provisions or benefit for income taxes has been made in the accompanying financial statements. The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) commencing with the taxable year ended December 31, 1993. In order for the Company to qualify as a REIT, it must distribute 90% of its REIT taxable incomes, as defined in the Code, to its shareholders and satisfy certain other requirements. The Operating Partnership intends to make sufficient cash distributions to the Company to enable it to meet its annual REIT distribution requirements.

The Operating Partners utilizes taxable subsidiaries to perform such activities as asset management, leasing and landscape services for third parties. These taxable subsidiaries are subject to federal, state and local income taxes. For the three years in the period ended December 31, 2002, the impact of these taxable subsidiaries’ income taxes and their related tax attributes were not material to the accompanying consolidated financial statements

As of December 31, 2002, the net basis for Federal income tax purposes, taking into account the special allocation of gain to the partners contributing property to the Operating Partnership was higher that the net assets as reported in the Operating Partnership’s consolidated financial statements by $2,204.

9. STOCK-BASED COMPENSATION PLANS

Stock Compensation Plans

At December 31, 2002, the Company had two stock-based compensation plans, the Employee Stock Plan (the “Stock Plan”) and the Employee Stock Purchase Plan (the “ESPP”) as described below. As discussed in note 1, the Operating Partnership accounts for stock based compensation under APB Opinion 25. Accordingly, no compensation cost is required to be recognized for the impact of Company stock options granted at the Company’s current stock price under the Stock Plan and for purchases of stock under the ESPP. For purposes of the pro forma presentation of net income and earnings per share under SFAS No. 123, as summarized in note 1, the fair value of each option grant is estimated as of the date of grant using the Black-Scholes option-pricing model. The weighted-average of all assumptions used in the calculation for various grants under all of the Company’s plans during 2002, 2001 and 2000 are as follows:

	2002		2001		2000
Dividend yield		7.2%		8.4%		8.0%
Expected volatility		22.7%		15.1%		24.8%
Risk-free interest rate		2.7% to 5.3%		3.7% to 5.3%		6.7% to 6.9%
Expected option life		5 to 7 years		5 to 7 years		5 to 7 years

Post Properties, Inc.

93

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

Employee Stock Plan

Under the Stock Plan, the Company may grant to its employees and directors options to purchase up to 6,000,000 shares of common stock. Of this amount, 550,000 shares are available for grants of restricted stock. Options granted to any key employee or officer cannot exceed 100,000 shares a year (500,000 shares if such key employee or officer is a member of the Company’s Executive Committee). The exercise price of each option may not be less than the market price on the date of grant and all options have a maximum term of ten years from the grant date.

A summary of the status of stock option activity under the Stock Plan as of December 31, 2002, 2001 and 2000, is presented below.

	2002					2001					2000
				Weighted					Weighted					Weighted
				Average					Average					Average
	Share			Exercise Price		Shares			Exercise Price		Share			Exercise Price
Outstanding at beginning of year		4,228,218		$	36		4,271,608		$	35		4,054,876		$	34
Granted		18,323			24		415,529			37		740,538			38
Exercised		(15,000	)		31		(262,332	)		30		(334,194	)		32
Forfeited		(142,048	)		38		(196,587	)		38		(189,612	)		38
Outstanding at end of year		4,089,493			35		4,228,218			36		4,271,608			35
Options exercisable at year-end		3,464,759					2,962,245					2,413,595
Weighted-average fair value of options granted during the year	$	2.13				$	1.44				$	4.76

At December 31, 2002, the range of exercise prices for options outstanding was $23.90 — $44.13 and the weighted-average remaining contractual life was 5 years.

In 2002 and 2001, the Company granted 15,353 and 17,566 shares of restricted stock, respectively, to company officers. The restricted shares granted in 2002 vest ratably over a three year period. The restricted shares granted in 2001 vest ratably over a five year period. For both years the total value of the restricted share grants was initially reflected in partners’ equity as additional capital reduced by non-amortized deferred compensation expense. Such deferred compensation is amortized ratably into compensation expense over the vesting period. Total compensation expense relating to the restricted stock was $265 and $171 in 2002 and 2001, respectively.

10. EMPLOYEE BENEFIT PLANS

Through a plan adopted by the Company, the employees of the Operating Partnership are participants in a defined contribution plan pursuant to Section 401 of the Internal Revenue Code. Beginning in 1996, Operating Partnership contributions, if any, to this plan are based on the performance of the Company and the Operating Partnership and are allocated to each participant based on the relative contribution of the participant to the total contributions of all participants. For purposes of allocating the Operating Partnership contribution, the maximum employee contribution included in the calculation is 3% of salary. Operating Partnership contributions of $452, $638 and $514 were made to this plan in 2002, 2001 and 2000, respectively.

The Company maintains an Employee Stock Purchase Plan (“ESPP”) to encourage stock ownership by eligible directors and employees. To participate in the ESPP, (i) directors must not be employed by the Company or the Operating Partnership and must have been a member of the board of directors for at least one month and (ii) an employee must have been employed full or part-time by the Company or the Operating Partnership for at least one month. The purchase price of shares of common stock under the ESPP is equal to 85% of the lesser of the closing price per share of common stock on the first or last day of the trading period, as defined.

Post Properties, Inc.

94

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

11. COMMITMENTS AND CONTINGENCIES

Land, office and equipment leases

The Operating Partnership is party to two ground leases with terms expiring in years 2040 and 2043 relating to a single operating community and six ground leases expiring in 2012, 2038, 2060, 2066, 2069 and 2074 for six separate communities and to office, equipment and other operating leases with terms expiring in years 2003 through 2006. Future minimum lease payments for non-cancelable land, office, equipment and other leases at December 31, 2002, are as follows:

2003	$	1,363
2004		1,286
2005		1,288
2006		1,306
2007		1,328
2008 and thereafter		156,470

The Operating Partnership incurred $5,223, $5,998 and $5,935 of rent expense for the years ended December 31, 2002, 2001 and 2000, respectively.

Contingencies

The Operating Partnership is party to various legal actions which are incidental to its business. Management believes that these actions will not have a material adverse affect on the consolidated balance sheets and statements of operations.

12. RELATED PARTY TRANSACTIONS

In 2002 and 2001, the Operating Partnership invested in four Property LLCs accounted for under the equity method of accounting (see note 4). In 2002 and 2001, the Operating Partnership recorded, before elimination of the Operating Partnership’s equity interests, development fees, general construction contract billings, management fees and expense reimbursements (primarily personnel costs) of approximately $11,916 and $15,202, respectively, from these related companies. Additionally in 2002 and 2001, the Operating Partnership earned interest under the construction loans to the Project LLCs totaling $4,482 and $1,024, respectively.

The Operating Partnership provides landscaping services for executive officers, employees, directors and other related parties. For the years ended December 31, 2002, 2001 and 2000, the Operating Partnership received landscaping revenue of $775, $705 and $667, respectively for such services. Such revenue includes reimbursement of direct and indirect expenses. Additionally, the Operating Partnership provides accounting and administrative services to entities controlled by certain directors of the Company. Fees under this arrangement aggregated $25 for each of the years ended December 31, 2002, 2001 and 2000. Also, the Operating Partnership was contracted to assist in the development of apartment complexes constructed by a former executive and current shareholder. Fees under this arrangement were $0, $7 and $29 for the years ended December 31, 2002, 2001 and 2000, respectively.

At December 31, 2002 and 2001, the Operating Partnership had outstanding loan balances to certain current and former Operating Partnership executives totaling $7,600 and $9,250, respectively. These loans mature ten years from the issue date and bear interest at a rate of 6.32% per annum. Proceeds from these loans were used by these executives to acquire the Operating Partnership’s common shares on the open market. Additionally, at December 31, 2002 and 2001, the Operating Partnership had outstanding additional loans to certain Operating Partnership executives totaling $1,140 and $1,300, respectively. The loans bear interest at 6.32% per annum. If the executives continue to be employed by the Operating Partnership, the loans will be forgiven annually over five to ten year periods, as defined in the agreements. The annual loan forgiveness of $160 is recorded as compensation expense.

Post Properties, Inc.

95

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

13. DERIVATIVE FINANCIAL INSTRUMENTS

At December 31, 2002, the Operating Partnership had outstanding interest rate swap agreements with a notional value of $129,000 with maturity dates ranging from 2005 to 2009. For the years ended December 31, 2002 and 2001, the Operating Partnership recorded unrealized net losses of $10,204 and $6,645, respectively, on these cash flow hedges as a decrease in accumulated other comprehensive income, a shareholders’ equity account, in the accompanying consolidated balance sheet. In addition, the Operating Partnership recorded the change in fair value of the ineffective component of its outstanding interest rate cap agreements in the statement of operations for the years ended December 31, 2002 and 2001. This charge against earnings during these years and the fair value of the interest rate cap agreements as of December 31, 2002 were not significant to the Operating Partnership’s financial position or results of operations. Within the next twelve months, the Operating Partnership expects to reclassify out of accumulated other comprehensive income approximately $5,879.

Upon the adoption of SFAS No. 133 in 2001, the Operating Partnership recorded a net transition loss of $695 relating to the write down of the book value of its interest rate cap agreements to their fair value. This loss was reflected as a cumulative effect of accounting change in the consolidated statement of operations for the year ended December 31, 2001.

Subsequent to December 31, 2002, the Operating Partnership entered into two interest rate cap arrangements with two financial institutions. The new interest rate cap arrangements replaced three expiring interest rate cap arrangements and were structured as cash flow hedges to provide a fixed ceiling at 5% for the Operating Partnership’s variable rate, tax-exempt borrowings. The Operating Partnership is required to maintain this interest rate exposure protection under the terms of the financing arrangements. The $2,720 cost of the arrangement will be amortized as additional expense over their five year term in accordance with SFAS No. 133.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosures of estimated fair value were determined by management using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Operating Partnership could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash equivalents, rents and accounts receivables, accounts payable, accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values because of the short-term nature of these instruments. The fair value of fixed rate debt was approximately $928,313 (carrying value of $877,706) and the fair value of floating rate debt approximated its carrying value due to the adjustable nature of the arrangements at December 31, 2002.

In order to manage the impact of interest rate changes on earnings and cash flow, the Operating Partnership entered into and has outstanding interest rate swap and interest rate cap arrangements. As more fully described in note 1, these interest rate cap and interest rate swap agreements are carried on the consolidated balance sheet at fair market value in accordance with SFAS No. 133. At December 31, 2002, the carrying amounts related to these arrangements represented net liabilities totaling approximately $16,849.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2002. Although management is not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

Post Properties, Inc.

96

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

15. SEGMENT INFORMATION

Segment Description

In accordance with SFAS No. 131, “Disclosure About the Segments of an Enterprise and Related Information,” the Operating Partnership presents segment information based on the way that management organizes the segments within the enterprise for making operating decisions and assessing performance. The segment information is prepared on substantially the same basis as the internally reported information used by the Operating Partnership’s chief operating decision makers to manage the business.

The Operating Partnership’s chief operating decision makers focus on the Operating Partnership’s primary sources of income from property rental operations. Property rental operations are broken down into four segments based on the various stages in the property ownership lifecycle. These segments are described below. All other ancillary service and support operations, including the third party service businesses (see note 7), are aggregated in the accompanying segment information. The segment information presented below reflects the segment categories based on the lifecycle status of each community as of December 31, 2002. The segment information for the years ended December 31, 2001 and 2000 have been adjusted due to the restatement impact of reclassifying the operating results of the assets designated as held for sale in 2002 to discontinued operations under SFAS No. 144 (see note 5).

•  Fully stabilized communities — those apartment communities which have been stabilized (the earlier of the point at which a property reaches 95% occupancy or one year after completion of construction) for both the current and prior year.

•  Communities stabilized during prior year — communities which reached stabilized occupancy in the prior year.

•  Development and lease up communities — those communities that are in lease-up but were not stabilized by the beginning of the current year, including communities that stabilized during the current year.

•  Sold communities — communities which were sold in the current or prior year and not reflected as discontinued operations (see notes 1 and 5).

Segment Performance Measure

Management uses contribution to funds from operations (“FFO”) as the performance measure for its segments. FFO is defined by the National Association of Real Estate Investment Trusts as net income available to common shareholders determined in accordance with generally accepted accounting principles (“GAAP”), excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Operating Partnership’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Operating Partnership’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Operating Partnership’s needs.

Segment Information

The following table reflects each segment’s contribution to consolidated revenues and FFO together with a reconciliation of segment contribution to FFO, total FFO and income before extraordinary item and preferred dividends. Additionally, substantially all of the Operating Partnership’s assets relate to the Operating Partnership’s

Post Properties, Inc.

97

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

property rental operations. Asset cost, depreciation and amortization by segment are not presented because such information at the segment level is not reported internally.

	2002			2001			2000
Revenues
Fully stabilized communities	$	256,477		$	275,297		$	266,465
Communities stabilized during prior year		17,535			14,946			3,538
Development and lease-up communities		39,571			25,741			14,256
Sold communities		745			19,659			52,883
Other		15,669			29,675			31,098
Consolidated revenues	$	329,997		$	365,318		$	368,240
Contribution to Funds from Operations
Fully stabilized communities	$	167,225		$	186,087		$	185,106
Communities stabilized during prior year		11,628			8,943			932
Development and lease-up communities		23,192			15,312			8,569
Sold communities		369			12,330			35,956
Other		—			1,065			1,354
Contribution to FFO		202,414			223,737			231,917
FFO — discontinued operations		5,885			8,796			10,733
Other operating income, net of expense		(5,051	)		(14,558	)		(2,257	)
Depreciation on non-real estate assets		(1,985	)		(2,378	)		(1,962	)
Minority interest in consolidated property partnerships		2,055			2,098			(511	)
Interest expense		(58,436	)		(51,960	)		(45,332	)
Amortization of deferred loan costs		(2,327	)		(1,978	)		(1,636	)
General and administrative expense		(14,431	)		(13,256	)		(10,066	)
Other expense		(694	)		–			—
Distributions to preferred unitholders		(17,049	)		(17,368	)		(17,475	)
Total FFO		110,381			133,133			163,411
Depreciation on wholly-owned real estate assets		(82,918	)		(70,956	)		(66,283	)
Depreciation on real estate assets held in unconsolidated entities		(1,103	)		(67	)		—
Gains on property sales — continuing operations		13,275			23,942			3,208
Income from discontinued operations		(5,885	)		(8,796	)		(10,733	)
Distributions to preferred unitholders		17,049			17,368			17,475
Income from continuing operations	$	50,799		$	94,624		$	107,078

16. SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash investing and financing activities for the years ended December 31, 2002, 2001 and 2000 are as follows:

The Operating Partnership committed to distribute $32,785, $32,741 and $33,466 for the quarters ended December 31, 2002, 2001 and 2000, respectively.

17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The operating results of eight apartment communities and one commercial property classified as held for sale under SFAS No. 144 in 2002 were included in discontinued operations in the accompanying statements of operations for all periods presented, as further discussed in note 5. To conform with this presentation, the quarterly financial information presented below reflects the reclassification of the operating results of these assets to discontinued operations, which differs from the presentation of discontinued operations in the Operating Partnership’s previously issued financial statements included in its quarterly reports on Form 10-Q.

Post Properties, Inc.

98

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

Quarterly financial information for the years ended December 31, 2002 and 2001, as revised to reflect the changes discussed above, was as follows:

	Year Ended December 31, 2002
	First			Second			Third			Fourth
Revenues	$	81,981		$	80,727		$	83,952		$	83,337
Income from continuing operations		25,385			10,110			9,121			6,183
Income (loss) from discontinued operations		(5,027	)		19,586			(1,114	)		9,010
Income before cumulative effect of accounting change and extraordinary item		20,358			29,696			8,007			15,193
Cumulative effect of accounting change		—			—			—			—
Extraordinary item		—			(136	)		—			—
Net income		20,358			29,560			8,007			15,193
Distributions to preferred unitholders		(4,262	)		(4,263	)		(4,262	)		(4,262	)
Net income available to common unitholders	$	16,096		$	25,297		$	3,745		$	10,931
Earnings per Common Unit:
Income before accounting change and extraordinary item — basic	$	0.38		$	0.60		$	0.09		$	0.26
Income before accounting change and extraordinary item — diluted		0.38			0.60			0.09			0.26
Net income available to common unitholders — basic		0.38			0.60			0.09			0.26
Net income available to common unitholders — diluted		0.38			0.60			0.09			0.26

	Year Ended December 31, 2001(1)
	First			Second			Third			Fourth(2)
Revenues	$	94,341		$	93,776		$	90,729		$	86,472
Income (loss) from continuing operations		25,151			39,545			30,096			(168	)
Income from discontinued operations		2,426			2,489			2,015			1,866
Income before cumulative effect of accounting change and extraordinary item		27,577			42,034			32,111			1,698
Cumulative effect of accounting change		(695	)		—			—			—
Extraordinary item		—			(88	)		—			—
Net income		26,882			41,946			32,111			1,698
Distributions to preferred unitholders		(4,369	)		(4,369	)		(4,369	)		(4,261	)
Net income (loss) available to common unitholders	$	22,513		$	37,577		$	27,742		$	(2,563	)
Earnings per Common Unit:
Income (loss) before accounting change and extraordinary item — basic	$	0.53		$	0.86		$	0.64		$	(0.06	)
Income (loss) before accounting change and extraordinary item — diluted		0.53			0.86			0.64			(0.06	)
Net income (loss) available to common unitholders — basic		0.51			0.86			0.64			(0.06	)
Net income (loss) available to common unitholders — diluted		0.51			0.85			0.64			(0.06	)

(1)	The total of the four quarterly amounts for net income and earnings per unit does not equal the total for the year. These differences result from the use of a weighted average to compute the number of units outstanding for the purpose of calculating the Operating Partnership’s earnings per unit.
(2)	Reflects the impact of project abandonment, employee severance and impairment charges of $17,450.

Post Properties, Inc.

99

Post Apartment Homes, L.P.

POST APARTMENT HOMES, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data)

18. SUBSEQUENT EVENT

Subsequent to December 31, 2002, the Company’s board of directors elected a new chairman. The Company’s former chairman was elected chairmen emeritus and the Company’s vice-chairman relinquished his vice-chairman status. Both the former chairman and former vice-chairman will remain on the Company’s board of directors. Their change in roles from executive to non-executive status will result in the Company recording a non-cash charge in the first quarter of 2003 relating to payments provided to these individuals pursuant to their existing contractual arrangements with the Company. The Company estimates the charge will be approximately $12,000 to $14,000, plus an additional amount of up $8,000 that may be incurred as a result of the settlement of split-dollar life insurance obligations to the individuals under their contractual arrangements. These amounts represent the present value of the estimated payments and other costs to be incurred over the term of the contractual arrangements.

Post Properties, Inc.

100

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

December 31, 2002

(Dollars in thousands)

													Gross amount at which
							Initial costs				Costs		Carried at close of period
											Capitalized
				Related					Building and		Subsequent				Building and				Accumulated		Date of		Date		Depreciable
		Description		Encumbrances			Land		Improvements		to Acquisition		Land		Improvements		Total(1)		Depreciation		Construction		Acquired		Lives Years
Georgia
Post Ashford			Apartments	$	9,895	(2)	$	1,906	$	—	$	8,659	$	1,906	$	8,659	$	10,565	$	3,887		04/86 – 06/87		06/87		5-40 Years
Post Briarcliff			Apartments		—			13,344		—		46,628		13,344		46,628		59,972		6,555		12/96		09/96		5-40 Years
Post Bridge			Apartments		12,450	(2)		868		—		12,621		869		12,620		13,489		5,984		09/84 – 12/86		09/84		5-40 Years
Post Brookhaven			Apartments		—			7,921		—		32,375		7,921		32,375		40,296		13,298		07/89 – 12/92		03/89		5-40 Years
Post Canyon			Apartments		16,845	(2)		931		—		18,809		931		18,809		19,740		8,840		04/84 – 04/86		10/81		5-40 Years
Post Chase			Apartments		15,000	(2)		1,438		—		16,671		1,438		16,671		18,109		7,398		06/85 – 04/87		06/85		5-40 Years
Post Chastain			Apartments		29,786			6,352		—		40,832		6,779		40,405		47,184		16,167		06/88 – 10/90		06/88		5-40 Years
Post Collier Hills			Apartments		—			6,487		—		25,416		7,183		24,720		31,903		6,081		10/95		06/95		5-40 Years
Post Corners			Apartments		14,760	(2)		1,473		—		15,868		1,473		15,868		17,341		7,461		08/84 – 04/86		08/84		5-40 Years
Post Court			Apartments		18,650	(2)		1,769		—		18,198		1,769		18,198		19,967		7,739		06/86 – 04/88		12/85		5-40 Years
Post Crest			Apartments		26,446			4,733		—		24,963		4,763		24,933		29,696		6,404		09/95		10/94		5-40 Years
Post Crossing			Apartments		—			3,951		—		19,845		3,951		19,845		23,796		4,751		04/94 – 08/95		11/93		5-40 Years
Post Dunwoody			Apartments		—			4,917		—		29,052		4,961		29,008		33,969		8,552		11/88		12/84 & 8/94(5)		5-40 Years
Post Gardens			Apartments		—			5,859		—		34,007		5,931		33,935		39,866		5,757		07/96		05/96		5-40 Years
Post Glen			Apartments		20,254			5,591		—		21,766		5,784		21,573		27,357		4,368		07/96		05/96		5-40 Years
Post Lane			Apartments		—			1,512		—		8,472		2,067		7,917		9,984		3,696		04/87 – 05/88		01/87		5-40 Years
Post Lenox Park			Apartments		10,996			3,132		—		11,011		3,132		11,011		14,143		2,762		03/94 – 05/95		03/94		5-40 Years
Post Lindbergh			Apartments		—			6,268		—		27,135		6,652		26,751		33,403		4,570		11/96		08/96		5-40 Years
Post Mill			Apartments		12,880	(2)		915		—		13,448		922		13,441		14,363		6,739		05/83 – 05/85		05/81		5-40 Years
Post Oak			Apartments		—			2,027		—		8,527		2,027		8,527		10,554		2,937		09/92 – 12/93		09/92		5-40 Years
Post Oglethorpe			Apartments		—			3,662		—		17,341		3,662		17,341		21,003		4,430		03/93 – 10/94		03/93		5-40 Years
Post Park(6)			Apartments		—			6,253		—		40,869		8,830		38,292		47,122		16,336		06/87 – 09/90		06/87		5-40 Years
Post Parkside			Mixed Use		—			3,402		—		20,180		3,465		20,117		23,582		2,349		02/99		12/97		5-40 Years
Post Peachtree Hills			Apartments		—			4,215		—		14,233		4,857		13,591		18,448		4,116		02/92 – 09/94		02/92 & 09/92(5)		5-40 Years
Post Renaissance(10)			Apartments		—			—		—		20,354		—		20,354		20,354		6,456		07/91 – 12/94		06/91 & 01/94(5)		5-40 Years
Post Ridge			Apartments		—			5,150		—		31,702		5,150		31,702		36,852		4,999		10/96		07/96		5-40 Years
Post Spring			Apartments		—			2,105		—		38,283		2,105		38,283		40,388		2,127		09/99		09/99		5-40 Years
Post Summit			Apartments		—			1,575		—		6,533		1,575		6,533		8,108		2,858		01/90 – 12/90		01/90		5-40 Years
Post Valley			Apartments		18,600	(2)		1,117		—		19,582		1,117		19,582		20,699		8,512		03/86 – 04/88		12/85		5-40 Years
Post Vinings			Apartments		—			4,322		—		22,238		5,668		20,892		26,560		9,049		05/88 – 09/91		05/88		5-40 Years
Post Village			Apartments
	The Arbors		Apartments		—			373		—		17,533		373		17,533		17,906		7,203		04/82 – 10/83		03/82		5-40 Years
	The Fountains and
	The Meadows		Apartments		26,000	(2)		611		—		39,229		878		38,962		39,840		16,006		08/85 – 05/88		08/85		5-40 Years
	The Gardens		Apartments		14,500	(2)		187		—		28,697		637		28,247		28,884		11,604		06/88 – 07/89		05/84		5-40 Years
	The Hills		Apartments		7,000	(2)		91		—		12,879		307		12,663		12,970		5,202		05/84 – 04/86		04/83		5-40 Years

Post Properties, Inc.

101

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

December 31, 2002

(Dollars in thousands)

														Gross amount at which
							Initial costs				Costs			Carried at close of period
											Capitalized
				Related					Building and		Subsequent					Building and					Accumulated		Date of		Date		Depreciable
		Description		Encumbrances			Land		Improvements		to Acquisition			Land		Improvements		Total(1)			Depreciation		Construction		Acquired		Lives Years
Post Walk			Apartments		19,300	(2)		2,954		—		18,330			2,954		18,330		21,284			8,540		03/86 – 08/87		06/85		5-40 Years
Post Woods			Apartments		26,369			1,378		—		28,207			3,070		26,515		29,585			12,472		03/76 – 09/83		06/76		5-40 Years
Post Stratford(10)			Apartments		—			328		—		24,345			620		24,053		24,673			2,354		04/99		01/99		5-40 Years
Post Riverside			Mixed Use		—			11,130		—		108,177			12,457		106,850		119,307			12,674		07/96		01/96		5-40 Years
Texas
Addison Circle Apartment Homes By Post – Phase I			Mixed Use		27,839			2,885		41,482		8,403			3,324		49,446		52,770			9,401		10/97		10/97		5-40 Years
Addison Circle Apartment Homes By Post – Phase II			Mixed Use		49,759			3,417		1,128		84,631			4,126		85,050		89,176			11,866		10/97		10/97		5-40 Years
Addison Circle Apartment Homes By Post – Phase III			Mixed Use		13,408			752		—		21,445			931		21,266		22,197			1,694		07/99		10/99		5-40 Years
Post American Beauty Mill			Apartments		—			156		2,786		3,589			156		6,375		6,531			733		10/97		10/97		5-40 Years
Post Block 588			Apartments		—			1,278		48		21,957			1,415		21,868		23,283			1,676		10/97		10/97		5-40 Years
Post Cole’s Corner			Mixed Use		—			1,886		18,006		1,663			2,086		19,469		21,555			4,063		N/A		10/97		5-40 Years
Post Columbus Square			Mixed Use		—			4,565		24,595		767			4,565		25,362		29,927			3,460		N/A		10/97		5-40 Years
Heights of State- Thomas/Gallery			Mixed Use		—			5,455		15,559		29,206			5,812		44,408		50,220			5,207		10/97		10/97		5-40 Years
Legacy at Town Center			Apartments		—			684		—		32,828			811		32,701		33,512			1,687		03/99		03/99		5-40 Years
Post Midtown -
	Phase I, II & III		Mixed Use		—			4,408		1,412		74,613			4,305		76,128		80,433			5,060		10/97		10/97		5-40 Years
Post Hackberry Creek			Apartments		—			7,269		23,579		(148	)		7,269		23,431		30,700	(8)		3,895		N/A		10/97		5-40 Years
Post Town Lake/Parks			Apartments		—			2,985		19,464		2,054			2,985		21,518		24,503			4,109		N/A		10/97		5-40 Years
Post White Rock			Apartments		—			1,560		9,969		1,570			1,560		11,539		13,099			2,084		N/A		10/97		5-40 Years
Post Windhaven			Apartments		—			4,029		23,385		4,414			4,029		27,799		31,828			3,901		N/A		10/97		5-40 Years

Post Properties, Inc.

102

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

December 31, 2002

(Dollars in thousands)

												Gross amount at which
						Initial costs				Costs		Carried at close of period
										Capitalized
			Related					Building and		Subsequent				Building and					Accumulated		Date of		Date		Depreciable
	Description		Encumbrances			Land		Improvements		to Acquisition		Land		Improvements			Total(1)		Depreciation		Construction		Acquired		Lives Years
The Abbey of State-Thomas		Apartments		—			575		6,276		1,656		575		7,932			8,507		1,084		N/A		10/97		5-40 Years
The Meridian at State-Thomas		Apartments		—			1,535		11,605		868		1,535		12,473			14,008		1,985		N/A		10/97		5-40 Years
The Rice(10)		Mixed Use		—			449		13,393		21,045		449		34,438			34,887		3,463		10/97		10/97		5-40 Years
The Vineyard of Uptown		Apartments		—			1,133		8,560		240		1,113		8,800			9,933		1,179		N/A		10/97		5-40 Years
The Vintage of Uptown		Apartments		—			2,614		12,188		436		2,614		12,624			15,238		1,929		N/A		10/97		5-40 Years
West Avenue Lofts(6)(7)(10)		Mixed Use		—			—		16,490		6,623		—		23,113			23,113		1,493		09/99		09/99		5-40 Years
The Worthington of State-Thomas		Mixed Use		—			3,744		34,700		1,429		3,744		36,129			39,873		5,544		N/A		10/97		5-40 Years
Uptown Village I & II		Apartments		16,014			3,955		22,120		16,320		6,195		36,200			42,395		4,051		N/A		10/97		5-40 Years
Post Wilson Building (10)		Mixed Use		—			—		689		16,396		—		17,085			17,085		1,295		10/97		10/97		5-40 Years
Florida
Post Harbour Place I, II & III		Mixed Use		—			3,854		—		90,511		9,278		85,087			94,365		5,692		03/97(4)		01/97		5-40 Years
Post Hyde Park		Apartments		—			3,498		—		26,179		5,108		24,569			29,677		4,820		09/94		07/94		5-40 Years
Post Lake		Apartments		28,500	(2)		6,113		—		34,043		6,724		33,432			40,156		14,157		11/85 – 03/88		10/85		5-40 Years
Post Parkside (Orlando)		Mixed Use		—			2,493		—		29,475		2,493		29,475			31,968		2,983		03/99		03/99		5-40 Years
Post Rocky Point		Apartments		57,000			10,510		—		59,947		10,567		59,890			70,457		11,295		04/94 – 11/96		02/94 & 09/96(5)		5-40 Years
Post Walk at Hyde Park		Apartments		—			1,943		—		10,944		1,974		10,913			12,887		3,040		10/95 – 10/97		09/95		5-40 Years
Virginia
Post Corners at Trinity Centre		Apartments		17,935			4,404		—		23,737		4,493		23,648			28,141		5,061		06/94		06/94		5-40 Years
Post Forest		Apartments		—			8,590		—		26,105		9,106		25,589	(3)		34,695		11,796		01/89 – 12/90		03/88		5-40 Years
Washington D.C.
Post Pentagon Row(10)		Mixed Use		—			2,359		7,659		82,249		9,141		83,126			92,267		1,873		06/99		02/99		5-40 Years

Post Properties, Inc.

103

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION

December 31, 2002

(Dollars in thousands)

												Gross amount at which
						Initial costs				Costs		Carried at close of period
										Capitalized
				Related				Building and		Subsequent				Building and					Accumulated		Date of		Date		Depreciable
		Description		Encumbrances		Land		Improvements		to Acquisition		Land		Improvements		Total(1)			Depreciation		Construction		Acquired		Lives Years
New York
Post Toscana			Apartments		—		15,976		—		58,525		—		74,501		74,501			—		01/02(4)		01/02		5-40 Years
Post Luminaria			Apartments		—		4,938		—		44,979		4,938		44,979		49,917			933		03/01(4)		03/01		5-40 Years
North Carolina
Uptown Place			Mixed Use		—		2,336		—		28,579		2,363		28,552		30,915			1,696		09/98		09/98		5-40 Years
Gateway I & II			Apartments		—		2,424		—		60,531		6,207		56,748		62,955			1,725		09/98		09/98		5-40 Years
Post Park at Phillips Place			Mixed Use		—		4,305		—		36,855		4,307		36,853		41,160			8,100		01/96		11/95		5-40 Years
Arizona
Roosevelt Square I – III(10)			Mixed Use		—		1,920		—		44,683		2,297		44,306		46,603			2,085		02/99		02/99		5-40 Years
Tennessee
Bennie Dillon			Mixed Use		—		—		—		8,414		—		8,414		8,414			720		07/98		07/98		5-40 Years
Colorado
Uptown Square I, II & III			Apartments		—		2,963		580		103,224		3,988		102,779		106,767			3,383		10/97		10/97		5-40 Years
Miscellaneous Investments					—		19,757		4,930		36,649		5,222		56,114		61,336	(9)		12,514						5-40 Years
	Total			$	510,186	$	283,964	$	320,603	$	2,100,648	$	289,353	$	2,415,862	$	2,705,215		$	443,965

(1)	The aggregate cost for Federal Income Tax purposes to the Company was approximately $2,219,817 at December 31, 2002, taking into account the special allocation of gain to the partners contributing property to the Operating Partnership.
(2)	These properties serve as collateral for the Federal National Mortgage Association credit enhancement.
(3)	Balance includes an allowance for the possible loss of $3,700 which was taken in prior years.
(4)	Property is under construction or initial lease-up at December 31, 2002.
(5)	Additional land was acquired for construction of a second phase.
(6)	This property was held for sale at December 31, 2002. The carrying value of the assets represents historical cost, which is lower than the fair value of the properties.
(7)	This community was sold during the first quarter of 2003.
(8)	Balance is net of a reserve of $2,055 to write down the asset to fair value.
(9)	Balance is net of reserves of $10,430 to write down certain land parcels to fair value.

(10)  The Company has a leasehold interest in the land underlying these communities.

Post Properties, Inc.

104

Post Apartment Homes, L.P.

A summary of activity for real estate investments and accumulated depreciation is as follows:

			2002			2001			2000
Real estate investments
	Balance at beginning of year		$	2,777,980		$	2,827,094		$	2,582,785
		Improvements		121,110			211,881			380,856
		Disposition of property		(193,875	)		(260,995	)		(136,547	)
	Balance at end of year		$	2,705,215		$	2,777,980		$	2,827,094
Accumulated depreciation
	Balance at beginning of year		$	404,274		$	357,180		$	303,016
		Depreciation		87,927			76,111			71,113
		Accumulated depreciation on disposed property		(48,236	)		(29,017	)		(16,949	)
	Balance at end of year		$	443,965	(a)	$	404,274	(a)	$	357,180	(a)

(a)  Accumulated depreciation on the balance sheet is net of accumulated depreciation on assets held for sale in the amounts of $17,829, $11,260 and $12,059 for the years ended December 31, 2002, 2001 and 2000, respectively.

Post Properties, Inc.

105

Post Apartment Homes, L.P.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Participants and Administrator of the

Post Properties, Inc. 1995 Non-Qualified Employee Stock Purchase Plan

In our opinion, the accompanying statements of net assets available for plan benefits and of changes in net assets available for plan benefits present fairly, in all material respects, the net assets of the Post Properties, Inc. 1995 Non-Qualified Employee Stock Purchase Plan at December 31, 2002 and 2001 and the changes in net assets available for plan benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Atlanta, Georgia

February 28, 2003

Post Properties, Inc.

106

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN

STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS

		Year Ended December 31,
		2002		2001
ASSETS
	Receivable from Post Apartment Homes, L.P.	$	176,895	$	455,119
NET ASSETS AVAILABLE FOR PLAN BENEFITS
	Net assets available for plan benefits	$	176,895	$	455,119

Post Properties, Inc.

107

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS

		Year ended December 31,
		2002			2001
NET ASSETS AVAILABLE FOR PLAN BENEFITS, JANUARY 1		$	455,119		$	473,017
DEDUCTIONS:
	Purchase of participants’ shares		(649,485	)		(937,218	)
	Payment for payroll taxes on behalf of participants		(27,488	)		(50,930	)
ADDITIONS:
	Participant contributions		398,749			970,250
NET ASSETS AVAILABLE FOR PLAN BENEFITS, DECEMBER 31		$	176,895		$	455,119

Post Properties, Inc.

108

Post Apartment Homes, L.P.

POST PROPERTIES, INC.

1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN

NOTES TO FINANCIAL STATEMENTS

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A)  Post Properties, Inc. (the “Company”) established the 1995 Non-Qualified Employee Stock Purchase Plan (the “Plan”) to encourage stock ownership by eligible directors and employees.

(B)	The financial statements have been prepared on the accrual basis of accounting.
(C)	All expenses incurred in the administration of the Plan are paid by the Company and are excluded from these financial statements.

NOTE 2 — THE PLAN

The Plan became effective as of January 1, 1995. Under the Plan, eligible participating employees and directors of the Company can purchase Common Stock at a discount (up to 15% as set by the Compensation Committee of the Company’s Board of Directors) from the Company through salary withholding or cash contributions. The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974, nor is it intended to qualify for special tax treatment under Section 401(a) of the Internal Revenue Code.

Directors who have been a member of the Board of Directors for at least one full calendar month and full-time employees who have been employed a full calendar month are eligible to participate in the Plan. Eligible directors and employees (the “Participants”) may contribute in cash or as a specified dollar amount or percentage of their compensation to the Plan. The minimum payroll deduction for a Participant for each payroll period for purchases under the Plan is $10.00. The maximum contribution which a Participant can make for purchases under the Plan for any calendar year is $100,000. All contributions to the Plan are held in the general assets of Post Apartment Homes, L.P., the Company’s operating partnership.

Shares of the Company’s Common Stock are purchased by an investment firm semi-annually after the end of each six-month period, as defined, and credited to each Participant’s individual account. The purchase price of the Common Stock purchased pursuant to the Plan is currently equal to 85% of the closing price on either the first or last trading day of each purchase period, whichever is lower.

All Common Stock of the Company purchased by Participants pursuant to the Plan may be voted by the Participants or as directed by the Participants.

The Plan does not discriminate, in scope, terms, or operation, in favor of officers or directors of the Company and is available, subject to the eligibility rules of the Plan, to all employees of the Company on the same basis.

NOTE 3 — FEDERAL INCOME TAXES

The Plan is not subject to Federal income taxes. The difference between the fair market value of the shares acquired under the Plan, and the amount contributed by the Participants is treated as ordinary income to the Participants’ for Federal income tax purposes. Accordingly, the Company withholds all applicable taxes from the employee contributions. The fair market value of the shares is determined as of the stock purchase date.

Post Properties, Inc.

109

Post Apartment Homes, L.P.

3. Exhibits

Certain exhibits required by Item 601 of Regulation S-K have been filed with previous reports by the registrants and are incorporated by reference herein.

The Registrants agree to furnish a copy of all agreements relating to long-term debt upon request of the Commission.

Exhibit
No.				Description
	3.1(a)		—	Articles of Incorporation of the Company
	3.2		—	Articles of Amendment to the Articles of Incorporation of the Company
	3.3		—	Articles of Amendment to the Articles of Incorporation of the Company
	3.4		—	Articles of Amendment to the Articles of Incorporation of the Company
	3.5(b)		—	Articles of Amendment to the Articles of Incorporation of the Company
	3.6		—	Bylaws of the Company (as Amended and Restated as of March 22, 2003)
	4.1(c)		—	Indenture between the Company and SunTrust Bank, as Trustee
	4.2(c)		—	First Supplemental Indenture to the Indenture between the Company and SunTrust Bank, as Trustee
	10.1		—	Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership
	10.2		—	First Amendment to Second Amended and Restated Partnership Agreement
	10.3		—	Second Amendment to Second Amended and Restated Partnership Agreement
	10.4(d)		—	Third Amendment to Second Amended and Restated Partnership Agreement
	10.5(d)		—	Fourth Amendment to Second Amended and Restated Partnership Agreement
	10.6(b)		—	Fifth Amendment to the Second Amended and Restated Partnership Agreement
	10.7(e)		—	Sixth Amendment to Amended and Restated Partnership Agreement
	10.8(f)*		—	Employee Stock Plan
	10.9*		—	Amendment to Employee Stock Plan
	10.10*		—	Amendment No. 2 to Employee Stock Plan
	10.11*		—	Amendment No. 3 to Employee Stock Plan
	10.12*		—	Amendment No. 4 to Employee Stock Plan
	10.13(f)	*	—	Noncompetition Agreement between the Company, the Operating Partnership and John A. Williams
	10.14(f)	*	—	Noncompetition Agreement between the Company, the Operating Partnership and John T. Glover
	10.15(d)	*	—	Amendment of Noncompetition Agreement between the Company, the Operating Partnership and John A. Williams dated as of June 1, 1998
	10.16(d)	*	—	Amendment of Noncompetition Agreement between the Company, the Operating Partnership and John T. Glover dated as of June 1, 1998
	10.17(b)	*	—	Option and Transfer Agreement among the Operating Partnership, Post Services, John A. Williams and John T. Glover
	10.18(f)		—	Promissory Note made by Post Services, Inc. in favor of RAM Partners, Inc.
	10.19		—	Form of Indemnification Agreement for officers and directors
	10.20(a)	*	—	Profit Sharing Plan of the Company
	10.21*		—	Amendment Number One to Profit Sharing Plan
	10.22*		—	Amendment Number Two to Profit Sharing Plan
	10.23*		—	Amendment Number Three to Profit Sharing Plan
	10.24*		—	Amendment Number Four to Profit Sharing Plan
	10.25(f)		—	Form of General Partner 1% Exchange Agreement
	10.26(g)	*	—	Employee Stock Purchase Plan

Post Properties, Inc.

110

Post Apartment Homes, L.P.

Exhibit
No.				Description
	10.27*		—	Amendment to Employee Stock Purchase Plan
	10.28(g)	*	—	Amended and Restated Dividend Reinvestment and Stock Purchase Plan
	10.29(e)		—	Fifth Amended and Restated Credit Agreement dated as of January 1, 2001 among Post Apartment Homes, L.P., Wachovia Bank of Georgia, N.A., and the banks listed on the signature pages thereto (the “Fifth Credit Agreement”)
	10.30(i)	*	—	Deferred Compensation Plan for Directors and Executive Committee Members
	10.31(j)	*	—	Form of Change of Control Agreement and schedule of executive officers who have entered into such agreement
	10.32(j)	*	—	Form of Change of Control Agreement and schedule of executive officers who have entered into such agreement
	10.33(j)	*	—	Master Employment Agreement between the Company, the Operating Partnership, Post Services, Inc. and John A. Williams dated as of March 25, 2002
	10.34(j)	*	—	Master Employment Agreement between the Company, the Operating Partnership, Post Services, Inc. and John T. Glover dated as of March 22, 2002
	21.1		—	List of Subsidiaries
	23.1		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-62243)
	23.2		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-70689)
	23.3		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 33-81772)
	23.4		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-36595)
	23.5		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-47399)
	23.6		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 33-00020)
	23.7		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-94121)
	23.8		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-80427)
	23.9		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-44722)
	23.10		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-42884)
	23.11		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-55994)
	23.12		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-38725)
	23.13		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-02374)
	99.1		—	Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002 – President and Chief Executive Officer
	99.2		—	Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002 – Executive Vice President and Chief Financial Officer

  * Identifies each management contract or compensatory plan required to be filed.

(a)	Filed as an exhibit to the Registration Statement on Form S-11 (SEC File No. 33-61936), as amended, of the Company.
(b)	Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.

Post Properties, Inc.

111

Post Apartment Homes, L.P.

(c)	Filed as an exhibit to the Registration Statement on Form S-3 (SEC File No. 333-42884) of the Company.
(d)	Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 1998.
(e)	Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 2000.

(f)  Filed as an exhibit to the Registration Statement on Form S-11 (SEC File No. 33-71650), as amended, of the Company.

(g)	Filed as an exhibit to the Registration Statement on Form S-8 (SEC File No. 33-86674) of the Company.
(h)	Filed within the prospectus that is a part of the Registration Statement on Form S-3 (SEC File No. 333-44722), as amended, of the Company.

(i)	Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 1999.
(j)	Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 2001.

(b)  Reports on Form 8-K

           None

Post Properties, Inc.

112

Post Apartment Homes, L.P.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	POST PROPERTIES, INC.
	(Registrant)
March 25, 2003	By  /s/ DAVID P. STOCKERT David P. Stockert, President and Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ ROBERT C. GODDARD, III Robert C. Goddard, III	Chairman of the Board and Director	March 25, 2003
/s/ DAVID P. STOCKERT David P. Stockert	President, Chief Executive Officer and Director (Principal Executive Officer)	March 25, 2003
/s/ R. GREGORY FOX R. Gregory Fox	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	March 25, 2003
/s/ ARTHUR J. QUIRK Arthur J. Quirk	Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)	March 25, 2003
/s/ ROBERT L. ANDERSON Robert L. Anderson	Director	March 25, 2003
/s/ ARTHUR M. BLANK Arthur M. Blank	Director	March 25, 2003
/s/ HERSCHEL M. BLOOM Herschel M. Bloom	Director	March 25, 2003
/s/ RUSSELL R. FRENCH Russell R. French	Director	March 25, 2003
/s/ JOHN T. GLOVER John T. Glover	Director	March 25, 2003
/s/ CHARLES E. RICE Charles E. Rice	Director	March 25, 2003
/s/ L. BARRY TEAGUE L. Barry Teague	Director	March 25, 2003
/s/ RONALD DE WAAL Ronald de Waal	Director	March 25, 2003
John A. Williams	Chairman Emeritus and Director

Post Properties, Inc.

113

Post Apartment Homes, L.P.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	POST PROPERTIES, INC.
	By: Post G.P. Holdings, Inc., as General Partner
March 25, 2003	By  /s/ DAVID P. STOCKERT David P. Stockert, President and Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ ROBERT C. GODDARD, III Robert C. Goddard, III	Chairman of the Board and Director	March 25, 2003
/s/ DAVID P. STOCKERT David P. Stockert	President, Chief Executive Officer and Director (Principal Executive Officer)	March 25, 2003
/s/ R. GREGORY FOX R. Gregory Fox	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	March 25, 2003
/s/ ARTHUR J. QUIRK Arthur J. Quirk	Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)	March 25, 2003
/s/ ROBERT L. ANDERSON Robert L. Anderson	Director	March 25, 2003
/s/ ARTHUR M. BLANK Arthur M. Blank	Director	March 25, 2003
/s/ HERSCHEL M. BLOOM Herschel M. Bloom	Director	March 25, 2003
/s/ RUSSELL R. FRENCH Russell R. French	Director	March 25, 2003
/s/ JOHN T. GLOVER John T. Glover	Director	March 25, 2003
/s/ CHARLES E. RICE Charles E. Rice	Director	March 25, 2003
/s/ L. BARRY TEAGUE L. Barry Teague	Director	March 25, 2003
/s/ RONALD DE WAAL Ronald de Waal	Director	March 25, 2003
John A. Williams	Chairman Emeritus and Director

Post Properties, Inc.

114

Post Apartment Homes, L.P.

CERTIFICATIONS

I, David P. Stockert, certify that:

1.	I have reviewed this annual report on Form 10-K of Post Properties, Inc. and Post Apartment Homes, L.P.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)	Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.  The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.  The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

March 27, 2003

POST PROPERTIES, INC a Georgia corporation	POST APARTMENT HOMES, L.P. a Georgia limited partnership
/s/ David P. Stockert David P. Stockert President and Chief Executive Officer	By: POST GP HOLDINGS, INC., a Georgia corporation, its sole general partner /s/ David P. Stockert David P. Stockert President and Chief Executive Officer

Post Properties, Inc.

115

Post Apartment Homes, L.P.

I, R. Gregory Fox, certify that:

1.	I have reviewed this annual report on Form 10-K of Post Properties, Inc. and Post Apartment Homes, L.P.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)	Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.  The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.  The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

March 27, 2003

POST PROPERTIES, INC a Georgia corporation	POST APARTMENT HOMES, L.P. a Georgia limited partnership
/s/ R. Gregory Fox R. Gregory Fox Executive Vice President and Chief Financial Officer	By: POST GP HOLDINGS, INC., a Georgia corporation, its sole general partner /s/ R. Gregory Fox R. Gregory Fox Executive Vice President and Chief Financial Officer

Post Properties, Inc.

