Restrictive Covenants

Certain of Gables’ debt agreements contain 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 restricts Gables’ discretion to declare and pay dividends. In general, during any fiscal year the Operating Partnership may only distribute up to 95% of its consolidated income available for distribution (as defined in the related agreement) exclusive of distributions of capital gains for such year. The applicable debt agreements contain exceptions to these limitations to allow the Operating Partnership to make any distributions necessary to allow Gables to maintain its status as a REIT. Gables does not anticipate that this provision will adversely effect the ability of the Operating Partnership to make distributions or Gables’ ability to declare dividends as currently anticipated.

The tax-exempt bonds contain certain covenants which require a certain percentage of the apartments in such communities be rented to individuals based upon income levels specified by U.S. government programs, as defined.

Maturities

The aggregate maturities of notes payable at December 31, 1999 are as follows:

Joint Venture Indebtedness

The Arbors of Harbortown apartment community secures a $16.4 million tax-exempt bond obligation, which is recourse to Gables up to $1.0 million, bears interest at a variable low-floater rate, has a maturity date of April 2013, and is payable in monthly installments of interest only. The recourse amount is fully cash-collateralized and held by the Arbors of Harbortown JV. The credit enhancement for the bond obligation expires in May 2001.

The Metropolitan Uptown apartment community secures a conventional fixed-rate loan with $17.7 million outstanding at December 31, 1999, 25% of which has been guaranteed by Gables. The loan has a maturity date of December 31, 2002 and bears interest at a rate of 7.18%.

Each of the eight development communities owned by the Gables Residential Apartment Portfolio JV is secured by a construction loan with committed funding equal to 50% of the total budgeted development costs. The construction loans have an initial maturity of March 25, 2002 with two one-year extension options. As of December 31, 1999, there was an aggregate $60.0 million of indebtedness outstanding under these construction loans which currently bear interest at LIBOR plus 1.65%.

Interest Rate Protection Agreements

The terms of the two interest rate protection agreements in place at December 31, 1999 are as follows:

(a) The 30-day LIBOR rate in effect at December 31, 1999 was 6.49%.

Pledged Assets

The aggregate net book value at December 31, 1999 of real estate assets pledged as collateral for indebtedness was $469,429.