Gables Residential Trust (GBP) DEF 14A Definitive proxy

SCHEDULE 14A

(Rule 14a-101)

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[GABLES LETTERHEAD]

March 30, 2001

Dear Shareholder:

      You are cordially invited to attend the annual meeting of shareholders of Gables Residential Trust to be held Tuesday, May 15, 2001 at 9:00 a.m. local time. The meeting will take place at The Vinings Club, located in Overlook III, the office building of Gables’ headquarters at 2859 Paces Ferry Road, Atlanta, Georgia.

      The attached proxy statement, with formal notice of the meeting on the first page, describes the matters expected to be acted upon at the meeting. We urge you to review these materials carefully and to use this opportunity to take part in the company’s affairs by voting on the matters described in the proxy statement. At the meeting, we will also review Gables’ operations, report on 2000 financial results and discuss Gables’ plans for the future. Our trustees and management team will be available to answer any questions you may have. We hope that you will be able to attend.

      Your vote is important to us. Whether you plan to attend the meeting or not, please either complete the enclosed proxy card and return it as promptly as possible, or vote via the internet or by calling the toll-free telephone number. The enclosed proxy card contains instructions regarding all three methods of voting. If you attend the meeting, you may continue to have your shares voted as instructed in the proxy or you may withdraw your proxy at the meeting and vote your shares in person.

      Thank you for your continued support and interest in Gables.

Sincerely,

/s/ Chris D. Wheeler

Chris D. Wheeler
Chairman of the Board and
Chief Executive Officer

GABLES RESIDENTIAL TRUST

2859 Paces Ferry Road
Overlook III, Suite 1450
Atlanta, Georgia 30339
___________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 2001
___________________

      The 2001 annual meeting of shareholders of Gables Residential Trust will be held on Tuesday, May 15, 2001 at 9:00 a.m. local time. The meeting will take place at The Vinings Club, located in Overlook III, the office building of Gables’ headquarters at 2859 Paces Ferry Road, Atlanta, Georgia. Shareholders will vote upon the following proposals at the meeting:

      1. To elect two Class I trustees to serve until the 2004 annual meeting of shareholders and one Class III trustee to serve until the 2003 annual meeting of shareholders.

      2. To consider and act upon any other matters that may properly be brought before the annual meeting and at any adjournments or postponements.

      You may vote if you are a shareholder of record as of the close of business on March 16, 2001. If you do not plan to attend the meeting and vote your common shares in person, please vote in one of the following ways:

• Use the toll-free telephone number shown on the proxy card;

• Go to the website address shown on the proxy card and vote over the Internet; or

• Mark, sign, date and promptly return the enclosed proxy card in the postage-paid envelope.

      Any proxy may be revoked at any time prior to its exercise at the annual meeting.

	By Order of the Board of Trustees
	/s/ Marvin R. Banks, Jr. Marvin R. Banks, Jr. Secretary
March 30, 2001

TABLE OF CONTENTS

TABLE OF CONTENTS

PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
	What is the purpose of the annual meeting?
	Who is entitled to vote?
	Who can attend the meeting?
	How many shares must be represented at the meeting in order to hold the meeting?
	How do I vote?
	Will other matters be voted on at the annual meeting?
	Can I revoke my proxy instructions?
	What other information should I review before voting?
PROPOSAL 1: ELECTION OF TRUSTEES
	Introduction
	Vote Required
	Recommendation
	Information Regarding Nominees, Other Trustees and Named Executive Officers
	Board of Trustees and Committees
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS
	Trustee Compensation
	Executive Compensation
	Summary Compensation Table
	Aggregated Option Exercises in Fiscal Year 2000 and Fiscal Year-End 2000 Option Values
	Employment and Severance Agreements
	Share Performance Graph
	1994 Share Option Plan
	Incentive Compensation Plan
	Deferred Compensation Plan
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
	Compensation Committee Interlocks and Insider Participation
AUDIT COMMITTEE REPORT
PRINCIPAL AND MANAGEMENT SHAREHOLDERS
	Benefit Ownership Table
	Section 16(a) Beneficial Ownership Reporting Compliance
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
OTHER MATTERS
	Independent Public Accountants
	Expenses of Solicitation
	Shareholder Proposals
	Exhibit A
	Audit Committee Charter
	I. General Statement of Purpose
	II. Audit Committee Composition
	III. Meetings
	IV. Audit Committee Activities

		Page No.
PROXY STATEMENT			1
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING			1
	What is the purpose of the annual meeting?		1
	Who is entitled to vote?		1
	Who can attend the meeting?		1
	How many shares must be represented at the meeting in order to hold the meeting?		2
	How do I vote?		2
	Will other matters be voted on at the annual meeting?		2
	Can I revoke my proxy instructions?		2
	What other information should I review before voting?		3
PROPOSAL 1: ELECTION OF TRUSTEES			3
	Introduction		3
	Vote Required		3
	Recommendation		4
	Information Regarding Nominees, Other Trustees and Named Executive Officers		4
	Board of Trustees and Committees		7
COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS			8
	Trustee Compensation		8
	Executive Compensation		9
	Summary Compensation Table		9
	Aggregated Option Exercises in Fiscal Year 2000 and Fiscal Year-End Option Values		12
	Employment and Severance Agreements		12
	Share Performance Graph		14
	1994 Share Option Plan		14
	Incentive Compensation Plan		15
	Deferred Compensation Plan		15
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION			15
	Compensation Committee Interlocks and Insider Participation		18
AUDIT COMMITTEE REPORT			18
PRINCIPAL AND MANAGEMENT SHAREHOLDERS			20
	Beneficial Ownership Table		20
	Section 16(a) Beneficial Ownership Reporting Compliance		22
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			22
OTHER MATTERS			23
	Independent Public Accountants		23
	Expenses of Solicitation		23
	Shareholder Proposals		23
EXHIBIT A – AUDIT COMMITTEE CHARTER			A-1