116

Post Apartment Homes, L.P.

Index to Exhibits

Certain exhibits required by Item 601 of Regulation S-K have been filed with previous reports by the registrants and are incorporated by reference herein.

The Registrants agree to furnish a copy of all agreements relating to long-term debt upon request of the Commission.

Exhibit
No.				Description
	3.1(a)		—	Articles of Incorporation of the Company
	3.2		—	Articles of Amendment to the Articles of Incorporation of the Company
	3.3		—	Articles of Amendment to the Articles of Incorporation of the Company
	3.4		—	Articles of Amendment to the Articles of Incorporation of the Company
	3.5(b)		—	Articles of Amendment to the Articles of Incorporation of the Company
	3.6		—	Bylaws of the Company (as Amended and Restated as of March 22, 2003)
	4.1(c)		—	Indenture between the Company and SunTrust Bank, as Trustee
	4.2(c)		—	First Supplemental Indenture to the Indenture between the Company and SunTrust Bank, as Trustee
	10.1		—	Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership
	10.2		—	First Amendment to Second Amended and Restated Partnership Agreement
	10.3		—	Second Amendment to Second Amended and Restated Partnership Agreement
	10.4(d)		—	Third Amendment to Second Amended and Restated Partnership Agreement
	10.5(d)		—	Fourth Amendment to Second Amended and Restated Partnership Agreement
	10.6(b)		—	Fifth Amendment to the Second Amended and Restated Partnership Agreement
	10.7(e)		—	Sixth Amendment to Amended and Restated Partnership Agreement
	10.8(f)*		—	Employee Stock Plan
	10.9*		—	Amendment to Employee Stock Plan
	10.10*		—	Amendment No. 2 to Employee Stock Plan
	10.11*		—	Amendment No. 3 to Employee Stock Plan
	10.12*		—	Amendment No. 4 to Employee Stock Plan
	10.13(f)	*	—	Noncompetition Agreement between the Company, the Operating Partnership and John A. Williams
	10.14(f)	*	—	Noncompetition Agreement between the Company, the Operating Partnership and John T. Glover
	10.15(d)	*	—	Amendment of Noncompetition Agreement between the Company, the Operating Partnership and John A. Williams dated as of June 1, 1998
	10.16(d)	*	—	Amendment of Noncompetition Agreement between the Company, the Operating Partnership and John T. Glover dated as of June 1, 1998
	10.17(b)	*	—	Option and Transfer Agreement among the Operating Partnership, Post Services, John A. Williams and John T. Glover
	10.18(f)		—	Promissory Note made by Post Services, Inc. in favor of RAM Partners, Inc.
	10.19		—	Form of Indemnification Agreement for officers and directors
	10.20(a)	*	—	Profit Sharing Plan of the Company
	10.21*		—	Amendment Number One to Profit Sharing Plan
	10.22*		—	Amendment Number Two to Profit Sharing Plan
	10.23*		—	Amendment Number Three to Profit Sharing Plan
	10.24*		—	Amendment Number Four to Profit Sharing Plan
	10.25(f)		—	Form of General Partner 1% Exchange Agreement
	10.26(g)	*	—	Employee Stock Purchase Plan

Post Properties, Inc.

117

Post Apartment Homes, L.P.

Exhibit
No.				Description
	10.27*		—	Amendment to Employee Stock Purchase Plan
	10.28(g)	*	—	Amended and Restated Dividend Reinvestment and Stock Purchase Plan
	10.29(e)		—	Fifth Amended and Restated Credit Agreement dated as of January 1, 2001 among Post Apartment Homes, L.P., Wachovia Bank of Georgia, N.A., and the banks listed on the signature pages thereto (the “Fifth Credit Agreement”)
	10.30(i)	*	—	Deferred Compensation Plan for Directors and Executive Committee Members
	10.31(j)	*	—	Form of Change of Control Agreement and schedule of executive officers who have entered into such agreement
	10.32(j)	*	—	Form of Change of Control Agreement and schedule of executive officers who have entered into such agreement
	10.33(j)	*	—	Master Employment Agreement between the Company, the Operating Partnership, Post Services, Inc. and John A. Williams dated as of March 25, 2002
	10.34(j)	*	—	Master Employment Agreement between the Company, the Operating Partnership, Post Services, Inc. and John T. Glover dated as of March 22, 2002
	21.1		—	List of Subsidiaries
	23.1		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-62243)
	23.2		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-70689)
	23.3		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 33-81772)
	23.4		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-36595)
	23.5		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-47399)
	23.6		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 33-00020)
	23.7		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-94121)
	23.8		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-80427)
	23.9		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-44722)
	23.10		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-42884)
	23.11		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-55994)
	23.12		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-38725)
	23.13		—	Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-02374)
	99.1		—	Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002 – President and Chief Executive Officer
	99.2		—	Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002 – Executive Vice President and Chief Financial Officer

  * Identifies each management contract or compensatory plan required to be filed.

(a)	Filed as an exhibit to the Registration Statement on Form S-11 (SEC File No. 33-61936), as amended, of the Company.
(b)	Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.

Post Properties, Inc.

118

Post Apartment Homes, L.P.

(c)	Filed as an exhibit to the Registration Statement on Form S-3 (SEC File No. 333-42884) of the Company.
(d)	Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 1998.
(e)	Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 2000.
(f)	Filed as an exhibit to the Registration Statement on Form S-11 (SEC File No. 33-71650), as amended, of the Company.
(g)	Filed as an exhibit to the Registration Statement on Form S-8 (SEC File No. 33-86674) of the Company.
(h)	Filed within the prospectus that is a part of the Registration Statement on Form S-3 (SEC File No. 333-44722), as amended, of the Company.
(i)	Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 1999.
(j)	Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 2001.

(b)  Reports on Form 8-K

           None

Post Properties, Inc.

119

Post Apartment Homes, L.P.

EX-3.2

                                                                    EXHIBIT 3.2
                             ARTICLES OF AMENDMENT

                                       OF

                           ARTICLES OF INCORPORATION

                                       OF

                             POST PROPERTIES, INC.


                                       I.

         The name of the corporation is Post Properties, Inc. (the
"Corporation").

                                      II.

         The amendment (the "Amendment") is to add the following as a new
Article 2(d) of the Corporation's Articles of Incorporation, to determine the
terms of a series of the Preferred Stock:

"(d)     8 1/2% Series A Cumulative Redeemable Preferred Shares.

         (i)     TITLE. The series of Preferred Stock is hereby designated as
the "8 1/2% Series A Cumulative Redeemable Preferred Shares" (the "Series A
Preferred Shares").

         (ii)    NUMBER. The maximum number of authorized shares of the Series
A Preferred Shares shall be 1,150,000.

         (iii)   RELATIVE SENIORITY. In respect of rights to receive dividends
and to participate in distributions of payments in the event of any
liquidation, dissolution or winding up of the Corporation, the Series A
Preferred Shares shall rank senior to the Common Stock and any other class or
series of shares of the Corporation ranking, as to dividends and upon
liquidation, junior to the Series A Preferred Shares (collectively, "Junior
Shares").

         (iv)    DIVIDENDS.

         (A)     The holders of the then outstanding Series A Preferred Shares
shall be entitled to receive, when and as declared by the Board of Directors
out of any funds legally available therefor, cumulative dividends at the rate
of $4.25 per share per year, payable in equal amounts of $1.0625 per share
quarterly in cash on the last day of each March, June, September, and December
or, if not a Business Day (as hereinafter defined), the next succeeding
Business Day.  Dividends shall begin on December 31, 1996 (each such day being
hereafter called a "Quarterly Dividend Date" and each period ending on a
Quarterly Dividend Date being hereinafter called a "Dividend Period").
Dividends shall be payable to holders of record as they appear in the share


records of the Corporation at the close of business on the applicable record
date (the "Record Date"), which shall be the 15th day of the calendar month in
which the applicable Quarterly Dividend Date falls on or such other date
designated by the Board of Directors of the Corporation for the payment of
dividends that is not more than 30 nor less than 10 days prior to such
Quarterly Dividend Date. The amount of any dividend payable for any Dividend
Period shorter than a full Dividend Period shall be prorated and computed on
the basis of a 360-day year of twelve 30-day months.  Dividends paid on the
Series A Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a per share basis among all such shares at the time outstanding.

         "Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.

         (B)     The amount of any dividends accrued on any Series A Preferred
Shares at any Quarterly Dividend Date shall be the amount of any unpaid
dividends accumulated thereon, to and including such Quarterly Dividend Date,
whether or not earned or declared, and the amount of dividends accrued on any
shares of Series A Preferred Shares at any date other than a Quarterly Dividend
Date shall be equal to the sum of the amount of any unpaid dividends
accumulated thereon, to and including the last preceding Quarterly Dividend
Date, whether or not earned or declared, plus an amount calculated on the basis
of the annual dividend rate of $4.25 per share for the period after such last
preceding Quarterly Dividend Date to and including the date as of which the
calculation is made based on a 360-day year of twelve 30-day months.

         (C)     Except as provided in this paragraph (d), the Series A
Preferred Shares will not be entitled to any dividends in excess of full
cumulative dividends as described above and shall not be entitled to
participate in the earnings or assets of the Corporation, and no interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series A Preferred Shares which may be in arrears.

         (D)     Any dividend payment made on the Series A Preferred Shares
shall be first credited against the earliest accrued but unpaid dividend due
with respect to such shares which remains payable.

         (E)     If, for any taxable year, the Corporation elects to designate
as "capital gain dividends" (as defined in Section 857 of the Internal Revenue
Code of 1986, as amended (the "Code")), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year to holders of all
classes of shares (the "Total Dividends"), then the portion of the Capital
Gains Amount that shall be allocated to the holders of the Series A Preferred
Shares shall equal (i) the Capital Gains Amount multiplied by (ii) a fraction
that is equal to (a) the total dividends paid or made available to the holders
of the Series A Preferred Shares for the year over (b) the Total Dividends.





                                       2


         (F)     No dividends on the Series A Preferred Shares shall be
authorized by the Board of Directors or be paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibit
such authorization, payment or setting apart for payment or provides that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such authorization or payment shall be
restricted or prohibited by law.  Notwithstanding the foregoing, dividends on
the Series A Preferred Shares will accrue whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are authorized.

         (v)     LIQUIDATION RIGHTS.

         (A)     Upon the voluntary or involuntary dissolutions, liquidation or
winding up of the Corporation, the holders of the Series A Preferred Shares
then outstanding shall be entitled to receive and to be paid out of the assets
of the Corporation available for distribution to its shareholders, before any
payment or distribution shall be made on any Junior Shares, the amount of
$50.00 per share, plus accrued and unpaid dividends thereon.

         (B)     After the payment to the holders of the Series A Preferred
Shares of the full preferential amounts provided for in this paragraph (d), the
holder of the Series A Preferred Shares, as such, shall have no right or claim
to any of the remaining assets of the Corporation.

         (C)     If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable with respect
to the preference value of the Series A Preferred Shares and any other shares
of the Corporation ranking as to any such distribution on a parity with the
Series A Preferred Shares are not paid in full, the holders of the Series A
Preferred Shares and of such other shares will share ratably in any such
distribution of assets of the Corporation in proportion to the full respective
preference amounts to which they are entitled.

         (D)     Neither the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Corporation, nor the
merger or consolidation of the Corporation into or with any other entity or the
merger or consolidation of any other entity into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this paragraph (d).

         (vi)    REDEMPTION.

         (A)     OPTIONAL REDEMPTION. On and after October 1, 2026, the
Corporation may, at its option, redeem at any time all or, from time to time,
part of the Series A Preferred Shares at a price per share (the " Redemption
Price"), payable in cash, of $50.00, together with all accrued and unpaid
dividends to and including the date fixed for redemption (the "Redemption
Date"), without interest, to the full extent the Company has funds legally
available therefor. The





                                       3


Series A Preferred Shares have no stated maturity, except as provided for in
subparagraph (ix) below, and will not be subject to any sinking fund or
mandatory redemption provisions.

         (B)     PROCEDURES OF REDEMPTION.

                 (1)      Notice of redemption will be given by publication in
         a newspaper of general circulation in the City of New York, such
         publication to be made once a week for two successive weeks commencing
         not less than 30 nor more than 60 days prior to the Redemption Date.
         Notice of any redemption will also be mailed by the registrar, postage
         prepaid, not less than 30 nor more than 60 days prior to the
         Redemption Date, addressed to each holder of record of the Series A
         Preferred Shares to be redeemed at the address set forth in the share
         transfer records of the registrar. No failure to give such notice or
         any defect therein or in the mailing thereof shall affect the validity
         of the proceedings for the redemption of any Series A Preferred Shares
         except as to the holder to whom the Corporation has failed to give
         notice or except as to the holder to whom notice was defective. In
         addition to any information required by law or by the applicable rules
         of any exchange upon which Series A Preferred Shares may be listed or
         admitted to trading, such notice shall state: (a) the Redemption Date;
         (b) the Redemption Price; (c) the number of Series A Preferred Shares
         to be redeemed; (d) the place or places where certificates for such
         shares are to be surrendered for payment of the Redemption Price; and
         (e) that dividends on the shares to be redeemed will cease to
         accumulate on the Redemption Date. If fewer than all of the Series A
         Preferred Shares held by any holder are to be redeemed, the notice
         mailed to such holder shall also specify the number of Series A
         Preferred Shares to be redeemed from such holder. If fewer than all
         the Preferred Shares held by any holder are to be redeemed, the notice
         mailed to such holder shall also specify the number of Preferred
         Shares to be redeemed from such holder.

                 (2)      If notice has been mailed in accordance with
         subparagraph (vi)(B)(1) above and provided that on or before the
         Redemption Date specified in such notice all funds necessary for such
         redemption shall have been irrevocably set aside by the Corporation,
         separate and apart from its other funds in trust for the pro rata
         benefit of the holders of the Series A Preferred Shares so called for
         redemption, so as to be, and to continue to be available therefor,
         then, from and after the Redemption Date, dividends on the Series A
         Preferred Shares so called for redemption shall cease to accumulate,
         and said shares shall no longer be deemed to be outstanding and shall
         not have the status of Series A Preferred Shares and all rights of the
         holders thereof as shareholder of the Corporation (except the right to
         receive the Redemption Price) shall cease. Upon surrender, in
         accordance with such notice, of the certificates for any Series A
         Preferred Shares so redeemed (properly endorsed or assigned for
         transfer, if the Corporation shall so require and the notice shall so
         state), such Series A Preferred Shares shall be redeemed by the
         Corporation at the Redemption Price. In case fewer than all the Series
         A Preferred Shares represented by any such certificate are redeemed, a
         new certificate or certificates shall be issued presenting the
         unredeemed Series A Preferred Shares without cost to the holder
         thereof.





                                       4


                 (3)      Any funds deposited with a bank or trust company for
         the purpose of redeeming Series A Preferred Shares shall be
         irrevocable except that:

                          (a)     the Corporation shall be entitled to receive
                 from such bank or trust company the interest or other
                 earnings, if any, earned on any money so deposited in trust,
                 and the holders of any shares redeemed shall have no claim to
                 such interest or other earnings; and

                          (b)     any balance of monies so deposited by the
                 Corporation and unclaimed by the holders of the Series A
                 Preferred Shares entitled thereto at the expiration of two
                 years from the applicable Redemption Date shall be repaid,
                 together with any interest or other earnings earned thereon,
                 to the Corporation, and after any such repayment, the holders
                 of the shares entitled to the funds so repaid to the
                 Corporation shall look only to the Corporation for payment
                 without interest or other earnings.

                 (4)      No Series A Preferred Shares may be redeemed except
         from proceeds from the sale of other capital stock of the Corporation,
         including but not limited to common stock, preferred stock, depositary
         shares, interests, participations or other ownership interests
         (however designated) and any rights (other than debt securities
         convertible into or exchangeable for equity securities) or options to
         purchase any of the foregoing.

                 (5)      Unless full accumulated dividends on all Series A
         Preferred Shares shall have been or contemporaneously are declared and
         paid or declared and a sum sufficient for the payment thereof set
         apart for payment for all past Dividend Periods and the then current
         Dividend Period, no Series A Preferred Shares shall be redeemed or
         purchased or otherwise acquired directly or indirectly (except by
         conversion into or exchange for Junior Shares); provided, however,
         that the foregoing shall not prevent the redemption of Series A
         Preferred Shares to preserve the Corporation's REIT status or the
         purchase or acquisition of Series A Preferred Shares pursuant to a
         purchase or exchange offer made on the same terms to holders of all
         outstanding Series A Preferred Shares.

                 (6)      If the Redemption Date is after a Record Date and
         before the related Quarterly Dividend Date, the dividend payable on
         such Quarterly Dividend Date shall be paid to the holder in whose name
         the Series A Preferred Shares to be redeemed are registered at the
         close of business on such Record Date notwithstanding the redemption
         thereof between such Record Date and the related Quarterly Dividend
         Date or the Corporation's default in the payment of the dividend due.
         Except as provided above, the Company will make no payment or
         allowance for unpaid dividends, whether or not in arrears, on
         Preferred Shares to be redeemed.

                 (7)      In case of redemption of less than all Series A
         Preferred Shares at the time outstanding, the Series A Preferred
         Shares to be redeemed shall be selected pro rata from





                                       5


         the holders of record of such shares in proportion to the number of
         Series A Preferred Shares held by such holders (with adjustments to
         avoid redemption of fractional shares) or by any other equitable
         method determined by the Corporation.

         (vii)   VOTING RIGHTS.   Except as required by law, and as set forth
below, the holders of the Series A Preferred Shares shall not be entitled to
vote at any meeting of the shareholders for election of Directors or for any
other purpose or otherwise to participate in any action taken by the
Corporation or the shareholders thereof, or to receive notice of any meeting of
shareholders.

         (A)     Whenever dividends on any Series A Preferred Shares shall be
in arrears for six or more quarterly periods, whether or not such quarterly
periods are consecutive, the holders of such Series A Preferred Shares (voting
separately as a class with all other series of preferred shares upon which like
voting rights have been conferred and are exercisable) will be entitled to vote
for the election of two additional Directors of the Corporation at a special
meeting called by the holders of record of at least ten percent (10%) of any
series of preferred shares so in arrears (unless such request is received less
than 90 days before the date fixed for the next annual or special meeting of
the shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until all dividends accumulated on such Series A
Preferred Shares for the past dividend periods and the then current dividend
period shall have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment. In such case, the entire Board of
Directors of the Corporation will be increased by two Directors.

         (B)     So long as any Series A Preferred Shares remain outstanding,
the Corporation will not, without the affirmative vote or consent of the
holders of at least two-thirds of the Series A Preferred Shares outstanding at
the time, given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of shares of capital stock
ranking prior to the Series A Preferred Shares with respect to the payment of
dividends or the distribution of assets upon liquidation, dissolution or
winding up or reclassify any authorized shares of the Corporation into such
shares, or create, authorize or issue any obligation or security convertible
into or evidencing the right to purchase any such shares; or (ii) amend, alter
or repeal the provisions of the Corporation's Articles of Incorporation,
including this Amendment, whether by merger, consolidation or otherwise (an
"Event"), so as to materially and adversely affect any right, preference,
privilege or voting power of the Series A Preferred Shares or the holders
thereof; provided, however, with respect to the occurrence of any of the Events
set forth in (ii) above, so long as the Series A Preferred Shares remain
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event, the Corporation may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of
holders of Series A Preferred Shares and provided further that (x) any increase
in the amount of the authorized Preferred Stock or the creating or issuance of
any other series of Preferred Stock, or (y) any increase in the amount of
authorized Series A Preferred Shares or any other series of Preferred





                                       6


Stock, in each case ranking on a parity with or junior to the Series A
Preferred Shares with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.

         The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series A Preferred Shares shall have been
redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.

         (C)     On each matter submitted to a vote of the holders of Series A
Preferred Shares in accordance with this paragraph (d), or as otherwise
required by law, each Preferred Share shall be entitled to one vote. With
respect to each Preferred Share, the holder thereof may designate a proxy, with
each such proxy having the right to vote on behalf of the holder.

         (viii)  CONVERSION.      The Series A Preferred Shares are not
convertible into or exchangeable for an other property or securities of the
Corporation.

         (ix)    RESTRICTIONS ON OWNERSHIP.

         (A) Definitions. The following terms shall have the following
meanings:

                 (1) "Acquire" shall mean the acquisition of Beneficial
Ownership of Series A Preferred Shares by any means whatsoever including,
without limitation, (A) the acquisition of direct ownership of shares by any
Person, including through the exercise of any option, warrant, pledge, security
interest or similar right to acquire shares, and (B) the acquisition of
indirect ownership of shares (taking into account the constructive ownership
rules of Section 544 of the Code, as modified by Section 856(h)(l)(B) of the
Code, and also applying the look-thru rule contained in Section 856(h)(3)(A) of
the Code to pension trusts described in Section 401(a) of the Code) by a Person
who is an "individual" within the meaning of Section 542(a)(2) of the Code,
including through the acquisition by any Person of any option, warrant, pledge,
security interest or similar right to acquire shares.

                 (2) "Beneficial Ownership" shall mean, with respect to any
Person that is an "individual" as defined in Section 542(a)(2) of the Code,
the Series A Preferred Shares owned by such Person after taking into account
the constructive ownership rules of Section 544 of the Code, as modified by
Section 856(h)(1)(B) of the Code, and after applying the pension trust
look-thru rule contained in Section 856(h)(3)(A) of the Code. The terms
"Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.

                 (3) "Code" shall mean the Internal Revenue Code of 1986, as
amended. Any reference herein to any current provision of the Code shall be
deemed to refer to any future successor provision of federal income statutory
law.





                                       7


                 (4) "Initial Public Offering" means the sale of Series A
Preferred Shares pursuant to the Corporation's prospectus supplement dated
September 26, 1996 as filed with the Securities and Exchange Commission
pursuant to Rule 424(b)(5) promulgated under the Securities Act of 1933, as
amended.

                 (5) "Ownership Limit" shall initially mean 6% of the
outstanding Series A Preferred Shares of the Corporation, and after any
adjustment as set forth in subparagraph (ix)(H) below, shall mean such greater
percentage (but not greater than 9.8%) of the outstanding Series A Preferred
Shares as so adjusted.

                 (6) "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Section 401(a) or
501(c) (17) of the Code), a portion of a trust permanently set aside for or to
be used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a group as that
term is used for purposes of Section 13(d) (3) of the Securities Exchange Act
of 1934, as amended; but does not include an underwriter that participates in a
public offering of the Series A Preferred Shares for a period of 90 days
following the purchase by such underwriter of the Series A Preferred Shares.

                 (7) "REIT" shall mean a Real Estate Investment Trust under
Section 856 of the Code.

                 (8) "Restricted Transfer Redemption Price" shall mean the
lower of (A) the price paid by the transferee from whom shares are being
redeemed and (B) the average of the last reported sales prices on the New York
Stock Exchange of Series A Preferred Shares on the ten trading days immediately
preceding the date fixed for redemption by the Board of Directors, or if the
Series A Preferred Shares are not then traded on the New York Stock Exchange,
the average of the last reported sales prices of the Series A Preferred Shares
on the ten trading days immediately preceding the relevant date as reported on
any exchange or quotation system over which the Series A Preferred Shares may
be traded, or if the Series A Preferred Shares are not then traded over any
exchange or quotation system, then the price determined in good faith by the
Board of Directors of the Corporation as the fair market value of Series A
Preferred Shares on the relevant date.

                 (9) "Restriction Termination Date" shall mean the first day
after the date of the Initial Public Offering on which the Corporation
determines pursuant to subparagraph (ix)(K) below that it is no longer in the
best interests of the Corporation to attempt to, or continue to, qualify as a
REIT.

                 (10) "Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition that results in a change in the record
or Beneficial Ownership of Series A Preferred Shares or the right to vote or
receive dividends on Series A Preferred Shares (including (A) the granting of
any option or entering into any agreement for the sale, transfer or other
disposition of





                                       8


Series A Preferred Shares or the right to vote or receive dividends on Series A
Preferred Shares or (B) the sale, transfer, assignment or other disposition or
grant of any securities or rights convertible into or exchangeable for Series A
Preferred Shares, or the right to vote or receive dividends on Series A
Preferred Shares), whether voluntary or involuntary and whether by operation of
law or otherwise.

         (B) Restrictions.

                 (1) During the period commencing on the date of the Initial
Public Offering and prior to the Restriction Termination Date: (a) no Person
shall Acquire any Series A Preferred Shares if, as a the result of such
acquisition, any "individual", as defined in Section 542(a)(2) of the Code
(other than a pension trust which is described in Section 401(a) of the Code)
shall Beneficially Own an amount of Series A Preferred Shares in excess of the
Ownership Limit; (b) no Person shall Acquire any shares of Series A Preferred
Shares if, as a result of such acquisition, the Series A Preferred Shares and
Common Stock of the Corporation would be directly or indirectly owned by less
than 100 Persons (determined without reference to the rules of attribution
under Section 544 of the Code); and (c) no Person shall Acquire any shares if,
as a result of such acquisition, the Corporation would be "closely held" within
the meaning of Section 856(h) of the Code.

                 (2) Any Transfer that (x) would result in a violation of the
restrictions in subparagraph (ix)(B)(1)(b) or (c) or (y) a transferring
shareholder has actual knowledge will result in a violation of any of the
restrictions in subparagraph (ix)(B)(1)(a) shall be void ab initio as to the
Transfer of such Series A Preferred Shares that would cause the violation of
the applicable restriction in subparagraph (ix)(B)(1), and the intended
transferee shall acquire no rights in such Series A Preferred Shares.

         (C) Remedies for Breach.

                 (1) If the Board of Directors or a committee thereof shall at
any time determine in good faith that a Transfer has taken place that falls
within the scope of subparagraph (ix)(B)(2) or that a Person intends to Acquire
Beneficial Ownership of any shares of the Corporation that will result in
violation of subparagraph (ix)(B)(1) or (2) (whether or not such violation is
intended), the Board of Directors or a committee thereof shall take such action
as it or they deem advisable to refuse to give effect to or to prevent such
Transfer, including, but not limited to, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer.

                 (2) Without limitation to subparagraph (ix)(B)(2) or (C)(1),
any purported transferee of Beneficial Ownership of Series A Preferred Shares
acquired in violation of subparagraph (ix)(B) shall, if it shall be deemed to
have received any such Beneficial Ownership, be deemed to have acted as agent
on behalf of the Corporation in acquiring such of the interests as result in a
violation of subparagraph (ix)(B) and shall be deemed to hold such interests in
trust





                                       9


on behalf and for the benefit of the Corporation. The transferee shall have no
right to receive dividends or other distributions with respect to such
interests, and shall have no right to vote such interests. Such transferee
shall have no claim, cause of action, or any other recourse whatsoever against
a transferor of interests acquired in violation of subparagraph (ix)(B). The
transferee's sole right with respect to such interests shall be to receive at
the Corporation's sole and absolute discretion, either (A) consideration for
such interests upon the resale of the interests as directed by the Corporation
pursuant to subparagraph (ix)(C)(3) or (B) the Restricted Transfer Redemption
Price pursuant to subparagraph (ix)(C)(3).

                 (3) The Board of Directors shall, within 6 months after
receiving notice of a Transfer that violates subparagraph (ix)(C)(2), either
(in its sole and absolute discretion) (A) direct the transferee of such
interests to sell all interests held in trust for the Corporation pursuant to
subparagraph (ix)(C)(2) for cash in such manner as the Board of Directors
directs or (B) redeem such interests for the Restricted Transfer Redemption
Price on such date within such 6 month period as the Board of Directors may
determine. If the Board of Directors directs the transferee to sell the
interests, the transferee shall receive such proceeds as trustee for the
Corporation and pay the Corporation out of the proceeds of such sale all
expenses incurred by the Corporation in connection with such sale plus any
remaining amount of such proceeds that exceeds the amount paid by the
transferee for the interests, and the transferee shall be entitled to retain
only the proceeds in excess of such amounts required to be paid to the
Corporation.

         (D) Notice of Restricted Transfer. Any Person who Acquires or attempts
or intends to Acquire shares in violation of subparagraph (ix)(B) shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
or intended Transfer on the Corporation's status as a REIT.

         (E) Owners Required To Provide Information. From the date of the
Initial Public Offering and prior to the Restriction Termination Date each
person who is a Beneficial Owner of Series A Preferred Shares and each Person
(including the shareholder of record) who is holding Series A Preferred Shares
for a Beneficial Owner shall provide to the Corporation such information as the
Corporation may request, in good faith, in order to determine the Corporation's
status as a REIT.

         (F) Remedies Not Limited. Except as provided in subparagraph (ix)(M),
nothing contained in this subparagraph (ix) shall limit the authority of the
Board of Directors to take such other action as it deems necessary or advisable
to protect the Corporation and the interests of its shareholder in preserving
the Corporation's status as a REIT.

         (G) Ambiguity. In the case of an ambiguity in the application of any
of the provisions of this subparagraph (ix), including any definition contained
in subparagraph (ix)(A), the Board of Directors shall have the power to
determine the application of the provisions of this subparagraph (ix) with
respect to any situation based on the facts known to it.





                                       10


         (H) Modification of Ownership Limit. Subject to the limitations
provided in subparagraph (ix)(I), the Board of Directors may from time to time
increase the Ownership Limit.

         (I) Limitations on Modifications.

                 (1) The Ownership Limit may not be increased if, after giving
effect to such increase, five Persons who are considered "individuals" pursuant
to Section 542(a) (2) of the Code could Beneficially Own (including ownership
of Common Stock for purposes of this subparagraph (ix)(I)(1)), in the
aggregate, more than 49.0% in value of the outstanding shares of stock of the
Corporation.

                 (2) Prior to the modification of the Ownership Limit pursuant
to subparagraph (ix)(H), the Board of Directors of the Corporation may require
such opinions of counsel, affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or ensure the Corporation's status
as a REIT.

         (J) Legend. Each certificate for Series A Preferred Shares shall bear
a legend referring to the restrictions described above.

         (K) Termination of REIT Status. The Board of Directors shall take no
action to terminate the Corporation's status as a REIT or to amend the
provisions of this subparagraph (ix) until such time as (A) the Board of
Directors adopts a resolution recommending that the Corporation terminate its
status as a REIT or amend this subparagraph (ix), as the case may be, (B) the
Board of Directors presents the resolution at an annual or special meeting of
the shareholders and (C) such resolution is approved by holders of a majority of
the issued and outstanding Series A Preferred Shares.

         (L) Severability. If any provision of this subparagraph (ix) or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.

         (M) NYSE Settlement. Nothing in this Amendment shall preclude the
settlement of any transaction with respect to the Series A Preferred Shares of
the Corporation entered into through the facilities of the New York Stock
Exchange."

                                      III.

         This Amendment was adopted on September 26, 1996 without shareholder
approval, as such approval was not required.

                                      IV.

         This Amendment was duly adopted by the Board of Directors.





                                       11


         IN WITNESS WHEREOF, Post Properties, Inc. has caused these Articles of
Amendment to be executed and sealed by its duly authorized officers this 30th
day of September, 1996.

                                   POST PROPERTIES, INC.


                                   By: /s/ John A. Williams
                                      -----------------------------------
                                      John A. Williams
                                      Chairman and Chief Executive Officer

[CORPORATE SEAL]



Attest:

/s/ Sherry W. Cohen
- ---------------------
Sherry W. Cohen
Senior Vice President and Secretary





                                       12

EX-3.3

                                                                    EXHIBIT 3.3


                              ARTICLES OF AMENDMENT

                                       OF

                            ARTICLES OF INCORPORATION

                                       OF

                              POST PROPERTIES, INC.


                                       I.

         The name of the corporation is Post Properties, Inc. (the
"Corporation").


                                       II.

         The amendment (the "Amendment") is to add the following as a new
Article 2(d) of the Corporation's Articles of Incorporation, to determine the
terms of a series of the Preferred Stock:

"(d)     7 5/8% Series B Cumulative Redeemable Preferred Shares.

         (i)      TITLE. The series of Preferred Stock is hereby designated as
the "7 5/8% Series B Cumulative Redeemable Preferred Shares" (the "Series B
Preferred Shares").

         (ii)     NUMBER. The maximum number of authorized shares of the Series
B Preferred Shares shall be 2,300,000.

         (iii)    RELATIVE SENIORITY. In respect of rights to receive dividends
and to participate in distributions of payments in the event of any liquidation,
dissolution or winding up of the Corporation, the Series B Preferred Shares
shall rank senior to the Common Stock and any other class or series of shares of
the Corporation ranking, as to dividends and upon liquidation, junior to the
Series B Preferred Shares (collectively, "Junior Shares").

         (iv)     DIVIDENDS.

         (A)      The holders of the then outstanding Series B Preferred Shares
shall be entitled to receive, when and as declared by the Board of Directors out
of any funds legally available therefor, cumulative dividends at the rate of
$1.90625 per share per year, payable in equal amounts of $0.47656 per share
quarterly in cash on the last day of each March, June, September, and December
or, if not a Business Day (as hereinafter defined), the next succeeding Business

Day. Dividends shall begin on December 31, 1997 (each such day being hereafter
called a "Quarterly Dividend Date" and each period ending on a Quarterly
Dividend Date being hereinafter called a "Dividend Period"). Dividends shall be
payable to holders of record as they appear in the share records of the
Corporation at the close of business on the applicable record date (the "Record
Date"), which shall be the 15th day of the calendar month in which the
applicable Quarterly Dividend Date falls on or such other date designated by the
Board of Directors of the Corporation for the payment of dividends that is not
more than 30 nor less than 10 days prior to such Quarterly Dividend Date. The
amount of any dividend payable for any Dividend Period shorter than a full
Dividend Period shall be prorated and computed on the basis of a 360-day year of
twelve 30-day months. Dividends paid on the Series B Preferred Shares in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a per share basis among
all such shares at the time outstanding.

         "Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.

         (B)      The amount of any dividends accrued on any Series B Preferred
Shares at any Quarterly Dividend Date shall be the amount of any unpaid
dividends accumulated thereon, to and including such Quarterly Dividend Date,
whether or not earned or declared, and the amount of dividends accrued on any
shares of Series B Preferred Shares at any date other than a Quarterly Dividend
Date shall be equal to the sum of the amount of any unpaid dividends accumulated
thereon, to and including the last preceding Quarterly Dividend Date, whether or
not earned or declared, plus an amount calculated on the basis of the annual
dividend rate of $1.90625 per share for the period after such last preceding
Quarterly Dividend Date to and including the date as of which the calculation is
made based on a 360-day year of twelve 30-day months.

         (C)      Except as provided in this paragraph (d), the Series B
Preferred Shares will not be entitled to any dividends in excess of full
cumulative dividends as described above and shall not be entitled to participate
in the earnings or assets of the Corporation, and no interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series B Preferred Shares which may be in arrears.

         (D)      Any dividend payment made on the Series B Preferred Shares
shall be first credited against the earliest accrued but unpaid dividend due
with respect to such shares which remains payable.

         (E)      If, for any taxable year, the Corporation elects to designate
as "capital gain dividends" (as defined in Section 857 of the Internal Revenue
Code of 1986, as amended (the "Code")), any portion (the "Capital Gains Amount")
of the dividends paid or made available for the year to holders of all classes
of shares (the "Total Dividends"), then the portion of the Capital Gains Amount
that shall be allocated to the holders of the Series B Preferred Shares shall
equal (i) the Capital Gains Amount multiplied by (ii) a fraction that is equal
to (a) the total dividends paid


                                        2

or made available to the holders of the Series B Preferred Shares for the year
over (b) the Total Dividends.

         (F)      No dividends on the Series B Preferred Shares shall be
authorized by the Board of Directors or be paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibit such
authorization, payment or setting apart for payment or provides that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such authorization or payment shall be
restricted or prohibited by law. Notwithstanding the foregoing, dividends on the
Series B Preferred Shares will accrue whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are authorized.

         (v)      LIQUIDATION RIGHTS.

         (A)      Upon the voluntary or involuntary dissolutions, liquidation or
winding up of the Corporation, the holders of the Series B Preferred Shares then
outstanding shall be entitled to receive and to be paid out of the assets of the
Corporation available for distribution to its shareholders, before any payment
or distribution shall be made on any Junior Shares, the amount of $50.00 per
share, plus accrued and unpaid dividends thereon.

         (B)      After the payment to the holders of the Series B Preferred
Shares of the full preferential amounts provided for in this paragraph (d), the
holder of the Series B Preferred Shares, as such, shall have no right or claim
to any of the remaining assets of the Corporation.

         (C)      If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable with respect
to the preference value of the Series B Preferred Shares and any other shares of
the Corporation ranking as to any such distribution on a parity with the Series
B Preferred Shares are not paid in full, the holders of the Series B Preferred
Shares and of such other shares will share ratably in any such distribution of
assets of the Corporation in proportion to the full respective preference
amounts to which they are entitled.

         (D)      Neither the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Corporation, nor the merger
or consolidation of the Corporation into or with any other entity or the merger
or consolidation of any other entity into or with the Corporation, shall be
deemed to be a dissolution, liquidation or winding up, voluntary or involuntary,
for the purposes of this paragraph (d).

         (vi)     REDEMPTION.

         (A)      OPTIONAL REDEMPTION. On and after October 28, 2007, the
Corporation may, at its option, redeem at any time all or, from time to time,
part of the Series B Preferred Shares at a price per share (the " Redemption
Price"), payable in cash, of $25.00, together with all


                                        3

accrued and unpaid dividends to and including the date fixed for redemption (the
"Redemption Date"), without interest, to the full extent the Company has funds
legally available therefor. The Series B Preferred Shares have no stated
maturity, except as provided for in subparagraph (ix) below, and will not be
subject to any sinking fund or mandatory redemption provisions.

         (B)      PROCEDURES OF REDEMPTION.

                  (1)      Notice of redemption will be given by publication in
         a newspaper of general circulation in the City of New York, such
         publication to be made once a week for two successive weeks commencing
         not less than 30 nor more than 60 days prior to the Redemption Date.
         Notice of any redemption will also be mailed by the registrar, postage
         prepaid, not less than 30 nor more than 60 days prior to the Redemption
         Date, addressed to each holder of record of the Series B Preferred
         Shares to be redeemed at the address set forth in the share transfer
         records of the registrar. No failure to give such notice or any defect
         therein or in the mailing thereof shall affect the validity of the
         proceedings for the redemption of any Series B Preferred Shares except
         as to the holder to whom the Corporation has failed to give notice or
         except as to the holder to whom notice was defective. In addition to
         any information required by law or by the applicable rules of any
         exchange upon which Series B Preferred Shares may be listed or admitted
         to trading, such notice shall state: (a) the Redemption Date; (b) the
         Redemption Price; (c) the number of Series B Preferred Shares to be
         redeemed; (d) the place or places where certificates for such shares
         are to be surrendered for payment of the Redemption Price; and (e) that
         dividends on the shares to be redeemed will cease to accumulate on the
         Redemption Date. If fewer than all of the Series B Preferred Shares
         held by any holder are to be redeemed, the notice mailed to such holder
         shall also specify the number of Series B Preferred Shares to be
         redeemed from such holder. If fewer than all the Series B Preferred
         Shares held by any holder are to be redeemed, the notice mailed to such
         holder shall also specify the number of Series B Preferred Shares to be
         redeemed from such holder.

                  (2)      If notice has been mailed in accordance with
         subparagraph (vi)(B)(1) above and provided that on or before the
         Redemption Date specified in such notice all funds necessary for such
         redemption shall have been irrevocably set aside by the Corporation,
         separate and apart from its other funds in trust for the pro rata
         benefit of the holders of the Series B Preferred Shares so called for
         redemption, so as to be, and to continue to be available therefor,
         then, from and after the Redemption Date, dividends on the Series B
         Preferred Shares so called for redemption shall cease to accumulate,
         and said shares shall no longer be deemed to be outstanding and shall
         not have the status of Series B Preferred Shares and all rights of the
         holders thereof as shareholder of the Corporation (except the right to
         receive the Redemption Price) shall cease. Upon surrender, in
         accordance with such notice, of the certificates for any Series B
         Preferred Shares so redeemed (properly endorsed or assigned for
         transfer, if the Corporation shall so require and the notice shall so
         state), such Series B Preferred Shares shall be redeemed by the
         Corporation at the Redemption Price. In case fewer than all the Series
         B Preferred Shares represented by any


                                        4

         such certificate are redeemed, a new certificate or certificates shall
         be issued presenting the unredeemed Series B Preferred Shares without
         cost to the holder thereof.

                  (3)      Any funds deposited with a bank or trust company for
         the purpose of redeeming Series B Preferred Shares shall be irrevocable
         except that:

                           (a)      the Corporation shall be entitled to receive
                  from such bank or trust company the interest or other
                  earnings, if any, earned on any money so deposited in trust,
                  and the holders of any shares redeemed shall have no claim to
                  such interest or other earnings; and

                           (b)      any balance of monies so deposited by the
                  Corporation and unclaimed by the holders of the Series B
                  Preferred Shares entitled thereto at the expiration of two
                  years from the applicable Redemption Date shall be repaid,
                  together with any interest or other earnings earned thereon,
                  to the Corporation, and after any such repayment, the holders
                  of the shares entitled to the funds so repaid to the
                  Corporation shall look only to the Corporation for payment
                  without interest or other earnings.

                  (4)      No Series B Preferred Shares may be redeemed except
         from proceeds from the sale of other capital stock of the Corporation,
         including but not limited to common stock, preferred stock, depositary
         shares, interests, participations or other ownership interests (however
         designated) and any rights (other than debt securities convertible into
         or exchangeable for equity securities) or options to purchase any of
         the foregoing.

                  (5)      Unless full accumulated dividends on all Series B
         Preferred Shares shall have been or contemporaneously are declared and
         paid or declared and a sum sufficient for the payment thereof set apart
         for payment for all past Dividend Periods and the then current Dividend
         Period, no Series B Preferred Shares shall be redeemed or purchased or
         otherwise acquired directly or indirectly (except by conversion into or
         exchange for Junior Shares); provided, however, that the foregoing
         shall not prevent the redemption of Series B Preferred Shares to
         preserve the Corporation's REIT status or the purchase or acquisition
         of Series B Preferred Shares pursuant to a purchase or exchange offer
         made on the same terms to holders of all outstanding Series B Preferred
         Shares.

                  (6)      If the Redemption Date is after a Record Date and
         before the related Quarterly Dividend Date, the dividend payable on
         such Quarterly Dividend Date shall be paid to the holder in whose name
         the Series B Preferred Shares to be redeemed are registered at the
         close of business on such Record Date notwithstanding the redemption
         thereof between such Record Date and the related Quarterly Dividend
         Date or the Corporation's default in the payment of the dividend due.
         Except as provided above, the Company will make no payment or allowance
         for unpaid dividends, whether or not in arrears, on Series B Preferred
         Shares to be redeemed.


                                        5

                  (7)      In case of redemption of less than all Series B
         Preferred Shares at the time outstanding, the Series B Preferred Shares
         to be redeemed shall be selected pro rata from the holders of record of
         such shares in proportion to the number of Series B Preferred Shares
         held by such holders (with adjustments to avoid redemption of
         fractional shares) or by any other equitable method determined by the
         Corporation.

         (vii)    VOTING RIGHTS. Except as required by law, and as set forth
below, the holders of the Series B Preferred Shares shall not be entitled to
vote at any meeting of the shareholders for election of Directors or for any
other purpose or otherwise to participate in any action taken by the Corporation
or the shareholders thereof, or to receive notice of any meeting of
shareholders.

         (A)      Whenever dividends on any Series B Preferred Shares shall be
in arrears for six or more quarterly periods, whether or not such quarterly
periods are consecutive, the holders of such Series B Preferred Shares (voting
separately as a class with all other series of preferred shares upon which like
voting rights have been conferred and are exercisable) will be entitled to vote
for the election of two additional Directors of the Corporation at a special
meeting called by the holders of record of at least ten percent (10%) of any
series of preferred shares so in arrears (unless such request is received less
than 90 days before the date fixed for the next annual or special meeting of the
shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until all dividends accumulated on such Series B
Preferred Shares for the past dividend periods and the then current dividend
period shall have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment. In such case, the entire Board of
Directors of the Corporation will be increased by two Directors.

         (B)      So long as any Series B Preferred Shares remain outstanding,
the Corporation will not, without the affirmative vote or consent of the holders
of at least two-thirds of the Series B Preferred Shares outstanding at the time,
given in person or by proxy, either in writing or at a meeting (such series
voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of shares of capital stock
ranking prior to the Series B Preferred Shares with respect to the payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up or reclassify any authorized shares of the Corporation into such shares, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or repeal
the provisions of the Corporation's Articles of Incorporation, including this
Amendment, whether by merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, privilege or voting power
of the Series B Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii) above, so long
as the Series B Preferred Shares remain outstanding with the terms thereof
materially unchanged, taking into account that upon the occurrence of an Event,
the Corporation may not be the surviving entity, the occurrence of any such
Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of Series B Preferred Shares
and provided further that (x) any increase in the amount of the authorized


                                        6

Preferred Stock or the creating or issuance of any other series of Preferred
Stock, or (y) any increase in the amount of authorized Series B Preferred Shares
or any other series of Preferred Stock, in each case ranking on a parity with or
junior to the Series B Preferred Shares with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up, shall
not be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers.

         The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series B Preferred Shares shall have been
redeemed or called for redemption and sufficient funds shall have been deposited
in trust to effect such redemption.

         (C)      On each matter submitted to a vote of the holders of Series B
Preferred Shares in accordance with this paragraph (d), or as otherwise required
by law, each Series B Preferred Share shall be entitled to one vote. With
respect to each Series B Preferred Share, the holder thereof may designate a
proxy, with each such proxy having the right to vote on behalf of the holder.

         (viii)   CONVERSION. The Series B Preferred Shares are not convertible
into or exchangeable for any other property or securities of the Corporation.

         (ix)     RESTRICTIONS ON OWNERSHIP.

         (A) Definitions. The following terms shall have the following meanings:

                  (1) "Acquire" shall mean the acquisition of Beneficial
Ownership of Series B Preferred Shares by any means whatsoever including,
without limitation, (A) the acquisition of direct ownership of shares by any
Person, including through the exercise of any option, warrant, pledge, security
interest or similar right to acquire shares, and (B) the acquisition of indirect
ownership of shares (taking into account the constructive ownership rules of
Section 544 of the Code, as modified by Section 856(h)(l)(B) of the Code, and
also applying the look-thru rule contained in Section 856(h)(3)(A) of the Code
to pension trusts described in Section 401(a) of the Code) by a Person who is an
"individual" within the meaning of Section 542(a) (2) of the Code, including
through the acquisition by any Person of any option, warrant, pledge, security
interest or similar right to acquire shares.

                  (2) "Beneficial Ownership" shall mean, with respect to any
Person that is an "individual" as defined in Section 542(a) (2) of the Code, the
Series B Preferred Shares owned by such Person after taking into account the
constructive ownership rules of Section 544 of the Code, as modified by Section
856(h)(1)(B) of the Code, and after applying the pension trust look-thru rule
contained in Section 856(h)(3)(A) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.


                                        7

                  (3) "Code" shall mean the Internal Revenue Code of 1986, as
amended. Any reference herein to any current provision of the Code shall be
deemed to refer to any future successor provision of federal income statutory
law.

                  (4) "Initial Public Offering" means the sale of Series B
Preferred Shares pursuant to the Corporation's prospectus supplement dated
October 23, 1997 as filed with the Securities and Exchange Commission pursuant
to Rule 424(b)(5) promulgated under the Securities Act of 1933, as amended.

                  (5) "Ownership Limit" shall initially mean 6% of the
outstanding Series B Preferred Shares of the Corporation, and after any
adjustment as set forth in subparagraph (ix)(H) below, shall mean such greater
percentage (but not greater than 9.8%) of the outstanding Series B Preferred
Shares as so adjusted.

                  (6) "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Section 401(a) or
501(c) (17) of the Code), a portion of a trust permanently set aside for or to
be used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a group as that term
is used for purposes of Section 13(d) (3) of the Securities Exchange Act of
1934, as amended; but does not include an underwriter that participates in a
public offering of the Series B Preferred Shares for a period of 90 days
following the purchase by such underwriter of the Series B Preferred Shares.

                  (7) "REIT" shall mean a Real Estate Investment Trust under
Section 856 of the Code.

                  (8) "Restricted Transfer Redemption Price" shall mean the
lower of (A) the price paid by the transferee from whom shares are being
redeemed and (B) the average of the last reported sales prices on the New York
Stock Exchange of Series B Preferred Shares on the ten trading days immediately
preceding the date fixed for redemption by the Board of Directors, or if the
Series B Preferred Shares are not then traded on the New York Stock Exchange,
the average of the last reported sales prices of the Series B Preferred Shares
on the ten trading days immediately preceding the relevant date as reported on
any exchange or quotation system over which the Series B Preferred Shares may be
traded, or if the Series B Preferred Shares are not then traded over any
exchange or quotation system, then the price determined in good faith by the
Board of Directors of the Corporation as the fair market value of Series B
Preferred Shares on the relevant date.

                  (9) "Restriction Termination Date" shall mean the first day
after the date of the Initial Public Offering on which the Corporation
determines pursuant to subparagraph (ix)(K) below that it is no longer in the
best interests of the Corporation to attempt to, or continue to, qualify as a
REIT.


                                        8

                  (10) "Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition that results in a change in the record
or Beneficial Ownership of Series B Preferred Shares or the right to vote or
receive dividends on Series B Preferred Shares (including (A) the granting of
any option or entering into any agreement for the sale, transfer or other
disposition of Series B Preferred Shares or the right to vote or receive
dividends on Series B Preferred Shares or (B) the sale, transfer, assignment or
other disposition or grant of any securities or rights convertible into or
exchangeable for Series B Preferred Shares, or the right to vote or receive
dividends on Series B Preferred Shares), whether voluntary or involuntary and
whether by operation of law or otherwise.

         (B) Restrictions.

                  (1) During the period commencing on the date of the Initial
Public Offering and prior to the Restriction Termination Date: (a) no Person
shall Acquire any Series B Preferred Shares if, as a result of such acquisition,
any "individual," as defined in Section 542(a)(2) of the Code (other than a
pension trust which is described in Section 401(a) of the Code) shall
Beneficially Own an amount of Series B Preferred Shares in excess of the
Ownership Limit; (b) no Person shall Acquire any shares of Series B Preferred
Shares if, as a result of such acquisition, the Series B Preferred Shares and
Common Stock of the Corporation would be directly or indirectly owned by less
than 100 Persons (determined without reference to the rules of attribution under
Section 544 of the Code); and (c) no Person shall Acquire any shares if, as a
result of such acquisition, the Corporation would be "closely held" within the
meaning of Section 856(h) of the Code.

                  (2) Any Transfer that (x) would result in a violation of the
restrictions in subparagraph (ix)(B)(1)(b) or (c) or (y) a transferring
shareholder has actual knowledge will result in a violation of any of the
restrictions in subparagraph (ix)(B)(1)(a) shall be void ab initio as to the
Transfer of such Series B Preferred Shares that would cause the violation of the
applicable restriction in subparagraph (ix)(B)(1), and the intended transferee
shall acquire no rights in such Series B Preferred Shares.

         (C) Remedies for Breach.

                  (1) If the Board of Directors or a committee thereof shall at
any time determine in good faith that a Transfer has taken place that falls
within the scope of subparagraph (ix)(B)(2) or that a Person intends to Acquire
Beneficial Ownership of any shares of the Corporation that will result in
violation of subparagraph (ix)(B)(1) or (2) (whether or not such violation is
intended), the Board of Directors or a committee thereof shall take such action
as it or they deem advisable to refuse to give effect to or to prevent such
Transfer, including, but not limited to, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer.


                                        9

                  (2) Without limitation to subparagraph (ix)(B)(2) or (C)(1),
any purported transferee of Beneficial Ownership of Series B Preferred Shares
acquired in violation of subparagraph (ix)(B) shall, if it shall be deemed to
have received any such Beneficial Ownership, be deemed to have acted as agent on
behalf of the Corporation in acquiring such of the interests as result in a
violation of subparagraph (ix)(B) and shall be deemed to hold such interests in
trust on behalf and for the benefit of the Corporation. The transferee shall
have no right to receive dividends or other distributions with respect to such
interests, and shall have no right to vote such interests. Such transferee shall
have no claim, cause of action, or any other recourse whatsoever against a
transferor of interests acquired in violation of subparagraph (ix)(B). The
transferee's sole right with respect to such interests shall be to receive at
the Corporation's sole and absolute discretion, either (A) consideration for
such interests upon the resale of the interests as directed by the Corporation
pursuant to subparagraph (ix)(C)(3) or (B) the Restricted Transfer Redemption
Price pursuant to subparagraph (ix)(C)(3).

                  (3) The Board of Directors shall, within 6 months after
receiving notice of a Transfer that violates subparagraph (ix)(C)(2), either (in
its sole and absolute discretion) (A) direct the transferee of such interests to
sell all interests held in trust for the Corporation pursuant to subparagraph
(ix)(C)(2) for cash in such manner as the Board of Directors directs or (B)
redeem such interests for the Restricted Transfer Redemption Price on such date
within such 6 month period as the Board of Directors may determine. If the Board
of Directors directs the transferee to sell the interests, the transferee shall
receive such proceeds as trustee for the Corporation and pay the Corporation out
of the proceeds of such sale all expenses incurred by the Corporation in
connection with such sale plus any remaining amount of such proceeds that
exceeds the amount paid by the transferee for the interests, and the transferee
shall be entitled to retain only the proceeds in excess of such amounts required
to be paid to the Corporation.

         (D) Notice of Restricted Transfer. Any Person who Acquires or attempts
or intends to Acquire shares in violation of subparagraph (ix)(B) shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such Transfer or attempted or
intended Transfer on the Corporation's status as a REIT.

         (E) Owners Required To Provide Information. From the date of the
Initial Public Offering and prior to the Restriction Termination Date each
person who is a Beneficial Owner of Series B Preferred Shares and each Person
(including the shareholder of record) who is holding Series B Preferred Shares
for a Beneficial Owner shall provide to the Corporation such information as the
Corporation may request, in good faith, in order to determine the Corporation's
status as a REIT.

         (F) Remedies Not Limited. Except as provided in subparagraph (ix)(M),
nothing contained in this subparagraph (ix) shall limit the authority of the
Board of Directors to take such other action as it deems necessary or advisable
to protect the Corporation and the interests of its shareholder in preserving
the Corporation's status as a REIT.


                                       10

         (G) Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this subparagraph (ix), including any definition contained in
subparagraph (ix)(A), the Board of Directors shall have the power to determine
the application of the provisions of this subparagraph (ix) with respect to any
situation based on the facts known to it.

         (H) Modification of Ownership Limit. Subject to the limitations
provided in subparagraph (ix)(I), the Board of Directors may from time to time
increase the Ownership Limit.

         (I) Limitations on Modifications.

                  (1) The Ownership Limit may not be increased if, after giving
effect to such increase, five Persons who are considered "individuals" pursuant
to Section 542(a) (2) of the Code could Beneficially Own (including ownership of
Common Stock for purposes of this subparagraph (ix)(I)(1)), in the aggregate,
more than 49.0% in value of the outstanding shares of stock of the Corporation.

                  (2) Prior to the modification of the Ownership Limit pursuant
to subparagraph (ix)(H), the Board of Directors of the Corporation may require
such opinions of counsel, affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or ensure the Corporation's status
as a REIT.

         (J) Legend. Each certificate for Series B Preferred Shares shall bear a
legend referring to the restrictions described above.

         (K) Termination of REIT Status. The Board of Directors shall take no
action to terminate the Corporation's status as a REIT or to amend the
provisions of this subparagraph (ix) until such time as (A) the Board of
Directors adopts a resolution recommending that the Corporation terminate its
status as a REIT or amend this subparagraph (ix), as the case may be, (B) the
Board of Directors presents the resolution at an annual or special meeting of
the shareholders and (C) such resolution is approved by holders of a majority of
the issued and outstanding Series B Preferred Shares.

         (L) Severability. If any provision of this subparagraph or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.

         (M) NYSE Settlement. Nothing in this Amendment shall preclude the
settlement of any transaction with respect to the Series B Preferred Shares of
the Corporation entered into through the facilities of the New York Stock
Exchange."



                                       11

                                      III.

         This Amendment was adopted on October 23, 1997.


                                       IV.

         This Amendment was duly adopted by the Board of Directors without
shareholder approval, as such approval was not required.










                                       12

         IN WITNESS WHEREOF, Post Properties, Inc. has caused these Articles of
Amendment to be executed and sealed by its duly authorized officers this 23th
day of October, 1997.

                                    POST PROPERTIES, INC.


                                    By: /s/ John A. Williams
                                       -----------------------------------------
                                       John A. Williams
                                       Chairman and Chief Executive Officer

[CORPORATE SEAL]



Attest:


/s/ Sherry W. Cohen
- --------------------
Sherry W. Cohen
Senior Vice President and Secretary








                                       13

EX-3.4

                                                                     EXHIBIT 3.4

                             ARTICLES OF AMENDMENT

                                       OF

                           ARTICLES OF INCORPORATION

                                       OF

                             POST PROPERTIES, INC.


                                       I.

         The name of the corporation is Post Properties, Inc. (the
"Corporation")


                                      II.

         The amendment (the "Amendment") is to add the following as a new
Article 2(e) of the Corporation's Articles of Incorporation, to determine the
terms of a series of the Preferred Stock:

"(e)     7 5/8% Series C Cumulative Redeemable Preferred Shares.

         (i)    TITLE. The series of Preferred Stock is hereby designated as
the "7 5/8% Series C Cumulative Redeemable Preferred Shares" (the "Series C
Preferred Shares").

         (ii)   NUMBER. The maximum number of authorized shares of the Series C
Preferred Shares shall be 2,300,000.

         (iii)  RELATIVE SENIORITY. In respect of rights to receive dividends
and to participate in distributions of payments in the event of any
liquidation, dissolution or winding up of the Corporation, the Series C
Preferred Shares shall rank senior to the Common Stock and any other class or
series of shares of the Corporation ranking, as to dividends and upon
liquidation, junior to the Series C Preferred Shares (collectively, "Junior
Shares").

         (iv)   DIVIDENDS.

                (A) The holders of the then outstanding Series C Preferred
Shares shall be entitled to receive, when and as declared by the Board of
Directors out of any funds legally available therefor, cumulative dividends at
the rate of $1.90625 per share per year, payable in equal amounts of $0.47656
per share quarterly in cash on the last day of each March, June, September, and
December or, if not a Business Day (as hereinafter defined), the next
succeeding Business Day. Dividends shall begin on March 31, 1998 (each such day
being hereafter called a "Quarterly Dividend Date" and each period ending on a
Quarterly Dividend Date being hereinafter called a "Dividend Period").
Dividends shall be payable to holders of record as they appear in the share
records of the Corporation at the close of business on the applicable record
date (the "Record Date"),





which shall be the 15th day of the calendar month in which the applicable
Quarterly Dividend Date falls on or such other date designated by the Board of
Directors of the Corporation for the payment of dividends that is not more than
30 nor less than 10 days prior to such Quarterly Dividend Date. The amount of
any dividend payable for any Dividend Period shorter than a full Dividend
Period shall be prorated and computed on the basis of a 360-day year of twelve
30-day months. Dividends paid on the Series C Preferred Shares in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a per share basis among all such
shares at the time outstanding.

                  "Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in New York City are authorized or required by law, regulation or executive
order to close.

                  (B) The amount of any dividends accrued on any Series C
Preferred Shares at any Quarterly Dividend Date shall be the amount of any
unpaid dividends accumulated thereon, to and including such Quarterly Dividend
Date, whether or not earned or declared, and the amount of dividends accrued on
any shares of Series C Preferred Shares at any date other than a Quarterly
Dividend Date shall be equal to the sum of the amount of any unpaid dividends
accumulated thereon, to and including the last preceding Quarterly Dividend
Date, whether or not earned or declared, plus an amount calculated on the basis
of the annual dividend rate of $1.90625 per share for the period after such
last preceding Quarterly Dividend Date to and including the date as of which
the calculation is made based on a 360-day year of twelve 30-day months.

                  (C) Except as provided in this paragraph (e), the Series C
Preferred Shares will not be entitled to any dividends in excess of full
cumulative dividends as described above and shall not be entitled to
participate in the earnings or assets of the Corporation, and no interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series C Preferred Shares which may be in arrears.

                  (D) Any dividend payment made on the Series C Preferred
Shares shall be first credited against the earliest accrued but unpaid dividend
due with respect to such shares which remains payable.

                  (E) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section 857 of the
Internal Revenue Code of 1986, as amended (the "Code")), any portion (the
"Capital Gains Amount") of the dividends paid or made available for the year to
holders of all classes of shares (the "Total Dividends"), then the portion of
the Capital Gains Amount that shall be allocated to the holders of the Series C
Preferred Shares shall equal (i) the Capital Gains Amount multiplied by (ii) a
fraction that is equal to (a) the total dividends paid or made available to the
holders of the Series C Preferred Shares for the year over (b) the Total
Dividends.

                  (F) No dividends on the Series C Preferred Shares shall be
authorized by the Board of Directors or be paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its

                                       2





indebtedness, prohibit such authorization, payment or setting apart for payment
or provides that such authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such authorization
or payment shall be restricted or prohibited by law. Notwithstanding the
foregoing, dividends on the Series C Preferred Shares will accrue whether or
not the Corporation has earnings, whether or not there are funds legally
available for the payment of such dividends and whether or not such dividends
are authorized.

         (v)      LIQUIDATION RIGHTS.

                  (A) Upon the voluntary or involuntary dissolutions,
liquidation or winding up of the Corporation, the holders of the Series C
Preferred Shares then outstanding shall be entitled to receive and to be paid
out of the assets of the Corporation available for distribution to its
shareholders, before any payment or distribution shall be made on any Junior
Shares, the amount of $25.00 per share, plus accrued and unpaid dividends
thereon.

                  (B) After the payment to the holders of the Series C
Preferred Shares of the full preferential amounts provided for in this
paragraph (e), the holder of the Series C Preferred Shares, as such, shall have
no right or claim to any of the remaining assets of the Corporation.

                  (C) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable with respect
to the preference value of the Series C Preferred Shares and any other shares
of the Corporation ranking as to any such distribution on a parity with the
Series C Preferred Shares are not paid in full, the holders of the Series C
Preferred Shares and of such other shares will share ratably in any such
distribution of assets of the Corporation in proportion to the full respective
preference amounts to which they are entitled.

                  (D) Neither the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Corporation, nor the
merger or consolidation of the Corporation into or with any other entity or the
merger or consolidation of any other entity into or with the Corporation, shall
be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this paragraph (e).

         (vi)     REDEMPTION.

                  (A) OPTIONAL REDEMPTION. On and after February 9, 2003, the
Corporation may, at its option, redeem at any time all or, from time to time,
part of the Series C Preferred Shares at a price per share (the " Redemption
Price"), payable in cash, of $25.00, together with all accrued and unpaid
dividends to and including the date fixed for redemption (the "Redemption
Date"), without interest, to the full extent the Company has funds legally
available therefor. The Series C Preferred Shares have no stated maturity,
except as provided for in subparagraph (ix) below, and will not be subject to
any sinking fund or mandatory redemption provisions.

                                       3





                  (B)      PROCEDURES OF REDEMPTION.

                           (1) Notice of redemption will be given by
         publication in a newspaper of general circulation in the City of New
         York, such publication to be made once a week for two successive weeks
         commencing not less than 30 nor more than 60 days prior to the
         Redemption Date. Notice of any redemption will also be mailed by the
         registrar, postage prepaid, not less than 30 nor more than 60 days
         prior to the Redemption Date, addressed to each holder of record of
         the Series C Preferred Shares to be redeemed at the address set forth
         in the share transfer records of the registrar. No failure to give
         such notice or any defect therein or in the mailing thereof shall
         affect the validity of the proceedings for the redemption of any
         Series C Preferred Shares except as to the holder to whom the
         Corporation has failed to give notice or except as to the holder to
         whom notice was defective. In addition to any information required by
         law or by the applicable rules of any exchange upon which Series C
         Preferred Shares may be listed or admitted to trading, such notice
         shall state: (a) the Redemption Date; (b) the Redemption Price; (c)
         the number of Series C Preferred Shares to be redeemed; (d) the place
         or places where certificates for such shares are to be surrendered for
         payment of the Redemption Price; and (e) that dividends on the shares
         to be redeemed will cease to accumulate on the Redemption Date. If
         fewer than all of the Series C Preferred Shares held by any holder are
         to be redeemed, the notice mailed to such holder shall also specify
         the number of Series C Preferred Shares to be redeemed from such
         holder. If fewer than all the Series C Preferred Shares held by any
         holder are to be redeemed, the notice mailed to such holder shall also
         specify the number of Series C Preferred Shares to be redeemed from
         such holder.

                           (2) If notice has been mailed in accordance with
         subparagraph (vi)(B)(1) above and provided that on or before the
         Redemption Date specified in such notice all funds necessary for such
         redemption shall have been irrevocably set aside by the Corporation,
         separate and apart from its other funds in trust for the pro rata
         benefit of the holders of the Series C Preferred Shares so called for
         redemption, so as to be, and to continue to be available therefor,
         then, from and after the Redemption Date, dividends on the Series C
         Preferred Shares so called for redemption shall cease to accumulate,
         and said shares shall no longer be deemed to be outstanding and shall
         not have the status of Series C Preferred Shares and all rights of the
         holders thereof as shareholder of the Corporation (except the right to
         receive the Redemption Price) shall cease. Upon surrender, in
         accordance with such notice, of the certificates for any Series C
         Preferred Shares so redeemed (properly endorsed or assigned for
         transfer, if the Corporation shall so require and the notice shall so
         state), such Series C Preferred Shares shall be redeemed by the
         Corporation at the Redemption Price. In case fewer than all the Series
         C Preferred Shares represented by any such certificate are redeemed, a
         new certificate or certificates shall be issued presenting the
         unredeemed Series C Preferred Shares without cost to the holder
         thereof.

                           (3) Any funds deposited with a bank or trust company
         for the purpose of redeeming Series C Preferred Shares shall be
         irrevocable except that:

                                       4





                           (a) the Corporation shall be entitled to receive
                  from such bank or trust company the interest or other
                  earnings, if any, earned on any money so deposited in trust,
                  and the holders of any shares redeemed shall have no claim to
                  such interest or other earnings; and

                           (b) any balance of monies so deposited by the
                  Corporation and unclaimed by the holders of the Series C
                  Preferred Shares entitled thereto at the expiration of two
                  years from the applicable Redemption Date shall be repaid,
                  together with any interest or other earnings earned thereon,
                  to the Corporation, and after any such repayment, the holders
                  of the shares entitled to the funds so repaid to the
                  Corporation shall look only to the Corporation for payment
                  without interest or other earnings.

                           (4) No Series C Preferred Shares may be redeemed
         except from proceeds from the sale of other capital stock of the
         Corporation, including but not limited to common stock, preferred
         stock, depositary shares, interests, participations or other ownership
         interests (however designated) and any rights (other than debt
         securities convertible into or exchangeable for equity securities) or
         options to purchase any of the foregoing.

                           (5) Unless full accumulated dividends on all Series
         C Preferred Shares shall have been or contemporaneously are declared
         and paid or declared and a sum sufficient for the payment thereof set
         apart for payment for all past Dividend Periods and the then current
         Dividend Period, no Series C Preferred Shares shall be redeemed or
         purchased or otherwise acquired directly or indirectly (except by
         conversion into or exchange for Junior Shares); provided, however,
         that the foregoing shall not prevent the redemption of Series C
         Preferred Shares to preserve the Corporation's REIT status or the
         purchase or acquisition of Series C Preferred Shares pursuant to a
         purchase or exchange offer made on the same terms to holders of all
         outstanding Series C Preferred Shares.

                           (6) If the Redemption Date is after a Record Date
         and before the related Quarterly Dividend Date, the dividend payable
         on such Quarterly Dividend Date shall be paid to the holder in whose
         name the Series C Preferred Shares to be redeemed are registered at
         the close of business on such Record Date notwithstanding the
         redemption thereof between such Record Date and the related Quarterly
         Dividend Date or the Corporation's default in the payment of the
         dividend due. Except as provided above, the Company will make no
         payment or allowance for unpaid dividends, whether or not in arrears,
         on Series C Preferred Shares to be redeemed.

                           (7) In case of redemption of less than all Series C
         Preferred Shares at the time outstanding, the Series C Preferred
         Shares to be redeemed shall be selected pro rata from the holders of
         record of such shares in proportion to the number of Series C
         Preferred Shares held by such holders (with adjustments to avoid
         redemption of fractional shares) or by any other equitable method
         determined by the Corporation.

         (vii) VOTING RIGHTS. Except as required by law, and as set forth
below, the holders of the Series C Preferred Shares shall not be entitled to
vote at any meeting of the shareholders for

                                       5





election of Directors or for any other purpose or otherwise to participate in
any action taken by the Corporation or the shareholders thereof, or to receive
notice of any meeting of shareholders.

                  (A) Whenever dividends on any Series C Preferred Shares shall
be in arrears for six or more quarterly periods, whether or not such quarterly
periods are consecutive, the holders of such Series C Preferred Shares (voting
separately as a class with all other series of preferred shares upon which like
voting rights have been conferred and are exercisable) will be entitled to vote
for the election of two additional Directors of the Corporation at a special
meeting called by the holders of record of at least ten percent (10%) of any
series of preferred shares so in arrears (unless such request is received less
than 90 days before the date fixed for the next annual or special meeting of
the shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until all dividends accumulated on such Series C
Preferred Shares for the past dividend periods and the then current dividend
period shall have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment. In such case, the entire Board of
Directors of the Corporation will be increased by two Directors.

                  (B) So long as any Series C Preferred Shares remain
outstanding, the Corporation will not, without the affirmative vote or consent
of the holders of at least two-thirds of the Series C Preferred Shares
outstanding at the time, given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class), (i) authorize or create, or
increase the authorized or issued amount of, any class or series of shares of
capital stock ranking prior to the Series C Preferred Shares with respect to
the payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up or reclassify any authorized shares of the
Corporation into such shares, or create, authorize or issue any obligation or
security convertible into or evidencing the right to purchase any such shares;
or (ii) amend, alter or repeal the provisions of the Corporation's Articles of
Incorporation, including this Amendment, whether by merger, consolidation or
otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series C Preferred Shares or the
holders thereof; provided, however, with respect to the occurrence of any of
the Events set forth in (ii) above, so long as the Series C Preferred Shares
remain outstanding with the terms thereof materially unchanged, taking into
account that upon the occurrence of an Event, the Corporation may not be the
surviving entity, the occurrence of any such Event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
power of holders of Series C Preferred Shares and provided further that (x) any
increase in the amount of the authorized Preferred Stock or the creating or
issuance of any other series of Preferred Stock, or (y) any increase in the
amount of authorized Series C Preferred Shares or any other series of Preferred
Stock, in each case ranking on a parity with or junior to the Series C
Preferred Shares with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.

                  The foregoing voting provisions will not apply if, at or
prior to the time when the act with respect to which such vote would otherwise
be required shall be effected, all outstanding Series C Preferred Shares shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.

                                       6





                  (C) On each matter submitted to a vote of the holders of
Series C Preferred Shares in accordance with this paragraph (e), or as
otherwise required by law, each Series C Preferred Share shall be entitled to
one vote. With respect to each Series C Preferred Share, the holder thereof may
designate a proxy, with each such proxy having the right to vote on behalf of
the holder.

         (viii)   CONVERSION. The Series C Preferred Shares are not convertible
into or exchangeable for any other property or securities of the Corporation.

         (ix)     RESTRICTIONS ON OWNERSHIP.

                  (A) Definitions. The following terms shall have the following
meanings:

                      (1) "Acquire" shall mean the acquisition of Beneficial
         Ownership of Series C Preferred Shares by any means whatsoever
         including, without limitation, (A) the acquisition of direct ownership
         of shares by any Person, including through the exercise of any option,
         warrant, pledge, security interest or similar right to acquire shares,
         and (B) the acquisition of indirect ownership of shares (taking into
         account the constructive ownership rules of Section 544 of the Code,
         as modified by Section 856(h)(l)(B) of the Code, and also applying the
         look-thru rule contained in Section 856(h)(3)(A) of the Code to
         pension trusts described in Section 401(a) of the Code) by a Person
         who is an "individual" within the meaning of Section 542(a) (2) of the
         Code, including through the acquisition by any Person of any option,
         warrant, pledge, security interest or similar right to acquire shares.

                      (2) "Beneficial Ownership" shall mean, with respect to
         any Person that is an "individual" as defined in Section 542(a) (2) of
         the Code, the Series C Preferred Shares owned by such Person after
         taking into account the constructive ownership rules of Section 544 of
         the Code, as modified by Section 856(h)(1)(B) of the Code, and after
         applying the pension trust look-thru rule contained in Section
         856(h)(3)(A) of the Code. The terms "Beneficial Owner," "Beneficially
         Owns" and "Beneficially Owned" shall have the correlative meanings.

                      (3) "Code" shall mean the Internal Revenue Code of 1986,
         as amended. Any reference herein to any current provision of the Code
         shall be deemed to refer to any future successor provision of federal
         income statutory law.

                      (4) "Initial Public Offering" means the sale of Series C
         Preferred Shares pursuant to the Corporation's prospectus supplement
         dated February 4, 1998 as filed with the Securities and Exchange
         Commission pursuant to Rule 424(b)(5) promulgated under the Securities
         Act of 1933, as amended.

                      (5) "Ownership Limit" shall initially mean 6% of the
         outstanding Series C Preferred Shares of the Corporation, and after
         any adjustment as set forth in subparagraph (ix)(H) below, shall mean
         such greater percentage (but not greater than 9.8%) of the outstanding
         Series C Preferred Shares as so adjusted.

                                       7


                           (6)  "Person" shall mean an individual, corporation,
         partnership, estate, trust (including a trust qualified under Section
         401(a) or 501(c) (17) of the Code), a portion of a trust permanently
         set aside for or to be used exclusively for the purposes described in
         Section 642(c) of the Code, association, private foundation within the
         meaning of Section 509(a) of the Code, joint stock company or other
         entity and also includes a group as that term is used for purposes of
         Section 13(d) (3) of the Securities Exchange Act of 1934, as amended;
         but does not include an underwriter that participates in a public
         offering of the Series C Preferred Shares for a period of 90 days
         following the purchase by such underwriter of the Series C Preferred
         Shares.

                           (7)  "REIT" shall mean a Real Estate Investment
         Trust under Section 856 of the Code.

                           (8)  "Restricted Transfer Redemption Price" shall
         mean the lower of (A) the price paid by the transferee from whom
         shares are being redeemed and (B) the average of the last reported
         sales prices on the New York Stock Exchange of Series C Preferred
         Shares on the ten trading days immediately preceding the date fixed
         for redemption by the Board of Directors, or if the Series C Preferred
         Shares are not then traded on the New York Stock Exchange, the average
         of the last reported sales prices of the Series C Preferred Shares on
         the ten trading days immediately preceding the relevant date as
         reported on any exchange or quotation system over which the Series C
         Preferred Shares may be traded, or if the Series C Preferred Shares
         are not then traded over any exchange or quotation system, then the
         price determined in good faith by the Board of Directors of the
         Corporation as the fair market value of Series C Preferred Shares on
         the relevant date.

                           (9)  "Restriction Termination Date" shall mean the
         first day after the date of the Initial Public Offering on which the
         Corporation determines pursuant to subparagraph (ix)(K) below that it
         is no longer in the best interests of the Corporation to attempt to,
         or continue to, qualify as a REIT.

                           (10) "Transfer" shall mean any sale, transfer, gift,
         assignment, devise or other disposition that results in a change in
         the record or Beneficial Ownership of Series C Preferred Shares or the
         right to vote or receive dividends on Series C Preferred Shares
         (including (A) the granting of any option or entering into any
         agreement for the sale, transfer or other disposition of Series C
         Preferred Shares or the right to vote or receive dividends on Series C
         Preferred Shares or (B) the sale, transfer, assignment or other
         disposition or grant of any securities or rights convertible into or
         exchangeable for Series C Preferred Shares, or the right to vote or
         receive dividends on Series C Preferred Shares), whether voluntary or
         involuntary and whether by operation of law or otherwise.

                  (B)      Restrictions.

                           (1) During the period commencing on the date of the
         Initial Public Offering and prior to the Restriction Termination Date:
         (a) no Person shall Acquire any Series C Preferred Shares if, as a
         result of such acquisition, any "individual," as defined in

                                       8





         Section 542(a)(2) of the Code (other than a pension trust which is
         described in Section 401(a) of the Code) shall Beneficially Own an
         amount of Series C Preferred Shares in excess of the Ownership Limit;
         (b) no Person shall Acquire any shares of Series C Preferred Shares
         if, as a result of such acquisition, the Series C Preferred Shares and
         Common Stock of the Corporation would be directly or indirectly owned
         by less than 100 Persons (determined without reference to the rules of
         attribution under Section 544 of the Code); and (c) no Person shall
         Acquire any shares if, as a result of such acquisition, the
         Corporation would be "closely held" within the meaning of Section
         856(h) of the Code.

                      (2) Any Transfer that (x) would result in a violation of
         the restrictions in subparagraph (ix)(B)(1)(b) or (c) or (y) a
         transferring shareholder has actual knowledge will result in a
         violation of any of the restrictions in subparagraph (ix)(B)(1)(a)
         shall be void ab initio as to the Transfer of such Series C Preferred
         Shares that would cause the violation of the applicable restriction in
         subparagraph (ix)(B)(1), and the intended transferee shall acquire no
         rights in such Series C Preferred Shares.

                  (C) Remedies for Breach.

                      (1) If the Board of Directors or a committee thereof
         shall at any time determine in good faith that a Transfer has taken
         place that falls within the scope of subparagraph (ix)(B)(2) or that a
         Person intends to Acquire Beneficial Ownership of any shares of the
         Corporation that will result in violation of subparagraph (ix)(B)(1)
         or (2) (whether or not such violation is intended), the Board of
         Directors or a committee thereof shall take such action as it or they
         deem advisable to refuse to give effect to or to prevent such
         Transfer, including, but not limited to, refusing to give effect to
         such Transfer on the books of the Corporation or instituting
         proceedings to enjoin such Transfer.

                      (2) Without limitation to subparagraph (ix)(B)(2) or (C)
         (1), any purported transferee of Beneficial Ownership of Series C
         Preferred Shares acquired in violation of subparagraph (ix)(B) shall,
         if it shall be deemed to have received any such Beneficial Ownership,
         be deemed to have acted as agent on behalf of the Corporation in
         acquiring such of the interests as result in a violation of
         subparagraph (ix)(B) and shall be deemed to hold such interests in
         trust on behalf and for the benefit of the Corporation. The transferee
         shall have no right to receive dividends or other distributions with
         respect to such interests, and shall have no right to vote such
         interests. Such transferee shall have no claim, cause of action, or
         any other recourse whatsoever against a transferor of interests
         acquired in violation of subparagraph (ix)(B). The transferee's sole
         right with respect to such interests shall be to receive at the
         Corporation's sole and absolute discretion, either (A) consideration
         for such interests upon the resale of the interests as directed by the
         Corporation pursuant to subparagraph (ix)(C)(3) or (B) the Restricted
         Transfer Redemption Price pursuant to subparagraph (ix)(C)(3).

                      (3) The Board of Directors shall, within 6 months after
         receiving notice of a Transfer that violates subparagraph (ix)(C)(2),
         either (in its sole and absolute discretion) (A) direct the transferee
         of such interests to sell all interests held in trust for the
         Corporation

                                       9





         pursuant to subparagraph (ix)(C)(2) for cash in such manner as the
         Board of Directors directs or (B) redeem such interests for the
         Restricted Transfer Redemption Price on such date within such 6 month
         period as the Board of Directors may determine. If the Board of
         Directors directs the transferee to sell the interests, the transferee
         shall receive such proceeds as trustee for the Corporation and pay the
         Corporation out of the proceeds of such sale all expenses incurred by
         the Corporation in connection with such sale plus any remaining amount
         of such proceeds that exceeds the amount paid by the transferee for
         the interests, and the transferee shall be entitled to retain only the
         proceeds in excess of such amounts required to be paid to the
         Corporation.

                  (D) Notice of Restricted Transfer. Any Person who Acquires or
attempts or intends to Acquire shares in violation of subparagraph (ix)(B)
shall immediately give written notice to the Corporation of such event and
shall provide to the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such Transfer or attempted
or intended Transfer on the Corporation's status as a REIT.

                  (E) Owners Required To Provide Information. From the date of
the Initial Public Offering and prior to the Restriction Termination Date each
person who is a Beneficial Owner of Series C Preferred Shares and each Person
(including the shareholder of record) who is holding Series C Preferred Shares
for a Beneficial Owner shall provide to the Corporation such information as the
Corporation may request, in good faith, in order to determine the Corporation's
status as a REIT.

                  (F) Remedies Not Limited. Except as provided in subparagraph
(ix)(M), nothing contained in this subparagraph (ix) shall limit the authority
of the Board of Directors to take such other action as it deems necessary or
advisable to protect the Corporation and the interests of its shareholder in
preserving the Corporation's status as a REIT.

                  (G) Ambiguity. In the case of an ambiguity in the application
of any of the provisions of this subparagraph (ix), including any definition
contained in subparagraph (ix)(A), the Board of Directors shall have the power
to determine the application of the provisions of this subparagraph (ix) with
respect to any situation based on the facts known to it.

                  (H) Modification of Ownership Limit. Subject to the
limitations provided in subparagraph (ix)(I), the Board of Directors may from
time to time increase the Ownership Limit.

                  (I) Limitations on Modifications.

                      (1) The Ownership Limit may not be increased if, after
         giving effect to such increase, five Persons who are considered
         "individuals" pursuant to Section 542(a) (2) of the Code could
         Beneficially Own (including ownership of Common Stock for purposes of
         this subparagraph (ix)(I)(1)), in the aggregate, more than 49.0% in
         value of the outstanding shares of stock of the Corporation.

                                       10





                      (2) Prior to the modification of the Ownership Limit
         pursuant to subparagraph (ix)(H), the Board of Directors of the
         Corporation may require such opinions of counsel, affidavits,
         undertakings or agreements as it may deem necessary or advisable in
         order to determine or ensure the Corporation's status as a REIT.

                  (J) Legend. Each certificate for Series C Preferred Shares
shall bear a legend referring to the restrictions described above.

                  (K) Termination of REIT Status. The Board of Directors shall
take no action to terminate the Corporation's status as a REIT or to amend the
provisions of this subparagraph (ix) until such time as (A) the Board of
Directors adopts a resolution recommending that the Corporation terminate its
status as a REIT or amend this subparagraph (ix), as the case may be, (B) the
Board of Directors presents the resolution at an annual or special meeting of
the shareholders and (C) such resolution is approved by holders of a majority
of the issued and outstanding Series C Preferred Shares.

                  (L) Severability. If any provision of this subparagraph or
any application of any such provision is determined to be invalid by any
Federal or state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.

                  (M) NYSE Settlement. Nothing in this Amendment shall preclude
the settlement of any transaction with respect to the Series C Preferred Shares
of the Corporation entered into through the facilities of the New York Stock
Exchange."


                                      III.

         This Amendment was adopted on February 4, 1998.


                                      IV.

         This Amendment was duly adopted by the Board of Directors without
shareholder approval, as such approval was not required.

                                       11




         IN WITNESS WHEREOF, Post Properties, Inc. has caused these Articles of
Amendment to be executed and sealed by its duly authorized officers this 4th
day of February, 1998.


                                      POST PROPERTIES, INC.


                                      By:  /s/  John T. Glover
                                           ------------------------------------
                                           John T. Glover
                                           President


[CORPORATE SEAL]



Attest:

- ------------------------------------
Sherry W. Cohen
Senior Vice President and Secretary

                                       12

EX-3.6

                                                                     EXHIBIT 3.6


                                     BYLAWS

                                       OF

                              POST PROPERTIES, INC.
                 (as Amended and Restated as of March 22, 2003)


                                    ARTICLE I

                                  SHAREHOLDERS

                  SECTION 1. ANNUAL MEETING. The annual meeting of the
shareholders for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held at such place,
either within or without the State of Georgia, on such date, and at such time,
as the Board of Directors may by resolution provide, or if the Board of
Directors fails to provide, then such meeting shall be held at the principal
office of the Corporation at 10:00 a.m., local time, on the fourth Tuesday in
April of each year, if not a legal holiday under the laws of the State of
Georgia, and if a legal holiday, on the next succeeding business day. The Board
of Directors may specify by resolution prior to any special meeting of
shareholders held within the year that such meeting shall be in lieu of the
annual meeting.

                  SECTION 2. SPECIAL MEETINGS. Special meetings of the
shareholders may be called by the Board of Directors, by the Chairman of the
Board of Directors, by the President, or by the Corporation upon the written
request (which request shall set forth the purpose or purposes of the meeting)
of the shareholders of record (as established pursuant to Section 6(b) of
Article I of these Bylaws) of outstanding shares representing more than 50% of
all the votes entitled to be cast on any issue proposed to be considered at the
proposed special meeting. In the event such meeting is called by the Board of
Directors, the Chairman of the Board, or the President, such meeting may be held
at such place, either within or without the State of Georgia, as is stated in
the call and notice thereof. If such meeting is called at the request of
shareholders as provided in this Section 2, then such meeting shall be held at
such place in the State of Georgia as is stated in the notice thereof.

                  SECTION 3. NOTICE OF MEETINGS. A written or printed notice
stating the place, day and hour of the meeting, and in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered or mailed by the Secretary of the Corporation to each holder of record
of stock of the Corporation at the time entitled to vote, at his address as it
appears upon the records of the Corporation, not less than 10 nor more than 60
days prior to such meeting. If the Secretary fails to give such notice within 20
days after the call of a meeting, the person calling or requesting such meeting,
or any person designated by them, may give such notice. Notice of such meeting
may be waived in writing by any shareholder. Notice of any adjourned meeting of
the shareholders shall not be required if the time and place to which the
meeting is adjourned are announced at the meeting at which the adjournment is
taken, unless the Board of Directors sets a new record date for such meeting in
which case notice shall be given in the manner provided in this Section 3.




                  SECTION 4. QUORUM AND SHAREHOLDER VOTE. A quorum for action on
any subject matter at any annual or special meeting of shareholders shall exist
when the holders of shares entitled to vote a majority of the votes entitled to
be cast on such subject matter are represented in person or by proxy at such
meeting. If a quorum is present, the affirmative vote of such number of shares
as is required by the Georgia Business Corporation Code (as in effect at the
time the vote is taken), for approval of the subject matter being voted upon,
shall be the act of the shareholders, unless a greater vote is required by the
Articles of Incorporation or these Bylaws. If a quorum is not present, a meeting
of shareholders may be adjourned from time to time by the vote of shares having
a majority of the votes of the shares represented at such meeting, until a
quorum is present. When a quorum is present at the reconvening of any adjourned
meeting, and if the requirements of Section 3 of this Article I have been
observed, then any business may be transacted at such reconvened meeting in the
same manner and to the same extent as it might have been transacted at the
meeting as originally noticed.

                  SECTION 5. PROXIES. A shareholder may vote either in person or
by proxy duly executed in writing by the shareholder. Unless written notice to
the contrary is delivered to the Corporation by the shareholder, a proxy for any
meeting shall be valid for any reconvention of any adjourned meeting.

                  SECTION 6. FIXING RECORD DATE.

                  (a)      Except as provided in paragraph (b) of this Section
6, for the purpose of determining shareholders entitled to notice of or to vote
at any meeting of shareholders or any adjournment thereof, or entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors shall have the
power to fix a date, which date shall not be more than 70 days prior to the date
on which the particular action requiring a determination of shareholders is to
be taken, as the record date for any such determination of shareholders. A
record date for the determination of shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof shall not be set
less than 10 days prior to such meeting; provided that the record date for the
determination of shareholders entitled to notice of or to vote at any special
meeting of shareholders called by the Corporation at the request of holders of
shares pursuant to Section 2 of Article I hereof or any adjournment thereof
shall be 20 days after the "Determination Date" (as defined in paragraph (b) of
this Section 6), and provided further that such record date shall be 70 days
prior to such special meeting. In any case where a record date is set, under any
provision of this Section 6, only shareholders of record on the said date shall
be entitled to participate in the action for which the determination of
shareholders of record is made, whether the action is payment of a dividend,
allotment of any rights or any change or conversion or exchange of capital stock
or other such action, and, if the record date is set for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders, only
such shareholders of record shall be entitled to such notice or vote,
notwithstanding any transfer of any shares on the books of the Corporation after
such record date.

                  (b)      (i)      In order that the Corporation may determine
the shareholders entitled to request a special meeting of the shareholders or a
special meeting in lieu of the annual



                                      -2-

meeting of the shareholders pursuant to Section 2 of Article I hereof, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than 10 days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. Any shareholder of record seeking to have the shareholders request
such a special meeting shall, by written notice to the Secretary, request the
Board of Directors to fix a record date. The Board of Directors shall, within 10
business days after the date on which such a request is received, adopt a
resolution fixing the record date. If no record date has been fixed by the Board
of Directors within 10 business days after the date on which such a request is
received, the record date for determining shareholders entitled to request such
a special meeting shall be the first day on which a signed written request
setting forth the request to fix a record date is delivered to the Corporation
by delivery to its principal place of business, or any officer or agent of the
Corporation having custody of the books in which proceedings of meetings of
shareholders are recorded.

                           (ii)     Every written request for a special meeting
shall bear the date of signature of each shareholder who signs the request and
no such request shall be effective to request such a meeting unless, within 70
days after the record date established in accordance with paragraph (b)(i) of
this Section, written requests signed by a sufficient number of record holders
as of such record date to request a special meeting in accordance with Section 2
of Article I hereof are delivered to the Corporation in the manner prescribed in
paragraph (b)(i) of this Section.

                           (iii)    In the event of the delivery, in the manner
provided by this Section, to the Corporation of the requisite written request or
requests for a special meeting and/or any related revocation or revocations, the
Corporation shall engage nationally recognized independent inspectors of
elections for the purpose of promptly performing a ministerial review of the
validity of the requests and revocations. For the purpose of permitting a prompt
ministerial review by the independent inspectors, no request by shareholders for
a special meeting shall be effective until the earlier of (i) five business days
following delivery to the Corporation of requests signed by the holders of
record (on the record date established in paragraph (b)(i) of this Section) of
the requisite minimum number of shares that would be necessary to request such a
meeting under Section 2 of Article I hereof, or (ii) such date as the
independent inspectors certify to the Corporation that the requests delivered to
the Corporation in accordance with this Article represent at least the minimum
number of shares that would be necessary to request such meeting (the earlier of
such dates being herein referred to as the "Determination Date"). Nothing
contained in this paragraph shall in any way be construed to suggest or imply
that the Board of Directors or any shareholder shall not be entitled to contest
the validity of any request or revocation thereof, whether during or after such
five business day period, or to take any other action (including, without
limitation, the commencement, prosecution or defense of any litigation with
respect thereto).

                           (iv)     Unless the independent inspectors shall
deliver, on or before the Determination Date, a certified report to the
Corporation stating that the valid requests for a special meeting submitted
pursuant to paragraph (iii) above represent less than the requisite minimum
number of shares that would be necessary to request a special meeting under
Section 2 of Article I hereof, the Board of Directors shall, within five
business days after the


                                      -3-

Determination Date, adopt a resolution calling a special meeting of the
shareholders and fixing a record date for such meeting, in accordance with
Section 6(a) of Article I of these Bylaws.

                  SECTION 7. NOTICE OF SHAREHOLDER BUSINESS. At an annual
meeting of the shareholders, only such business shall be conducted as shall have
been brought before the meeting (a) by or at the direction of the Board of
Directors or (b) by any shareholder of the Corporation who complies with the
notice procedures set forth in this Section 7 and only to the extent that such
business is appropriate for shareholder action under the provisions of the
Georgia Business Corporation Code. For business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which notice of the date of the
annual meeting was mailed to such shareholder. A shareholder's notice to the
Secretary shall set forth as to each matter the shareholder proposes to bring
before the annual meeting (a) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (b) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business, (c) the class
and number of shares of stock of the Corporation which are beneficially owned by
the shareholder, and (d) any material interest of the shareholder in such
business. Notwithstanding anything in the Bylaws to the contrary, no business
shall be conducted at an annual meeting except in accordance with the procedures
set forth in this Section 7. At an annual meeting, the Chairman shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 7, and if he should so determine, he shall so declare to the meeting and
any such business not properly brought before the meeting shall not be
transacted.

                  SECTION 8. NOTICE OF SHAREHOLDER NOMINEES. Except for
Directors who are elected by Directors pursuant to the provisions of Section 9
of Article II of these Bylaws, only persons who are nominated in accordance with
the procedures set forth in this Section 8 shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of the
Corporation may be made at a meeting of shareholders (a) by or at the direction
of the Board of Directors or (b) by any shareholder of the Corporation entitled
to vote for the election of Directors at the meeting who complies with the
notice procedures set forth in this Section 8. Such nominations, other than
those made by or at the direction of the Board of Directors, shall be made
pursuant to timely notice in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which notice of the date of the
meeting was mailed to such shareholder. Such shareholder's notice shall set
forth (a) as to each person whom the shareholder proposes to nominate for
election or re-election as a Director, all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
Directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended; and (b) as to the
shareholder giving the notice (i) the name and address, as they appear on the
Corporation's books, of such shareholder and (ii) the class and number of shares
of stock of the Corporation which are beneficially owned by such shareholder. No
person shall be eligible for


                                      -4-


election as a Director of the Corporation unless nominated in accordance with
the procedures set forth in the Bylaws. The Chairman shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by the Bylaws, and if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.

                                   ARTICLE II

                                    DIRECTORS

                  SECTION 1. POWERS OF DIRECTORS. The Board of Directors shall
manage the business and affairs of the Corporation and, subject to any
restrictions imposed by law, by the Articles of Incorporation, or by these
Bylaws, may exercise all the powers of the Corporation.

                  SECTION 2.        NUMBER AND TERM OF DIRECTORS.

                  (a)      Except as provided in this Section 2, eight Directors
shall constitute the full Board. At any annual or special meeting the
shareholders may, and at any meeting of directors, the directors (by a vote of
not less than a majority of the directors then in office) may, fix a different
number of Directors who shall constitute the full Board, but the full Board
shall consist of not less than three nor more than fifteen Directors.

                  (b)      The Board of Directors shall be classified, with
respect to the time for which they severally hold office, into three classes, as
nearly equal in number as possible. Each class will hold office until its
successors are elected and qualified. At each annual meeting of shareholders of
the Corporation, the successors of the class of directors whose terms expire at
that meeting shall be elected to hold office for a term expiring at the annual
meeting of shareholders held in the third year following the year of their
election.

                  SECTION 3. MEETINGS OF THE DIRECTORS. The Board of Directors
shall meet each year immediately following the annual meeting of shareholders,
and the Board may by resolution provide for the time and place of other regular
meetings. Special meetings of the Directors may be called by the Chairman of the
Board or by the President or by any two of the Directors.

                  SECTION 4. NOTICE OF MEETINGS. Notice of each meeting of the
Directors shall be given by the Secretary by mailing the same at least 72 hours
before the meeting or by private carrier or telephone, telegraph, teletype,
facsimile or other form of wire or wireless carrier at least 48 hours before the
meeting, to each Director, except that no notice need be given of regular
meetings fixed by the resolution of the Board or of the meeting of the Board
held at the place of and immediately following the annual meeting of the
shareholders. Any Director may waive notice, either before or after the meeting,
and shall be deemed to have waived notice if he is present at the meeting.

                  SECTION 5. ACTION OF DIRECTORS WITHOUT A MEETING. Any action
required by law to be taken at a


                                      -5-

meeting of the Board of Directors, or any action which may be taken at a meeting
of the Board of Directors, or of any committee thereof, may be taken without a
meeting if written consent, setting forth the action so taken, shall be signed
by all the Directors, or all the members of the committee, as the case may be,
and be filed with the minutes of the proceedings of the Board or the committee.
Such consent shall have the same force and effect as a unanimous vote of the
Board or the committee, as the case may be.

                  SECTION 6. COMMITTEES. The Board of Directors may, in its
discretion, appoint committees, each consisting of one or more Directors, which
shall have and may exercise such delegated powers as shall be conferred on or
authorized by the resolutions appointing them, subject to such limitations as
may be imposed from time to time by the Georgia Business Corporation Code. A
majority of any such committee may determine its action, fix the time and place
of its meetings, and determine its rules of procedure. Each committee shall keep
minutes of its proceedings and actions and shall report regularly to the Board
of Directors. The Board of Directors shall have power at any time to fill
vacancies in, change the membership of, or discharge any such committee.

                  SECTION 7. COMPENSATION. The Board of Directors shall have the
authority to determine from time to time the amount of compensation that shall
be paid to its members for attendance at meetings of, or service on, the Board
of Directors of any committee of the Board. The Board of Directors also shall
have the power to reimburse Directors for reasonable expenses of attendance at
Directors' meetings and committee meetings.

                  SECTION 8. REMOVAL. Any or all directors may be removed from
office at any time with or without cause.

                  SECTION 9. VACANCIES. A vacancy occurring in the Board of
Directors by reason of the removal of a Director by the shareholders shall be
filled by the shareholders, or, if authorized by the shareholders, by the
remaining Directors. Any other vacancy occurring in the Board of Directors may
be filled by the affirmative vote of a majority of the remaining Directors
though less than a quorum of the Board of Directors, or by the sole remaining
Director, as the case may be, or, if the vacancy is not so filled, or if no
director remains, by the shareholders. A Director elected to fill a vacancy
shall serve for the unexpired term of his predecessor in office.

                  SECTION 10. TELEPHONE CONFERENCE MEETINGS. Unless the Articles
of Incorporation otherwise provide, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board or committee by means of telephone conference or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 10 shall constitute presence in person at such meeting.

                                   ARTICLE III

                                    OFFICERS

                  SECTION 1. OFFICERS. The Corporation shall have such officers
as are appointed from time to time by, or in the manner prescribed by, the Board
of Directors.



                                      -6-


                  SECTION 2. COMPENSATION. The salaries of the officers shall be
fixed from time to time by, or in the manner prescribed by, the Board of
Directors. No officer shall be prevented from receiving such salary by reason of
the fact that he is also a Director of the Corporation.


                                   ARTICLE IV

                        DEPOSITORIES, SIGNATURE AND SEAL

                  SECTION 1. DEPOSITORIES. All funds of the Corporation shall be
deposited in the name of the Corporation in such depository or depositories as
the Board may designate and shall be drawn out on checks, drafts or other orders
signed by such officer, officers, agent or agents as the Board may from time to
time authorize.

                  SECTION 2. CONTRACTS. All contracts and other instruments
shall be signed on behalf of the Corporation by such person or persons that have
authority to do so, as such authority is established by, or in the manner
provided by, the Board of Directors.

                  SECTION 3. SEAL. The seal of the Corporation shall be as
follows:

                  The seal may be manually affixed to any document or may be
lithographed or otherwise printed on any document with the same force and effect
as if it had been affixed manually. The signature of the Secretary or Assistant
Secretary shall attest the seal and may be a facsimile if and to the extent
permitted by law.


                                    ARTICLE V

                                 STOCK TRANSFERS

                  SECTION 1. FORM AND EXECUTION OF CERTIFICATES. The
certificates of shares of capital stock of the Corporation shall be in such form
as may be approved by the Board of Directors and shall be signed by the Chairman
of the Board or President or a Vice President and by the Secretary or any
Assistant Secretary or the Treasurer or any Assistant Treasurer, provided that
any such certificate may be signed by the facsimile signature of either or both
of such officers imprinted thereon if the same is countersigned by a transfer
agent of the Corporation, and provided further that certificates bearing the
facsimile of the signature of such officers imprinted thereon shall be valid in
all respects as if such person or persons were still in office, even though such
officer or officers shall have died or otherwise ceased to be officers.

                  SECTION 2. TRANSFERS OF SHARES. Shares of stock in the
Corporation shall be transferable only on the books of the Corporation by proper
transfer signed by the holder of


                                      -7-


record thereof or by a person duly authorized to sign for such holder of record.
The Corporation or its transfer agent or agents shall be authorized to refuse
any transfer unless and until it is furnished such evidence as it may reasonably
require showing that the requested transfer is proper.

                  SECTION 3. LOST, DESTROYED OR STOLEN CERTIFICATES. Where the
holder of record of a share or shares of stock of the Corporation claims that
the certificate representing said share has been lost, destroyed or wrongfully
taken, the Board shall by resolution provide for the issuance of a certificate
to replace the original if the holder of record so requests before the
Corporation has notice that the certificate has been acquired by a bona fide
purchaser, files with the Corporation a sufficient indemnity bond, and furnishes
evidence of such loss, destruction or wrongful taking satisfactory to the
Corporation, in the reasonable exercise of its discretion. The Board may
authorize such officer or agent as it may designate to determine the sufficiency
of such an indemnity bond and to determine reasonably the sufficiency of the
evidence of loss, destruction or wrongful taking.

                  SECTION 4. TRANSFER AGENT AND REGISTRAR. The Board may (but
shall not be required to) appoint a transfer agent or agents and a registrar or
registrars to transfers, and may require that all stock certificates bear the
signature of such transfer agent or of such transfer agent and registrar.



                                   ARTICLE VI

                                 INDEMNIFICATION

                  SECTION 1. MANDATORY INDEMNIFICATION. The Corporation shall
indemnify to the fullest extent permitted by the Georgia Business Corporation
Code, and to the extent that applicable law from time to time in effect shall
permit indemnification that is broader than provided in these Bylaws, then to
the maximum extent authorized by law, any individual made a party to a
proceeding (as defined in the Georgia Business Corporation Code) because he is
or was a director or officer against liability (as defined in the Georgia
Business Corporation Code), incurred in the proceeding, if he acted in a manner
he believed in good faith to be in or not opposed to the best interests of the
Corporation and, in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.

                  SECTION 2. PERMISSIVE INDEMNIFICATION. The Corporation shall
have the power to indemnify to the fullest extent permitted by the Georgia
Business Corporation Code, any individual made a party to a proceeding (as
defined in the Georgia Business Corporation Code) because he is or was an
employee or agent of the Company against liability (as defined in the Georgia
Business Corporation Code), incurred in the proceeding, if he acted in a manner
he believed in good faith to be in or not opposed to the best interests of the
Corporation and, in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.


                                      -8-


                  SECTION 3. ADVANCES FOR EXPENSES. The Corporation shall pay
for or reimburse the reasonable expenses incurred by a director or officer who
is a party to a proceeding, and shall have the authority to pay for or reimburse
the reasonable expenses of an employee or agent of the Company who is a party to
a proceeding, in each case in advance of the final disposition of a proceeding
if:

                  (i)      Such person furnishes the Corporation a written
affirmation of his good faith belief that he has met the standard of conduct set
forth in Section 1 or Section 2 above, as applicable; and

                  (ii)     Such person furnishes the Corporation a written
undertaking, executed personally on his behalf to repay any advances if it is
ultimately determined that he is not entitled to indemnification.

         The written undertaking required by paragraph (b) above must be an
unlimited general obligation of such person but need not be secured and may be
accepted without reference to financial ability to make repayment.

                  SECTION 4. INDEMNIFICATION NOT EXCLUSIVE. The right to
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in this Article VI shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the Articles of Incorporation, provision of
these Bylaws, agreement, vote of stockholders or disinterested directors or
otherwise.

                  SECTION 5. AMENDMENT OR REPEAL. Any repeal or modification of
the foregoing provisions of this Article VI shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.


                                   ARTICLE VII

                               AMENDMENT OF BYLAWS

                  SECTION 1. AMENDMENT. These Bylaws may be altered, amended,
repealed or new Bylaws adopted by the Board of Directors by the affirmative vote
of a majority of all directors then holding office, but any bylaws adopted by
the Board of Directors may be altered, amended, repealed, or any new bylaws
adopted, by the shareholders at an annual or special meeting of shareholders,
when notice of any such proposed alteration, amendment, repeal or addition shall
have been given in the notice of such meeting. The shareholders may prescribe
that any bylaw or bylaws adopted by them shall not be altered, amended or
repealed by the Board of Directors. Action by the shareholders with respect to
these Bylaws shall be taken by an affirmative vote of a majority of all shares
outstanding and entitled to vote generally in the election of directors, voting
as a single voting group.


                                      -9-

EX-10.1

                                                                    EXHIBIT 10.1

_______________________________________________________________________________
_______________________________________________________________________________



                          SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                           POST APARTMENT HOMES, L.P.




                          Dated as of October 24, 1997




_______________________________________________________________________________
_______________________________________________________________________________


                               TABLE OF CONTENTS



                                                                                                                     PAGE
                                                                                                                     ----
                                                                                                                  
ARTICLE 1
         DEFINED TERMS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 2
         ORGANIZATIONAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         Section 2.1      Organization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         Section 2.2      Name  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         Section 2.3      Registered Office and Agent; Principal Office . . . . . . . . . . . . . . . . . . . . . . .  14
         Section 2.4      Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         Section 2.5      Term  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

ARTICLE 3
         PURPOSE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         Section 3.1      Purpose and Business  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         Section 3.2      Powers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

ARTICLE 4
         CAPITAL CONTRIBUTIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         Section 4.1      Capital Contributions of the Partners . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         Section 4.2      Issuances of Additional Partnership Interests . . . . . . . . . . . . . . . . . . . . . . .  17
         Section 4.3      Contribution of Proceeds of Issuance of REIT Shares . . . . . . . . . . . . . . . . . . . .  18

ARTICLE 5
         DISTRIBUTIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         Section 5.1      Requirement and Characterization of Distributions . . . . . . . . . . . . . . . . . . . . .  19
         Section 5.2      Amounts Withheld  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         Section 5.3      Distributions Upon Liquidation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20

ARTICLE 6
         ALLOCATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         Section 6.1      Allocations For Capital Account Purposes  . . . . . . . . . . . . . . . . . . . . . . . . .  20

ARTICLE 7
         MANAGEMENT AND OPERATIONS OF BUSINESS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         Section 7.1      Management  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         Section 7.2      Certificate of Limited Partnership  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
         Section 7.3      Restrictions on General Partner's Authority . . . . . . . . . . . . . . . . . . . . . . . .  26
         Section 7.4      Reimbursement of the General Partner and PPI  . . . . . . . . . . . . . . . . . . . . . . .  27
         Section 7.5      Outside Activities of the General Partner, Post LP Holdings and PPI . . . . . . . . . . . .  28



                                      i


                                                                                                                    
         Section 7.6      Contracts with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
         Section 7.7      Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
         Section 7.8      Liability of the General Partner and PPI  . . . . . . . . . . . . . . . . . . . . . . . . .  31
         Section 7.9      Other Matters Concerning the General Partner  . . . . . . . . . . . . . . . . . . . . . . .  32
         Section 7.10     Title to Partnership Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         Section 7.11     Reliance by Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33

ARTICLE 8
         RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         Section 8.1      Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         Section 8.2      Management of Business  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         Section 8.3      Outside Activities of Limited Partners  . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Section 8.4      Return of Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Section 8.5      Rights of Limited Partners Relating to the Partnership  . . . . . . . . . . . . . . . . . .  34
         Section 8.6      Redemption Right  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35

ARTICLE 9
         BOOKS, RECORDS, ACCOUNTING AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
         Section 9.1      Records and Accounting  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
         Section 9.2      Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
         Section 9.3      Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37

ARTICLE 10
         TAX MATTERS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         Section 10.1     Preparation of Tax Returns  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         Section 10.2     Tax Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         Section 10.3     Tax Matters Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         Section 10.4     Organizational Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40
         Section 10.5     Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40

ARTICLE 11
         TRANSFERS AND WITHDRAWALS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41
         Section 11.1     Transfer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41
         Section 11.2     Transfer of Post Partners' Partnership Interests or PPI's Ownership
                          Interest  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41
         Section 11.3     Limited Partners' Rights to Transfer  . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
         Section 11.4     Substituted Limited Partners  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43
         Section 11.5     Assignees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44
         Section 11.6     General Provisions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44

ARTICLE 12
         ADMISSION OF PARTNERS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45
         Section 12.1     Admission of Successor General Partner  . . . . . . . . . . . . . . . . . . . . . . . . . .  45







                                      -ii-

                                                                                                                 
         Section 12.2     Admission of Additional Limited Partners  . . . . . . . . . . . . . . . . . . . . . . . . .  45
         Section 12.3     Amendment of Agreement and Certificate of Limited Partnership . . . . . . . . . . . . . . .  46

ARTICLE 13
         DISSOLUTION, LIQUIDATION AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
         Section 13.1     Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
         Section 13.2     Winding Up  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
         Section 13.3     Negative Capital Account  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
         Section 13.4     Deemed Distribution and Recontribution  . . . . . . . . . . . . . . . . . . . . . . . . . .  51
         Section 13.5     Rights of Limited Partners  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
         Section 13.6     Notice of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
         Section 13.7     Termination of Partnership and Cancellation of Certificate
                          of Limited Partnership  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
         Section 13.8     Reasonable Time for Winding-Up  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
         Section 13.9     Waiver of Partition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52

ARTICLE 14
         AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
         Section 14.1     Amendments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
         Section 14.2     Meetings of the Partners  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54

ARTICLE 15
         GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
         Section 15.1     Addresses and Notice  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
         Section 15.2     Titles and Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
         Section 15.3     Pronouns and Plurals  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
         Section 15.4     Further Action  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
         Section 15.5     Binding Effect  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
         Section 15.6     Waiver  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
         Section 15.7     Counterparts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
         Section 15.8     Applicable Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
         Section 15.9     Invalidity of Provisions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
         Section 15.10    Entire Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
         Section 15.11    Guarantee by PPI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56

Exhibits:

Exhibit A - Partner, Contributions and Partnership Interests
Exhibit B - Capital Account Maintenance
Exhibit C - Special Allocation Rules
Exhibit D - Value of Contributed Property
Exhibit E - Notice of Redemption
Exhibit F - Designation of the Voting Powers, Designation, Preferences and Relative, Participating, Optional or Other
            Special Rights and Qualifications, Limitations or Restrictions of the Series A Preferred Partnership Units







                                     -iii-


                          SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                           POST APARTMENT HOMES, L.P.


         THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP,
dated as of October 24, 1997, is entered into by and among Post GP Holdings,
Inc. ("Post GP Holdings"), a Georgia corporation, as the General Partner, and
the Persons whose names are set forth on Exhibit A as attached hereto, as the
Limited Partners, including Post LP Holdings, Inc. ("Post LP Holdings"), a
Georgia corporation, together with any other Persons who become Partners in the
Partnership as provided herein.  Post Properties, Inc. ("PPI"), a Georgia
corporation, owns all of the stock of Post GP Holdings and Post LP Holdings but
is not a partner in the Partnership.


                                   ARTICLE 1
                                 DEFINED TERMS

         The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.

         "Act" means the Georgia Revised Uniform Limited Partnership Act
(Official Code of Georgia Annotated, Sections 14-9-100 et seq.), as it may be
amended from time to time, and any successor to such statute.  References to
specific Sections of the Act refer to the corresponding Sections of the
Official Code of Georgia Annotated.

         "Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 4.2 hereof and who is
shown as such on the books and records of the Partnership.

         "Adjusted Capital Account" means the Capital Account maintained for
each Partner as of the end of each Partnership Year (i) increased by any
amounts which such Partner is obligated to restore pursuant to any provision of
this Agreement or is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
and (ii) decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

         "Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Adjusted Capital Account as of
the end of the relevant Partnership Year.

         "Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Exhibit B hereof. Once an Adjusted Property is deemed
distributed by, and recontributed to, the Partnership for federal income tax
purposes upon a termination thereof pursuant to


Section 708 of the Code, such property shall thereafter constitute a
Contributed Property until the Carrying Value of such property is further
adjusted pursuant to Exhibit B hereof.

         "Affiliate" means, with respect to any Person, (i) any Person directly
or indirectly controlling, controlled by or under common control with such
Person, (ii) any Person owning or controlling ten percent (10%) or more of the
outstanding voting interests of such Person, (iii) any Person of which such
Person owns or controls ten percent (10%) or more of the voting interests, or
(iv) any officer, director, general partner or trustee of such Person or of any
Person referred to in clauses (i), (ii), and (iii) above.

         "Agreed Value" means (i) in the case of any Contributed Property set
forth in Exhibit D and as of the time of its contribution to the Partnership,
the Agreed Value of such property as set forth in Exhibit D; (ii) in the case
of any Contributed Property not set forth in Exhibit D and as of the time of
its contribution to the Partnership, the 704(c) Value of such property or other
consideration, reduced by any liabilities either assumed by the Partnership
upon such contribution or to which such property is subject when contributed,
and (iii) in the case of any property distributed to a Partner by the
Partnership, the Partnership's Carrying Value of such property at the time such
property is distributed, reduced by any indebtedness either assumed by such
Partner upon such distribution or to which such property is subject at the time
of distribution as determined under Section 752 of the Code and the Regulations
thereunder.

         "Agreement" means this Second Amended and Restated Agreement of
Limited Partnership, as it may be amended, supplemented or restated from time
to time.

         "Articles of Incorporation" means the Articles of Restatement of the
Articles of Incorporation of PPI filed in the State of Georgia on July 21,
1993, as amended or restated from time to time.

         "Assignee" means a Person to whom one or more Partnership Units have
been transferred in a manner permitted under this Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Section 11.5.

         "Available Cash" means, with respect to any period for which such
calculation is being made,

         (i)  the sum of:

              (a)         the Partnership's Net Income or Net Loss (as the case
         may be) for such period (without regard to adjustments resulting from
         allocations described in Sections 1.A through 1.E of Exhibit C),

              (b)         Depreciation and all other noncash charges deducted
         in determining Net Income or Net Loss for such period,





                                      -2-


              (c)         the amount of any reduction in the reserves of the
         Partnership referred to in clause (ii)(f) below (including, without
         limitation, reductions resulting because the General Partner
         determines such amounts are no longer necessary),

              (d)         the excess of proceeds from the sale, exchange,
         disposition, or refinancing of Partnership property for such period
         over the gain (or loss, as the case may be) recognized from such sale,
         exchange, disposition, or refinancing during such period (excluding
         Terminating Capital Transactions), and

              (e)         all other cash received by the Partnership for such
         period that was not included in determining Net Income or Net Loss for
         such period;

         (ii) less the sum of:

              (a)         all principal debt payments made during such period
         by the Partnership,

              (b)         capital expenditures made by the Partnership during
         such period,

              (c)         investments in any entity (including loans made
         thereto) to the extent that such investments are not otherwise
         described in clause (ii)(a) or (ii)(b),

              (d)         all other expenditures and payments not deducted in
         determining Net Income or Net Loss for such period,

              (e)         any amount included in determining Net Income or Net
         Loss for such period that was not received by the Partnership during
         such period,

              (f)         the amount of any increase in reserves during such
         period which the General Partner determines to be necessary or
         appropriate in its sole and absolute discretion, and

              (g)         the amount of any working capital accounts and other
         cash or similar balances which the General Partner determines to be
         necessary or appropriate in its sole and absolute discretion.

         Notwithstanding the foregoing, Available Cash shall not include any
cash received or reductions in reserves, or take into account any disbursements
made or reserves established, after commencement of the dissolution and
liquidation of the Partnership.

         "Book-Tax Disparities" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date.  A Partner's share of the Partnership's Book-Tax Disparities in all
of its Contributed Property and Adjusted Property will be reflected by the
difference between such





                                      -3-


Partner's Capital Account balance as maintained pursuant to Exhibit B and the
hypothetical balance of such Partner's Capital Account computed as if it had
been maintained strictly in accordance with federal income tax accounting
principles.

         "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.

         "Capital Account" means the Capital Account maintained for a Partner
pursuant to Exhibit B hereof.

         "Capital Contribution" means, with respect to any Partner, any cash,
cash equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Section
4.1, 4.2 or 4.3 hereof.

         "Carrying Value" means (i) with respect to a Contributed Property or
Adjusted Property, the 704(c) Value of such property reduced (but not below
zero) by all Depreciation with respect to such Property charged to the
Partners' Capital Accounts, and (ii) with respect to any other Partnership
property, the adjusted basis of such property for federal income tax purposes,
all as of the time of determination.  The Carrying Value of any property shall
be adjusted from time to time in accordance with Exhibit B hereof, and to
reflect changes, additions or other adjustments to the Carrying Value for
dispositions and acquisitions of Partnership properties, as deemed appropriate
by the General Partner.

         "Cash Amount" means an amount of cash equal to the Value on the
Valuation Date of the REIT Shares Amount.

         "Certificate" means the Certificate of Limited Partnership relating to
the Partnership filed in the office of the Georgia Secretary of State, as
amended from time to time in accordance with the terms hereof and the Act.

         "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder.  Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.

         "Common Partnership Unit" means a Partnership Unit that is not a
Preferred Partnership Unit.

         "Consent" means the consent or approval of a proposed action by a
Partner given in accordance with Section 14.2 hereof.

         "Contributed Property" means each property or other asset, in such
form as may be permitted by the Act, but excluding cash, contributed or deemed
contributed to the Partnership (or deemed





                                      -4-


contributed to the Partnership on termination and reconstitution thereof
pursuant to Section 708 of the Code). Once the Carrying Value of a Contributed
Property is adjusted pursuant to Exhibit B hereof, such property shall no
longer constitute a Contributed Property for purposes of Exhibit B hereof, but
shall be deemed an Adjusted Property for such purposes.

         "Conversion Factor" means 1.0, provided that in the event that PPI (i)
declares or pays a dividend on its outstanding REIT Shares in REIT Shares or
makes a distribution to all holders of its outstanding REIT Shares in REIT
Shares, (ii) subdivides its outstanding REIT Shares, or (iii) combines its
outstanding REIT  Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction,
the numerator of which shall be the number of REIT Shares issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination (assuming for such purposes that such dividend, distribution,
subdivision or combination has occurred as of such time), and the denominator
of which shall be the actual number of REIT Shares (determined without the
above assumption) issued and outstanding on the record date for such dividend,
distribution, subdivision or combination.  Any adjustment to the Conversion
Factor shall become effective immediately after the effective date of such
event retroactive to the record date, if any, for such event.

         "Debt" means, as to any Person, as of any date of determination, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) lease obligations of such
Person which, in accordance with generally accepted accounting principles,
should be capitalized.

         "Depreciation" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year, except that if the Carrying
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be
an amount which bears the same ratio to such beginning Carrying Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization, or other cost
recovery deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Carrying Value using any reasonable method selected
by the General Partner.

         "Effective Date" means October 24, 1997.

         "General Partner" means Post GP Holdings or its successors as general
partner of the Partnership.





                                      -5-


         "General Partner Interest" means a Partnership Interest held by the
General Partner that is a general partnership interest.  A General Partner
Interest may be expressed as a number of Partnership Units.

         "IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United States.

         "Immediate Family" means, with respect to any natural Person, such
natural Person's spouse and such natural Person's natural or adoptive parents,
descendants, nephews, nieces, brothers, and sisters.

         "Incapacity" or "Incapacitated" means, (i) as to any individual
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him incompetent to manage his Person or his estate;
(ii) as to any corporation which is a Partner, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its
charter; (iii) as to any partnership which is a Partner, the dissolution and
commencement of winding up of the partnership; (iv) as to any estate which is a
Partner, the distribution by the fiduciary of the estate's entire interest in
the Partnership; (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi)
as to any Partner, the bankruptcy of such Partner.  For purposes of this
definition, bankruptcy of a Partner shall be deemed to have occurred when (a)
the Partner commences a voluntary proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed  against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief of or against
such Partner under any bankruptcy, insolvency or other similar law now or
hereafter in effect has not been dismissed within one hundred twenty (120) days
after the commencement thereof, (g) the appointment without the Partner's
consent or acquiescence of a trustee, receiver or liquidator has not been
vacated or stayed within ninety (90) days of such appointment, or (h) an
appointment referred to in clause (g) is not vacated within ninety (90) days
after the expiration of any such stay.

         "Indemnitee" means (i) any Person made a party to a proceeding by
reason of  (A) its status as the General Partner, (B) its status as the sole
shareholder of the General Partner (i.e. PPI), (C) his status as a director or
officer of the Partnership, the General Partner PPI or any Subsidiary of PPI or
the Partnership, or (D) his or its liability, pursuant to a loan guaranty or
otherwise, for any indebtedness of the Partnership or any Subsidiary of the
Partnership (including without limitation any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject
to), and (ii) such other Persons (including Affiliates and Subsidiaries of the
General Partner,





                                      -6-


PPI or the Partnership) as the General Partner may designate from time to time
(whether before or after the event giving rise to potential liability), in its
sole and absolute discretion.

         "IPO" means the closing on July 22, 1993 of the initial public
offering of shares of PPI pursuant to that certain Purchase Agreement among
Post Apartment Homes, L.P., PPI and the representatives of the  several
underwriters.

         "Limited Partner" means any Person named as a Limited Partner in
Exhibit A attached hereto, as such Exhibit may be amended from time to time, or
any Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.  The General Partner shall
maintain the information set forth in Exhibit A hereto, as such information
shall change from time to time, in such form as the General Partner deems
appropriate for the conduct of the Partnership's affairs, and Exhibit A shall
be deemed amended from time to time to reflect the information so maintained by
the General Partner, whether or not a formal amendment to this Agreement has
been executed amending such Exhibit A.  Such information shall reflect (and
Exhibit A shall be deemed amended from time to time to reflect) the issuance of
any additional Partnership Units to the General Partner or any other Person,
the transfer of Partnership Units and the redemption of any Partnership Units,
all as contemplated herein.

         "Limited Partner Interest" means a Partnership Interest of a Limited
Partner in the Partnership representing a fractional part of the Partnership
Interests of all Limited Partners and includes any and all benefits to which
the holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the
terms and provisions of this Agreement.  A Limited Partner Interest may be
expressed as a number of Partnership Units of any one or more classes.

         "Liquidation Preference Amount" means, with respect to any Preferred
Partnership Unit, the amount payable with respect to such Preferred Partnership
Unit (as established by the instrument designating such Preferred Partnership
Units) upon the voluntary or involuntary dissolution, liquidation or winding up
of the Partnership, or upon the earlier redemption of such Preferred
Partnership Units, as the case may be.

         "Liquidator" has the meaning set forth in Section 13.2.

         "Net Income" means, for any taxable period, the excess, if any, of the
Partnership's items of income and gain for such taxable period over the
Partnership's items of loss and deduction for such taxable period.  The items
included in the calculation of Net Income shall be determined in accordance
with Exhibit B. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Income is subjected to the special
allocation rules in Exhibit C, Net Income or the resulting Net Loss, whichever
the case may be, shall be recomputed without regard to such item.





                                      -7-


         "Net Loss" means, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction for such taxable period over the
Partnership's items of income and gain for such taxable period.  The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit B.  Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Loss is subjected to the special
allocation rules in Exhibit C, Net Loss or the resulting Net Income, whichever
the case may be, shall be recomputed without regard to such item.

         "Nonrecourse Built-in Gain" means, with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Section 2.B of Exhibit C if such
properties were disposed of in a taxable transaction in full satisfaction of
such liabilities and for no other consideration.

         "Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).

         "Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).

         "Notice of Redemption" means the Notice of Redemption substantially in
the form of Exhibit E to this Agreement.

         "Original Limited Partner" means a Limited Partner who was a Partner
on the date of closing of the IPO and who owns one or more Original Limited
Partnership Units on the date action is called for under Section 13.1.

         "Original Limited Partnership Unit" means a Partnership Unit held by
an Original Limited Partner on the date of closing of the IPO and held by such
Original Limited Partner on the date action is called for under Section 13.1.

         "Ownership Interest" means the stock and securities (including
evidence of indebtedness) of  the General Partner and Post LP Holdings at any
time owned or held directly or indirectly by PPI.

         "Partner" means a General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners.

         "Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).

         "Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).





                                      -8-


         "Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).

         "Partnership" means the limited partnership formed under the Act and
pursuant to the Prior Agreement, as amended and restated pursuant to this
Agreement, and any successor thereto.

         "Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement.  A Partnership Interest may be expressed as a number of
Partnership Units.

         "Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership
Year shall be determined in accordance with the rules of Regulations Section
1.704-2(d).

         "Partnership Record Date" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.1
hereof, which record date shall be the same as the record date established by
the General Partner for a distribution to its shareholders of some or all of
its portion of such distribution.

         "Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1 and 4.2.
The ownership of Partnership Units may be evidenced by such form of certificate
for units, if any, as the General Partner adopts from time to time on behalf of
the Partnership.  Without limitation on the authority of the General Partner as
set forth in Section 4.2 hereof, the General Partner may designate any
Partnership Units, when issued, as Common Partnership Units or as Preferred
Partnership Units, may establish any other class of Partnership Units, and may
designate one or more series of any class of Partnership Units.

         "Partnership Year" means the fiscal year of the Partnership, which
shall be the calendar year.

         "Percentage Interest" means, as to a Partner, with respect to any
class of Partnership Units held by such Partner, its interest in such class of
Partnership Units as determined by dividing the number of Partnership Units in
such class owned by such Partner by the total number of Partnership Units in
such class then outstanding.

         "Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.

         "Post GP Holdings" means Post GP Holdings, Inc., a Georgia
corporation.





                                      -9-


         "Post LP Holdings" means Post LP Holdings, Inc., a Georgia
corporation.

         "PPI" means Post Properties, Inc., a Georgia corporation.

         "Post Merger Sub" means Post Interim Holdings, Inc., a Georgia
corporation formerly known as Post LP Holdings, Inc., or more fully discussed
in Section 12.4 hereof.

         "Post Partners" means Post GP Holdings and Post LP Holdings.

         "Preferred Partnership Unit" means any Partnership Unit issued from
time to time pursuant to Section 4.2 hereof that is designated by the General
Partner at the time of its issuance as a Preferred Partnership Unit.  Each
Preferred Partnership Unit shall have such designations, preferences and
relative, participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to Limited Partner Interests and
Common Partnership Units, all as shall be determined by the General Partner
subject to the requirements of Section 4.2 hereof.

         "Principal" means each of John A. Williams and John T. Glover, in his
individual capacity as a Limited Partner.

         "Principal-Controlled Partnership" means any of those certain general
partnerships which, on the date of execution of this Agreement, has as its sole
partners a Principal and a corporation which is wholly owned by such Principal
and which becomes a Partner at the time of execution of this Agreement by
reason of a Capital Contribution pursuant to Section 4.1 hereof.

         "Prior Agreement" means the Agreement of Limited Partnership of Post
Apartment Homes, L.P., dated as of May 14, 1993, between PPI as the sole
general partner and John A. Williams as the sole limited partner, as amended
and restated in its entirety by the First Amended and Restated Agreement of
Limited Partnership of Post Apartment Homes, L.P., dated as of July 22, 1993,
between PPI as the sole general partner and the Limited Partners of Post
Apartment Homes, L.P., as further amended by the First Amendment to First
Amended and Restated Agreement of Limited Partnership of Post Apartment Homes,
L.P., dated as of October 1, 1996, and as further amended by the Second
Amendment to First Amended and Restated Agreement of Limited Partnership of
Post Apartment Homes, L.P., dated as of October 15, 1996, which Prior Agreement
is, itself, amended and restated in its entirety by this Agreement as of the
Effective Date.

         "Recapture Income" means any gain recognized by the Partnership upon
the disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.

         "Redeeming Partner" has the meaning set forth in Section 8.6 hereof.

         "Redemption Amount" means either the Cash Amount or the REIT Shares
Amount, as determined by PPI in its sole and absolute discretion.  A Redeeming
Partner shall have no right,





                                      -10-


without the General Partner's and PPI's consent, to receive the Redemption
Amount in the form of the REIT Shares Amount.

         "Redemption Right" shall have the meaning set forth in Section 8.6
hereof.

         "Regulations" means the Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

         "REIT" means a real estate investment trust under Section 856 of the
Code.

         "REIT Share" shall mean a share of common stock of PPI.

         "REIT Shares Amount" shall mean a number of REIT Shares equal to the
product of the number of Common Partnership Units offered for redemption by a
Redeeming Partner, multiplied by the Conversion Factor; provided that in the
event PPI issues to all holders of REIT Shares rights, options, warrants or
convertible or exchangeable securities entitling the shareholders to subscribe
for or purchase REIT Shares, or any other securities or property (collectively,
the "rights") then the REIT Shares Amount shall also include such rights that a
holder of that number of REIT Shares would be entitled to receive.

         "Residual Gain" or "Residual Loss" means any item of gain or loss, as
the case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of Contributed Property or
Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate Book-Tax
Disparities.

         "704(c) Value" of any Contributed Property means the value of such
property as set forth in Exhibit D, or if no value is set forth in Exhibit D,
the fair market value of such property or other consideration at the time of
contribution as determined by the General Partner using such reasonable method
of valuation as it may adopt; provided, however, that the 704(c) Value of any
property deemed contributed to the Partnership for federal income tax purposes
upon termination and reconstitution thereof pursuant to Section 708 of the Code
shall be determined in accordance with Exhibit B hereof.  Subject to Exhibit B
hereof, the General Partner shall, in its sole and absolute discretion, use
such method as it deems reasonable and appropriate to allocate the aggregate of
the 704(c) Values of Contributed Properties in a single or integrated
transaction among the separate properties on a basis proportional to their
respective fair market values.

         "Series A Preferred Partnership Unit" means a Partnership Unit issued
by the Partnership to PPI in consideration of the contribution by PPI to the
Partnership of the entire net proceeds received by PPI from the issuance of the
Series A Preferred Shares on October 1, 1996.  The Series A Preferred
Partnership Units constitute Preferred Partnership Units.  The Series A
Preferred Partnership Units have the voting powers, designation, preferences
and relative, participating,





                                      -11-


optional or other special rights and qualifications, limitations or
restrictions as are set forth in Exhibit F, attached hereto.  Each Series A
Preferred Partnership Unit shall be substantially the economic equivalent of a
Series A Preferred Share.  The Series A Preferred Partnership Units have been
assigned by PPI to the Post Partners as of the Effective Date.

         "Series A Preferred Shares" means the 8 1/2% Series A Cumulative
Redeemable Preferred Shares, par value $0.01 per share, having a liquidation
preference equivalent to $50.00 per share, issued by PPI on October 1, 1996.

         "Series 1996A Common Partnership Units" means a Partnership Unit
issued by the Partnership to John A. Williams and L. Barry Teague, as
Additional Limited Partners, on October 15, 1996 pursuant to Section 14.2.  The
Series 1996A Common Partnership Units constitute Common Partnership Units.  The
Series 1996A Common Partnership Units have the same designation, preferences
and relative, participating, optional and  other special rights, powers and
duties as all other Common Partnership Units outstanding as of October 15,
1996, with the exception that no Series 1996A Common Partnership Units may be
redeemed pursuant to Section 8.6 hereof at any time prior to October 15, 1998.

         "Specified Redemption Date" means the tenth (10th) Business Day after
receipt by the General Partner of a Notice of Redemption; provided that with
respect to any Series 1996A Common Partnership Unit, no Specified Redemption
Date shall occur prior to October 15, 1998 (i.e., two years following the
issuance of the Series 1996A Common Partnership Units); and provided further,
that if PPI combines its outstanding REIT Shares, no specified Redemption Date
shall occur after the record date and prior to the effective date of such
combination.

         "Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which a majority of (i) the voting power of the
voting equity securities, or (ii) the outstanding equity interests is owned,
directly or indirectly, by such Person.

         "Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4.

         "Terminating Capital Transaction" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related
series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership.

         "Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (i) the fair
market value of such property (as determined under Exhibit B hereof) as of such
date, over (ii) the Carrying Value of such property (prior to any adjustment to
be made pursuant to Exhibit B hereof) as of such date.

         "Unrealized Loss" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (i) the Carrying
Value of such property (prior to any adjustment





                                      -12-


to be made pursuant to Exhibit B hereof) as of such date, over (ii) the fair
market value of such property (as determined under Exhibit B hereof) as of such
date.

         "Valuation Date" means the date of receipt by the General Partner of a
Notice of Redemption or, if such date is not a Business Day, the first Business
Day thereafter.

         "Value" means, with respect to a REIT Share, the average of the daily
market price for the ten (10) consecutive trading days immediately preceding
the Valuation Date.  The market price for each such trading day shall be: (i)
if the REIT Shares are listed or admitted to trading on any securities exchange
or the Nasdaq National Market, the closing price, regular way, on such day, or
if no such sale takes place on such day, the average of the closing bid and
asked prices on such day; (ii) if the REIT Shares are not listed or admitted to
trading on any securities exchange or the Nasdaq National Market, the last
reported sale price on such day or, if no sale takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reliable quotation source designated by PPI; or (iii) if the REIT Shares are
not listed or admitted to trading on any securities exchange or the Nasdaq
National Market and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low asked prices
on such day, as reported by a reliable quotation source designated by PPI, or
if there shall be no bid and asked prices on such day, the average of the high
bid and low asked prices, as so reported, on the most recent day (not more than
ten (10) days prior to the date in question) for which prices have been so
reported; provided that if there are no bid and asked prices reported during
the ten (10) days prior to the date in question, the Value of the REIT Shares
shall be determined by PPI acting in good faith on the basis of such quotations
and other information as it considers, in its reasonable judgment, appropriate.
In the event the REIT Shares Amount includes rights that a holder of REIT
Shares would be entitled to receive, then the Value of such rights shall be
determined by PPI acting in good faith on the basis of such quotations and
other information as it considers, in its reasonable judgment, appropriate.


                                   ARTICLE 2
                             ORGANIZATIONAL MATTERS

         Section 2.1      Organization

         The Partnership is a limited partnership organized pursuant to the
provisions of the Act and upon the terms and conditions set forth in the Prior
Agreement.  The Partners hereby amend and restate the Prior Agreement in its
entirety as of the Effective Date.  Except as expressly provided herein to the
contrary, the rights and obligations of the Partners and the administration and
termination of the Partnership shall be governed by the Act.  The Partnership
Interest of each Partner shall be personal property for all purposes.





                                      -13-


         Section 2.2      Name

         The name of the Partnership is Post Apartment Homes, L.P.  The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof.  The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires.  The General Partner in its sole and absolute discretion may
change the name of the Partnership at any time and from time to time and shall
notify the Limited Partners of such change in the next regular communication to
the Limited Partners.

         Section 2.3      Registered Office and Agent; Principal Office

         The address of the registered office of the Partnership in the State
of Georgia is located at 1201 Peachtree Street, N.E., Suite 1240, Atlanta,
Georgia  30361, and the registered agent for service of process on the
Partnership in the State of Georgia at such registered office is CT Corporation
System.  The principal office of the Partnership is located at Suite 2200, 3350
Cumberland Circle, N.W., Atlanta, Georgia 30339, and may be changed to such
other place as the General Partner may from time to time designate by notice to
the Limited Partners.  The Partnership may maintain offices at such other place
or places within or outside the State of Georgia as the General Partner deems
advisable.

         Section 2.4      Power of Attorney

         A.   Each Limited Partner and each Assignee hereby constitutes and
appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to:

              (1)         execute, swear to, seal, acknowledge, deliver, file
                          and record in the appropriate public offices (a) all
                          certificates, documents and other instruments
                          (including, without limitation, this Agreement and
                          the Certificate and all amendments or restatements
                          thereof) that the General Partner or the Liquidator
                          deems appropriate or necessary to form, qualify or
                          continue the existence or qualification of the
                          Partnership as a limited partnership (or a
                          partnership in which the limited partners have
                          limited liability to the extent provided by
                          applicable law) in the State of Georgia and in all
                          other jurisdictions in which the Partnership may or
                          plans to conduct business or own property; (b) all
                          instruments that the General Partner or the
                          Liquidator deems appropriate or necessary to reflect
                          any amendment, change, modification or restatement of
                          this Agreement in accordance with its terms; (c) all
                          conveyances and other instruments or documents that
                          the General Partner or the Liquidator deems
                          appropriate or necessary to reflect the





                                      -14-

              dissolution and liquidation of the Partnership pursuant to the
              terms of this Agreement, including, without limitation, a
              certificate of cancellation; (d) all instruments relating to the
              admission, withdrawal, removal or substitution of any Partner
              pursuant to, or other events described in, Article 11, 12 or 13
              hereof or the Capital Contribution of any Partner; and (e) all
              certificates, documents and other instruments relating to the
              determination of the rights, preferences and privileges of
              Partnership Interests; and

         (2)  execute, swear to, seal, acknowledge and file all ballots,
              consents, approvals, waivers, certificates and other instruments
              appropriate or necessary, in the sole and absolute discretion of
              the General Partner or the Liquidator, to make, evidence, give,
              confirm or ratify any vote, consent, approval, agreement or other
              action which is made or given by the Partners hereunder or is
              consistent with the terms of this Agreement or appropriate or
              necessary, in the sole discretion of the General Partner or the
              Liquidator, to effectuate the terms or intent of this Agreement.

Nothing contained herein shall be construed as authorizing the General Partner
or the Liquidator to amend this Agreement except in accordance with Article 14
hereof or as may be otherwise expressly provided for in this Agreement.

         B.   The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
or any Liquidator to act as contemplated by this Agreement in any filing or
other action by it on behalf of the Partnership, and it shall survive and not
be affected by the subsequent Incapacity of any Limited Partner or Assignee and
the transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Units and shall extend to such Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives.  Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or any Liquidator, acting in good faith pursuant to such power
of attorney; and each such Limited Partner or Assignee hereby waives any and
all defenses which may be available to contest, negate or disaffirm the action
of the General Partner or any Liquidator, taken in good faith under such power
of attorney.  Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within fifteen (15) days after receipt of
the General Partner's or Liquidator's request therefor, such further
designation, powers of attorney and other instruments as the General Partner or
the Liquidator, as the case may be, deems necessary to effectuate this
Agreement and the purposes of the Partnership.

         Section 2.5      Term

         The term of the Partnership commenced on May 14, 1993, the date the
Certificate was filed in the office of the Secretary of State of Georgia in
accordance with the Act and shall continue until





                                      -15-


December 31, 2092, unless the Partnership is dissolved sooner pursuant to the
provisions of Article 13 or as otherwise provided by law.


                                   ARTICLE 3
                                    PURPOSE

         Section 3.1      Purpose and Business

         The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in such a manner as to permit PPI at
all times to be classified as a REIT, unless PPI ceases to qualify as a REIT
for reasons other than the conduct of the business of the Partnership, (ii) to
enter into any partnership, joint venture or other similar arrangement to
engage in any of the foregoing or to own interests in any entity engaged in any
of the foregoing, and (iii) to do anything necessary or incidental to the
foregoing.  In connection with the foregoing, and without limiting PPI's right
in its sole discretion to cease qualifying as a REIT, the Partners acknowledge
that PPI's current status as a REIT inures to the benefit of all of the
Partners and not solely the Post Partners, as wholly owned subsidiaries of PPI.

         Section 3.2      Powers

         The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business  described herein
and for the protection and benefit of the Partnership, provided that the
Partnership shall not take, or refrain from taking, any action which, in the
judgment of the General Partner or PPI, in its sole and absolute discretion,
(i) could adversely affect the ability of PPI to continue to qualify as a REIT,
(ii) could subject PPI to any additional taxes under Section 857 or Section
4981 of the Code; or (iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over PPI or its securities,
unless such action (or inaction) shall have been specifically consented to by
the General Partner and PPI in writing.


                                   ARTICLE 4
                             CAPITAL CONTRIBUTIONS

         Section 4.1      Capital Contributions of the Partners

         Capital Contributions made by Partners at the time of and prior to the
execution of this Agreement are set forth in Exhibit A to this Agreement.  To
the extent the Partnership acquires any property by the merger of any other
Person into the Partnership, Persons who receive Partnership Interests in
exchange for their interests in the Person merging into the Partnership shall
become





                                      -16-


Partners and shall be deemed to have made Capital Contributions as provided in
the applicable merger agreement.  Each Partner shall own Partnership Units in
the amount set forth for such Partner in Exhibit A, as amended from time to
time, and shall have a Percentage Interest in each class of Partnership Units
determined as set forth herein, which Percentage Interest shall be adjusted
from time to time by the General Partner to the extent necessary to reflect
accurately redemptions, Capital Contributions, the issuance of additional
Partnership Units (pursuant to any merger or otherwise), or similar events
having an effect on a Partner's Percentage Interest.  Except as provided in
Sections 4.2, 10.5, and 13.3, the Partners shall have no obligation to make any
additional Capital Contributions or loans to the Partnership.

         Section 4.2      Issuances of Additional Partnership Interests

         A.   The General Partner is hereby authorized to cause the Partnership
from time to time to issue to the Partners (including the Post Partners) or
other Persons additional Partnership Units or other Partnership Interests in
one or more classes, or one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or other
special rights, powers and duties, including rights, powers and duties senior
to Limited Partner Interests, all as shall be determined by the General Partner
in its sole and absolute discretion and without the approval of any of the
Limited Partners, subject to Georgia law, including, without limitation, (i)
the allocations of items of Partnership income, gain, loss, deduction and
credit to each such class or series of Partnership Interests; (ii) the right of
each such class or series of Partnership Interests to share in Partnership
distributions; and (iii) the rights of each such class or series of Partnership
Interests upon dissolution and liquidation of the Partnership, provided that no
such additional Partnership Units or other Partnership Interests shall be
issued to PPI or any Post Partner unless either

              (a)         (1) the additional Partnership Interests are issued
         in connection with an issuance of shares of PPI, which shares have
         designations, preferences and other rights, all such that the economic
         interests are substantially similar to the designations, preferences
         and other rights of the additional Partnership Interests issued to the
         Post Partners in accordance with this Section 4.2.A, and (2) PPI shall
         transfer to one or both of the Post Partners, by loan or capital
         contribution, an amount equal to the proceeds raised in connection
         with the issuance of such shares of PPI and, in turn, the applicable
         Post Partners shall make Capital Contributions to the Partnership in
         an aggregate amount equal to the amount transferred to them by PPI; or

              (b)         the additional Partnership Interests are issued to
         all Partners holding Common Partnership Units in proportion to their
         respective Percentage Interests in Common Partnership Units.

Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units for less than fair market
value, so long as the General Partner concludes in good faith that such
issuance is in the interest of PPI and the Partnership (for example, and not by
way of limitation, the issuance of Partnership Units pursuant to an employee
purchase plan





                                      -17-


providing for employee purchases of Partnership Units at a discount from fair
market value or employee options that have an exercise price that is less than
the fair market value of the Partnership Units, either at the time of issuance
or at the time of exercise).

         B.   PPI shall not issue any additional REIT Shares (other than REIT
Shares issued pursuant to Section 8.6), or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase REIT Shares (collectively, "New Securities") other than to all holders
of REIT Shares unless (i) the General Partner shall cause the Partnership to
issue to the Post Partners Partnership Interests or rights, options, warrants
or convertible or exchangeable securities of the Partnership having
designations, preferences and other rights, all such that the economic
interests are substantially similar to those of the New Securities; and (ii)
PPI transfers to one or both of the Post Partners, by loan or contribution, the
proceeds from the issuance of such New Securities and from the exercise of
rights contained in such New Securities and the applicable Post Partners, in
turn, contribute the amount so transferred to them to the Partnership.  Without
limiting the foregoing, PPI is expressly authorized to issue New Securities for
less than fair market value, and the General Partner is expressly authorized to
cause the Partnership to issue to the Post Partners corresponding Partnership
Interests, so long as (x) the General Partner concludes in good faith that such
issuance is in the interest of PPI and the Partnership (for example, and not by
way of limitation, the issuance of REIT Shares and corresponding Partnership
Units pursuant to an employee stock purchase plan providing for employee
purchases of REIT Shares at a discount from fair market value or employee stock
options that have an exercise price that is less than the fair market value of
the REIT Shares, either at the time of issuance or at the time of exercise),
and (y) PPI transfers all proceeds from such issuance and exercise to the Post
Partners, whether by loan or capital contribution, and the Post Partners, in
turn, contribute the amount so transferred to them to the Partnership.

         Section 4.3      Contribution of Proceeds of Issuance of REIT Shares

         In connection with the issuance of REIT Shares pursuant to Section
4.2, PPI shall transfer to one or both of the Post Partners any proceeds raised
in connection with such issuance, by loan or capital contribution, and the
applicable Post Partners, in turn, shall contribute the amount so transferred
to them to the Partnership, provided that if the proceeds actually received by
PPI are less than the gross proceeds of such issuance as a result of any
underwriter's discount or other expenses paid or incurred in connection with
such issuance, then PPI shall be deemed to have transferred to the applicable
Post Partners, by loan or capital contribution, and the applicable Post
Partners shall be deemed in turn to have made Capital Contributions to the
Partnership, in the amount of the gross proceeds of such issuance and the
Partnership shall be deemed simultaneously to have reimbursed the Post Partners
pursuant to Section 7.4.C, and the Post Partners in turn shall be deemed to
have reimbursed PPI, for the amount of such underwriter's discount or other
expenses paid by PPI.





                                      -18-


                                   ARTICLE 5
                                 DISTRIBUTIONS

         Section 5.1      Requirement and Characterization of Distributions

         The General Partner shall cause the Partnership to distribute
quarterly an amount equal to 100% of Available Cash generated by the
Partnership during such quarter to the Partners who are Partners on the
Partnership Record Date with respect to such quarter in the following order of
priority:

              (i)         First, to the holders of the Preferred Partnership
                          Units in such amount as is required for the
                          Partnership to pay all distributions with respect to
                          such Preferred Partnership Units due or payable in
                          accordance with the instruments designating such
                          Preferred Partnership Units through the last day of
                          such quarter; such distributions shall be made to
                          such Partners in such order of priority and with such
                          preferences as have been established with respect to
                          such Preferred Partnership Units as of the last day
                          of such calendar quarter; and then

              (ii)        To the holders of Common Partnership Units in
                          proportion to their respective Percentage Interests
                          held with respect to Common Partnership Units on such
                          Partnership Record Date;

         provided that in no event may a Partner receive a distribution of
         Available Cash with respect to a Partnership Unit if such Partner is
         entitled to receive a distribution out of such Available Cash with
         respect to a REIT Share for which such Partnership Unit has been
         redeemed or exchanged.  The General Partner shall take such reasonable
         efforts, as determined by it in its sole and absolute discretion and
         consistent with PPI's qualification as a REIT, to distribute Available
         Cash to the Limited Partners so as to preclude any such distribution
         or portion thereof from being treated as part of a sale of property to
         the Partnership by a Limited Partner under Section 707 of the Code or
         the Regulations thereunder; provided that PPI, the General Partner and
         the Partnership shall not have liability to a Limited Partner under
         any circumstances as a result of any distribution to a Limited Partner
         being so treated.

              Notwithstanding anything to the contrary contained herein, in no
         event shall any Partner receive a distribution of Available Cash with
         respect to any Common Partnership Unit with respect to any quarter
         until such time as the Partnership has distributed to the holders of
         the Preferred Partnership Units an amount sufficient to pay all
         distributions payable with respect to such Preferred Partnership Units
         through the last day of such quarter, in accordance with the
         instruments designating such Preferred Partnership Units.





                                      -19-



         Section 5.2      Amounts Withheld

         All amounts withheld pursuant to the Code or any provisions of any
state or local tax law and Section 10.5 hereof with respect to any allocation,
payment or distribution to the General Partner, the Limited Partners or
Assignees shall be treated as amounts distributed to the General Partner,
Limited Partners or Assignees pursuant to Section 5.1 for all purposes under
this Agreement.

         Section 5.3      Distributions Upon Liquidation

         Proceeds from a Terminating Capital Transaction, and any other cash
received or reductions in reserves made after commencement of the liquidation
of the Partnership, shall be distributed to the Partners in accordance with
Section 13.2.

                                   ARTICLE 6
                                  ALLOCATIONS

         Section 6.1      Allocations For Capital Account Purposes

         For purposes of maintaining the Capital Accounts and in determining
the rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Exhibit B hereof) shall
be allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.

              A.  Net Income.  After giving effect to the special allocations
         set forth in Section 1 of Exhibit C, Net Income shall be allocated in
         the following manner and order of priority:

              (1)         To the General Partner until the cumulative
              allocations of Net Income under this Section 6.1.A.(1) equal the
              cumulative Net Losses allocated to the General Partner under
              Section 6.1.B.(5) hereof.

              (2)         To those Partners who have received allocations of
              Net Loss under Section 6.1.B.(4) hereof until the cumulative
              allocations of Net Income under this Section 6.1.A.(2) equal such
              cumulative allocations of Net Loss (such allocation of Net Income
              to be in proportion to the cumulative allocations of Net Loss
              under such section to each such Partner).

              (3)         To the Post Partners until the cumulative allocations
              of Net Income under this Section 6.1.A.(3) equal the cumulative
              allocations of Net Loss to the Post Partners under Section
              6.1.B.(3) hereof (such allocation of Net Income to be in
              proportion to the cumulative allocations of Net Loss under such
              section to each such Partner).





                                      -20-


              (4)         To those Partners who have received allocations of
              Net Loss under Section 6.1.B.(2) hereof until the cumulative
              allocations of Net Income under this Section 6.1.A.(4) equal such
              cumulative allocations of Net Loss (such allocation of Net Income
              to be in proportion to the cumulative allocations of Net Loss
              under such section to each such Partner).

              (5)         To the Partners until the cumulative allocations of
              Net Income under this Section 6.1.A.(5) equal the cumulative
              allocations of Net Loss to such Partners under Section 6.1.B.(1)
              hereof (such allocation of Net Income to be in proportion to the
              cumulative allocations of Net Loss under such section to each
              such Partner).

              (6)         Any remaining Net Income shall be allocated to the
              Partners who hold Common Partnership Units in proportion to their
              respective Percentage Interests  with respect to Common
              Partnership Units.

              B.  Net Losses.  After giving effect to the special allocations
         set forth in Section 1 of Exhibit C, Net Losses shall be allocated to
         the Partners as follows:

              (1)         To the Partners who hold Common Partnership Units in
              accordance with their respective Percentage Interests held with
              respect to Common Partnership Units, except as otherwise provided
              in this Section 6.1.B.

              (2)         To the extent that an allocation of Net Loss under
              Section 6.1.B.(1) would cause a Partner to have an Adjusted
              Capital Account Deficit at the end of such taxable year (or
              increase any existing Adjusted Capital Account Deficit of such
              Partner), such Net Loss shall instead be allocated to those
              Partners, if any, for whom such allocation of Net Loss  would not
              cause or increase an Adjusted Capital Account Deficit.  Solely
              for purposes of this Section 6.1.B.(2), the Adjusted Capital
              Account Deficit, in the case of the Post Partners, shall be
              determined without regard to the amount credited to the Post
              Partners' respective Capital Accounts for the aggregate
              Liquidation Preference Amount attributable to Preferred
              Partnership Units and without regard to any deemed deficit
              restoration obligation of the General Partner recognized under
              Regulations Section 1.704-1(b)(2)(ii)(c)(2); and in the case of a
              Principal or a Principal-Controlled Partnership, shall be
              determined without regard to such Partner's deficit Capital
              Account restoration obligation under Section 13.3.B hereof.  The
              Net Loss allocated under this Section 6.1.B.(2) shall be
              allocated among the Partners who may receive such allocation in
              proportion to and to the extent of the respective amounts of Net
              Loss that could be allocated to such Partners without causing
              such Partners to have an Adjusted Capital Account Deficit.

              (3)         Any remaining Net Loss that cannot be allocated under
              Sections 6.1.B.(1) and (2) hereof shall be allocated to the Post
              Partners in proportion to their respective Percentage Interests
              with respect to Preferred Partnership Units, to the extent that
              such





                                      -21-


              allocation of Net Loss would not cause or increase an Adjusted
              Capital Account Deficit of the Post Partners determined, in the
              case of the General Partner, without regard to any deemed deficit
              restoration obligation of the General Partner recognized under
              Regulations Section 1.704-1(b)(2)(ii)(c)(2).

              (4)         Any remaining Net Loss shall be allocated to the
              Principals and the Principal-Controlled Partnerships in
              accordance with their respective Percentage Interests in Common
              Partnership Units; provided that if, after the death of a
              Principal, the estate of such Principal or any
              Principal-Controlled Partnership with respect to such Principal
              elects pursuant to Section 13.3.C hereof to eliminate or reduce
              its deficit Capital Account restoration obligation under Section
              13.3.B hereof, Net Losses shall not be allocated to such Partner
              to the extent that such allocation would cause such Partner to
              have an Adjusted Capital Account Deficit (or would increase any
              existing Adjusted Capital Account Deficit of such Partner) as of
              the end of such taxable year, and instead shall be allocated to
              those Principals and Principal- Controlled Partnerships as to
              whom the foregoing limitation does not apply.

              (5)         Any remaining Net Loss shall be allocated to the
              General Partner.

              C.  For purposes of Regulations Section 1.752-3(a), the Partners
         agree that Nonrecourse Liabilities of the Partnership in excess of the
         sum of (i) the amount of Partnership Minimum Gain, and (ii) the total
         amount of Nonrecourse Built-in Gain shall be allocated among the
         Partners in accordance with their respective Percentage Interests in
         Common Partnership Units.

              D.  Any gain allocated to the Partners upon the sale or other
         taxable disposition of any Partnership asset shall to the extent
         possible, after taking into account other required allocations of gain
         pursuant to Exhibit C, be characterized as Recapture Income in the
         same proportions and to the same extent as such Partners have been
         allocated any deductions directly or indirectly giving rise to the
         treatment of such gains as Recapture Income.


                                   ARTICLE 7
                     MANAGEMENT AND OPERATIONS OF BUSINESS

         Section 7.1      Management

         A.   Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are and
shall be exclusively vested in the General Partner, and no Limited Partner
shall have any right to participate in or exercise control or management power
over the business and affairs of the Partnership.  The General Partner may not
be removed by the Limited Partners with or without cause.  In addition to the
powers now or hereafter granted a general partner of a limited partnership
under applicable law or which are granted to the General





                                      -22-


Partner under any other provision of this Agreement, the General Partner,
subject to Section 7.3 hereof, shall have full power and authority to do all
things deemed necessary or desirable by it to conduct the business of the
Partnership, to exercise all powers set forth in Section 3.2 hereof and to
effectuate the purposes set forth in Section 3.1 hereof, including, without
limitation:

              (1)         the making of any expenditures, the lending or
                          borrowing of money (including, without limitation,
                          making prepayments on loans and borrowing money to
                          permit the Partnership to make distributions to its
                          Partners in such amounts as will permit PPI (so long
                          as PPI qualifies as a REIT) to avoid the payment of
                          any federal income tax (including, for this purpose,
                          any excise tax pursuant to Section 4981 of the Code)
                          and to make distributions to the Post Partners such
                          that PPI can distribute to its shareholders amounts
                          sufficient to permit PPI to maintain REIT status),
                          the assumption or guarantee of, or other contracting
                          for, indebtedness and other liabilities, the issuance
                          of evidences of indebtedness (including the securing
                          of same by deed to secure debt, mortgage, deed of
                          trust or other lien or encumbrance on the
                          Partnership's assets) and the incurring of any
                          obligations it deems necessary for the conduct of the
                          activities of the Partnership;

              (2)         the making of tax, regulatory and other filings, or
                          rendering of periodic or other reports to
                          governmental or other agencies having jurisdiction
                          over the business or assets of the Partnership;

              (3)         the acquisition, disposition, mortgage, pledge,
                          encumbrance, hypothecation or exchange of any assets
                          of the Partnership (including the exercise or grant
                          of any conversion, option, privilege, or subscription
                          right or any other right available in connection with
                          any assets at any time held by the Partnership) or
                          the merger or other combination of the Partnership
                          with or into another entity (all of the foregoing
                          subject to any prior approval only to the extent
                          required by Section 7.3 hereof);

              (4)         the use of the assets of the Partnership (including,
                          without limitation, cash on hand) for any purpose
                          consistent with the terms of this Agreement and on
                          any terms it sees fit, including, without limitation,
                          the financing of the conduct of the operations of
                          PPI, the General Partner, the Partnership or any of
                          the Partnership's Subsidiaries, the lending of funds
                          to other Persons (including without limitation
                          Subsidiaries of the Partnership and/or PPI), the
                          repayment of obligations of PPI, the Partnership,
                          Subsidiaries of the Partnership and/or PPI and any
                          other Person in which it has an equity investment,
                          and the making of capital contributions to
                          Subsidiaries of the Partnership and/or PPI;





                                      -23-


              (5)         the management, operation, leasing, landscaping,
                          repair, alteration, demolition or improvement of any
                          real property or improvements owned by the
                          Partnership or any Subsidiary of the Partnership;

              (6)         the negotiation, execution, and performance of any
                          contracts, conveyances or other instruments that the
                          General Partner considers useful or necessary to the
                          conduct of the Partnership's operations or the
                          implementation of the General Partner's powers under
                          this Agreement, including contracting with
                          contractors, developers, consultants, accountants,
                          legal counsel, other professional advisors and other
                          agents and the payment of their expenses and
                          compensation out of the Partnership's assets;

              (7)         the distribution of Partnership cash or other
                          Partnership assets in accordance with this Agreement;

              (8)         holding, managing, investing and reinvesting cash and
                          other assets of the Partnership;

              (9)         the collection and receipt of revenues and income of
                          the Partnership;

              (10)        the establishment of one or more divisions of the
                          Partnership, the selection and dismissal of employees
                          of the Partnership, any division of the Partnership,
                          the General Partner or PPI (including, without
                          limitation, employees having titles such as
                          "president", "vice president", "secretary" and
                          "treasurer" of the Partnership, any division of the
                          Partnership, the General Partner or PPI), and agents,
                          outside attorneys, accountants, consultants and
                          contractors of the Partnership, any division of the
                          Partnership, the General Partner or PPI and the
                          determination of their compensation and other terms
                          of employment or hiring;

              (11)        the maintenance of such insurance for the benefit of
                          the Partnership and the Partners as it deems
                          necessary or appropriate;

              (12)        the formation of, or acquisition of, an interest in,
                          and the contribution of property to, any further
                          limited or general partnerships, joint ventures or
                          other relationships that it deems desirable
                          (including, without limitation, the acquisition of
                          interests in, and the contributions of property to,
                          its Subsidiaries and any other Person in which it has
                          an equity investment from time to time);

              (13)        the control of any matters affecting the rights and
                          obligations of the Partnership, including the
                          settlement, compromise, submission to arbitration or
                          any other form of dispute resolution, or abandonment
                          of, any claim, cause





                                      -24-


                          of action, liability, debt or damages, due or owing
                          to or from the Partnership, the commencement or
                          defense of suits, legal proceedings, administrative
                          proceedings, arbitrations or other forms of dispute
                          resolution, and the representation of the Partnership
                          in all suits or legal proceedings, administrative
                          proceedings, arbitrations or other forms of dispute
                          resolution, the incurring of legal expense, and the
                          indemnification of any Person against liabilities and
                          contingencies to the extent permitted by law;

              (14)        the undertaking of any action in connection with the
                          Partnership's direct or indirect investment in its
                          Subsidiaries or any other Person (including, without
                          limitation, the contribution or loan of funds by the
                          Partnership to such Persons);

              (15)        the determination of the fair market value of any
                          Partnership property distributed in kind using such
                          reasonable method of valuation as it may adopt;

              (16)        the exercise, directly or indirectly, through any
                          attorney-in-fact acting under a general or limited
                          power of attorney, of any right, including the right
                          to vote, appurtenant to any asset or investment held
                          by the Partnership;

              (17)        the exercise of any of the powers of the General
                          Partner enumerated in this Agreement on behalf of or
                          in connection with any Subsidiary of the Partnership
                          or any other Person in which the Partnership has a
                          direct or indirect interest, or jointly with any such
                          Subsidiary or other Person;

              (18)        the exercise of any of the powers of the General
                          Partner enumerated in this Agreement on behalf of any
                          Person in which the Partnership does not have an
                          interest pursuant to contractual or other
                          arrangements with such Person; and

              (19)        the making, execution and delivery of any and all
                          deeds, leases, notes, deeds to secure debt,
                          mortgages, deeds of trust, security agreements,
                          conveyances, contracts, guarantees, warranties,
                          indemnities, waivers, releases or legal instruments
                          or agreements in writing necessary or appropriate in
                          the judgment of the General Partner for the
                          accomplishment of any of the powers of the General
                          Partner enumerated in this Agreement.

         B.   Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any other provision of this Agreement
(except as provided in Section 7.3), the Act or any applicable law, rule or
regulation, to the fullest extent permitted under the Act or other applicable
law.  The execution, delivery or





                                      -25-


performance by the General Partner or the Partnership of any agreement
authorized or permitted under this Agreement shall not constitute a breach by
the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this Agreement
or of any duty stated or implied by law or equity.

         C.   At all times from and after the date hereof, the General Partner
may cause the Partnership to obtain and maintain (i) casualty, liability and
other insurance on the properties of the Partnership; and (ii) liability
insurance for the Indemnitees hereunder.

         D.   At all times from and after the date hereof, the General Partner
may cause the Partnership to establish and maintain any and all reserves,
working capital accounts and other cash or similar balances in such amounts as
the General Partner, in its sole and absolute discretion, deems appropriate and
reasonable from time to time.

         E.   In exercising its authority under this Agreement, the General
Partner may, but shall be under no obligation to, take into account the tax
consequences to any Partner of any action taken by it.  The General Partner and
the Partnership shall not have liability to a Limited Partner under any
circumstances as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner pursuant
to its authority under this Agreement.

         Section 7.2      Certificate of Limited Partnership

         To the extent that such action is determined by the General Partner to
be reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which
the limited partners have limited liability) under the laws of the State of
Georgia and each other state or the District of Columbia, in which the
Partnership may elect to do business or own property.  Subject to the terms of
Section 8.5.A(4) hereof, the General Partner shall not be required, before or
after filing, to deliver or mail a copy of the Certificate or any amendment
thereto to any Limited Partner.  The General Partner shall use all reasonable
efforts to cause to be filed such other certificates or documents as may be
reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability to the extent provided by
applicable law) in the State of Georgia and any other state, or the District of
Columbia, in which the Partnership may elect to do business or own property.

         Section 7.3      Restrictions on General Partner's Authority

         A.   The General Partner may not, without the written Consent of all
of the Limited Partners, take any action in contravention of an express
prohibition or limitation contained in this Agreement.

         B.   Except as provided in Article 13 hereof, the General Partner may
not sell, exchange, transfer or otherwise dispose of all or substantially all
of the Partnership's assets in a single





                                      -26-


transaction or a series of related transactions (including by way of merger,
consolidation or other combination with any other Person) without the Consent
of the Limited Partners holding a majority of the outstanding Common
Partnership Units held by Limited Partners.

         Section 7.4      Reimbursement of the General Partner and PPI

         A.   Except as provided in this Section 7.4 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments, and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.

         B.   The General Partner and PPI shall be reimbursed on a monthly
basis, or such other basis as the General Partner may determine in its sole and
absolute discretion, for all expenses the General Partner and/or PPI incur
relating to the ownership and operation of, or for the benefit of, the
Partnership, provided that the amount of any such reimbursement shall be
reduced by any interest earned by the General Partner or PPI with respect to
bank accounts or other instruments or accounts held by it on behalf of the
Partnership as permitted in Section 7.5.A.  The Limited Partners acknowledge
that the sole business of the General Partner and PPI is the ownership of
direct or indirect interests in and the direct or indirect operation of the
Partnership and that all of the expenses of the General Partner and PPI are
incurred for the benefit of the Partnership.  Such reimbursements shall be in
addition to any reimbursement to the General Partner or PPI as a result of
indemnification pursuant to Section 7.7 hereof.

         C.   The General Partner and PPI shall also be reimbursed for all
expenses they incur relating to the organization and/or reorganization of the
Partnership and the General Partner, the public offering of REIT Shares by PPI,
and any other issuance of additional Partnership Interests or REIT Shares
pursuant to Section 4.2 hereof.

         D.   In the event that the General Partner or PPI shall elect to
purchase from the shareholders of PPI REIT Shares pursuant to any stock
repurchase program or for the purpose of delivering such REIT Shares to satisfy
an obligation under Section 8.6 of this Agreement, any dividend reinvestment
program adopted by PPI, any employee stock purchase plan adopted by the General
Partner or PPI or any other similar obligation or arrangement undertaken by the
General Partner or PPI in the future, the purchase price paid by the General
Partner or PPI for such REIT Shares and any other expenses incurred by the
General Partner or PPI in connection with such purchase shall be considered
expenses of the Partnership and shall be reimbursed to the General Partner or
PPI, as the case may be, subject to the conditions that, if such REIT Shares
are sold by the General Partner or PPI, the General Partner shall contribute to
the Partnership any proceeds received by the General Partner or PPI for such
REIT Shares (provided that a transfer of REIT Shares for Partnership Units
pursuant to Section 8.6 shall not be considered a sale for such purpose).





                                      -27-


         Section 7.5      Outside Activities of the General Partner, Post LP
Holdings and PPI

         A.   The General Partner shall not directly or indirectly enter into
or conduct any business other than in connection with the ownership,
acquisition and disposition of Partnership Interests as a General Partner, the
management of the business of the Partnership and such activities as are
incidental thereto.  Post LP Holdings shall not directly or indirectly enter
into or conduct any business other than in connection with the ownership,
organization and disposition of Partnership Interests as a Limited Partner, and
such activities as are incidental thereto.  PPI shall not directly or
indirectly enter into or conduct any business other than in connection with the
direct or indirect ownership of the stock and debt obligations of the General
Partner and Post LP Holdings, making loans or contributions to the Post
Partners or the Partnership, and such activities as are incidental thereto.
PPI and the Post Partners shall not incur any debts other than (i) debts for
which the Partnership may be liable or for which the General Partner may be
liable in its capacity as General Partner of the Partnership, (ii) any guaranty
of any debt of the Partnership, or (iii) a debt incurred by PPI pursuant to
Article 5 of the Articles of Incorporation.  The assets of the Post Partners
shall be limited to Partnership Interests and the assets of PPI shall be
limited to the direct and indirect ownership of the stock and debt obligations
of the Post Partners.  The Post Partners shall not own any assets other than
Partnership Interests as a General Partner or Limited Partner, and other than
such bank accounts or similar instruments or accounts as each deems necessary
to carry out its responsibilities contemplated under this Agreement and the
Articles of Incorporation.  The Post Partners, any Affiliates of the Post
Partners and PPI may acquire Limited Partner Interests and shall be entitled to
exercise all rights of a Limited Partner relating to such Limited Partner
Interests.

         B.   In the event PPI exercises its rights under Article 5 of the
Articles of Incorporation to purchase REIT Shares, then the General Partner
shall cause the Partnership to purchase from one or both of the Post Partners
that number of Common Partnership Units equal to the product obtained by
multiplying the number of REIT Shares to be purchased by PPI times the
Conversion Factor on the same terms and for the same aggregate price that PPI
purchased such REIT Shares.  The applicable Post Partners shall then distribute
such funds to PPI.

         C.   The Post Partners shall not issue at any time any capital stock
(whether voting or non-voting, common or preferred) or any evidence of
indebtedness, except to PPI or any direct or indirect wholly owned subsidiary
of PPI.

         Section 7.6      Contracts with Affiliates

         A.   The Partnership may lend or contribute funds or other assets to
its Subsidiaries or other Persons in which it has an equity investment, and
such Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner.  The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.





                                      -28-


         B.   Except as provided in Section 7.5.A, the Partnership may transfer
assets to joint ventures, other partnerships, corporations or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions consistent with this Agreement and applicable law as
the General Partner, in its sole and absolute discretion, believes are
advisable.

         C.   Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are determined by the General
Partner in good faith, in its sole and absolute discretion, to be fair and
reasonable.

         D.   The General Partner, in its sole and absolute discretion and
without the approval of the Limited Partners, may propose and adopt on behalf
of the Partnership employee benefit plans, stock option plans and similar plans
funded by the Partnership for the benefit of employees of the General Partner,
PPI, the Partnership, Subsidiaries of the Partnership or any Affiliate of any
of them in respect of services performed, directly or indirectly, for the
benefit of the Partnership, the General Partner, PPI or any of the
Partnership's Subsidiaries.

         E.   The General Partner is expressly authorized to enter into, in the
name and on behalf of the Partnership, a right of first opportunity arrangement
and other conflict avoidance agreements with various Affiliates of the
Partnership, PPI and the General Partner, on such terms as the General Partner,
in its sole and absolute discretion, believes are advisable.

         Section 7.7      Indemnification

         A.   The Partnership shall indemnify each Indemnitee from and against
any and all losses, claims, damages, liabilities, joint or several, expenses
(including without limitation attorney's fees and other legal fees and
expenses), judgments, fines, settlements, and other amounts arising from any
and all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, that relate to the operations of the
Partnership as set forth in this Agreement in which such Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, provided
that the Partnership shall not indemnify an Indemnitee (i) for intentional
misconduct or a knowing violation of the law, or (ii) for any transaction for
which such Indemnitee received a personal benefit in violation or breach of any
provision of this Agreement.  Without limitation, the foregoing indemnity shall
extend to any liability of any Indemnitee, pursuant to a loan guaranty or
otherwise, for any indebtedness of the Partnership or any Subsidiary of the
Partnership (including without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject
to), and the General Partner is hereby authorized and empowered, on behalf of
the Partnership, to enter into one or more indemnity agreements consistent with
the provisions of this Section 7.7 in favor of any Indemnitee having or
potentially having liability for any such indebtedness.  It is the intention of
this Section 7.7.A that the Partnership indemnify each Indemnitee to the
fullest extent permitted under the Act.  The termination of any proceeding by
judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this Section 7.7.A.
The termination of any proceeding by conviction of an





                                      -29-


Indemnitee or upon a plea of nolo contendere or its equivalent by an
Indemnitee, or an entry of an order of probation against an Indemnitee prior to
judgment, creates a rebuttable presumption that such Indemnitee acted in a
manner contrary to that specified in this Section 7.7.A with respect to the
subject matter of such proceeding.  Any indemnification pursuant to this
Section 7.7 shall be made only out of the assets of the Partnership, and
neither the General Partner nor any Limited Partner shall have any obligation
to contribute to the capital of the Partnership or otherwise provide funds,
including pursuant to Section 13.3.B, to enable the Partnership to fund its
obligations under this Section 7.7.

         B.   Reasonable expenses incurred by an Indemnitee who is a party to a
proceeding may be paid or reimbursed by the Partnership in advance of the final
disposition of the proceeding upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 7.7.A has been met, and (ii) a written undertaking
by or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.

         C.   The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity unless otherwise provided in a written agreement with
such Indemnitee or in the writing pursuant to which such Indemnitee is
indemnified.

         D.   The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of any of the Indemnitees and such other Persons
as the General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership's activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.

         E.   Any liabilities which an Indemnitee incurs as a result of acting
on behalf of the Partnership or the General Partner (whether as a fiduciary or
otherwise) in connection with the operation, administration or maintenance of
an employee benefit plan or any related trust or funding mechanism (whether
such liabilities are in the form of excise taxes assessed by the Internal
Revenue Service, penalties assessed by the Department of Labor, restitutions to
such a plan or trust or other funding mechanism or to a participant or
beneficiary of such plan, trust or other funding mechanism, or otherwise) shall
be treated as liabilities or judgments or fines under this Section 7.7, unless
such liabilities arise as a result of (i) such Indemnitee's intentional
misconduct or knowing violation of the law, or (ii) any transaction in which
such Indemnitee received a personal benefit in violation or breach of any
provision of this Agreement or applicable law.

         F.   In no event may an Indemnitee subject any of the Partners to
personal liability by reason of the indemnification provisions set forth in
this Agreement.





                                      -30-


         G.   An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.

         H.   The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.  Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on
the Partnership's liability to any Indemnitee under this Section 7.7 as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.

         I.   To the extent, but only to the extent, that this Section 7.7 is
subject to the limitations on indemnification set forth in Official Code of
Georgia Annotated Section  13-8-2(b), and indemnification of an Indemnitee
pursuant to this Section 7.7 would under the circumstances violate the
provisions of such statute (taking into account, among other things, the
availability of insurance coverage and the intention of the Partnership to
allocate to the Partnership rather than the Indemnitees the risks of insurable
claims), this Section 7.7 shall not be construed as purporting to indemnify
such Indemnitee against or to hold such Indemnitee harmless from liability for
damages arising solely out of bodily injury to persons or damage to property
resulting from the sole negligence of such Indemnitee.

         Section 7.8      Liability of the General Partner and PPI

         A.   Notwithstanding anything to the contrary set forth in this
Agreement, neither  the General Partner nor PPI shall be liable for monetary
damages to the Partnership, any Partners or any Assignees for losses sustained
or liabilities incurred as a result of errors in judgment or of any act or
omission if the General Partner acted in good faith.

         B.   The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership, PPI and PPI's shareholders
collectively, that the General Partner is under no obligation to consider the
separate interests of the Limited Partners (including, without limitation, the
tax consequences to Limited Partners or Assignees) in deciding whether to cause
the Partnership to take (or decline to take) any actions, and that neither the
General Partner nor PPI shall be liable for monetary damages for losses
sustained, liabilities incurred, or benefits not derived by Limited Partners in
connection with such decisions, provided that the General Partner has acted in
good faith.

         C.   Subject to its obligations and duties as General Partner set
forth in Section 7.1.A hereof, the General Partner may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents.  Neither the
General Partner nor PPI shall be responsible for any misconduct or negligence
on the part of any such agent appointed by the General Partner in good faith.





                                      -31-


         D.   Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be
asserted.

         Section 7.9      Other Matters Concerning the General Partner

         A.   The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, or other
paper or document believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties.

         B.   The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers, architects, engineers,
environmental consultants and other consultants and advisers selected by it,
and any act taken or omitted to be taken in reliance upon the opinion of such
Persons as to matters which such General Partner reasonably believes to be
within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such
opinion.

         C.   The General Partner shall have the right, in respect of any of
its powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact.  Each such
attorney shall, to the extent provided by the General Partner in the power of
attorney, have full power and authority to do and perform all and every act and
duty which is permitted or required to be done by the General Partner
hereunder.

         D.   Notwithstanding any other provisions of this Agreement or the
Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission
is necessary or advisable in order (i) to protect the ability of PPI to
continue to qualify as a REIT, or (ii) to avoid PPI incurring any taxes under
Section 857 or Section 4981 of the Code, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.

         Section 7.10     Title to Partnership Assets

         Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership
as an entity, and no Partner, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof.  Title to
any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the General
Partner may determine, including Affiliates of the General Partner.  The
General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General





                                      -32-


Partner shall be held by the General Partner for the use and benefit of the
Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its best efforts to cause
beneficial and record title to such assets to be vested in the Partnership as
soon as reasonably practicable.  All Partnership assets shall be recorded as
the property of the Partnership in its books and records, irrespective of the
name in which legal title to such Partnership assets is held.

         Section 7.11     Reliance by Third Parties

         Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without the consent or approval of any
other Partner or Person, to encumber, sell or otherwise use in any manner any
and all assets of the Partnership and to enter into any contracts on behalf of
the Partnership, and take any and all actions on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if the
General Partner were the Partnership's sole party in interest, both legally and
beneficially.  Each Limited Partner hereby waives any and all defenses or other
remedies which may be available against such Person to contest, negate or
disaffirm any action of the General Partner in connection with any such
dealing.  In no event shall any Person dealing with the General Partner or its
representatives be obligated to ascertain that the terms of this Agreement have
been complied with or to inquire into the necessity or expedience of any act or
action of the General Partner or its representatives.  Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (i)
at the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership, and
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.


                                   ARTICLE 8
                   RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

         Section 8.1      Limitation of Liability

         The Limited Partners shall have no liability under this Agreement
except as expressly provided in this Agreement, including Section 10.5 hereof,
or under the Act.

         Section 8.2      Management of Business

         No Limited Partner or Assignee (other than the General Partner, any of
its Affiliates or any officer, director, employee, partner, agent or trustee of
the General Partner, the Partnership or any of their Affiliates, in their
capacity as such) shall take part in the operation, management or control





                                      -33-


of the Partnership's business, transact any business in the Partnership's name
or have the power to sign documents for or otherwise bind the Partnership.  The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, employee, partner, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as such,
shall not affect, impair or eliminate the limitations on the liability of the
Limited Partners or Assignees under this Agreement.

         Section 8.3      Outside Activities of Limited Partners

         Subject to any agreements entered into pursuant to Section 7.6.E
hereof and any other agreements entered into by a Limited Partner or its
Affiliates with the Partnership or a Subsidiary, any Limited Partner (other
than any Post Partner) and any officer, director, employee, agent, trustee,
Affiliate or shareholder of any Limited Partner (other than any Post Partner)
shall be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including business
interests and activities that are in direct competition with the Partnership or
that are enhanced by the activities of the Partnership.  Neither the
Partnership nor any Partners shall have any rights by virtue of this Agreement
in any business ventures of any Limited Partner or Assignee.  None of the
Limited Partners nor any other Person shall have any rights by virtue of this
Agreement or the partnership relationship established hereby in any business
ventures of any other Person (other than PPI and the Post Partners to the
extent expressly provided herein) and such Person shall have no obligation
pursuant to this Agreement to offer any interest in any such business ventures
to the Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.

         Section 8.4      Return of Capital

         Except pursuant to the right of redemption set forth in Section 8.6,
no Limited Partner shall be entitled to the withdrawal or return of his Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein.  Except to
the extent provided by Exhibit C hereof or as permitted by Section 4.2.A, or
otherwise expressly provided in this Agreement, no Limited Partner or Assignee
shall have priority over any other Limited Partner or Assignee either as to the
return of Capital Contributions or as to profits, losses or distributions.

         Section 8.5      Rights of Limited Partners Relating to the Partnership

         A.   In addition to other rights provided by this Agreement or by the
Act, and except as limited by Section 8.5.C hereof, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at such Limited Partner's own
expense (including such copying and administrative charges as the General
Partner may establish from time to time):





                                      -34-


              (1)         to obtain a copy of the most recent annual and
                          quarterly reports filed with the Securities and
                          Exchange Commission by PPI pursuant to the Securities
                          Exchange Act of 1934;

              (2)         to obtain a copy of the Partnership's federal, state
                          and local income tax returns for each Partnership
                          Year;

              (3)         to obtain a current list of the name and last known
                          business, residence or mailing address of each
                          Partner; and

              (4)         to obtain a copy of this Agreement and the
                          Certificate and all amendments thereto, together with
                          executed copies of all powers of attorney pursuant to
                          which this Agreement, the Certificate and all
                          amendments thereto have been executed.

         B.   The Partnership shall notify any Limited Partner, on request, of
the then current Conversion Factor or any change made to the Conversion Factor.

         C.   Notwithstanding any other provision of this Section 8.5, the
General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
reasonably believes to be in the nature of trade secrets or other information
the disclosure of which the General Partner in good faith believes is not in
the best  interests of the Partnership or could damage the Partnership or its
business, or (ii) the Partnership is required by law or by agreements with an
unaffiliated third party to keep confidential.

         Section 8.6      Redemption Right

         A.   Subject to the provisions of this Section 8.6., each Limited
Partner, other than any Post Partner, shall have the right (the "Redemption
Right") to require the Partnership to redeem on a Specified Redemption Date all
or a portion of the Partnership Units held by such Limited Partner at a
redemption price equal to and in the form of the Redemption Amount to be paid
by the Partnership.  The Redemption Right shall be exercised pursuant to a
Notice of Redemption delivered to the General Partner by the Limited Partner
who is exercising the redemption right (the "Redeeming Partner").  A Limited
Partner may not exercise the Redemption Right for less than one thousand
(1,000) Partnership Units or, if such Limited Partner holds less than one
thousand (1,000) Partnership Units, all of the Partnership Units held by such
Limited Partner.  The Redeeming Partner shall have no right, with respect to
any Partnership Units so redeemed, to receive any distributions paid after the
Specified Redemption Date.  The Assignee of any Limited Partner may exercise
the rights of such Limited Partner pursuant to this Section 8.6, and such
Limited Partner shall be deemed to have assigned such rights to such Assignee
and shall be bound by the exercise of such rights by such Limited Partner's
Assignee.  In connection with any exercise of such rights by such Assignee





                                      -35-


on behalf of such Limited Partner, the Redemption Amount shall be paid by the
Partnership directly to such Assignee and not to such Limited Partner.

         B.   Notwithstanding the provisions of Section 8.6.A, either of the
General Partner or PPI may, in its sole and absolute discretion, assume
directly and satisfy a Redemption Right by paying to the Redeeming Partner the
Redemption Amount on the Specified Redemption Date, whereupon the General
Partner or PPI, as the case may be, shall acquire the Partnership Units offered
for redemption by the Redeeming Partner and shall be treated for all purposes
of this Agreement as the owner of such Partnership Units.  In the event the
General Partner or PPI shall exercise this right to satisfy the Redemption
Right in the manner described in the preceding sentence, the Partnership shall
have no obligation to pay any amount to the Redeeming Partner with respect to
such Redeeming Partner's exercise of the Redemption Right, and each of the
Redeeming Partner, the Partnership and, as the case may be, the General Partner
or PPI shall treat the transaction between the General Partner or PPI, as the
case may be, and the Redeeming Partner as a sale of the Redeeming Partner's
Partnership Units to the General Partner or PPI, as the case may be, for
federal income tax purposes.  Each Redeeming Partner agrees to execute such
documents as the General Partner or PPI, as the case may be, may reasonably
require in connection with the issuance of REIT Shares upon exercise of the
Redemption Right.

         C.   Notwithstanding any other provision of this Section 8.6, a
Partner shall not be entitled to exercise the Redemption Right pursuant to
Section 8.6.A if the delivery of REIT Shares to such Partner on the Specified
Redemption Date would be prohibited under the Articles of Incorporation.

         D.   Notwithstanding any other provision of this Section 8.6, no
Partner shall be entitled to exercise the Redemption Right pursuant to Section
8.6.A with respect to any Preferred Partnership Unit unless the General Partner
has expressly granted to such Partner in the instrument designating such
Preferred Partnership Units (or series or class thereof), the right to redeem
such Preferred Partnership Units pursuant to Section 8.6.A.  Preferred
Partnership Units shall be redeemed, if at all, only in accordance with such
redemption rights or options as are set forth with respect to such  Preferred
Partnership Units (or class or series thereof) in  the instruments designating
such Preferred Partnership Units (or class or series thereof).

         E.   No Series 1996A Common Partnership Unit may be redeemed pursuant
to this Section 8.6 at any time prior to October 15, 1998, unless sooner
permitted by the General Partner in its sole discretion.





                                      -36-


                                   ARTICLE 9
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

         Section 9.1      Records and Accounting

         The General Partner shall keep or cause to be kept at the principal
office of the Partnership those records and documents required to be maintained
by the Act and other books and records deemed by the General Partner to be
appropriate with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 9.3 hereof.  The books of the Partnership shall be maintained, for
financial and tax reporting purposes, on an accrual basis in accordance with
generally accepted accounting principles, or on such other basis as the General
Partner determines to be necessary or appropriate.

         Section 9.2      Fiscal Year

         The fiscal year of the Partnership shall be the calendar year.

         Section 9.3      Reports

         A.   As soon as practicable, but in no event later than one hundred
five (105) days after the close of each Partnership Year, the General Partner
shall cause to be mailed to each Limited Partner as of the close of the
Partnership Year, an annual report containing financial statements of the
Partnership or, if such statements are prepared solely on a consolidated basis
with the General Partner and/or PPI, financial statements of the General
Partner and/or PPI for such Partnership Year, presented in accordance with
generally accepted accounting principles, such statements to be audited by a
nationally recognized firm of independent public accountants selected by the
General Partner.

         B.   As soon as practicable, but in no event later than one hundred
five (105) days after the close of each calendar quarter (except the last
calendar quarter of each year), the General Partner shall cause to be mailed to
each Limited Partner as of the last day of the calendar quarter, a report
containing unaudited financial statements of the Partnership or, if such
statements are prepared solely on a consolidated basis with the General Partner
and/or PPI, financial statements of the General Partner and/or PPI, as well as
such other information as may be required by applicable law or regulation, or
as the General Partner determines to be appropriate.





                                      -37-



                                   ARTICLE 10
                                  TAX MATTERS

         Section 10.1     Preparation of Tax Returns

         The General Partner shall arrange for the preparation and timely
filing of all returns of Partnership income, gains, deductions, losses and
other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by Limited Partners for federal and state income tax reporting purposes.

         Section 10.2     Tax Elections

         Except as otherwise provided herein, the General Partner shall, in its
sole and absolute discretion, determine whether to make any available election
pursuant to the Code; provided, however, that the General Partner shall make
the election under Section 754 of the Code in accordance with applicable
Regulations thereunder.  The General Partner shall have the right to seek to
revoke any such election (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination in its sole
and absolute discretion that such revocation is in the best interests of the
Partners.

         Section 10.3     Tax Matters Partner

         A.   The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes.  Pursuant to Section 6223(c)(3) of
the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address and profit interest of
each of the Limited Partners and the Assignees; provided, however, that such
information is provided to the Partnership by the Limited Partners and the
Assignees.

         B.   The tax matters partner is authorized, but not required:

              (1)         to enter into any settlement with the IRS with
                          respect to any administrative or judicial proceedings
                          for the adjustment of Partnership items required to
                          be taken into account by a Partner for income tax
                          purposes (such administrative proceedings being
                          referred to as a "tax audit" and such judicial
                          proceedings being referred to as "judicial review"),
                          and in the settlement agreement the tax matters
                          partner may expressly state that such agreement shall
                          bind all Partners, except that such settlement
                          agreement shall not bind any Partner (i) who (within
                          the time prescribed pursuant to the Code and
                          Regulations) files a statement with the IRS providing
                          that the tax matters partner shall not have the
                          authority to enter into a settlement agreement on
                          behalf of such Partner, or (ii) who is a "notice
                          partner" (as defined in Section 6231(a)(8) of





                                      -38-


                          the Code) or a member of a "notice group" (as
                          addressed in Section 6223(b)(2) of the Code);

              (2)         in the event that a notice of a final administrative
                          adjustment at the Partnership level of any item
                          required to be taken into account by a Partner for
                          tax purposes (a "final adjustment") is mailed to the
                          tax matters partner, to seek judicial review of such
                          final adjustment, including the filing of a petition
                          for readjustment with the Tax Court or the United
                          States Claims Court, or the filing of a complaint for
                          refund with the District Court of the United States
                          for the district in which the Partnership's principal
                          place of business is located;

              (3)         to intervene in any action brought by any other
                          Partner for judicial review of a final adjustment;

              (4)         to file a request for an administrative adjustment
                          with the IRS at any time and, if any part of such
                          request is not allowed by the IRS, to file an
                          appropriate pleading (petition or complaint) for
                          judicial review with respect to such request;

              (5)         to enter into an agreement with the IRS to extend the
                          period for assessing any tax which is attributable to
                          any item required to be taken into account by a
                          Partner for tax purposes, or an item affected by such
                          item; and

              (6)         to take any other action on behalf of the Partners of
                          the Partnership in connection with any tax audit or
                          judicial review proceeding to the extent permitted by
                          law.

         The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.7 of this Agreement shall be fully applicable to
the tax matters partner in its capacity as such.

         C.   The tax matters partner shall receive no compensation for its
services.  All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne by the Partnership.  Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm to
assist the tax matters partner in discharging its duties hereunder, so long as
the compensation paid by the Partnership for such services is reasonable.





                                      -39-


         Section 10.4     Organizational Expenses

         The Partnership shall elect to deduct expenses, if any, incurred by it
in organizing the Partnership ratably over a sixty (60)-month period as
provided in Section 709 of the Code.

         Section 10.5     Withholding

         Each Limited Partner hereby authorizes the Partnership to withhold
from or pay on behalf of or with respect to such Limited Partner any amount of
federal, state, local, or foreign taxes that the General Partner determines
that the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the Code.  Any
amount paid on behalf of or with respect to a Limited Partner shall constitute
a loan by the Partnership to such Limited Partner, which loan shall be repaid
by such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership withholds
such payment from a distribution which would otherwise be made to the Limited
Partner, or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of
the Partnership which would, but for such payment, be distributed to the
Limited Partner.  Any amounts withheld pursuant to the foregoing clauses (i) or
(ii) shall be treated as having  been distributed to such Limited Partner.
Each Limited Partner hereby unconditionally and irrevocably grants to the
Partnership a security interest in such Limited Partner's Partnership Interest
to secure such Limited Partner's obligation to pay to the Partnership any
amounts required to be paid pursuant to this Section 10.5.  In the event that a
Limited Partner fails to pay any amounts owed to the Partnership pursuant to
this Section 10.5 when due, the General Partner may, in its sole and absolute
discretion, elect to make the payment to the Partnership on behalf of such
defaulting Limited Partner, and in such event shall be deemed to have loaned
such amount to such defaulting Limited Partner and shall succeed to all rights
and remedies of the Partnership as against such defaulting Limited Partner.
Without limitation, in such event the General Partner shall have the right to
receive distributions that would otherwise be distributable to such defaulting
Limited Partner until such time as such loan, together with all interest
thereon, has been paid in full; and any such distributions so received by the
General Partner shall be treated as having been distributed to the defaulting
Limited Partner and immediately paid by the defaulting Limited Partner to the
General Partner in repayment of such loan.  Any amounts payable by a Limited
Partner hereunder shall bear interest at the lesser of (A) the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, plus four (4)
percentage points or (b) the maximum lawful rate of interest on such
obligation, such interest to accrue from the date such amount is due (i.e.,
fifteen (15) days after demand) until such amount is paid in full.  Each
Limited Partner shall take such actions as the Partnership or the General
Partner shall request in order to perfect or enforce the security interest
created hereunder.





                                      -40-



                                   ARTICLE 11
                           TRANSFERS AND WITHDRAWALS

         Section 11.1     Transfer

         A.   The term "transfer," when used in this Article 11 with respect to
a Partnership Unit, shall be deemed to refer to a transaction by which the
General Partner purports to assign all or any part of its General Partner
Interest to another Person or by which a Limited Partner purports to assign all
or any part of its Limited Partner Interest to another Person, and includes a
sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange
or any other disposition by law or otherwise.  The term "transfer" when used in
this Article 11 does not include any redemption of Partnership Units by a
Limited Partner or acquisition of Partnership Units from a Limited Partner by
the General Partner or PPI pursuant to Section 8.6.

         B.   No Partnership Interest shall be transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article 11.  Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void.

         Section 11.2     Transfer of Post Partners' Partnership Interests or
PPI's Ownership Interest

         A.   No Post Partner may transfer any of its Partnership Interest or
withdraw as General Partner or Limited Partner, as appropriate, except as
provided in Section 11.2.B or in connection with a Transaction described in
Section 11.2.C.  PPI shall not transfer any of its Ownership Interest except in
connection with a Transaction described in Section 11.2.C.

         B.   Any Post Partner may transfer Partnership Interests held by it
(i) to the Partnership in accordance with Section 7.5.B hereof; (ii) to a
purported holder of REIT Shares in accordance with the provisions of Article 5
of the Articles of Incorporation; or (iii) to PPI, to the other Post Partner or
to any other direct or indirect wholly owned subsidiary of PPI.

         C.   Except as otherwise provided in Section 11.2.D, PPI shall not
engage in any merger, consolidation or other combination with or into another
Person or sale of all or substantially all of its assets, or any
reclassification, or recapitalization or change of outstanding REIT Shares
(other than a change in par value, or from par value to no par value, or as a
result of a subdivision or combination as described in the definition of
"Conversion Factor") ("Transaction"), unless (i) the Transaction also includes
a merger of the Partnership or sale of substantially all of the assets of the
Partnership which has been approved by the requisite Consent of Partners
pursuant to Section 7.3 and as a result of which all Limited Partners will
receive for each Common Partnership Unit an amount of cash, securities or other
property equal to the product of the Conversion Factor and the greatest amount
of cash,  securities or other property paid to a holder of one REIT Share in
consideration of one REIT Share at any time during the period from and after
the date on which the Transaction is consummated, provided that if, in
connection with the Transaction, a purchase, tender or exchange offer shall
have been made to and accepted by the holders of more than fifty percent





                                      -41-


(50%) of the outstanding REIT Shares, each holder of Common Partnership Units
shall receive the greatest amount of cash, securities or other property which
such holder would have received had it exercised the Redemption Right and
received REIT Shares in exchange for its Common Partnership Units immediately
prior to the expiration of such purchase, tender or exchange offer and had
thereupon accepted such purchase, tender or exchange offer; and (ii) no more
than seventy-five percent (75%) of the equity securities of the acquiring
Person in such Transaction shall be owned, after consummation of such
Transaction, by PPI, the General Partner or Persons who are Affiliates of PPI,
the Partnership or the General Partner immediately prior to the date on which
the Transaction is consummated.

         D.   Notwithstanding Section 11.2.C, any Post Partner or PPI may merge
or combine with another entity if immediately after such merger substantially
all of the assets of the surviving entity, other than general or limited
Partnership Units held by any Post Partner or PPI, are contributed to the
Partnership as a Capital Contribution in exchange for Partnership Units (either
directly by the Post Partners or indirectly by PPI to the Post Partners and
then by the Post Partners to the Partnership).  In addition, PPI may merge or
combine with any Post Partner or any other direct or indirect wholly owned
subsidiary of PPI, and any Post Partner may merge or combine with any other
Post Partner or any direct or indirect wholly owned subsidiary of PPI and, if
determined by the General Partner to be in the best interests of PPI and the
Partnership, with the Partnership.

         Section 11.3     Limited Partners' Rights to Transfer

         A.   Subject to the provisions of Section 11.3.F, no Limited Partner
shall have the right to transfer all or any portion of his Partnership
Interest, or any of such Limited Partner's rights as a Limited Partner, without
the prior written consent of the General Partner, which consent may be given or
withheld by the General Partner in its sole and absolute discretion.  Any
purported transfer of a Partnership Interest by a Limited Partner in violation
of this Section 11.3.A shall be void ab initio and shall not be given effect
for any purpose by the Partnership.

         B.   If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such
Limited Partner's estate shall have all the rights of a Limited Partner, but
not more rights than those enjoyed by other Limited Partners, for the purpose
of settling or managing the estate and such power as the Incapacitated Limited
Partner possessed to transfer all or any part of his or its interest in the
Partnership.  The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.

         C.   The General Partner may prohibit any transfer otherwise permitted
under Section 11.3.F by a Limited Partner of his Partnership Units (i) if, in
the opinion of legal counsel to the Partnership, such transfer would require
filing of a registration statement under the Securities Act of 1933 or would
otherwise violate any federal, state or foreign securities laws or regulations
applicable to the Partnership or the Partnership Units, or (ii) if the
transferring Limited Partner fails or is unable to obtain and deliver to the
Partnership a legal opinion, from counsel acceptable to the General Partner,
addressed to the Partnership and the General Partner, that such registration is
not required in





                                      -42-


connection with such transfer and that such transfer does not violate any
federal, state or foreign securities laws or regulations applicable to the
Partnership or the Partnership Units.

         D.   No transfer by a Limited Partner of his Partnership Units may be
made to any Person if (i) in the opinion of legal counsel for the Partnership,
it would result in the Partnership being treated as an association taxable as a
corporation, or (ii) such transfer is effectuated through an "established
securities market" or a "secondary market (or the substantial equivalent
thereof)" within the meaning of Section 7704(b) of the Code.

         E.   No transfer of any Partnership Units may be made to a lender to
the Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a Nonrecourse Liability, without the consent of the General
Partner, in its sole and absolute discretion.

         F.   Notwithstanding the provisions of Section 11.3.A (but subject to
the provisions of Sections 11.3.C, 11.3.D, and 11.3.E), a Limited Partner may
transfer, with or without the consent of the General Partner, all or a portion
of his Partnership Units to (i) a member of his Immediate Family, or a trust
for the benefit of a member of his Immediate Family, in a donative transfer
that does not involve the receipt of any consideration (but not by inheritance
so long as the transferee at the death of such Limited Partner would have a
basis for federal income tax  purposes in such Partnership Units equal to their
fair value at the time of such Limited Partner's death); or (ii) an
organization that qualifies under Section 501(c)(3) of the Code and that is not
a private foundation within the meaning of Section 509(a) of the Code; provided
that in the case of either (i) or (ii) above, such transferee shall constitute
an "accredited investor" as such term is defined in Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933, as amended.

         G.   The transfer of any Limited Partner Interest by Post LP Holdings
or any other Post Partner shall be governed by Section 11.2 hereof rather than
this Section 11.3.

         Section 11.4     Substituted Limited Partners

         A.   No Limited Partner shall have the right to substitute a
transferee as a Limited Partner in his place.  The General Partner shall,
however, have the right to consent to the admission of a transferee of the
interest of a Limited Partner pursuant to this Section 11.4 as a Substituted
Limited Partner, which consent may be given or withheld by the General Partner
in its sole and absolute discretion.  The General Partner's failure or refusal
to permit a transferee of any such interests to become a Substituted Limited
Partner shall not give rise to any cause of action against the Partnership or
any Partner.

         B.   A transferee who has been admitted as a Substituted Limited
Partner in accordance with this Article 11 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited Partner
under this Agreement.





                                      -43-


         C.   Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units and Percentage Interest of such Substituted Limited Partner
and to eliminate or adjust, if necessary, the name, address and interest of the
predecessor of such Substituted Limited Partner.

         Section 11.5     Assignees

         If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 as a
Substituted Limited Partner, as described in Section 11.4, such transferee
shall be considered an Assignee for purposes of this Agreement.  An Assignee
shall be deemed to have had assigned to it, and shall be entitled to receive,
distributions from the Partnership and the share of Net Income, Net Losses,
Recapture Income and any other items of income, gain, loss, deduction and
credit of the Partnership attributable to the Partnership Units assigned to
such transferee, but shall not be deemed to be a holder of Partnership Units
for any other purpose under this Agreement, and shall not be entitled to vote
such Partnership Units in any matter presented to the Limited Partners for a
vote (such Partnership Units being deemed to have been voted on such matter in
the same proportion as all other Partnership Units held by Limited Partners are
voted).  In the event any such transferee desires to make a further assignment
of any such Partnership Units, such transferee shall be subject to all the
provisions of this Article 11 to the same extent and in the same manner as any
Limited Partner desiring to make an assignment of Partnership Units.

         Section 11.6     General Provisions

         A.   No Limited Partner may withdraw from the Partnership other than
as a result of a permitted transfer of all of such Limited Partner's
Partnership Units in accordance with this Article 11 or pursuant to redemption
of all of its Partnership Units under Section 8.6.

         B.   Any Limited Partner who shall transfer all of his Partnership
Units in a transfer permitted pursuant to this Article 11 shall cease to be a
Limited Partner upon the admission of all Assignees of such Partnership Units
as Substituted Limited Partners.  Similarly, any Limited Partner who shall
transfer all of his Partnership Units pursuant to a redemption of all of his
Partnership Units under Section 8.6 shall cease to be a Limited Partner.

         C.   Transfers pursuant to this Article 11 may only be made on the
first day of a fiscal quarter of the Partnership, unless the General Partner
otherwise agrees.

         D.   If any Partnership Unit is transferred or assigned in compliance
with the provisions of this Article 11, or redeemed or transferred pursuant to
Section 8.6, on any day other than the first day of a Partnership Year, then
Net Income, Net Losses, each item thereof and all other items attributable to
such Partnership Unit for such Partnership Year shall be allocated to the
transferor Partner or the Redeeming Partner, as the case may be, and, in the
case of a transfer or assignment other than a redemption, to the transferee
Partner, by taking into account their varying interests





                                      -44-


during the Partnership Year in accordance with Section 706(d) of the Code,
using the interim closing of the books method.  Solely for purposes of making
such allocations, each of such items for the calendar month in which a transfer
or assignment occurs shall be allocated to the transferee Partner, and none of
such items for the calendar month in which a transfer or a redemption occurs
shall be allocated to the transferor Partner or the Redeeming Partner, as the
case may be.  All distributions of Available Cash attributable to such
Partnership Unit with respect to which the Partnership Record Date is before
the date of such transfer, assignment or redemption shall be made to the
transferor Partner or the Redeeming Partner, as the case may be, and, in the
case of a transfer or assignment other than a redemption, all distributions of
Available Cash thereafter attributable to such Partnership Unit shall be made
to the transferee Partner.


                                   ARTICLE 12
                             ADMISSION OF PARTNERS

         Section 12.1     Admission of Successor General Partner

         A successor to all of the General Partner Interest pursuant to Section
11.2 hereof who is proposed to be admitted as a successor General Partner shall
be admitted to the Partnership as the General Partner, effective upon such
transfer.  Any such transferee shall carry on the business of the Partnership
without dissolution.  In each case, the admission shall be subject to the
successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission.  In the
case of such admission on any day other than the first day of a Partnership
Year, all items attributable to the General Partner Interest for such
Partnership Year shall be allocated between the transferring General Partner
and such successor as provided in Section 11.6.D hereof.

         Section 12.2     Admission of Additional Limited Partners

         A.   After the admission to the Partnership of the initial Limited
Partners on the date of the closing of the IPO, a Person who made or makes a
Capital Contribution to the Partnership in accordance with this Agreement or
who exercises an option to receive Partnership Units shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the
General Partner (i) evidence of acceptance in form satisfactory to the General
Partner of all of the terms and conditions of this Agreement, including,
without limitation, the power of attorney granted in Section 2.4 hereof, and
(ii) such other documents or instruments as may be required in the discretion
of the General Partner in order to effect such Person's admission as an
Additional Limited Partner.

         B.   Notwithstanding anything to the contrary in this Section 12.2, no
Person shall be admitted as an Additional Limited Partner without the consent
of the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion.  The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name





                                      -45-


of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.

         C.   If any Additional Limited Partner is admitted to the Partnership
on any day other than the first day of a Partnership Year, then Net Income, Net
Losses, each item thereof and all other items allocable among Partners and
Assignees for such Partnership Year shall be allocated among such Additional
Limited Partner and all other Partners and Assignees by taking into account
their varying interests during the Partnership Year in accordance with Section
706(d) of the Code, using the interim closing of the books method.  Solely for
purposes of making such allocations, each of such items for the calendar month
in which an admission of any Additional Limited Partner occurs shall be
allocated among all the Partners and Assignees including such Additional
Limited Partner.  All distributions of Available Cash with respect to which the
Partnership Record Date is before the date of such  admission shall be made
solely to Partners and Assignees other than the Additional Limited Partner, and
all distributions of Available Cash thereafter shall be made to all the
Partners and Assignees including such Additional Limited Partner.

         D.   Pursuant to the Second Amendment to the First Amended and
Restated Partnership Agreement of Post Apartment Homes, L.P., dated October 15,
1996 (the "Second Amendment") the Series 1996A Common Partnership Units
(consisting of 138,150 Common Partnership Units) were issued to John A.
Williams and L. Barry Teague in connection with the Partnership's exercise of
an option to acquire real property owned by a partnership of which Messrs.
Williams and Teague were the sole partners.  Such option was exercised, and
such Partnership Units were issued, with the approval of a majority of the
disinterested directors of PPI.  Such Partnership Units were issued pursuant to
Section 4.2.A hereof, and are reflected on Exhibit A hereto.

         Section 12.3     Amendment of Agreement and Certificate of Limited
Partnership

         For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.

         Section 12.4.    Acknowledgment of and Consent to Certain
Transactions.

         On or about the Effective Date, the following transactions have
occurred:

         (1)  PPI has organized Post GP Holdings as a wholly-owned subsidiary
              of PPI.

         (2)  PPI has organized Post Merger Sub as a wholly-owned subsidiary of
              PPI.





                                      -46-


         (3)  PPI has transferred to Post GP Holdings the General Partner
              Interest, consisting of one percent (1%) of the aggregate Common
              Partnership Units outstanding immediately prior to the Effective
              Date.

         (4)  PPI has transferred to Post Merger Sub all Partnership Units
              (common and preferred), other than the General Partner Interest,
              held by PPI immediately prior to the Effective Date, and Post
              Merger Sub has been admitted to the Partnership as a substituted
              Limited Partner in the Partnership in place of PPI.

         (5)  Post GP Holdings has assumed and agreed to undertake, and does
              hereby assume and agree to undertake, PPI's rights, duties and
              responsibilities as General Partner hereunder, and PPI has
              withdrawn from the Partnership as both the General Partner and
              Limited Partner, such that PPI is no longer a Partner in the
              Partnership.  Post GP Holdings has been and is hereby admitted to
              the Partnership as substitute General Partner of the Partnership.

         (6)  Pursuant to an Agreement and Plan of Merger, dated as of August
              1, 1997, among PPI, Columbus Realty Trust ("Columbus") and Post
              Merger Sub, Columbus has merged with and into Post Merger Sub,
              with Post Merger Sub being the surviving corporation of the
              merger (the "Columbus Merger").

         (7)  PPI has organized Post LP Holdings as a wholly-owned subsidiary
              of PPI.

         (8)  PPI has contributed one hundred percent (100%) of the capital
              stock of Post Merger Sub to Post LP Holdings.  As a result of
              such contribution, Post Merger Sub became a wholly-owned,
              indirect subsidiary of PPI.

         (9)  PPI and Post LP Holdings have caused Post Merger Sub to be merged
              with and into the Partnership, with the Partnership being the
              surviving limited partnership (the "Second Merger").  As a result
              of the Second Merger, the Partnership has acquired all
              Partnership Units previously held by Post Merger Sub and all
              assets of Post Merger Sub acquired from Columbus in the Columbus
              Merger.

       (10)   As consideration for the Second Merger, the Partnership has
              issued to Post LP Holdings, a number of Partnership Units equal
              to the sum of (a) all Partnership Units previously held by Post
              Merger Sub, as described above, consisting of the number of
              Common Partnership Units and Series A Partnership Units acquired
              by the Partnership from Post Merger Sub in the Second Merger,
              plus (b) an additional number of Common Partnership Units equal
              to the sum of (x) the aggregate number of REIT Shares issued to
              Shareholders of Columbus in the Columbus Merger, plus (y) the
              aggregate number of fractional REIT Shares (rounded to the
              nearest whole number) in respect to which PPI paid cash to
              Columbus shareholders in the Columbus Merger.  Such Partnership





                                      -47-


              Units so issued by the Partnership to Post LP Holdings as a
              result of the Second Merger are reflected on Exhibit A.

       (11)   The General Partner, on behalf of the Partnership, has admitted
              and does hereby admit Post LP Holdings to the Partnership as a
              substituted Limited Partner, subject to the provisions of this
              Agreement applicable to Post LP Holdings.

 The Partners hereby consent to each of the foregoing transactions.

                                   ARTICLE 13
                    DISSOLUTION, LIQUIDATION AND TERMINATION



         Section 13.1     Dissolution

         The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement.  Upon
the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership.  The Partnership shall dissolve, and
its affairs shall be wound up, upon the first to occur of any of the following
("Liquidating Events"):

         A.   the expiration of its term as provided in Section 2.5 hereof;

         B.   an event of withdrawal of the General Partner, as defined in the
Act (other than an event described in Sections 14-9-602(a)(4) and
14-9-602(a)(5) of the Act), unless, within ninety (90) days after the
withdrawal all the remaining Partners agree in writing to continue the business
of the Partnership and to the appointment, effective as of the date of
withdrawal, of a successor General Partner;

         C.   from and after the date of this Agreement through December 31,
2013, an election to dissolve the Partnership made by the General Partner,
unless any Original Limited Partner who holds one or more Original Limited
Partnership Units objects in writing to such dissolution within thirty (30)
days of receiving written notice of such election from the General Partner;

         D.   from and after January 1, 2014 through December 31, 2043, an
election to dissolve the Partnership made by the General Partner, unless
Original Limited Partners holding at least five percent (5%) of the Original
Limited Partnership Units object in writing to such dissolution within thirty
(30) days of receiving written notice of such election from the General
Partner;

         E.   on or after January 1, 2044, an election to dissolve the
Partnership made by the General Partner, in its sole and absolute discretion;

         F.   entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;





                                      -48-


         G.   the sale of all or substantially all of the assets and properties
of the Partnership; or

         H.   a final and non-appealable judgment is entered by a court of
competent jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by a court
with appropriate jurisdiction against the General Partner, in each case under
any federal or state bankruptcy or insolvency laws as now or hereafter in
effect, unless prior to the entry of such order or judgment all of the
remaining Partners agree in writing to continue the business of the Partnership
and to the appointment, effective as of a date prior to the date of such order
or judgment, of a substitute General Partner.

         Section 13.2     Winding Up

         A.   Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets and satisfying the claims of its creditors and
Partners.  No Partner shall take any action that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Partnership's business
and affairs.  The General Partner or, in the event there is no remaining
General Partner, any Person elected by a majority in interest of the Limited
Partners (the General Partner or such other Person being referred to herein as
the "Liquidator") shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock in the General Partner) shall be applied and
distributed in the following order:

              (1)         First, to the payment and discharge of all of the
                          Partnership's debts and liabilities to creditors
                          other than the Partners;

              (2)         Second, to the payment and discharge of all of the
                          Partnership's debts and liabilities to the Post
                          Partners;

              (3)         Third, to the payment and discharge of all of the
                          Partnership's debts and liabilities to the other
                          Partners;

              (4)         The balance, if any, to the General Partner and
                          Limited Partners in accordance with their Capital
                          Accounts, after giving effect to all contributions,
                          distributions, and allocations for all periods.

The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.

         B.   Notwithstanding the provisions of Section 13.2.A hereof which
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the





                                      -49-


Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors)
and/or distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith
judgment of the Liquidator, such distributions in kind are in the best interest
of the Partners, and shall be subject to such conditions relating to the
disposition and management of such properties as the Liquidator deems
reasonable and equitable and to any agreements governing the operation of such
properties at such time.  The Liquidator shall determine the fair market value
of any property distributed in kind using such reasonable method of valuation
as it may adopt.

         C.   In the discretion of the Liquidator, a pro rata portion of the
distributions that would otherwise be made to the General Partner and Limited
Partners pursuant to this Article 13 may be:

              (1)         distributed to a trust established for the benefit of
                          the General Partner and Limited Partners for the
                          purposes of liquidating Partnership assets,
                          collecting amounts owed to the Partnership, and
                          paying any contingent or unforeseen liabilities or
                          obligations of the Partnership or of the General
                          Partner arising out of or in connection with the
                          Partnership.  The assets of any such trust shall be
                          distributed to the General Partner and Limited
                          Partners from time to time, in the reasonable
                          discretion of the Liquidator, in the same proportions
                          as the amount distributed to such trust by the
                          Partnership would otherwise have been distributed to
                          the General Partner and Limited Partners pursuant to
                          this Agreement; or

              (2)         withheld or escrowed to provide a reasonable reserve
                          for Partnership liabilities (contingent or otherwise)
                          and to reflect the unrealized portion of any
                          installment obligations owed to the Partnership,
                          provided that such withheld or escrowed amounts shall
                          be distributed to the General Partner and Limited
                          Partners in the manner and order of priority set
                          forth in Section 13.2.A as soon as practicable.

         Section 13.3     Negative Capital Accounts

         A.   Except as provided in this Section 13.3, no Partner, General or
Limited, shall be liable to the Partnership or to any other Partner for any
negative balance outstanding in each such Partner's Capital Account, whether
such negative Capital Account results from the allocation of Net Losses or
other items of deduction and loss to such Partner or from distributions to such
Partner.

         B.   Subject to Section 13.3.C, if a Principal or a
Principal-Controlled Partnership, on the date of the "liquidation" of his
respective interest in the Partnership (within the meaning of Regulations
Section 1.704- 1(b)(2)(ii)(g)), has a negative balance in his Capital Account,
then such





                                      -50-


Partner shall contribute in cash to the capital of the Partnership the amount
required to increase his Capital Account as of such date to zero.  Any such
contribution required of a Partner hereunder shall be made on or before the
later of (i) the end of the Partnership Year in which the interest of such
Partner is liquidated; or (ii) the ninetieth (90th) day following the date of
such liquidation.  Notwithstanding any provision hereof to the contrary, all
amounts so contributed by a Partner to the capital of the Partnership shall,
upon the liquidation of the Partnership under this Article 13, be first paid to
any then creditors of the Partnership, and any remaining amount shall be
distributed to the other Partners, if any, then having positive balances in
their respective Capital Accounts in proportion to such positive balances.

         C.   After the death of a Principal, the executor of the estate of
such Principal may elect to reduce (or eliminate) the deficit Capital Account
restoration obligation of such Principal pursuant to Section 13.3.B.  Such
election may be made by such executor by delivering to the General Partner
within two hundred seventy (270) days of the death of such Principal a written
notice setting forth the maximum deficit balance in his Capital Account that
such executor agrees to restore under Section 13.3.B, if any.  If such executor
does not make a timely election pursuant to this Section 13.3.C (whether or not
the balance in his Capital Account is negative at such time), then such
Principal's estate (and the beneficiaries thereof who receive distribution of
Partnership Units therefrom) shall be deemed to have a deficit Capital Account
restoration obligation as set forth pursuant to the terms of Section 13.3.B.
Any Principal- Controlled Partnership may likewise elect, after the death of
its respective Principal, to reduce (or eliminate) its deficit Capital Account
restoration obligation pursuant to Section 13.3.B by delivering a similar
written notice to the General Partner within the time period specified herein.
Any Principal-Controlled Partnership that does not make any such timely
election shall similarly be deemed to have a deficit Capital Account
restoration obligation as set forth pursuant to the terms of Section 13.3.B.

         Section 13.4     Deemed Distribution and Recontribution

         Notwithstanding any other provision of this Article 13, in the event
the Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership's
property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
Instead, for federal income tax purposes and for purposes of maintaining
Capital Accounts pursuant to Exhibit B hereto, the Partnership shall be deemed
to have distributed the property in kind to the General Partner and Limited
Partners, who shall be deemed to have assumed and taken such property subject
to all Partnership liabilities, all in accordance with their respective Capital
Accounts.  Immediately thereafter, the General Partner and Limited Partners
shall be deemed to have recontributed the Partnership property in kind to the
Partnership, which shall be deemed to have assumed and taken such property
subject to all such liabilities.





                                      -51-


         Section 13.5     Rights of Limited Partners

         Except as otherwise provided in this Agreement, each Limited Partner
shall look solely to the assets of the Partnership for the return of his
Capital Contributions and shall have no right or power to demand or receive
property other than cash from the Partnership.  Except as otherwise provided in
this Agreement, no Limited Partner shall have priority over any other Limited
Partner as to the return of his Capital Contributions, distributions, or
allocations.

         Section 13.6     Notice of Dissolution

         In the event a Liquidating Event occurs or an event occurs that would,
but for an election or objection by one or more Partners pursuant to Section
13.1, result in a dissolution of the Partnership, the General Partner shall,
within thirty (30) days thereafter, provide written notice thereof to each of
the Partners.

         Section 13.7     Termination of Partnership and Cancellation of
Certificate of Limited Partnership

         Upon the completion of the liquidation of the Partnership cash and
property as provided in Section 13.2 hereof, the Partnership shall be
terminated, a certificate of cancellation shall be filed, and all
qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Georgia shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.

         Section 13.8     Reasonable Time for Winding-Up

         A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.

         Section 13.9     Waiver of Partition

         Each Partner hereby waives any right to partition of the Partnership
property.


                                   ARTICLE 14
                  AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

         Section 14.1     Amendments

         A.   Amendments to this Agreement may be proposed by the General
Partner or by any Limited Partners holding twenty-five percent (25%) or more of
the Partnership Interests.  Following





                                      -52-


such proposal, the General Partner shall submit any proposed amendment to the
Limited Partners.  The General Partner shall seek the written vote of the
Partners on the proposed amendment or shall call a meeting to vote thereon and
to transact any other business that it may deem appropriate.  For purposes of
obtaining a written vote, the General Partner may require a response within a
reasonable specified time, but not less than fifteen (15) days, and failure to
respond in such time period shall constitute a vote which is consistent with
the General Partner's recommendation with respect to the proposal.  Except as
provided in Section 14.1.B, 14.1.C or 14.1.D, a proposed amendment shall be
adopted and be effective as an amendment hereto if it is approved by the
General Partner and it receives the Consent of the Partners holding a majority
of the Percentage Interests of the Limited Partners with respect to Common
Partnership Units (including Limited Partner Interests held by any Post
Partner).  [If the General Partner holds less than one percent (1%) of the
Common Partnership Units  outstanding as of the date any Consent is sought
pursuant to the immediately preceding sentence, then solely for the purposes of
such Consent the number of Common Partnership Units held by the Post Partners
as Limited Partner Interests shall be reduced by the number of Common
Partnership Units that, if added to the Common Partnership Units then held by
the General Partner, would cause the General Partner to hold one percent (1%)
of the outstanding Common Partnership Units; the purpose of this sentence being
to avoid dilution of the Consent rights of Limited Partners other than the Post
Partners as compared to the Consent rights of such Limited Partners under the
Prior Agreement, which required the General Partner to maintain one percent
(1%) of the Partnership Units as the General Partner Interest.]

         B.   Notwithstanding Section 14.1.A, the General Partner shall have
the power, without the consent of the Limited Partners, to amend this Agreement
as may be required to facilitate or implement any of the following purposes:

              (1)         to add to the obligations of the General Partner or
                          surrender any right or power granted to the General
                          Partner or any Affiliate of the General Partner for
                          the benefit of the Limited Partners;

              (2)         to reflect the admission, substitution, termination,
                          or withdrawal of Partners in accordance with this
                          Agreement;

              (3)         to set forth the designations, rights, powers,
                          duties, and preferences of the holders of any
                          additional Partnership Interests issued pursuant to
                          Section 4.2.A hereof;

              (4)         to reflect a change that is of an inconsequential
                          nature and does not adversely affect the Limited
                          Partners in any material respect, or to cure any
                          ambiguity, correct or supplement any provision in
                          this Agreement not inconsistent with law or with
                          other provisions, or make other changes with respect
                          to matters arising under this Agreement that will not
                          be inconsistent with law or with the provisions of
                          this Agreement; and





                                      -53-



              (5)         to satisfy any requirements, conditions or guidelines
                          contained in any order, directive, opinion, ruling or
                          regulation of a federal or state agency or contained
                          in federal or state law.

The General Partner shall provide notice to the Limited Partners when any
action under this Section 14.1.B is taken.

         C.   Notwithstanding Sections 14.1.A and 14.1.B hereof, this Agreement
shall not be amended without the Consent of each Partner adversely affected if
such amendment would (i) convert a Limited Partner's interest in the
Partnership into a general partner interest, (ii) modify the limited liability
of a Limited Partner in a manner adverse to such Limited Partner, (iii) alter
rights of the Partner to receive distributions pursuant to Article 5, or the
allocations specified in Article 6, in a manner adverse to such Partner (except
as permitted pursuant to Section 4.2 and Section 14.1.B(3) hereof), (iv) alter
or modify the Redemption Right and REIT Shares Amount as set forth in Sections
8.6 and 11.2.B, and related definitions hereof, in a manner adverse to such
Partner, (v) cause the termination of the Partnership prior to the time set
forth in Sections 2.5 or 13.1, or (vi) amend this Section 14.1.C.  Further, no
amendment may alter the restrictions on the General Partner's authority set
forth in Section 7.3 without the Consent specified in that section.

         D.   Notwithstanding Section 14.1.A hereof, the General Partner shall
not amend Sections 4.2.A, 7.5, 7.6, 11.2 or 14.2 without the Consent of the
Partners holding a majority of the Percentage Interests held by the Limited
Partners with respect to Common Partnership Units (excluding Limited Partner
Interests held by any Post Partner).

         Section 14.2     Meetings of the Partners

         A.   Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
Limited Partners holding twenty-five percent (25%) or more of the Partnership
Interests held with respect to Common Partnership Units.  The call shall state
the nature of the business to be transacted.  Notice of any such meeting shall
be given to all Partners not less than seven (7) days nor more than thirty (30)
days prior to the date of such meeting.  Partners may vote in person or by
proxy at such meeting.  Whenever the vote or Consent of Partners is permitted
or required under this Agreement, such vote or Consent may be given at a
meeting of Partners or may be given in accordance with the procedure prescribed
in Section 14.1 hereof.  Except as otherwise expressly provided in this
Agreement, the Consent of holders of a majority of the Percentage Interests
held with respect to Common Partnership Units shall control.

         B.   Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by a majority of the Percentage Interests of the
Partners held with respect to Common Partnership Units (or such other
percentage as is expressly required by this Agreement). Such consent may be in
one instrument or in several instruments, and shall have the same force and
effect as a vote of a majority of the





                                      -54-


Percentage Interests of the Partners held with respect to Common Partnership
Units (or such other percentage as is expressly required by this Agreement).
Such consent shall be filed with the General Partner.  An action so taken shall
be deemed to have been taken at a meeting held on the effective date so
certified.

         C.   Each Limited Partner may authorize any Person or Persons to act
for him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting.  Every proxy must be signed by the Limited Partner
or his attorney-in-fact.  No proxy shall be valid after the expiration of
eleven (11) months from the date thereof unless otherwise provided in the
proxy.  Every proxy shall be revocable at the pleasure of the Limited Partner
executing it, such revocation to be effective upon the Partnership's receipt of
written notice of such revocation from the Limited Partner executing such
proxy.

         D.   Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to
such rules for the conduct of the meeting as the General Partner or such other
Person deems appropriate in his sole discretion.  Without limitation, meetings
of Partners may be conducted in the same manner as meetings of the shareholders
of PPI and may be held at the same time, and as part of, meetings of the
shareholders of PPI.


                                   ARTICLE 15
                               GENERAL PROVISIONS

         Section 15.1     Addresses and Notice

         Any notice, demand, request or report required or permitted to be
given or made to a Partner or Assignee under this Agreement shall be in writing
and shall be deemed given or made when delivered in person or when sent by
first class United States mail or by other means of written communication to
the Partner or Assignee at the address set forth in Exhibit A or such other
address of which the Partner shall notify the General Partner in writing.

         Section 15.2     Titles and Captions

         All article or section titles or captions in this Agreement are for
convenience only.  They shall not be deemed part of this Agreement and in no
way define, limit, extend or describe the scope or intent of any provisions
hereof.  Except as specifically provided otherwise, references to "Articles"
and "Sections" are to Articles and Sections of this Agreement.

         Section 15.3     Pronouns and Plurals

         Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.





                                      -55-


         Section 15.4     Further Action

         The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.

         Section 15.5     Binding Effect

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

         Section 15.6     Waiver

         No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.

         Section 15.7     Counterparts

         This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or
the same counterpart.  Each party shall become bound by this Agreement
immediately upon affixing its signature hereto.

         Section 15.8     Applicable Law

         This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Georgia, without regard to the principles
of conflicts of law.

         Section 15.9     Invalidity of Provisions

         If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

         Section 15.10    Entire Agreement

         This Agreement contains the entire understanding and agreement among
the Partners with respect to the subject matter hereof and supersedes the Prior
Agreement and any other prior written or oral understandings or agreements
among them with respect thereto.

         Section 15.11    Guaranty by PPI

         PPI unconditionally and irrevocably guarantees to the Limited Partners
the performance by the Post Partners of the Post Partners' respective
obligations under this Agreement.  This guarantee is exclusively for the
benefit of the Limited Partners and shall not extend to the benefit of any
creditor of the Partnership.





                                      -56-


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first written above.

                                GENERAL PARTNER:

                                POST GP HOLDINGS, INC.


                                By: /s/ John T. Glover
                                   ----------------------------------
                                   John T. Glover
                                   President

                                      [CORPORATE SEAL]



                                LIMITED PARTNERS:

                                POST LP HOLDINGS, INC.:



                                By: /s/ John T. Glover
                                   ----------------------------------
                                   John T. Glover
                                   President

                                      [CORPORATE SEAL]

                                Each of the Limited Partners listed on Exhibit A
                                (other than Post LP Holdings, Inc.)

                                By:  POST PROPERTIES, INC.,
                                       as attorney-in-fact


                                By: /s/ John A. Williams             (SEAL)
                                   ----------------------------------
                                   John A. Williams
                                   Chairman





                                      -57-


Post Properties, Inc. has executed and delivered this Agreement solely for the
purposes of agreeing to the provisions of this Agreement applicable to it,
including without limitation Section 15.11 hereof.  Neither this execution by
Post Properties, Inc. nor anything contained herein constitute or shall be
deemed to constitute Post Properties, Inc. as a partner in the Partnership.

                                          POST PROPERTIES, INC.


                                          By /s/ John A. Williams
                                             ---------------------
                                             John A. Williams
                                             Chairman





                                      -58-


                                   EXHIBIT A
                          PARTNERS, CONTRIBUTIONS AND
                             PARTNERSHIP INTERESTS

                       [AWAITING CONFIRMATION FROM POST.]



                                                         Agreed Value of
              Name and Address              Cash           Contributed          Total           Partnership           Date of
                 of Partner             Contribution        Property         Contribution          Units          Contribution(s)
                                                                                                   
         General Partner

         Post GP Holdings, Inc.
         Suite 2200
         3350 Cumberland Circle
         Atlanta, Georgia 30309


         Limited Partners
         Post LP Holdings, Inc.


         Additional Limited
         Partners






                                   EXHIBIT A
                                (Page 1 of ___)


                                   EXHIBIT B
                          CAPITAL ACCOUNT MAINTENANCE

1.               Capital Accounts of the Partners

                 A.               The Partnership shall maintain for each
                                  Partner a separate Capital Account in
                                  accordance with the rules of Regulations
                                  Section 1.704-1(b)(2)(iv).  Such Capital
                                  Account shall be increased by (i) the amount
                                  of all Capital Contributions and any other
                                  deemed contributions made by such Partner to
                                  the Partnership pursuant to this Agreement,
                                  and (ii) all items of Partnership income and
                                  gain (including income and gain exempt from
                                  tax) computed in accordance with Section 1.B
                                  hereof and allocated to such Partner pursuant
                                  to Section 6.1.A of the Agreement and Exhibit
                                  C hereof, and decreased by (x) the amount of
                                  cash or Agreed Value of all actual and deemed
                                  distributions of cash or property made to
                                  such Partner pursuant to this Agreement and
                                  (y) all items of Partnership deduction and
                                  loss computed in accordance with Section 1.B
                                  hereof and allocated to such Partner pursuant
                                  to Section 6.1.B of the Agreement and Exhibit
                                  C hereof.

                 B.                For purposes of computing the amount of any
                                  item of income, gain, deduction or loss to be
                                  reflected in the Partners' Capital Accounts,
                                  unless otherwise specified in this Agreement,
                                  the determination, recognition and
                                  classification of any such item shall be the
                                  same as its determination, recognition and
                                  classification for federal income tax
                                  purposes determined in accordance with
                                  Section 703(a) of the Code (for this purpose
                                  all items of income, gain, loss or deduction
                                  required to be stated separately pursuant to
                                  Section 703(a)(1) of the Code shall be
                                  included in taxable income or loss), with the
                                  following adjustments:

                                  (1)              Except as otherwise provided
                                                  in Regulations Section
                                                  1.704(b)(2)(iv)(m), the
                                                  computation of all items of
                                                  income, gain, loss and
                                                  deduction shall be made
                                                  without regard to any
                                                  election under Section 754 of
                                                  the Code which may be made by
                                                  the Partnership, provided
                                                  that the amounts of any
                                                  adjustments to the adjusted
                                                  bases of the assets of the
                                                  Partnership made pursuant to
                                                  Section 734 of the Code as a
                                                  result of the distribution of
                                                  property by the Partnership
                                                  to a Partner (to the extent
                                                  that such adjustments have
                                                  not previously been reflected
                                                  in the Partners' Capital
                                                  Accounts) shall be reflected
                                                  in the Capital Accounts of
                                                  the Partners in the manner
                                                  and subject to the
                                                  limitations prescribed in
                                                  Regulations Section
                                                  1.704-1(b)(2)(iv)(m)(4).

                                  (2)              The computation of all items
                                                  of income, gain, loss and
                                                  deduction shall be made
                                                  without regard to the fact
                                                  that items described in
                                                  Sections 705(a)(1)(B) or
                                                  705(a)(2)(B) of the Code are
                                                  not includable in gross





                                   EXHIBIT B
                                 (Page 1 of 4)


                                                  income or are neither
                                                  currently deductible nor
                                                  capitalized for federal income
                                                  tax purposes.

                                  (3)             Any income, gain or loss
                                                  attributable to the taxable
                                                  disposition of any
                                                  Partnership property shall be
                                                  determined as if the adjusted
                                                  basis of such property as of
                                                  such date of disposition were
                                                  equal in amount to the
                                                  Partnership's Carrying Value
                                                  with respect to such property
                                                  as of such date.

                                  (4)              In lieu of the depreciation,
                                                  amortization and other cash
                                                  recovery deductions taken
                                                  into account in computing
                                                  such taxable income or loss,
                                                  there shall be taken into
                                                  account Depreciation for such
                                                  fiscal year.

                                  (5)              In the event the Carrying
                                                  Value of any Partnership
                                                  Asset is adjusted pursuant to
                                                  Section 1.D hereof, the
                                                  amount of any such adjustment
                                                  shall be taken into account
                                                  as gain or loss from the
                                                  disposition of such asset.

                                  (6)              Any items specially
                                                  allocated under Section 2 of
                                                  Exhibit C hereof shall not be
                                                  taken into account.

                 C.               Generally, a transferee (including any
                                  Assignee) of a Partnership Unit shall succeed
                                  to a pro rata portion of the Capital Account
                                  of the transferor; provided, however, that,
                                  if the transfer causes a termination of the
                                  Partnership under Section 708(b)(1)(B) of the
                                  Code, the Partnership's properties shall be
                                  deemed, solely for federal income tax
                                  purposes, to have been distributed in
                                  liquidation of the Partnership to the holders
                                  of Partnership Units (including such
                                  transferee) and recontributed by such Persons
                                  in reconstitution of the Partnership.  In
                                  such event, the Carrying Values of the
                                  Partnership properties shall be adjusted
                                  immediately prior to such deemed distribution
                                  pursuant to Section 1.D.(2) hereof. The
                                  Capital Accounts of such reconstituted
                                  Partnership shall be maintained in accordance
                                  with the principles of this Exhibit B.

                 D.               (1)      Consistent with the provisions of
                                           Regulations Section
                                           1.704-1(b)(2)(iv)(f), and as
                                           provided in Section 1.D.(2), the
                                           Carrying Values of all Partnership
                                           assets shall be adjusted upward or
                                           downward to reflect any Unrealized
                                           Gain or Unrealized Loss attributable
                                           to such Partnership property, as of
                                           the times of the adjustments
                                           provided in Section 1.D.(2) hereof,
                                           as if such Unrealized Gain or
                                           Unrealized Loss had been recognized
                                           on an actual sale of each such
                                           property and allocated pursuant to
                                           Section 6.1 of the Agreement.

                                  (2)      Such adjustments shall be made as of
                                           the following times: (a) immediately
                                           prior to the acquisition of an
                                           additional interest in the
                                           Partnership by any new or existing
                                           Partner in exchange for more than a
                                           de minimis Capital





                                   EXHIBIT B
                                 (Page 2 of 4)


                                           Contribution; (b) immediately prior
                                           to the distribution by the
                                           Partnership to a Partner of more than
                                           a de minimis amount of property as
                                           consideration for an interest in the
                                           Partnership; and (c) immediately
                                           prior to the liquidation of the
                                           Partnership within the meaning of
                                           Regulations Section 1.704-
                                           1(b)(2)(ii)(g), provided, however,
                                           that adjustments pursuant to clauses
                                           (a) and (b) above shall be made only
                                           if the General Partner determines
                                           that such adjustments are necessary
                                           or appropriate to reflect the
                                           relative economic interests of the
                                           Partners in the Partnership.

                                  (3)      In accordance with Regulations
                                           Section 1.704-1(b)(2)(iv)(e) the
                                           Carrying Value of Partnership assets
                                           distributed in kind shall be
                                           adjusted upward or downward to
                                           reflect any Unrealized Gain or
                                           Unrealized Loss attributable to such
                                           Partnership property, as of the time
                                           any such asset is distributed.

                                  (4)      In determining Unrealized Gain or
                                           Unrealized Loss for purposes of this
                                           Exhibit B, the aggregate cash amount
                                           and fair market value of all
                                           Partnership assets (including cash
                                           or cash equivalents) shall be
                                           determined by the General Partner
                                           using such reasonable method of
                                           valuation as it may adopt, or in the
                                           case of a liquidating distribution
                                           pursuant to Article 13 of the
                                           Agreement, be determined and
                                           allocated by the Liquidator using
                                           such reasonable methods of valuation
                                           as it may adopt.  The General
                                           Partner, or the Liquidator, as the
                                           case may be, shall allocate such
                                           aggregate value among the assets of
                                           the Partnership (in such manner as
                                           it determines in its sole and
                                           absolute discretion to arrive at a
                                           fair market value for individual
                                           properties).

                 E.               The provisions of this Agreement (including
                                  this Exhibit B and the other Exhibits to this
                                  Agreement) relating to the maintenance of
                                  Capital Accounts are intended to comply with
                                  Regulations Section 1.704-1(b), and shall be
                                  interpreted and applied in a manner
                                  consistent with such Regulations.  In the
                                  event the General Partner shall determine
                                  that it is prudent to modify the manner in
                                  which the Capital Accounts, or any debits or
                                  credits thereto (including, without
                                  limitation, debits or credits relating to
                                  liabilities which are secured by contributed
                                  or distributed property or which are assumed
                                  by the Partnership, the General Partner, or
                                  the Limited Partners), are computed in order
                                  to comply with such Regulations, the General
                                  Partner may make such modification, provided
                                  that it is not likely to have a material
                                  effect on the amounts distributable to any
                                  Person pursuant to Article 13 of the
                                  Agreement upon the dissolution of the
                                  Partnership.  The General Partner also shall
                                  (i) make any adjustments that are necessary
                                  or appropriate to maintain equality between
                                  the Capital Accounts of the Partners and the
                                  amount of Partnership capital reflected on
                                  the Partnership's balance sheet, as computed
                                  for book purposes, in accordance with
                                  Regulations Section 1.704-1(b)(2)(iv)(q), and
                                  (ii) make any appropriate





                                   EXHIBIT B
                                 (Page 3 of 4)


                                  modifications in the event unanticipated
                                  events might otherwise cause this Agreement
                                  not to comply with Regulations Section
                                  1.704-(b).

2.               No Interest

         No interest shall be paid by the Partnership on Capital Contributions
or on balances in Partners' Capital Accounts.

3.               No Withdrawal

         No Partner shall be entitled to withdraw any part of his Capital
Contribution or his Capital Account or to receive any distribution from the
Partnership, except as provided in Articles 4, 5, 7 and 13 hereof.





                                   EXHIBIT B
                                 (Page 4 of 4)


                                   EXHIBIT C
                            SPECIAL ALLOCATION RULES



1.       Special Allocation Rules

         Notwithstanding any other provision of the Agreement or this Exhibit
C, the following special allocations shall be made in the following order:

         A.      Minimum Gain Chargeback.  Notwithstanding the provisions of
Section 6.1 of the Agreement or any other provisions of this Exhibit C, if
there is a net decrease in Partnership Minimum Gain during any Partnership
Year, each Partner shall be specially allocated items of Partnership gross
income and gain for such year (and, if necessary, subsequent years) in an
amount equal to such Partner's share of the net decrease in Partnership Minimum
Gain, as determined under Regulations Section 1.704-2(g).  Allocations pursuant
to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Partner pursuant thereto.  The items to be so
allocated shall be determined in accordance with Regulations Section
1.704-2(f)(6).  This Section 1.A is intended to comply with the minimum gain
chargeback requirements in Regulations Section 1.704-2(f) and for purposes of
this Section 1.A only, each Partner's Adjusted Capital Account Deficit shall be
determined prior to any other allocations pursuant to Section 6.1 of this
Agreement with respect to such Partnership Year and without regard to any
decrease in Partner Minimum Gain during such Partnership Year.

         B.      Partner Minimum Gain Chargeback.  Notwithstanding any other
provision of Section 6.1 of the Agreement or any other provisions of this
Exhibit C (except Section 1.A hereof), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
Year, each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5), shall be specially allocated items of Partnership gross
income and gain for such year (and, if necessary, subsequent years) in an
amount equal to such Partner's share of the net decrease in Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with Regulations Section 1.704-2(i)(5).  Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto.  The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(i)(4).  This
Section 1.B is intended to comply with the minimum gain chargeback requirement
in such Section of the Regulations and shall be interpreted consistently
therewith.  Solely for purposes of this Section 1.B, each Partner's Adjusted
Capital Account Deficit shall be determined prior to any other allocations
pursuant to Section 6.1 of the Agreement or this Exhibit C with respect to such
Partnership Year, other than allocations pursuant to Section 1.A hereof.





                                   EXHIBIT C
                                 (Page 1 of 4)


         C.      Qualified Income Offset.  In the event any Partner
unexpectedly receives any adjustments, allocations or distributions described
in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704- 1(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections 1.A and 1.B hereof, such Partner has an Adjusted Capital Account
Deficit, items of Partnership gross income and gain shall be specifically
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Regulations, its Adjusted Capital Account Deficit
created by such adjustments, allocations or distributions as quickly as
possible.

         D.      Nonrecourse Deductions.  Nonrecourse Deductions for any
Partnership Year shall be allocated to the Partners in accordance with their
respective Percentage Interests in Common Partnership Units.  If the General
Partner determines in its good faith discretion that Nonrecourse Deductions for
any Partnership Year must be allocated in a different ratio to satisfy the safe
harbor requirements of the Regulations promulgated under Section 704(b) of the
Code, the General Partner is authorized, upon notice to the Limited Partners,
to revise the prescribed ratio for such Partnership Year to the numerically
closest ratio which does satisfy such requirements.

         E.      Partner Nonrecourse Deductions.  Any Partner Nonrecourse
Deductions for any Partnership Year shall be specially allocated to the Partner
who bears the economic risk of loss with respect to the Partner Nonrecourse
Debt to which such Partner Nonrecourse Deductions are attributable in
accordance with Regulations Section 1.704-2(i)(2).

         F.      Priority Allocation With Respect To Preferred Partnership
Units.  All or a portion of the remaining items of Partnership gross income or
gain for the Partnership Year, if any, shall be specially allocated to the Post
Partners in an amount equal to the excess, if any, of the cumulative
distributions received by each Post Partner pursuant to Section 5.1(i) hereof
for the current Partnership Year and all prior Partnership Years (other than
any distributions that are treated as being in satisfaction of the Liquidation
Preference Amount for any Preferred Partnership Units) over the cumulative
allocations of  Partnership gross income and gain to such Post Partner under
this Section 1.F for all prior Partnership Years (such allocations being made
in proportion to the respective excess amounts for each Post Partner).

         G.      Code Section 754 Adjustments.  To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
743(b) of the Code is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such item of gain or loss shall be
specially allocated to the Partners in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to such
Section of the Regulations.





                                   EXHIBIT C
                                 (Page 2 of 4)



2.       Allocations for Tax Purposes

         A.      Except as otherwise provided in this Section 2, for federal
income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Section 6.1 of
the Agreement and Section 1 of this Exhibit C.

         B.      In an attempt to eliminate Book-Tax Disparities attributable
to a Contributed Property or Adjusted Property, items of income, gain, loss,
and deduction shall be allocated for federal income tax purposes among the
Partners as follows:

                 (1)              In the case of a Contributed Property, such
                                  items attributable thereto shall be allocated

                                  a.       among the Partners consistent with
                                           the principles of Section 704(c) of
                                           the Code that takes into account the
                                           variation between the 704(c) Value
                                           of such property and its adjusted
                                           basis at the time of contribution;
                                           and

                                  b.       any item of Residual Gain or
                                           Residual Loss attributable to a
                                           Contributed Property shall be
                                           allocated among the Partners in the
                                           same manner as its correlative item
                                           of "book" gain or loss is allocated
                                           pursuant to Section 6.1 of the
                                           Agreement and Section 1 of this
                                           Exhibit C.

                 (2)              In the case of an Adjusted Property, such
                                  items attributable thereto shall be
                                  allocated,

                                  a.       first, among the Partners in a
                                           manner consistent with the
                                           principles of Section 704(c) of the
                                           Code to take into account the
                                           Unrealized Gain or Unrealized Loss
                                           attributable to such property and
                                           the allocations thereof pursuant to
                                           Exhibit B;

                                  b.       second, in the event such property
                                           was originally a Contributed
                                           Property, among the Partners in a
                                           manner consistent with Section
                                           2.B.(1) of this Exhibit C; and

                                  c.       any item of Residual Gain or
                                           Residual Loss attributable to an
                                           Adjusted Property shall be allocated
                                           among the Partners in the same
                                           manner as its correlative item of
                                           "book" gain or loss is allocated





                                   EXHIBIT C
                                 (Page 3 of 4)


                                  pursuant to Section 6.1 of the Agreement
                                  and Section 1 of this Exhibit C.

                 (3)              All other items of income, gain, loss and
                                  deduction shall be allocated among the
                                  Partners in the same manner as their
                                  correlative item of "book" gain or loss is
                                  allocated pursuant to Section 6.1 of the
                                  Agreement and Section 1 of this Exhibit C.

         C.      To the extent Regulations promulgated pursuant to Section
704(c) of the Code permit a partnership to utilize alternative methods to
eliminate the disparities between the agreed value of property and its adjusted
basis (including, without limitation, the implementation of curative
allocations), the General Partner shall have the authority to elect the method
to be used by the Partnership and such election shall be binding on all
Partners.

         Without limiting the foregoing, the General Partner shall take all
steps (including, without limitation, implementing curative allocations) that
it determines are necessary or appropriate to ensure that the amount of taxable
gain required to be recognized by the General Partner upon a disposition by the
Partnership of any Contributed Property or Adjusted Property does not exceed
the sum of (i) the gain that would be recognized by the General Partner if such
Property had an adjusted tax basis at the time of disposition equal to the
704(c) Value of such property; plus (ii) the deductions for depreciation,
amortization or other cost recovery actually allowed to the General Partner
with respect to such property for federal income tax purposes (after giving
effect to the "ceiling rule").





                                   EXHIBIT C
                                 (Page 4 of 4)


                                   EXHIBIT D
                         VALUE OF CONTRIBUTED PROPERTY


                                                                       
Underlying Property                           704(c) Value                   Agreed Value
- -------------------                           ------------                   ------------







                                   EXHIBIT D
                                 (Page 1 of 1)


                                   EXHIBIT E
                              NOTICE OF REDEMPTION

         The undersigned Limited Partner hereby irrevocably (i) redeems
__________ Partnership Units in Post Apartment Homes, L.P. in accordance with
the terms of the Second Amended and Restated Agreement of Limited Partnership
of Post Apartment Homes, L.P., as amended, and the Redemption Right referred to
therein, (ii) surrenders such Partnership Units and all right, title and
interest therein, and (iii) directs that the Cash Amount or REIT Shares (as
determined by the General Partner) deliverable upon exercise of the Redemption
Right be delivered to the address specified below, and if REIT Shares are to be
delivered, such REIT Shares be registered or placed in the name(s) and at the
address(es) specified below.  The undersigned hereby represents, warrants,
certifies and agrees (a) that the undersigned has good, marketable and
unencumbered title to such Partnership Units, free and clear of the rights or
interests of any other person or entity, (b) that the undersigned has the full
right, power and authority to redeem and surrender such Partnership Units as
provided herein, (c) that the undersigned has obtained the consent or approval
of all persons or entities, if any, having the right to consent to or approve
such redemption and surrender, (d) that, if REIT Shares are to be delivered,
the undersigned is acquiring such REIT Shares for his own account, for
investment and without a view to engaging in any resale or distribution
thereof, except such as may occur pursuant to the registration statement
required to be filed by the Company pursuant to a Registration Rights and
Lock-Up Agreement to which the undersigned and the General Partner are parties,
(e) that, if REIT Shares are to be delivered, such REIT Shares may not be
transferred by the undersigned except in transactions pursuant to such
registration statement or that are exempt from the registration requirements of
the Securities Act of 1933 and all applicable state and foreign securities laws
and (f) that, if REIT Shares are to be delivered, the Company may refuse to
transfer such REIT Shares as to which evidence satisfactory to it of such
registration or exemptions is not provided to it.

Dated:
       -------------

         Name of Limited Partner:

                                           -----------------------------
                                           (Signature of Limited Partner)

                                           -----------------------------
                                           (Street Address)

                                           -----------------------------
                                           (City)  (State) (Zip Code)

                          Signature Guaranteed by:

                                           -----------------------------

IF REIT SHARES ARE TO BE ISSUED, ISSUE TO:

Please insert social security or identifying number:





                                   EXHIBIT E
                                 (Page 1 of 1)


                                   EXHIBIT F
         DESIGNATION OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND
         RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
                  QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
                                     OF THE
                      SERIES A PREFERRED PARTNERSHIP UNITS


The following are the terms of the Series A Preferred Partnership Units
established pursuant to this Amendment:

1.       Number

         The maximum number of authorized Series A Preferred Partnership Units
shall be 1,150,000.

2.       Relative Seniority

         In respect of rights to receive quarterly distributions and to
participate in distributions of payments in the event of any liquidation,
dissolution or winding up of the Partnership, the Series A Preferred
Partnership Units shall rank senior to the Common Partnership Units and any
other class or series of Partnership Units of the Partnership ranking, as to
quarterly distributions and upon liquidation, junior to the Series A Preferred
Partnership Units (collectively, "Junior Partnership Units").

3.       Quarterly Distributions

         A.      The Post Partners, in their capacity as the holders of the
then outstanding Series A Preferred Partnership Units, shall be entitled to
receive, when and as declared by the General Partner out of any funds legally
available therefor, cumulative quarterly distributions at the rate of $4.25 per
Series A Preferred Partnership Unit per year, payable in equal amounts of
$1.0625 per unit quarterly in cash on the last day of each March, June,
September, and December or, if not a Business Day (as hereinafter defined), the
next succeeding Business Day beginning on December 31, 1996 (each such day
being hereafter called a "Quarterly Distribution Date" and each period ending
on a Quarterly Distribution Date being hereinafter called a "Distribution
Period").  Quarterly distributions on each Series A Preferred Partnership Unit
shall accrue and be cumulative from and including the date of original issue
thereof, whether or not (i) quarterly distributions on such Series A Preferred
Partnership Units are earned or declared; or (ii) on any Quarterly Distribution
Date there shall be funds legally available for the payment of quarterly
distributions.  Quarterly distributions paid on the Series A Preferred
Partnership Units in an amount less than the total amount of such quarterly
distributions at the time accrued and payable on such Partnership Units shall
be allocated pro rata on a per unit basis among all such Series A Preferred
Partnership Units at the time outstanding.





                                   EXHIBIT E
                                 (Page 1 of 4)


         "Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.

         B.      The amount of any quarterly distributions accrued on any
Series A Preferred Partnership Units at any Quarterly Distribution Date shall
be the amount of any unpaid quarterly distributions accumulated thereon, to and
including such Quarterly Distribution Date, whether or not earned or declared,
and the amount of quarterly distributions accrued on any Series A Preferred
Partnership Units at any date other than a Quarterly Distribution Date shall be
equal to the sum of the amount of any unpaid quarterly distributions
accumulated thereon, to and including the last preceding Quarterly Distribution
Date, whether or not earned or declared, plus an amount calculated on the basis
of the annual distribution rate of $4.25 per unit for the period after such
last preceding Quarterly Distribution Date to and including the date as of
which the calculation is made based on a 360-day year of twelve 30-day months.

         C.      Except as provided herein, the Series A Preferred Partnership
Units shall not be entitled to participate in the earnings or assets of the
Partnership, and no interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution or distributions on the Series A
Preferred Partnership Units which may be in arrears.

         D.      Any distribution made on the Series A Preferred Partnership
Units shall be first credited against the earliest accrued but unpaid quarterly
distribution due with respect to such Partnership Units which remains payable.

         E.      No quarterly distributions on the Series A Preferred
Partnership Units shall be authorized by the General Partner or be paid or set
apart for payment by the Partnership at such time as the terms and provisions
of any agreement of PPI, the General Partner or the Partnership, including any
agreement relating to its indebtedness, prohibits such authorization, payment
or setting apart for payment or provides that such authorization, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or if such authorization or payment shall be restricted or
prohibited by law.   Notwithstanding the foregoing, quarterly distributions on
the Series A Preferred Partnership Units will accrue whether or not the
Partnership has earnings, whether or not there are funds legally available for
the payment of such quarterly distributions and whether or not such quarterly
distributions are authorized.

4.       Liquidation Rights

         A.      Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Partnership, the Post Partners, in their capacity as the
holders of the Series A Preferred Partnership Units then outstanding, shall be
entitled to receive and to be paid out of the assets of the Partnership
available for distribution to its partners, before any payment or distribution
shall be made on any Junior Partnership Units, the amount of $50.00 per Series
A Preferred Partnership Unit, plus accrued and unpaid quarterly distributions
thereon.





                                   EXHIBIT F
                                 (Page 2 of 4)


         B.      After the payment to the holders of the Series A Preferred
Partnership Units of the full preferential amounts provided for herein, the
Post Partners, in their capacity as the holders of the Series A Preferred
Partnership Units as such, shall have no right or claim to any of the remaining
assets of the Partnership.

         C.      If, upon any voluntary or involuntary dissolution,
liquidation, or winding upon of the Partnership, the amounts payable with
respect to the preference value of the Series A Preferred Partnership Units and
any other Preferred Partnership Units of the Partnership ranking as to any such
distribution on a parity with the Series A Preferred Partnership Units are not
paid in full, the holders of the Series A Preferred Partnership Units and of
such other Preferred Partnership Units will share ratably in any such
distribution of assets of the Partnership in proportion to the full respective
preference amounts to which they are entitled.

         D.      Neither the sale, lease or conveyance of all or substantially
all of the property or business of the Partnership, nor the merger or
consolidation of the Partnership into or with any other entity or the merger or
consolidation of any other entity into or with the Partnership, shall be deemed
to be a dissolution, liquidation or winding up, voluntary or involuntary, for
the purposes hereof.

5.       Redemption

         A.      Optional Redemption.  On and after October 1, 2026, the
General Partner may, at its option, cause the Partnership to redeem at any time
all or, from time to time, part of the Series A Preferred Partnership Units at
a price per unit (the " Redemption Price"), payable in cash, of $50, together
with all accrued and unpaid distributions to the and including the date fixed
for redemption (the "Redemption Date").  The Series A Preferred Partnership
Units have no stated maturity and will not be subject to any sinking fund or
mandatory redemption provisions.

         B.      Procedures of Redemption.

                 (1)      At any time that PPI exercises its right to redeem
                          all or any of the Series A Preferred Shares, the
                          General Partner shall exercise its right to cause the
                          Partnership to redeem an equal number of Series A
                          Preferred Partnership Units in the manner set forth
                          herein.

                 (2)      No Series A Preferred Partnership Units may be
                          redeemed except from proceeds from the sale of
                          capital stock of PPI, including but not limited to
                          common stock, preferred stock, depositary shares,
                          interests, participations or other ownership
                          interests (however designated) and any rights (other
                          than debt securities convertible into the
                          exchangeable for equity securities) or options to
                          purchase any of the foregoing.  The proceeds of such
                          sale of capital stock of PPI shall be conveyed by PPI
                          to the Post Partners, by contribution or loan, and
                          thereupon contributed by the Post Partners to the
                          Partnership pursuant to the requirements of Section
                          4.2 of the Partnership Agreement.





                                   EXHIBIT F
                                 (Page 3 of 4)


6.       Voting Rights

         Except as required by law, the General Partner, in its capacity as the
holder of the Series A Preferred Partnership Units, shall not be entitled to
vote at any meeting of the Partners or for any other purpose or otherwise to
participate in any action taken by the Partnership or the Partners, or to
receive notice of any meeting of Partners.

7.       Conversion

         The Series A Preferred Partnership Units are not convertible into or
exchangeable for an other  property or securities of the Partnership.

8.       Restrictions on Ownership

         The Series A Preferred Partnership Units shall be owned and held
solely by one or both of the Post Partners.  As of the date hereof, all of the
Series A Preferred Partnership Units are owned by Post LP Holdings.

9.       General

         The rights of the Post Partners, in their capacity as holders of the
Series A Preferred Partnership Units, are in addition to and not in limitation
on any other rights or authority of the Post Partners, in any other capacity,
under the Partnership Agreement.  In addition, nothing contained herein shall
be deemed to limit or otherwise restrict any rights or authority of the Post
Partners under the Partnership Agreement, other than in their capacity as the
holders of the Series A Preferred Partnership Units.





                                   EXHIBIT F
                                 (Page 4 of 4)

EX-10.2

                                                                   EXHIBIT 10.2

                               FIRST AMENDMENT TO
                           SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                           POST APARTMENT HOMES, L.P.


         This First Amendment to Second Amended and Restated Agreement of
Limited Partnership of Post Apartment Homes, L.P. (this "Amendment") is entered
into as of October 28, 1997, by and among Post GP Holdings, Inc. (the "General
Partner") and the Limited Partners of Post Apartment Homes, L.P. All capitalized
terms used herein shall have the meanings given to them in the Second Amended
and Restated Agreement of Limited Partnership of Post Apartment Homes, L.P.,
dated October 24, 1997 (the "Partnership Agreement").

         WHEREAS, Post Properties, Inc. ("PPI"), on even date herewith, has
issued 2,000,000 shares of its 75/8% Series B Cumulative Redeemable Preferred
Shares, par value $0.01 per share, having a liquidation preference equivalent to
$25.00 per share (the "Series B Preferred Shares"), and has sold such Series B
Preferred Shares in a public offering;

         WHEREAS, PPI has contributed to Post LP Holdings, Inc. ("Post LP
Holdings") the net proceeds of the sale of the Series B Preferred Shares;

         WHEREAS, Post LP Holdings desires to contribute such net proceeds of
the sale of the Series B Preferred Shares to the Partnership in exchange for
partnership interests in the Partnership as set forth herein;

         WHEREAS, the General Partner is authorized to cause the Partnership to
issue interests in the Partnership to Post LP Holdings in exchange for such
contribution;

         NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

         Section 1.        Contribution.

         PPI has contributed to Post LP Holdings, and Post LP Holdings in turn
hereby contributes to the Partnership, the entire net proceeds received by PPI
from the issuance of the Series B Preferred Shares. As provided in Section 4.3
of the Partnership Agreement, Post LP Holdings shall be deemed to have made a
Capital Contribution to the Partnership in the amount of the gross proceeds of
such issuance, which is $50,000,000.00, and the Partnership shall be deemed
simultaneously to have reimbursed Post LP Holdings (and Post LP Holdings shall
be deemed to have reimbursed PPI)


pursuant to Section 7.4.C of the Partnership Agreement for the amount of the
underwriters discount and other costs incurred by PPI in connection with such
issuance.

         Section 2.        Issuance of Series B Preferred Partnership Units.

         In consideration of the contribution to the Partnership made by Post LP
Holdings pursuant to Section 1 hereof, the Partnership hereby issues to Post LP
Holdings 2,000,000 Series B Preferred Partnership Units (as defined herein).

         Section 3.        Definitions.

         In addition to those terms defined in the Partnership Agreement, the
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in the Partnership
Agreement and in this Amendment:

                  "Series B Preferred Partnership Unit" means a Partnership Unit
         issued by the Partnership to Post LP Holdings in consideration of the
         contribution by Post LP Holdings to the Partnership of the entire net
         proceeds received by Post LP Holdings from PPI in connection with PPI's
         issuance of the Series B Preferred Shares. The Series B Preferred
         Partnership Units shall constitute Preferred Partnership Units. The
         Series B Preferred Partnership Units shall have the voting powers,
         designation, preferences and relative, participating, optional or other
         special rights and qualifications, limitations or restrictions as are
         set forth in Exhibit G, attached hereto. It is the intention of the
         General Partner, in establishing the Series B Preferred Partnership
         Units, that each Series B Preferred Partnership Unit shall be
         substantially the economic equivalent of a Series B Preferred Share.

                  "Series B Preferred Shares" means the 75/8 % Series B
         Cumulative Redeemable Preferred Shares, par value $0.01 per share,
         having a liquidation preference equivalent to $25.00 per share, issued
         by PPI.

         Section 4.        Exhibits to Partnership Agreement.

         The General Partner shall maintain the information set forth in Exhibit
A to the Partnership Agreement, as such information shall change from time to
time, in such form as the General Partner deems appropriate for the conduct of
the Partnership affairs, and Exhibit A shall be deemed amended from time to time
to reflect the information so maintained by the General Partner, whether or not
a formal amendment to the Partnership Agreement has been executed amending such
Exhibit A. In addition to the issuance of Series B Preferred Partnership Units
to Post LP Holdings pursuant to this Amendment, such information shall reflect
(and Exhibit A shall be deemed amended from time to time to reflect) the
issuance of any additional Partnership Units to one or both of the Post Partners
or any other Person, the transfer of Partnership Units and the redemption of any
Partnership Units, all as contemplated herein.

         In addition, the Partnership Agreement is hereby amended by attaching
thereto as Exhibit G the Exhibit G attached hereto.



                                      -2-





         IN WITNESS WHEREOF, the parties hereto have executed the Amendment
under seal as of the date first written above.

                              GENERAL PARTNER:

                              POST GP HOLDINGS, INC.,
                              a Georgia corporation


                              By: /s/ John A. Williams
                                 -----------------------------------------
                                 John A. Williams
                                 Chairman and Chief Executive Officer


                              Attest: /s/ Sherry W. Cohen
                                     -------------------------------------
                                     Sherry W. Cohen
                                     Vice President and Secretary

                                                [CORPORATE SEAL]


                              LIMITED PARTNERS:


                              POST GP HOLDINGS, INC.,
                              a Georgia corporation,
                              as attorney-in-fact for the
                              Limited Partners

                              By: /s/ John A. Williams
                                 -----------------------------------------
                                 John A. Williams
                                 Chairman and Chief Executive Officer


                              Attest: /s/ Sherry W. Cohen
                                     -------------------------------------
                                     Sherry W. Cohen
                                     Vice President and Secretary

                                                [CORPORATE SEAL]





                                       -3-






                                    EXHIBIT G


                           POST APARTMENT HOMES, L.P.


         DESIGNATION OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND
          RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
                   QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS

                                     OF THE

                      SERIES B PREFERRED PARTNERSHIP UNITS


         The following are the terms of the Series B Preferred Partnership Units
established pursuant to this Amendment:

         (a)      NUMBER. The maximum number of authorized Series B Preferred
Partnership Units shall be 2,300,000.

         (b)      RELATIVE SENIORITY. In respect of rights to receive quarterly
distributions and to participate in distributions of payments in the event of
any liquidation, dissolution or winding up of the Partnership, the Series B
Preferred Partnership Units shall rank senior to the Common Partnership Units
and any other class or series of Partnership Units of the Partnership ranking,
as to quarterly distributions and upon liquidation, junior to the Series B
Preferred Partnership Units (collectively, "Junior Partnership Units").

         (c)      QUARTERLY DISTRIBUTIONS.

         (1)      The Post Partners, in their capacity as the holders of the
then outstanding Series B Preferred Partnership Units, shall be entitled to
receive, when and as declared by the General Partner out of any funds legally
available therefor, cumulative quarterly distributions at the rate of $1.90625
per Series B Preferred Partnership Unit per year, payable in equal amounts of
$0.47656 per unit quarterly in cash on the last day of each March, June,
September, and December or, if not a Business Day (as hereinafter defined), the
next succeeding Business Day beginning on December 31, 1997 (each such day being
hereafter called a "Quarterly Distribution Date" and each period ending on a
Quarterly Distribution Date being hereinafter called a "Distribution Period").
Quarterly distributions on each Series B Preferred Partnership Unit shall accrue
and be cumulative from and including the date of original issue thereof, whether
or not (i) quarterly distributions on such Series B Preferred Partnership Units
are earned or declared or (ii) on any Quarterly Distribution Date there shall be
funds legally available for the payment of quarterly distributions. Quarterly
distributions paid on the Series B Preferred Partnership Units in an amount less
than the total amount of such quarterly

                                       G-1






distributions at the time accrued and payable on such Partnership Units shall be
allocated pro rata on a per unit basis among all such Series B Preferred
Partnership Units at the time outstanding.

         "Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.

         (2)      The amount of any quarterly distributions accrued on any
Series B Preferred Partnership Units at any Quarterly Distribution Date shall be
the amount of any unpaid quarterly distributions accumulated thereon, to and
including such Quarterly Distribution Date, whether or not earned or declared,
and the amount of quarterly distributions accrued on any Series B Preferred
Partnership Units at any date other than a Quarterly Distribution Date shall be
equal to the sum of the amount of any unpaid quarterly distributions accumulated
thereon, to and including the last preceding Quarterly Distribution Date,
whether or not earned or declared, plus an amount calculated on the basis of the
annual distribution rate of $1.90625 per unit for the period after such last
preceding Quarterly Distribution Date to and including the date as of which the
calculation is made based on a 360-day year of twelve 30-day months.

         (3)      Except as provided herein, the Series B Preferred Partnership
Units shall not be entitled to participate in the earnings or assets of the
Partnership, and no interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution or distributions on the Series B
Preferred Partnership Units which may be in arrears.

         (4)      Any distribution made on the Series B Preferred Partnership
Units shall be first credited against the earliest accrued but unpaid quarterly
distribution due with respect to such Partnership Units which remains payable.

         (5)      No quarterly distributions on the Series B Preferred
Partnership Units shall be authorized by the General Partner or be paid or set
apart for payment by the Partnership at such time as the terms and provisions of
any agreement of PPI, General Partner or the Partnership, including any
agreement relating to its indebtedness, prohibits such authorization, payment or
setting apart for payment or provides that such authorization, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or if such authorization or payment shall be restricted or
prohibited by law. Notwithstanding the foregoing, quarterly distributions on the
Series B Preferred Partnership Units will accrue whether or not the Partnership
has earnings, whether or not there are funds legally available for the payment
of such quarterly distributions and whether or not such quarterly distributions
are authorized.

         (d)      LIQUIDATION RIGHTS.

         (1)      Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Partnership, the Post Partners, in their capacity as the
holders of the Series B Preferred Partnership Units then outstanding, shall be
entitled to receive and to be paid out of the assets of the Partnership

                                       G-2





available for distribution to its partners, before any payment or distribution
shall be made on any Junior Partnership Units, the amount of $25.00 per Series B
Preferred Partnership Unit, plus accrued and unpaid quarterly distributions
thereon.

         (2)      After the payment to the holders of the Series B Preferred
Partnership Units of the full preferential amounts provided for herein, the Post
Partners, in their capacity as the holders of the Series B Preferred Partnership
Units as such, shall have no right or claim to any of the remaining assets of
the Partnership.

         (3)      If, upon any voluntary or involuntary dissolution,
liquidation, or winding upon of the Partnership, the amounts payable with
respect to the preference value of the Series B Preferred Partnership Units and
any other Preferred Partnership Units of the Partnership ranking as to any such
distribution on a parity with the Series B Preferred Partnership Units are not
paid in full, the holders of the Series B Preferred Partnership Units and of
such other Preferred Partnership Units will share ratably in any such
distribution of assets of the Partnership in proportion to the full respective
preference amounts to which they are entitled.

         (4)      Neither the sale, lease or conveyance of all or substantially
all of the property or business of the Partnership, nor the merger or
consolidation of the Partnership into or with any other entity or the merger or
consolidation of any other entity into or with the Partnership, shall be deemed
to be a dissolution, liquidation or winding up, voluntary or involuntary, for
the purposes hereof.

         (e)      REDEMPTION.

         (1)      OPTIONAL REDEMPTION. On and after October 28, 2007, the
General Partner may, at its option, cause the Partnership to redeem at any time
all or, from time to time, part of the Series B Preferred Partnership Units at a
price per unit (the " Redemption Price"), payable in cash, of $25.00, together
with all accrued and unpaid distributions to the and including the date fixed
for redemption (the "Redemption Date"). The Series B Preferred Partnership Units
have no stated maturity and will not be subject to any sinking fund or mandatory
redemption provisions.

         (2)      PROCEDURES OF REDEMPTION.

                  (i)      At any time that PPI exercises its right to redeem
         all or any of the Series B Preferred Shares, the General Partner shall
         exercise its right to cause the Partnership to redeem an equal number
         of Series B Preferred Partnership Units in the manner set forth herein.

                  (ii)     No Series B Preferred Partnership Units may be
         redeemed except from proceeds from the sale of capital stock of PPI,
         including but not limited to common stock, preferred stock, depositary
         shares, interests, participations or other ownership interests (however
         designated) and any rights (other than debt securities convertible into
         the exchangeable for equity securities) or options to purchase any of
         the foregoing. The


                                       G-3





         proceeds of such sale of capital stock of PPI shall be conveyed by PPI
         to the Post Partners, by contribution or loan, and thereupon
         contributed by the Post Partners to the Partnership pursuant to the
         requirements of Section 4.2 of the Partnership Agreement.

         (f)      VOTING RIGHTS. Except as required by law, the General Partner,
in its capacity as the holder of the Series B Preferred Partnership Units, shall
not be entitled to vote at any meeting of the Partners or for any other purpose
or otherwise to participate in any action taken by the Partnership or the
Partners, or to receive notice of any meeting of Partners.

         (g)      CONVERSION. The Series B Preferred Partnership Units are not
convertible into or exchangeable for an other property or securities of the
Partnership.

         (h)      RESTRICTIONS ON OWNERSHIP. The Series B Preferred Partnership
Units shall be owned and held solely by one or both of the Post Partners. As of
the date hereof, all of the Series B Preferred Partnership Units are owned by
Post LP Holdings.

         (i)      GENERAL. The rights of the Post Partners, in their capacity as
holders of the Series B Preferred Partnership Units, are in addition to and not
in limitation on any other rights or authority of the Post Partners, in any
other capacity, under the Partnership Agreement. In addition, nothing contained
herein shall be deemed to limit or otherwise restrict any rights or authority of
the Post Partners, under the Partnership Agreement, other than in their capacity
as the holders of the Series B Preferred Partnership Units.
















                                       G-4

EX-10.3

                                                                   EXHIBIT 10.3





                               SECOND AMENDMENT TO
                           SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                           POST APARTMENT HOMES, L.P.


         This Second Amendment to First Amended and Restated Agreement of
Limited Partnership of Post Apartment Homes, L.P. (this "Amendment") is entered
into as of December 23, 1997, by and among Post GP Holdings, Inc. (the "General
Partner"), and the Limited Partners of Post Apartment Homes, L.P. All
capitalized terms used herein shall have the meanings given to them in the
Second Amended and Restated Agreement of Limited Partnership of Post Apartment
Homes, L.P., dated October 24, 1997, as amended by the First Amendment to Second
Amended and Restated Agreement of Limited Partnership of Post Apartment Homes,
L.P., dated as of October 28, 1997 (the "Partnership Agreement").

         WHEREAS, certain Limited Partners of Post Apartment Homes, L.P. (the
"Partnership") have requested an amendment to the Partnership Agreement as
provided herein, and such amendment has been approved by the requisite number of
Limited Partners as set forth in the Partnership Agreement;

         WHEREAS, the parties hereto accordingly desire to amend the Partnership
Agreement in accordance with the approved amendment;

         NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

         Section 1.        Amendment to Partnership Agreement - Election to
Restore Deficit Capital Account.

         The Partnership Agreement is hereby amended by adding the following new
Sections 13.3.D, 13.3.E, 13.3.F and 13.3.G immediately following the existing
Section 13.3.C:

                  D.       Any Partner (other than a Principal or a
         Principal-Controlled Partnership, whose rights and obligations shall be
         as set forth above) may elect at any time to undertake deficit Capital
         Account restoration liability under Section 13.3.E (or increase the
         amount of such deficit Capital Account restoration liability previously
         undertaken) by delivering written notice of such election to the
         General Partner. Any such notice of election shall include a statement
         of the maximum dollar amount of such Partner's deficit Capital Account
         restoration obligation (the "Stipulated Liability Cap") or a statement
         that such obligation shall be unlimited in amount. Such election,
         including the Stipulated Liability Cap, shall








         be subject to the written approval of the General Partner. At such time
         as the General Partner gives such written approval, such electing
         Partner shall be deemed an "Electing Partner" for purposes of this
         Section 13.3. The General Partner may prescribe such form or forms (if
         any) for an election under this Section 13.3.D as the General Partner
         deems appropriate.

                  E.       Subject to Section 13.3.F, if an Electing Partner (as
         hereinafter defined), on the date of the "liquidation" of his interest
         in the Partnership (within the meaning of Regulations Section
         1.704-1(b)(2)(ii)(g)), has a negative balance in his Capital Account,
         then such Electing Partner shall contribute in cash to the capital of
         the Partnership the lesser of (i) the amount required to increase his
         Capital Account as of such date to zero or (ii) such Electing Partner's
         Stipulated Liability Cap (as defined above). Any such contribution
         required of an Electing Partner hereunder shall be made on or before
         the later of (x) the end of the Partnership Year in which the interest
         of such Electing Partner is liquidated; or (y) the ninetieth (90th) day
         following the date of such liquidation. Notwithstanding any provision
         hereof to the contrary, all amounts so contributed by an Electing
         Partner to the capital of the Partnership shall, upon the liquidation
         of the Partnership under this Article 13, be first paid to any then
         creditors of the Partnership, and any remaining amount shall be
         distributed to the other Partners, if any, then having positive
         balances in their respective Capital Accounts in proportion to such
         positive balances.

                  F.       After the death of a Control Person (as hereinafter
         defined), the executor of the estate of such Control Person, on behalf
         of an Electing Partner, may elect to reduce (or eliminate) the deficit
         Capital Account restoration obligation of such Electing Partner
         pursuant to Section 13.3.E. Such election may be made by such executor
         by delivering to the General Partner within two hundred seventy (270)
         days of the death of such Control Person a written notice, on behalf of
         such Electing Partner, setting forth the maximum deficit balance in
         such Electing Partner's Capital Account that such Electing Partner
         agrees to restore under Section 13.3.E, if any. If such executor does
         not make a timely election pursuant to this Section 13.3.F (whether or
         not the balance in the Electing Partner's Capital Account is negative
         at such time), then such Electing Partner (and the beneficiaries of any
         Control Person who receive distribution of Partnership Units therefrom)
         shall be deemed to have a deficit Capital Account restoration
         obligation as set forth pursuant to the terms of Section 13.3.E. For
         purposes of this Section 13.3.F, "Control Person" means, with respect
         to any Electing Partner, (i) such Electing Partner, if such Electing
         Partner is an individual, and (ii) if such Electing Partner is not an
         individual, an individual who owns, directly or indirectly, a majority
         of (A) the power of the voting equity securities of such Electing
         Partner or (B) the outstanding equity interests of such Electing
         Partner.

         Section 2.        Amendment to Partnership Agreement - Allocation of
Net Losses

         Section 6.1.B of the Partnership Agreement is hereby deleted in its
entirety and the following new Section 6.1.B is inserted in its place:


                                       -2-






                  B. Net Losses. After giving effect to the special allocations
         set forth in Section 1 of Exhibit C, Net Losses shall be allocated to
         the Partners as follows:

                  (1)      To the Partners who hold Common Partnership Units in
                  accordance with their respective Percentage Interests held
                  with respect to Common Partnership Units, except as otherwise
                  provided in this Section 6.1.B.

                  (2)      To the extent that an allocation of Net Loss under
                  Section 6.1.B.(1) would cause a Partner to have an Adjusted
                  Capital Account Deficit at the end of such taxable year (or
                  increase any existing Adjusted Capital Account Deficit of such
                  Partner), such Net Loss shall instead be allocated to those
                  Partners, if any, for whom such allocation of Net Loss would
                  not cause or increase an Adjusted Capital Account Deficit.
                  Solely for purposes of this Section 6.1.B.(2), the Adjusted
                  Capital Account Deficit shall be determined (i) in the case of
                  the Post Partners, without regard to the amount credited to
                  the Post Partners' respective Capital Accounts for the
                  aggregate Liquidation Preference Amount attributable to
                  Preferred Partnership Units and without regard to any deemed
                  deficit restoration obligation of the General Partner
                  recognized under Regulations Section 1.704-1(b)(2)(ii)(c)(2),
                  and (ii) in the case of an Electing Partner, Principal or a
                  Principal-Controlled Partnership, without regard to such
                  Partner's deficit Capital Account restoration obligation under
                  Section 13.3 hereof. The Net Loss allocated under this Section
                  6.1.B.(2) shall be allocated among the Limited Partners who
                  may receive such allocation in proportion to their respective
                  Percentage Interests in Common Partnership Units, but for any
                  particular Limited Partner not in excess of the maximum amount
                  of Net Loss that could be allocated to such Partner without
                  causing such Partner to have an Adjusted Capital Account
                  Deficit.

                  (3)      Any remaining Net Loss that cannot be allocated under
                  Sections 6.1.B.(1) and (2) hereof shall be allocated to the
                  Post Partners in proportion to their respective Percentage
                  Interests with respect to Preferred Partnership Units, to the
                  extent that such allocation of Net Loss would not cause or
                  increase an Adjusted Capital Account Deficit of the Post
                  Partners determined, in the case of the General Partner,
                  without regard to any deemed deficit restoration obligation of
                  the General Partner recognized under Regulations Section
                  1.704-1(b)(2)(ii)(c)(2).

                  (4)      Any remaining Net Loss shall be allocated to the
                  Electing Partners, Principals and the Principal-Controlled
                  Partnerships who may receive such allocation without causing
                  an Adjusted Capital Account Deficit as to such Partner, in
                  proportion to their respective Percentage Interests in Common
                  Partnership Units; provided that if, after the death of a
                  Control Person (as defined in Section 13.3.F hereof) or
                  Principal, an election is made on behalf of the applicable
                  Electing Partner, Principal or Principal-Controlled
                  Partnership under Section 13.3 hereof to eliminate or reduce
                  its deficit Capital Account restoration obligation under
                  Section 13.3 hereof, Net Losses shall not be allocated to such
                  Partner to the extent that such allocation would cause such


                                       -3-





                  Partner to have an Adjusted Capital Account Deficit (or would
                  increase any existing Adjusted Capital Account Deficit of such
                  Partner) as of the end of such taxable year, and instead shall
                  be allocated to those Electing Partners, Principals and
                  Principal-Controlled Partnerships as to whom the foregoing
                  limitation does not apply, in proportion to their respective
                  Percentage Interests in Common Partnership Units.

                  (5) Any remaining Net Loss shall be allocated to the General
                  Partner.

                  C.       For purposes of Regulations Section 1.752-3(a), the
         Partners agree that Nonrecourse Liabilities of the Partnership in
         excess of the sum of (i) the amount of Partnership Minimum Gain, and
         (ii) the total amount of Nonrecourse Built-in Gains3 shall be allocated
         among the Partners in accordance with their respective Percentage
         Interests in Common Partnership Units.

                  D.       Any gain allocated to the Partners upon the sale or
         other taxable disposition of any Partnership asset shall to the extent
         possible, after taking into account other required allocations of gain
         pursuant to Exhibit C, be characterized as Recapture Income in the same
         proportions and to the same extent as such Partners have been allocated
         any deductions directly or indirectly giving rise to the treatment of
         such gains as Recapture Income.

         IN WITNESS WHEREOF, the parties hereto have executed the Amendment
under seal as of the date first written above.

                                  GENERAL PARTNER:

                                  POST GP HOLDINGS, INC.,
                                  a Georgia corporation


                                  By: /s/ John A. Williams
                                     ------------------------------------
                                     Name: John A. Williams
                                          -------------------------------
                                     Title: Chairman and Chief
                                            Executive Officer
                                           ------------------------------

                                  Attest: /s/ Sherry W. Cohen
                                         --------------------------------
                                         Name: Sherry W. Cohen
                                               --------------------------
                                         Title: Vice President and
                                                Secretary
                                                -------------------------

                                                    [CORPORATE SEAL]



                                      -4-





                                         LIMITED PARTNERS:

                                         POST GP HOLDINGS, INC., a
                                         Georgia corporation, as
                                         attorney-in-fact for the
                                         Limited Partners (other
                                         than Post LP Holdings,
                                         Inc.)



                                         By: /s/ John A. Williams
                                            -----------------------------------
                                            Name: John A. Williams
                                                 ------------------------------
                                            Title: Chairman and Chief
                                                   Executive Officer
                                                  -----------------------------

                                         Attest: /s/ Sherry W. Cohen
                                                -------------------------------
                                                Name: Sherry W. Cohen
                                                      -------------------------
                                                Title: Vice President and
                                                       Secretary
                                                       ------------------------



                                         POST LP HOLDINGS, INC.,
                                         a Georgia corporation


                                         By: /s/ John A. Williams
                                            -----------------------------------
                                            Name: John A. Williams
                                                 ------------------------------
                                            Title: Chairman and Chief
                                                   Executive Officer
                                                  -----------------------------

                                         Attest: /s/ Sherry W. Cohen
                                                 ------------------------------
                                                Name: Sherry W. Cohen
                                                     --------------------------
                                                Title: Vice President and
                                                       Secretary
                                                      -------------------------
                                                           [CORPORATE SEAL]




                                      -5-

EX-10.9

                                                                  EXHIBIT 10.9

                                    AMENDMENT
                             POST PROPERTIES, INC.
                              EMPLOYEE STOCK PLAN

        Pursuant to the power reserved in sec. 17 of the Post Properties, Inc.

Employee Plan, sec. 15, Adjustment, is hereby amended to delete the second

sentence in sec. 15 as currently in effect and to substitute the following for

such sentence:

        "Furthermore, the Board as part of any corporate transaction described
        in sec. 424(a) of the Code shall have the right to adjust (in any manner
        which the Board in its discretion deems consistent with sec. 424(a) of
        the Code) the number, kind or class (or any combination thereof)of
        shares of Stock reserved under sec. 3 of this Plan, and the Committee as
        part of any such transaction shall have the right to adjust (in any
        manner which the Committee in its discretion deems consistent with sec.
        424(a) of the Code) the number, kind or class (or any combination
        thereof) of shares of Stock underlying any Restricted Stock grants
        previously made under this Plan and any related grant conditions and
        forfeiture conditions, and the number, kind or class (or any combination
        thereof) of shares subject to Option grants previously made under this
        Plan and the related Option Price and, further, shall have the right to
        make (in any manner which the Committee in its discretion deems
        consistent with sec. 424(a) of the Code) Restricted Stock and Option
        grants to effect the assumption of, or the substitution for, restricted
        stock or option grants previously made by any other corporation to the
        extent that such corporate transaction calls for such substitution or
        assumption of such restricted stock or option grants."

        This Amendment to the Post Properties, Inc. Employee Stock Plan shall

be effective as of the date that the Board of Directors of Post Properties,

Inc. adopted this Amendment to the Plan.

                                                 POST PROPERTIES, INC.

                                                 BY:  /s/ Sherry W. Cohen
                                                     --------------------------

                                                 TITLE: Sr. V.P. & Sec.
                                                       ------------------------

                                                 DATE:  October 14, 1997
                                                      -------------------------

EX-10.10

                                                                   EXHIBIT 10.10

                               AMENDMENT NO. TWO
                             POST PROPERTIES, INC.
                              EMPLOYEE STOCK PLAN

     Pursuant to the power reserved in section 17 of the Post Properties, Inc.
Employee Stock Plan and in connection with the approval granted by the
shareholders of Post Properties, Inc., section 3, Shares Reserved Under the
Plan, is hereby amended to delete 1,200,000 from the first sentence thereof and
to insert in its place "3,500,000."


     This Amendment to the Post Properties, Inc. Employee Stock Plan shall be
effective as of the date that the shareholders of Post Properties, Inc. adopted
the Amendment to the Plan.


                                     POST PROPERTIES, INC.



                                     By: /s/ Sherry W. Cohen
                                         --------------------------
                                         Sherry W. Cohen
                                         Senior Vice President and Secretary

                                     Date: October 24, 1997

EX-10.11

                                                                  EXHIBIT 10.11


                              AMENDMENT NO. THREE
                              POST PROPERTIES, INC.
                               EMPLOYEE STOCK PLAN

         Pursuant to the power reserved in ss. 17 of the Post Properties, Inc.
Employee Stock Plan, ss. 7.3, Grants to Directors, is hereby amended to delete
ss. 7.3 in its entirety and to substitute the following for such section:

        "Each Director automatically shall be granted (without any further
         action on the part of the Committee) a NQO under this Plan as of the
         first day he serve as such to purchase the number of shares of Stock
         determined by dividing $10,000 by the Fair Market Value of a share of
         Stock on the date of grant and rounding down to the nearest whole
         number. Such grant shall be made at an Option Price equal to the Fair
         Market Value of a share of Stock on the date of such grant. Thereafter,
         each Director who is serving as such on December 31 of each calendar
         year and who has served as such for more than one full year
         automatically shall be granted (without any further action on the part
         of the Committee), as of such December 31, a NQO under this Plan to
         purchase 1,000 shares of Stock. Such grant shall be made at an Option
         Price equal to the Fair Market Value of a share of Stock on the date of
         such grant. Each NQO granted under this Plan to a Director shall be
         evidenced by an Option Certificate, shall be exercisable in full upon
         grant and shall expire 90 days after a Director ceases to serve as such
         or, if earlier, on the tenth anniversary of the date of the grant of
         the NQO. A NQO granted to a Director under this Plan shall conform in
         all other respects to the terms and conditions of a NQO under this
         Plan, and no Director shall be eligible to receive an Option under this
         Plan except as provided in this ss. 7.3. A grant of a NQO to a Director
         under this ss. 7.3 is intended to allow such Director to be a
         "disinterested person" within the meaning of Rule 16b-3, and all NQOs
         granted to Directors as well as this ss. 7.3 shall be construed to
         effect such intent."

         This Amendment to the Post Properties, Inc. Employee Stock Plan shall
be effective as of the date that the Board of Directors of Post Properties, Inc.
adopted the Amendment to the Plan.

                                  POST PROPERTIES, INC.



                                  By:  /s/ Sherry Cohen
                                       ---------------------------------------
                                       Sherry W. Cohen
                                       Senior Vice President and Secretary

                                  Date: October 30, 1997

EX-10.12

                                                                   EXHIBIT 10.12

                               AMENDMENT NO. FOUR
                             POST PROPERTIES, INC.
                              EMPLOYEE STOCK PLAN




         Pursuant to the power reserved in section 17 of the Post Properties,
Inc. Employee Stock Plan ("Plan"), the first sentence of Section 7.1, Committee
Action, is hereby amended to read as follows:


         "The Committee acting in its absolute discretion shall
         have the right to grant Options to Key Employees under
         this Plan from time to time to purchase shares of Stock;
         provided, however, that the Committee shall not have the
         right to grant new Options in exchange for the cancellation
         of outstanding Options which have a higher Option Price than
         the new Options and, further, no grants of ISOs shall be
         made to Key Employees who are not employed by Post or a
         Subsidiary, and no Option or Options, individually or
         collectively, shall be granted to any Key Employee in any
         calendar year to purchase more than 50,000 shares of Stock."

         This Amendment to the Plan shall be effective as of the date
that the Board of Directors of Post Properties, Inc. adopted this Amendment to
the Plan.

                           POST PROPERTIES, INC.



                           BY: /s/ Sherry W. Cohen
                              ---------------------------------------
                           TITLE: Senior Vice President and Secretary
                                 ------------------------------------
                           DATE: October 30, 1997

EX-10.19

                                                                  EXHIBIT 10.19


                [AMENDED AND RESTATED] INDEMNIFICATION AGREEMENT


         THIS [AMENDED AND RESTATED] INDEMNIFICATION AGREEMENT (this
"Agreement"), is made and entered into as of the ___ day of ___________, 1998,
by and between POST PROPERTIES, INC., a Georgia corporation (the "Company"),
and _______________, an officer or director of the Company ("Indemnitee"). For
the purposes of this Agreement, all references to the "Company" shall include
all subsidiaries, affiliates, corporations, partnerships, joint ventures,
enterprises, employee benefit plans, trusts and other entities on behalf of
which Indemnitee serves or will serve at the Company's request as an officer,
director, partner, trustee, employee or agent or in a related capacity.

                                  WITNESSETH:

         WHEREAS, Indemnitee has agreed to serve, at the request of the Company,
as an officer or director of the Company;

         [WHEREAS, the parties hereto have executed that certain Indemnification
Agreement dated as of July 22, 1993, which agreement is hereby amended and
restated in its entirety; and]

         WHEREAS, Indemnitee is willing to serve on behalf of the Company on the
condition that he or she be indemnified, and that he or she have litigation
expenses advanced, to the maximum extent permitted by law.

         NOW, THEREFORE, in consideration of Indemnitee's agreement to serve as
an officer or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties do hereby agree as follows:




         1.                Mandatory Indemnification.

         (a)      General. The Company shall indemnify and hold harmless
Indemnitee to the maximum extent provided for in this Agreement, and, to the
extent that applicable law from time to time in effect shall permit
indemnification that is broader than provided in this Agreement, then to the
maximum extent authorized by law. All amounts payable under the Company's
indemnification obligation shall be paid within thirty (30) days of Indemnitee's
request therefor.

         (b)      Actions Other Than Derivative Actions. In connection with any
threatened, pending or completed claim, action, suit or proceeding to which
Indemnitee is made or is threatened to be made a named defendant or respondent
("Party"), whether civil, criminal, administrative or investigative, and whether
formal or informal (an "Action"), but not including any Action by or in the
right of the Company (a "Derivative Action"), the Company hereby agrees to
indemnify and hold Indemnitee harmless from and against any judgment,
settlement, penalty, fine (including any excise tax assessed with respect to any
employee benefit plan), interest and reasonable expense (including attorneys'
fees) actually incurred by him or her by reason of the fact that Indemnitee is
or was an officer, director, employee or agent of the Company, or has liability
under Section 1l(a) of the Securities Act of 1933, as amended, or is or was
serving at the request of the Company as an officer, director, agent or
fiduciary of any corporation, partnership, joint venture, employee benefit plan,
trust or other enterprise; provided, that Indemnitee conducted himself or
herself in good faith and reasonably believed (i) in the case of conduct in his
of her official capacity, that such conduct was in the best interests of the
Company; (ii) in all other cases, that such conduct was at least not opposed to
the best interests of the Company; (iii) in the case of any criminal Action,
that the Indemnitee had no reasonable cause to believe that such conduct was
unlawful; and (iv) in the case of conduct with




                                       2





respect to any employee benefit plan, that the Indemnitee acted in a manner he
or she believed to be good faith to be in the interests of the participants in
and beneficiaries of the plan. Whether an Action is threatened, and whether
Indemnitee is threatened to be made a Party thereto, shall be determined by
Indemnitee in his reasonable judgment.

         (c)      Derivative Actions. In connection with any Derivative Action,
the Company hereby agrees to indemnify and hold Indemnitee harmless from and
against any reasonable expenses actually incurred by him or her (including
amounts paid in settlement but not including amounts paid as a judgment, penalty
or fine in respect of any such action) by reason of the fact that Indemnitee is
or was an officer, director, partner, trustee, employee or agent of the Company;
provided, that Indemnitee met the relevant standard of conduct described in
Section 1(b) hereof.

         (d)      Termination of Action. The termination of any Action by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not, of itself, create a presumption that Indemnitee did
not meet the relevant standard of conduct described in Section 1(b) hereof.

         (e)      Conduct of Indemnitee. Notwithstanding any foregoing provision
to the contrary, under no circumstance shall the Company indemnify or hold
Indemnitee harmless from and against any liability for judgments, settlements,
penalties, fines (including excise taxes assessed with respect to any employee
benefit plan), or expenses (including attorneys' fees) incurred by Indemnitee in
a proceeding in which Indemnitee is adjudged liable to the Company or is
subjected to injunctive relief in favor of the Company (i) for any
appropriation, in violation of his or her duties, of any business opportunity of
the Company, (ii) for acts or omissions that involve intentional misconduct or
knowing violation of law, (iii) for the types of liability set forth in Section
14-2-832




                                       3





of the Georgia Business Corporation Code (unlawful distributions), or (iv) for
any transaction from which he or she received an improper personal benefit.

         2.       Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any liability (including judgments, settlements, penalties, fines
(including excise taxes assessed with respect to any employee benefit plan),
interest or reasonable expenses (including attorneys' fees)) actually incurred
by him or her but not entitled to indemnification for all of the total amount
thereof, the Company shall indemnify Indemnitee for such portion thereof to
which Indemnitee is entitled.

         3.       Advancement of Expenses. The Company agrees to pay, in advance
of the final disposition of any Action (including, for this purpose, any
proceeding in Section 5 hereof) and within ten (10) days after Indemnitee's
written request, all reasonable expenses incurred by Indemnitee in defending or
acting as a witness in connection with such Action, including but not limited to
the investigation, defense, settlement or appeal of any Action, to which
Indemnitee is a Party or threatened in the reasonable judgment of Indemnitee to
be made a Party by reason of the fact that Indemnitee is or was an officer,
director, employee or agent of the Company, or has liability under Section 11
(a) of the Securities Act of 1933, as amended, or is or was serving at the
request of the Company as an officer, director, agent or fiduciary of any
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise. Indemnitee shall furnish the Company (i) a written affirmation of
his or her good faith belief that he or she has met the standard of conduct set
forth in Section 1(b) hereof or that the Action involves conduct for which
liability has been eliminated under a provision of the Company's articles of
incorporation; and (ii) a written undertaking to repay any funds advanced if it
is ultimately determined that Indemnitee is not entitled to indemnification.



                                       4

Indemnitee agrees to reimburse the Company for any such advancement if, when and
to the extent it is ultimately determined (by a court in a proceeding described
in Section 5 or otherwise) that Indemnitee is not entitled to indemnification
pursuant to this Agreement.

         4.       Indemnification in Specific Actions.

         (a)      The determination of whether, with respect to any specific
Action, Indemnitee has met the applicable standard of conduct set forth in
Section 1(b) hereof and is entitled to indemnification pursuant to Section 1
hereof shall be made (i) if there are two or more disinterested directors, by
the Board of Directors by a majority vote of all the disinterested directors (a
majority of whom shall for such purpose constitute a quorum) or by a majority of
the members of a committee of two or more disinterested directors appointed by
such vote; (ii) if a determination cannot be made under (i) above, in a written
opinion by independent legal counsel, selected in the manner described in the
foregoing clause (i) or, if there are fewer than two disinterested directors,
selected by the Board of Directors of the Company (in which selection directors
who do not qualify as disinterested directors may participate); or (iii) if
agreed to by Indemnitee, by the vote of a majority of shares of the Company
entitled to vote thereon (excluding shares owned by, or the voting of which is
controlled by, directors who do not qualify as disinterested directors).

         (b)      In the event that the determination is made that Indemnitee is
entitled to indemnification or advancement of expenses in a specific Action
pursuant to Section 1 hereof, such a determination is binding upon the Company
in any subsequent proceedings in connection with such Action.




                                       5



         5.       Enforcement of this Agreement.

         (a)      Reasonable expenses incurred by Indemnitee in connection with
his or her request for indemnification hereunder shall be borne by the Company,
unless Indemnitee is determined not to be entitled to indemnification for any
liability or expense hereunder. In the event that Indemnitee is a party to or
intervenes in any proceeding in which the validity or enforceability of this
Agreement is at issue or seeks an adjudication or award in arbitration to
enforce his or her rights under, or to recover damages for breach of, this
Agreement, Indemnitee, if he or she prevails in whole or in part in such action,
shall be entitled to recover from the Company and shall be indemnified by the
Company against any expenses actually and reasonably incurred by him or her.

         (b)      In any proceeding in which the validity or enforceability of
this Agreement is at issue, or in which Indemnitee seeks an adjudication or
award in arbitration to enforce his or her rights hereunder, the Company shall
have the burden of proving that Indemnitee is not entitled to indemnification
hereunder.

         6.       Termination of Service. Indemnitee's right to indemnification
and advancement of expenses pursuant to this Agreement shall continue regardless
of whether Indemnitee has ceased for any reason to be a director of the Company
and shall inure to the benefit of the heirs of Indemnitee and the executors or
administrators of Indemnitee's estate.

         7.       Maintenance of Directors and Officers Liability Insurance. In
the event the Company maintains policies of Directors and Officers Liability
Insurance, Indemnitee shall be named as an insured in such manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors.



                                       6




         8.       Subrogation. In the event Indemnitee receives a payment under
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who shall do everything that may be
necessary to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.

         9.       No Duplication of Payments. The Company shall not be liable
under this Agreement to make any payment in connection with any Action to the
extent Indemnitee has otherwise actually received payment (under any insurance
policy, bylaw provision or otherwise) of the amounts otherwise indemnifiable
hereunder.

         10.      Non-Exclusivity. Indemnitee's rights under this Agreement
shall be in addition to, and not in lieu of, any other rights Indemnitee may
have under any provision of the Company's Articles of Incorporation or Bylaws,
the Georgia Business Corporation Code or pursuant to any Directors and Officers
Liability Insurance. Nothing in this Agreement shall be deemed to diminish or
otherwise restrict Indemnitee's right to indemnification under any provision of
the Company's Articles of Incorporation or Bylaws, the Georgia Business
Corporation Code or pursuant to any Directors and Officers Liability Insurance,
but the rights to indemnification hereunder shall in any event apply
notwithstanding any contrary provision in, or conflict with, any provision of
the Company's Articles of Incorporation or Bylaws, unless prohibited by law.

         11.      Binding Effect. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns (including any direct or indirect successor by merger or
consolidation as provided in the Georgia Business Corporation Code), heirs,
executors and administrators.




                                       7




         12.      Governing Law. This Agreement shall be deemed to be made in,
and in all respects shall be interpreted, construed, and governed by and in
accordance with the laws of, the State of Georgia (without regard to the
conflict of laws principles thereof).

         13.      Severability. The Company and Indemnitee agree that the
agreements and provisions contained in this Agreement are severable and
divisible, that each such agreement and provision does not depend upon any other
provision or agreement for its enforceability, and that each such agreement and
provision set forth herein constitutes an enforceable obligation between the
Company and Indemnitee. Consequently, the parties hereto agree that neither the
invalidity nor the unenforceability of any provision of this Agreement shall
affect the other provisions hereof, and this Agreement shall remain in full
force and effect and be construed in all respects as if such invalid or
unenforceable provision were omitted.

         14.      Certain Amendments. The Company may enter into any amendment
to this Agreement required by applicable law without shareholder approval of
such amendment, unless shareholder approval is required by applicable law.




















                                       8



         IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as the date first above written.

                                    INDEMNITEE




                                    ----------------------------------
                                    Name:


                                    POST PROPERTIES, INC.

Attest:

By:                                 By:
   ------------------------             ------------------------------
   Secretary                            Name:
                                        Title:





















                                       9

EX-10.21

                                                                  EXHIBIT 10.21


                              AMENDMENT NUMBER ONE
            TO THE POST PROPERTIES, INC. PROFIT SHARING/sec. 401(K) PLAN
             AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1994


        Pursuant to sec. 13.1 of the Post Properties, Inc. Profit Sharing/sec.
401(k) Plan as amended and restated effective as of January 1, 1984 ("Plan"),
Post Properties, Inc. hereby amends the Plan as follows:

                                       1.

        By amending sec. 3.19, Forfeiture, to substitute "sec. 8.4" for "sec.
8.5" where it appears in such section.

                                       2.

        By amending sec. 6.1, Plan Sponsor and Company Action, to delete the
last paragraph of such section.

                                       3.

        By amending sec. 6.5, Account Debits and Allocation of Adjustment, to
add the following sentence to the end of such section:

         "For purposes of allocating the Adjustment for any Valuation Date, the
         balance of an Account shall include the Before-Tax Contributions
         credited to such Accounts as of such Valuation Date but shall exclude
         the Profit Sharing Contributions credited to such Account as of such
         Valuation Date."

                                       4.

        By amending subsection (2) of sec. 8.4(d), Forfeiture, to read as
follows:

         "(2) the last day of the Plan Year in which the Employee's employment
         as such terminates, unless he or she is reemployed as an Employee on or
         before such date."








                                       5.

        By amending sec. 13.1, Amendment, to add the following sentence to the
end of such section:

        "Any amendments to the Plan shall be in writing and shall be signed by
        the Chairman or the President of the Plan Sponsor or their delegate."

                                       6.

        This Amendment Number One shall be effective retroactively to January
1, 1994.

        IN WITNESS WHEREOF, Post Properties, Inc. has executed this Amendment
Number One this 15th day of July, 1994.



  (CORPORATE SEAL)                               POST PROPERTIES, INC.

                                                 By:/s/
                                                    ---------------------------

                                                 Title: Sr. Vice President
ATTEST:/s/ Sherry W. Cohen                             ------------------------
       -------------------------
Title: Sr. V.P. & Secretary
       -------------------------




                                      -2-

EX-10.22

                                                                  EXHIBIT 10.22


                              AMENDMENT NUMBER TWO
           TO THE POST PROPERTIES, INC. PROFIT SHARING/sec. 401(K) PLAN
            AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1994


Pursuant to sec. 13.1 of the Post Properties, Inc. Profit Sharing/sec. 401(k)
Plan as amended and restated effective as of January 1, 1994 ("Plan"), Post
Properties, Inc. hereby amends the Plan as follows:

                                       1.

By amending sec. 12.2 to read as follows:

         "12.2. Individual Account Investments. The Trustee at the direction of
         the Plan Sponsor shall establish at least two separate investment funds
         within the Trust Fund, one of which shall invest primarily in
         "qualifying employer securities" (as defined for purposes of ERISA sec.
         407) of the Plan Sponsor, and such funds as in effect from time to time
         shall be described in the summary plan description for this Plan or in
         such other materials as the Plan Sponsor furnishes from time to time to
         Employees and Beneficiaries. The Plan Sponsor from time to time shall
         establish and shall communicate in advance and in writing to Employees
         and Beneficiaries procedures for making investment elections under this
         sec. 12.2 between, or among, these investment funds as the Plan
         Sponsor in its absolute discretion deems necessary or appropriate
         under the circumstances for the proper administration of this Plan;
         provided, however, no Employee or Beneficiary shall have any right to
         make any investment elections with respect to his or her Matching
         Account, which Matching Account shall be invested solely in the
         investment fund that invests primarily in qualifying employer
         securities of the Plan Sponsor.

         Subject to such procedures, each Employee and each Beneficiary of a
         deceased Employee for whom an Individual Account continues to be
         maintained under the Plan shall have the right to elect how such
         Individual Account shall be invested as between or among such
         investment funds. All investment directions by Employees and
         Beneficiaries shall be timely furnished by the Plan Sponsor to the
         Trustee or by each Employee and Beneficiary directly to the Trustee or
         its delegate in accordance with procedures established by the Plan
         Sponsor. The Individual Account of an individual for whom no investment
         election is in effect under this sec. 12.2 shall (together with all
         contributions to such Individual Account) be invested automatically in
         the fund designated by the Plan Sponsor for such accounts.






         All additional administrative expenses incurred to effect the
         investment elections made under this sec. 12.2 shall be paid by the
         Trust Fund and charged (in accordance with such reasonable rules as
         the Plan Sponsor deems appropriate under the circumstances) to
         the Individual Account of the person making such election, unless the
         Plan Sponsor elects that the Plan Sponsor (or the Plan Sponsor and
         each Company) shall pay such expenses.

         The Trustee shall (in accordance with the provisions of the Trust
         Agreement) pass through to each Employee or Beneficiary any voting,
         tender and other similar rights appurtenant to his or her interest in
         an investment fund that invests primarily in qualifying employer
         securities of the Plan Sponsor and that is allocated to his or her
         Individual Account and, to the extent required in the regulations under
         ERISA sec. 404(c), shall pass through to each Employee or Beneficiary
         any voting, tender and other similar rights appurtenant to other
         investment funds allocated to his or her Individual Account."

                                       2.

By adding a new sec. 15 to read as follows:

         "sec. 15. Matching Contributions.

                  15.1. Amount of Matching Contributions. The Plan Sponsor shall
                  decide each Plan Year how much each Company shall contribute
                  as a Matching Contribution for such Plan Year based on the
                  extent to which the Plan Sponsor's actual funds from
                  operations for such year meet the targeted funds from
                  operations for such year. Forfeitures, if any, from Matching
                  Accounts shall be applied when available against the
                  Companies' obligation to make Matching Contributions, and no
                  Matching Contribution shall be made directly by the Companies
                  for any Plan Year to the extent that such Forfeitures are
                  available to satisfy the Matching Contribution obligation for
                  such Plan Year.

                  15.2. Allocation of Matching Contributions. Subject to the
                  limitations set forth in this sec. 15 and in sec. 7,
                  the Matching Contributions made for any Plan Year shall be
                  allocated as of the last day of such Plan Year by, or at the
                  direction of, the Plan Sponsor among the Matching Accounts of
                  all Active Participants on whose behalf Before-Tax
                  Contributions were made for such Plan Year. The Matching
                  Contribution shall be allocated to each such Matching Account
                  in the same proportion that the Before-Tax Contributions
                  allocated to such Active

                                       -2-








                  Participant's Before-Tax Account for such Plan Year bears to
                  the total of all Before-Tax Contributions allocated to all
                  Before-Tax Accounts for such Plan Year; provided, however, no
                  Before-Tax Contributions in excess of 3% of an Active
                  Participant's Compensation for a Plan Year shall be taken into
                  account in computing the numerator or denominator of such
                  fraction.

         15.3.    Limitations on Matching Contributions for Highly Compensated
                  Employees.

                        (a) General. Subject to sec. 15.3(f), the Average
                        Contribution Percentage for Highly Compensated Employees
                        for any Plan Year shall not exceed the Maximum
                        Contribution Percentage for such Plan Year. The Plan
                        Sponsor shall determine the amount, if any, of the
                        Excess Aggregate Contributions for such year for each
                        affected Highly Compensated Employee in accordance with
                        the rules under Code sec. 401(m).

                        (b) Special Rules.

                            (1) Other Plans or Arrangements. For purposes of
                            this sec. 15.3, the Contribution Percentage for any
                            Highly Compensated Employee who is eligible to have
                            "employee contributions" (within the meaning of
                            Code sec. 401(m)), "elective deferrals" (as
                            described in Code sec. 402(g)(3)), or "matching
                            contributions)' (as described in Code sec.
                            401(m)(4)) allocated to his or her account under
                            two or more plans or arrangements described in Code
                            sec. 401(a) or Code sec. 401(k) that are maintained
                            by a Company or an Affiliate shall be determined as
                            if all such contributions were made under this
                            Plan. If this Plan satisfies the requirements of
                            Code sec. 410(b) only if aggregated with one or
                            more other plans, or if one or more other plans
                            satisfy the requirements of Code sec. 410(b) only
                            if aggregated with this Plan, then this sec. 15.3
                            shall be applied by determining the Contribution
                            Percentages as if all such plans were a single
                            plan.

                            (2) Family Members. For purposes of determining the
                            Contribution Percentage of each Employee who is a 5%
                            owner or one of the 10 most highly paid Highly
                            Compensated Employees for such Plan Year, the
                            Matching Contributions and Compensation of such
                            Employee's "family members" (as described in

                                       -3-








                            Code sec. 414(q)(6)) shall be treated as the
                            Matching Contributions and Compensation of such
                            Employee, and such family members shall be
                            disregarded as separate Employees in determining
                            the Contribution Percentage both for individuals
                            who are Nonhighly Compensated Employees and for
                            individuals who are Highly Compensated Employees.
                            In the case of a Highly Compensated Employee whose
                            Contribution Percentage is determined under these
                            family aggregation rules, the determination of the
                            amount of Excess Aggregate Contributions shall be
                            made by reducing the Contribution Percentage in
                            accordance with the "leveling" method described in
                            Treas. Reg. sec. 1.401(m)-l(e)(2) and allocating
                            the Excess Aggregate Contributions among the family
                            members in proportion to the contributions of each
                            family member that have been combined.

                            (3) Other Requirements. The determination and
                            treatment of the Matching Contributions and
                            Contribution Percentage of any Employee shall
                            satisfy such other requirements as may be prescribed
                            by the Secretary of the Treasury.

                     (c) Distribution or Forfeiture of Excess Aggregate
                     Contributions. Notwithstanding any other provision of this
                     Plan, Excess Aggregate Contributions made for any Plan
                     Year, plus any investment income and minus any loss
                     allocable to such Excess Aggregate Contributions, shall be
                     forfeited (if otherwise forfeitable under sec. 8.4 and sec.
                     15.4(b)) or distributed (if not so forfeitable) from the
                     Individual Accounts of Highly Compensated Employees on
                     whose behalf such Excess Aggregate Contributions were
                     allocated for such Plan Year no later than the last day of
                     the immediately following Plan Year. Such distributions or
                     forfeitures shall be made to such Employees on the basis of
                     the respective portions of the Excess Aggregate
                     Contributions attributable to each such Employee,
                     determined by first reducing the Contribution Percentage of
                     the Highly Compensated Employee with the highest
                     Contribution Percentage to the extent necessary to satisfy
                     the Maximum Contribution Percentage limitations or to cause
                     such Contribution Percentage to equal the Contribution
                     Percentage of the Highly Compensated Employee with the next
                     highest Contribution Percentage, and then repeating such
                     process until the Maximum Contribution Percentage
                     limitations is satisfied.


                                       -4-





                     (d) Determination of Income or Loss. The investment income
                     or loss allocable to Excess Aggregate Contributions shall
                     be determined in accordance with sec. 6.5 for the Plan Year
                     for which such contributions were allocated (but not for
                     the period between the end of such Plan Year and the date
                     of distribution or forfeiture) in accordance with the
                     regulations under Code sec. 401(m).

                     (e) Order for Determining Excess Aggregate Contributions.
                     Excess Aggregate Contributions shall be determined after
                     first determining "excess deferrals" under sec. 7.3 and
                     then determining "excess contributions" under sec. 7.4.

                     (f) Multiple Use Limit. If in the same Plan Year the
                     Maximum Deferral Percentage limitation is satisfied by
                     using the alternate limit under sec. 3.24(b) and the
                     Maximum Contribution Percentage limitation is satisfied by
                     using the alternate limit under sec. 15.5(f)(2), the Plan
                     Sponsor shall determine the amount, if any, of the
                     reductions required to satisfy the rules under Code sec.
                     401(m) on the multiple use of such alternative limits. Any
                     such reduction shall be treated as an Excess Aggregate
                     Contribution and shall be distributed or forfeited in
                     accordance with sec. 15.3(c).

                     15.4. Other Rules Applicable to Matching Accounts.

                     (a) Vesting and Forfeitures. The vested portion of an
                     Employee's Matching Account shall equal the percentage
                     figure shown opposite the Employee's completed Years of
                     Employment under the Vesting Schedule set forth in sec.
                     8.4(c), and the rules in sec. 8.4 shall apply to an
                     Employee's Matching Account in the same manner as to his
                     or her Profit Sharing Account; provided, however,
                     Forfeitures, if any, from Matching Accounts shall be
                     applied when available against the Companies' obligation
                     to make Matching Contributions under sec. 15.1.

                     (b) Top-Heavy. For purposes of the minimum top-heavy
                     contribution under sec. 14.7(d), Matching Contributions
                     shall be taken into account in calculating the highest
                     percentage allocated to a key employee.

                     (c) Code sec. 415 Limitations. Notwithstanding anything to
                     the contrary in sec. 7.2(a), the sum of the Matching
                     Contributions, Before-Tax Contributions, Profit Sharing
                     Contributions and

                                       -5-








                            Forfeitures credited to an Eligible Employee's
                            Individual Account for any Plan Year shall not
                            exceed the Code sec. 415 limitation described in
                            sec. 7.2(a)

                     15.5. Special Definitions.

                     (a) Average Contribution Percentage -- means for each Plan
                     Year the average (expressed as a percentage) of the
                     Contribution Percentages computed separately (a) for the
                     group of individuals who are Highly Compensated Employees
                     during such Plan Year and (b) for the group of individuals
                     who are Nonhighly Compensated Employees during such Plan
                     Year.

                     (b) Matching Account -- means the bookkeeping subaccount
                     maintained as part of an Employee's Individual Account
                     attributable to his or her Matching Contributions under
                     this Plan.

                     (c) Matching Contribution -- means the matching
                     contribution made by a Company in accordance with this sec.
                     15.

                     (d) Contribution Percentage -- means for each Plan Year
                     for each Employee who has satisfied the employment
                     requirement described in sec. 4.1 and who is an
                     Eligible Employee at any time during the Plan Year, the
                     ratio (expressed as a percentage) of (1) the Matching
                     Contribution, if any, credited to his or her Individual
                     Account for such Plan Year to (2) his or her Compensation
                     for such Plan Year. The Contribution Percentage for an
                     Employee who is eligible to make, but does not make,
                     Before-Tax Contributions and is not credited with a
                     Matching Contribution shall be zero.

                     (e) Excess Aggregate Contributions -- means for each Highly
                     Compensated Employee for each Plan Year the excess of

                            (1) the Matching Contributions actually taken into
                            account in determining the Contribution Percentage
                            of such Highly Compensated Employee for such Plan
                            Year over

                            (2) the maximum amount of such contributions
                            permitted for such Plan Year under Code sec.
                            401(m)(2)(A),

                     where such maximum shall be determined by reducing such
                     contributions made by or on behalf of such Highly
                     Compensated Employees in order of their Contribution
                     Percentages, beginning with the highest of such
                     percentages.

                                      -6-








                     (f) Maximum Contribution Percentage -- means for any Plan
                     Year the greater of

                            (1) the Average Contribution Percentage for
                            Nonhighly Compensated Employees for such Plan Year
                            multiplied by 1.25, or

                            (2) the lesser of (i) the Average Contribution
                            Percentage for Nonhighly Compensated Employees for
                            such Plan Year multiplied by 2 or (ii) the Average
                            Contribution Percentage for Nonhighly Compensated
                            Employees plus 2 percentage points."

                                       3.

This amendment shall be effective as of January 1, 1996. Except as otherwise
expressly amended by this amendment, the Plan as in effect before this amendment
shall remain in full force and effect.

IN WITNESS WHEREOF, Post Properties, Inc. has caused this Amendment Number Two
to be executed by its duly authorized officer this 2nd day of January, 1996..

                                                      POST PROPERTIES, INC.

                                                 BY: /s/
                                                     -------------------------

                                                 TITLE: President
                                                       -----------------------


                                      -7-

EX-10.23

                                                                   EXHIBIT 10.23

                             AMENDMENT NUMBER THREE
              POST PROPERTIES, INC. PROFIT SHARING/ss. 401(K) PLAN
             AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1994

Pursuant to ss. 13.1 of the Post Properties, Inc. Profit Sharing/ss. 401(k) Plan
as amended and restated effective as of January 1, 1994 ("Plan"), Post
Properties, Inc. hereby amends the Plan as follows:

1.       By amending ss. 3.19, Forfeiture, to read as follows:

         "3.19. Forfeiture -- means the nonvested portion of an Individual
         Account of an Employee that is deducted from such Account in accordance
         with the terms of this Plan."

2.       By amending ss. 6.2(a), Forfeitures, to insert the phrase "attributable
         to Profit Sharing Contributions" after the word "Forfeitures".

3.       By amending the last sentence of ss. 6.5, Account Debits and Allocation
         of Adjustment, to read as follows:

         "For purposes of allocating the Adjustment for any Valuation Date, the
         Individual Accounts shall be adjusted for contributions, distributions,
         withdrawals and other applicable debits and credits in accordance with
         procedures established for such purpose by the Plan's recordkeeper."

4.       By amending ss. 6.6, Allocation Report, to read as follows:

         "6.6. Allocation Report. At least annually and at such other times as
         determined by the Plan Sponsor, if any, each person for whom an
         Individual Account is maintained shall be provided with a statement
         showing the amounts allocated to and the new value of that Individual
         Account."

5.       By amending the last sentence in ss. 8.4(b), Immediate Payment, to read
         as follows:

         "If the vested portion of an Employee's Individual Account is $3,500 or
         less at the time of his or her Employment Termination Date (or at the
         time of any prior distribution), such Employee shall be deemed to have
         requested an immediate payment under this ss. 8.4(b) and that vested
         portion shall be paid in accordance with ss. 9.1(c) and procedures
         established by the Plan Sponsor as soon as practicable after the
         Employee's Employment Termination Date."



6.       By amending ss. 8.4(e), Reemployment, to read as follows:

         "(e)  Reemployment.

                  (1) If the former Employee is reemployed as an Employee before
                  he or she has 6 consecutive Breaks in Service and the vested
                  portion of his or her Profit Sharing Account and Matching
                  Account was more than zero, the dollar amount that was treated
                  as a Forfeiture under ss. 8.4(d) and ss. 15.4(a), if any,
                  shall be restored (from Forfeitures and, if necessary, from
                  the Profit Sharing Contribution) to the Employee's Individual
                  Account only if the Employee repays to the Plan an amount
                  equal to the dollar amount of the distribution from the
                  Employee's Profit Sharing Account and Matching Account in
                  accordance with this ss. 8.4(e). Such repayment must be made
                  before the earlier of (1) five years after the first date on
                  which the Employee is subsequently reemployed as an Employee
                  or (2) the date the Employee has six consecutive Breaks in
                  Service following the date of the distribution. If no such
                  repayment is made, the dollar amount that was treated as a
                  Forfeiture shall not be restored notwithstanding the former
                  Employee's reemployment.

                  (2) If the former Employee is reemployed as an Employee before
                  he or she has six consecutive Breaks in Service and the vested
                  portion of his or her Profit Sharing Account and Matching
                  Account was zero and, the dollar amount that was treated as a
                  Forfeiture under ss. 8.4(d) and ss. 15.4(a), if any, shall
                  automatically be restored upon the Employee's reemployment.

                  (3) If the former Employee is reemployed as an Employee after
                  he or she has six consecutive Breaks in Service, the dollar
                  amount that was treated as a Forfeiture shall not be restored.
                  "

7.       By amending the last sentence of ss. 3.14, Eligible Employee, to read
         as follows:

         "In addition, for purposes of eligibility to make Before-Tax
         Contributions under ss. 5.2, the term Eligible Employee shall not
         include an Employee who is classified on the Company's personnel or
         payroll records as a part-time employee who works less than 30 hours
         per week, unless such person has completed at least one "year of
         eligibility service" as described below.

         A "year of eligibility service" means (1) a period of 12 consecutive
         months beginning on an Employee's Employment Commencement Date during
         which such Employee is credited with at least 1,000 Hours of Service or
         (2) any Plan Year including an anniversary of such Employment
         Commencement Date during which such Employee is credited with at least
         1,000 Hours of Service. For this purpose, an Employee's Hours of
         Service shall also include hours for which the Employee (i) is directly
         or indirectly paid, or entitled to


                                       -2-






         payment, for a period of time (without regard to whether the employment
         relationship is terminated) when the Employee performs no duties as an
         Employee due to vacations, holidays, illness, incapacity (including
         disability), layoff, jury duty, military duty or leave of absence, or
         (ii) is paid for any reason an amount as "back pay," irrespective of
         mitigation of damages, where such Hour of Service credit, if any, for
         periods when no duties are performed shall be calculated in accordance
         with then applicable Department of Labor Hour of Service regulations.


8.       By amending ss. 8.7, Separate Accounts, to read as follows:

         "8.7. Separate Accounts. If a distribution is made from an Employee's
         Profit Sharing Account under ss. 8.5(a) or ss. 8.6 at a time when the
         Employee's vested portion was less than 100%, the Plan Sponsor
         thereafter shall determine the then vested portion of the Employee's
         Profit Sharing Account in accordance with the following formula:

                  X =  P   (AB + (R x D)) - (R x D), where
                  X =      the current dollar amount, if any, of the vested
                           portion of the Employee's Profit Sharing Account;
                  P =      the employee's current vested percentage under the
                           vesting schedule in ss. 8.4(c);
                  AB =     the current dollar amount, if any, of the balance
                           posted to the Employee's Profit Sharing Account;
                  D =      the dollar amount previously distributed to the
                           Employee from his or her Profit Sharing Account; and
                  R =      AB divided by the dollar amount, if any, posted to
                           the Employee's Profit Sharing Account immediately
                           after the distribution.

         Finally, a separate Profit Sharing Account shall be established for
         such Employee if he or she subsequently becomes an Active Employee and
         both Profit Sharing Accounts shall be merged into one such account when
         the Employee's interest in each such account fully vests."

9.       By amending the Plan to correct certain typographical errors as
         follows:

         a.       By amending the first sentence in ss. 5.2(b)(5), Resumption
                  After Termination, to substitute "ss. 5.2(b)(4)" for "ss.
                  5.2(c)(4)";

         b.       By amending the last sentence in ss. 6.1, Plan Sponsor and
                  Company Action, to substitute "ss. 6.2(a)" for "ss. 6.3(a)";

         c.       By amending clause (2) in ss. 7.2(b), Corrections, to
                  substitute "ss. 6.2" for "ss. 6.3";



                                      -3-







         d.       By amending the last sentence in ss. 8.4(c), Vesting Schedule,
                  to substitute "ss. 8.4(c)" for "ss. 5.4(c)";

         e.       By amending the first sentence in ss. 8.4(e), Reemployment, as
                  in effect before the amendment made in Paragraph 6 of this
                  Amendment Number Three, to substitute "ss. 8.4(c)" for "ss.
                  5.4(c)";

         f.       By amending ss. 8.5(b), Before-Tax Accounts, to substitute
                  "ss. 8.5(b)" for "ss. 8.6(b)" each place it appears;

         g.       By amending the second sentence in ss. 8.6, In-Service
                  Withdrawals, to substitute "ss. 8.5" for "ss. 8.6";

         h.       By amending the last sentence in ss. 8.6, In-Service
                  Withdrawals, to substitute "ss. 8.6" for "ss. 8.7" each place
                  it appears;

         i.       By amending the first sentence in ss. 8.7, Separate Accounts,
                  as in effect before the amendment made in Paragraph 8 of this
                  Amendment Number Three, to substitute "ss. 8.5(a)" for "ss.
                  8.6(a)" and to substitute "ss. 8.6" for "ss. 8.7"; and

         j.       By amending the last sentence in ss. 9.1(c), Automatic Lump
                  Sum Distributions, to substitute "ss. 8.5" for "ss. 8.6" and
                  to substitute "ss. 8.6" for "ss. 8.7".

10.      The provisions of Paragraphs 6, 7 and 8 of this Amendment shall be
         effective for individuals who are Employees on or after the date this
         Amendment is executed and all other provisions of this Amendment shall
         be effective retroactively to January 1, 1994. Except as otherwise
         expressly amended by this Amendment, the Plan as in effect before this
         Amendment shall remain in full force and effect.

IN WITNESS WHEREOF, Post Properties, Inc. has caused this Amendment Number Three
to be executed by its duly authorized officer as of this 29th day of May, 1997.

                                     POST PROPERTIES, INC.

                                     By:  /s/ Judy Denman
                                        ---------------------------------------

                                     Title: Senior Vice President
                                           ------------------------------------


                                        -4-

EX-10.24

                                                                   EXHIBIT 10.24


                              AMENDMENT NUMBER FOUR
              POST PROPERTIES, INC. PROFIT SHARING/SS. 401(K) PLAN
             AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1994


Pursuant to ss. 13.1 of the Post Properties, Inc. Profit Sharing/ss. 401(k) Plan
as amended and restated effective as of January 1, 1994 ("Plan"), Post
Properties, Inc. hereby amends the Plan as follows:

1.       The provisions set forth in Paragraph 7 of Amendment Number Three to
         the Plan, which amended the last sentence of ss. 3.14, Eligible
         Employee, shall be effective for individuals who are Employees in Plan
         Years beginning on or after January 1, 1995.

2.       Except as otherwise expressly amended by this Amendment, the Plan as in
         effect before this Amendment shall remain in full force and effect.

IN WITNESS WHEREOF, Post Properties, Inc. has caused this Amendment Number Four
to be executed by its duly authorized officer as of this 12th day of September,
1997.


                                            POST PROPERTIES, INC.

                                            By: /s/ Judy Denman
                                               --------------------------------

                                            Title: Senior Vice President
                                                  ------------------------------

EX-10.27

                                                                   EXHIBIT 10.27


                                    AMENDMENT
                              POST PROPERTIES, INC.
                 1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN

        Pursuant to the power reserved in sec. 12 in the Post Properties, Inc.
1995 NonQualified Employee Stock Purchase Plan ("Plan"), the following sections
of the Plan are hereby amended as follows:

1.   Sec. 2.9., Eligible Employee is hereby amended to read as follows:

     "Sec. 2.9. Eligible Employee shall mean each officer or employee of Post or
a participating Employer

     (a) who is classified on the payroll records of Post or a Participating
Employer as a full-time or part-time employee, and

     (b) who has completed at least one full calendar month of employment with
Post or a Participating Employer."

2.   Sec. 12., Amendment or Termination, is hereby amended to read as follows:

     "Sec. 12. Post shall have the right at any time and from time to time to
amend the Plan, and any amendment to the Plan shall be in writing and shall be
signed by the Chairman or President of Post or their delegate; provided, no
amendment shall affect the rights or powers or duties of the Committee absent
the approval of the Board. Furthermore, no amendment shall be retroactive unless
Post in its discretion determines that such amendment is in the best interest of
Post or such amendment is required by applicable law to be retroactive. Post may
also terminate the Plan and any Purchase Period at any time (together with any
related contribution elections) or may terminate any Purchase Period (together
with any related contribution elections) at any time; provided, however, that no
such termination shall be retroactive unless Post determines that applicable law
requires a retroactive termination of this Plan. Any termination decision shall
be evidenced in writing and shall be signed by the Chairman or President of Post
or their delegate."








         This Amendment to the Plan shall be effective as of the date that the
Board of Directors of Post Properties, Inc. adopted this Amendment to the Plan.

                                                 POST PROPERTIES, INC.

                                                 BY: /s/ Sherry W. Cohen
                                                    ---------------------------
                                                 TITLE: Sr. V.P./Sec.
                                                       ------------------------
                                                 DATE: October 14, 1997
                                                       ------------------------

EX-21

                                                                               .
                                                                               .
                                                                               .
                                                                      EXHIBIT 21

                      SUBSIDIARIES OF POST PROPERTIES, INC.
                             (AS OF MARCH 26, 2003)






      NAME                                                  STATE OF FORMATION
      ----                                                  ------------------
                                                      


1.    1499 Massachusetts Avenue, Inc.                       Delaware

2.    1499 Massachusetts Holding, LLC                       Delaware

3.    Addison Circle Access, Inc.                           Delaware

4.    Addison Townhomes One, Ltd.                           Texas

5.    Akard-McKinney Investment Company, LLC                Texas

6.    Armada Condominiums, L.P.                             Georgia

7.    Armada Denver Condominiums, LLC                       Texas

8.    Armada Homes, Inc.                                    Delaware

9.    Armada Phoenix Townhomes, LLC                         Texas

10.   Armada Residences, L.P.                               Georgia

11.   Briarcliff Commercial Property, LLC                   Georgia

12.   Cumberland Lake, Inc.                                 Georgia

13.   Greenwood Residential, LLC                            Texas

14.   P/C 89th Street LLC                                   Delaware

15.   P/C First Avenue LLC                                  Delaware

16.   Post 89th Street, LLC                                 Georgia

17.   Post 1499 Massachusetts, LLC                          Georgia

18.   Post Apartment Homes, L.P.                            Georgia

19.   Post Asset Management, Inc.                           Georgia

20.   Post Austin Triangle, L.P.                            Georgia






      NAME                                                  STATE OF FORMATION
      ----                                                  ------------------
                                                      
21.   Post Biltmore, LLC                                    Delaware

22.   Post Carlyle I, LLC                                   Georgia

23.   Post Carlyle II, LLC                                  Delaware

24.   Post Carlyle Services, LLC.                           Georgia

25.   Post Construction Services, Inc.                      Georgia

26.   Post Development Services Limited Partnership         Georgia

27.   Post GP Holdings, Inc.                                Georgia

28.   Post Landscape Group, Inc.                            Georgia

29.   Post LP Holdings, Inc.                                Georgia

30.   Post Paseo Colorado, LLC                              Delaware

31.   Post Peachtree, LLC                                   Delaware

32.   Post Rice Lofts, LLC                                  Texas

33.   Post Services, Inc.                                   Georgia

34.   Post Triangle, LLC                                    Georgia

35.   Post Uptown, LLC                                      Texas

36.   Post West Avenue, LLC                                 Georgia

37.   Post West Avenue Lofts, L.P.                          Georgia

38.   Post-AmerUs American Beauty Mill, L.P.                Georgia

39.   Post-AmerUs Bennie Dillon, L.P.                       Georgia

40.   Post-AmerUs Rice Lofts, L.P.                          Georgia

41.   Post-AmerUs Wilson Building II, L.P.                  Georgia

42.   Post-AmerUs Wilson Building, L.P.                     Georgia

43.   STS Loan & Management, Inc.                           Georgia

44.   Residential Ventures, Inc.                            Georgia






      NAME                                                  STATE OF FORMATION
      ----                                                  ------------------
                                                      
45.   Rice Lofts, LP                                        Texas

46.   Riverside Villas, LLC                                 Georgia

47.   Rocky Point Management, Inc.                          Georgia

48.   Rose Hill Associates, LLC                             Delaware

49.   STS Loan, L.P.                                        Georgia

50.   Uptown Denver, LLC                                    Colorado

51.   Villas at Parkway Village, LP                         Georgia

52.   Villas GP, LLC                                        Georgia

EX-23.1

                                                                    EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-62243) of our report dated February 28, 2003
appearing on page 47 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 2002.



/s/ PricewaterhouseCoopers LLP
- ------------------------------

Atlanta, Georgia
March 24, 2003

EX-23.2

                                                                    EXHIBIT 23.2



                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-70689) of our report dated February 28, 2003
appearing on page 47 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 2002.



/s/ PricewaterhouseCoopers LLP
- ------------------------------

Atlanta, Georgia
March 24, 2003

EX-23.3

                                                                    EXHIBIT 23.3


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-81772) of
our report dated February 28, 2003 appearing on page 47 of Post Properties,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002.


/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
March 24, 2003

EX-23.4

                                                                    EXHIBIT 23.4


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-36595) of
our reports dated February 28, 2003 appearing on pages 47 and 73 of Post
Properties, Inc.'s and Post Apartment Homes, L.P.'s Annual Report on Form 10-K
for the year ended December 31, 2002, respectively.


/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
March 24, 2003

EX-23.5

                                                                    EXHIBIT 23.5


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-47399) of
our report dated February 28, 2003 appearing on page 47 of Post Properties,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002.



/s/ PricewaterhouseCoopers LLP
- ------------------------------

Atlanta, Georgia
March 24, 2003

EX-23.6

                                                                    EXHIBIT 23.6


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-00020) of our report dated February 28, 2003
appearing on page 47 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 2002.



/s/ PricewaterhouseCoopers LLP
- ------------------------------

Atlanta, Georgia
March 24, 2003

EX-23.7

                                                                    EXHIBIT 23.7


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-94121) of our report dated February 28, 2003
appearing on page 47 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 2002.


/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
March 24, 2003

EX-23.8

                                                                    EXHIBIT 23.8


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-80427) of
our report dated February 28, 2003 appearing on page 47 of Post Properties,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002.



/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
March 24, 2003

EX-23.9

                                                                    EXHIBIT 23.9


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-44722) of
our report dated February 28, 2003 appearing on page 47 of Post Properties,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2002.



/s/ PricewaterhouseCoopers LLP
- ------------------------------


Atlanta, Georgia
March 24, 2003

EX-23.10

                                                                   EXHIBIT 23.10


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-42884) of
our reports dated February 28, 2003 appearing on pages 47 and 73 of Post
Properties, Inc.'s and Post Apartment Homes, L.P.'s Annual Report on Form 10-K
for the year ended December 31, 2002, respectively.



/s/ PricewaterhouseCoopers LLP
- ------------------------------

Atlanta, Georgia
March 24, 2003

EX-23.11

                                                                   EXHIBIT 23.11


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-55994) of
our reports dated February 28, 2003 appearing on pages 47 and 73 of Post
Properties, Inc.'s and Post Apartment Homes, L.P.'s Annual Report on Form 10-K
for the year ended December 31, 2002, respectively.


/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
March 24, 2003

EX-23.12

                                                                   EXHIBIT 23.12


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-38725) of our report dated February 28, 2003
appearing on page 47 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 2002.


/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
March 24, 2003

EX-23.13

                                                                   EXHIBIT 23.13


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-02374) of our report dated February 28, 2003
appearing on page 47 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 2002.


/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
March 24, 2003

EX-99.1

                                                                    Exhibit 99.1



                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                    AS ADOPTED PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002

         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in
connection with the Annual Report on Form 10-K of Post Properties, Inc. ("Post")
and Post Apartment Homes, L.P. ("PAH", and together with Post, the
"Registrants") for the year ended December 31, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned, the President and Chief Executive Officer of Post and Post GP
Holdings, Inc., PAH's general partner, certifies that:

         1)       the Report fully complies with the requirements of Section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         2)       the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Registrants.



/s/ David P. Stockert
- -------------------------------------
David P. Stockert
President and Chief Executive Officer
March 27, 2003

EX-99.2

                                                                    Exhibit 99.2



                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                    AS ADOPTED PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002

         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in
connection with the Annual Report on Form 10-K of Post Properties, Inc. ("Post")
and Post Apartment Homes, L.P. ("PAH", and together with Post, the
"Registrants") for the year ended December 31, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned, the Executive Vice President and Chief Financial Officer of Post
and Post GP Holdings, Inc., PAH's general partner, certifies that:

         1)       the Report fully complies with the requirements of Section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         2)       the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Registrants.



/s/ R. Gregory Fox
- ----------------------------
R. Gregory Fox
Executive Vice President and
Chief Financial Officer
March 27, 2003