March 30, 2001

GABLES RESIDENTIAL TRUST

2859 Paces Ferry Road
Overlook III, Suite 1450
Atlanta, Georgia 30339

PROXY STATEMENT

      This proxy statement is furnished in connection with the solicitation of proxies by the Board of Trustees of Gables Residential Trust for use at the 2001 annual meeting of shareholders to be held on Tuesday, May 15, 2001 at 9:00 a.m. local time, and at any adjournments or postponements of the annual meeting. The meeting will take place at the Vinings Club, located in Overlook III, the office building of Gables’ headquarters at 2859 Paces Ferry Road, Atlanta, Georgia.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

What is the purpose of the annual meeting?

      At the annual meeting, shareholders will act upon the matters set forth in the accompanying notice of meeting, including the election of three trustees and any other matters that may properly come before the meeting.

Who is entitled to vote?

      All shareholders of record of Gables’ common shares at the close of business on March 16, 2001, which is referred to as the record date, are entitled to receive notice of the annual meeting and to vote the common shares held by them on the record date. Each outstanding common share entitles its holder to cast one vote for each matter to be voted upon.

Who can attend the meeting?

      All shareholders of record of Gables’ common shares at the close of business on the record date, or their designated proxies, are authorized to attend the annual meeting.

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How many shares must be represented at the meeting in order to hold the meeting?

      The presence, in person or by proxy, of holders of at least a majority of the total number of outstanding common shares entitled to vote is necessary to constitute a quorum for the transaction of business at the annual meeting. As of the record date, there were 23,254,982 common shares outstanding and entitled to vote at the annual meeting. Shares that reflect abstentions or “broker non-votes” will be counted for purposes of determining whether a quorum is present for the transaction of business at the annual meeting. “Broker non-votes” are proxies received from brokers or other nominees holding shares on behalf of their clients who have not been given specific voting instructions from their clients with respect to non-routine matters. Under the rules of the New York Stock Exchange, brokers and other nominees do not have discretionary voting power to vote such shares on non-routine matters without specific voting instructions from the beneficial owners of the shares.

How do I vote?

      If your common shares are held by a broker, bank or other nominee (i.e., in “street name”), you will receive instructions from your nominee which you must follow in order to have your common shares voted.

      If you hold your shares in your own name as a holder of record, you may vote in person at the annual meeting or instruct the proxy holders named in the enclosed proxy card how to vote your common shares by:

• using the toll-free telephone number shown on the proxy card;

• going to the website address shown on the proxy card and voting over the Internet; or

• marking, signing, dating and returning the proxy card in the postage-paid envelope that we have provided to you.Please note that if you vote by telephone or over the Internet, you do not need to return your proxy card.

Will other matters be voted on at the annual meeting?

      We are not aware of any other matters to be presented at the annual meeting other than those described in this proxy statement. If any other matters not described in the proxy statement are properly presented at the meeting, proxies will be voted in accordance with the best judgment of the proxy holders.

Can I revoke my proxy instructions?

      You may revoke your proxy at any time before it has been exercised by:

• filing a written revocation with the Secretary of Gables at the address set forth below;

• filing a duly executed proxy bearing a later date; or

• appearing in person and voting by ballot at the annual meeting.

      Any shareholder of record as of the record date attending the annual meeting may vote in person whether or not a proxy has been previously given, but the presence (without further action) of a shareholder at the annual meeting will not constitute revocation of a previously given proxy.

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What other information should I review before voting?

      Our 2000 annual report, including financial statements for the fiscal year ended December 31, 2000, is being mailed to shareholders concurrently with this proxy statement. The annual report, however, is not part of the proxy solicitation material. A copy of our annual report filed with the Securities and Exchange Commission (the “SEC”) on Form 10-K, including the financial statements and the financial statement schedules, may be obtained without charge by:

• writing to the Secretary of Gables Residential Trust at the following address: 2859 Paces Ferry Road, Suite 1450, Atlanta, Georgia 30339;

• accessing the EDGAR database at the SEC’s website at www.sec.gov;

• going to Gables’ website at www.gables.com; or

• contacting the SEC by telephone at (800) SEC-0330.

PROPOSAL 1: ELECTION OF TRUSTEES

Introduction

      The Board of Trustees of Gables ordinarily consists of eight members who are divided into three classes. There are currently only seven members due to a vacancy in Class I created by the recent passing of David M. Holland. At the annual meeting, two Class I trustees will be elected to serve until the 2004 Annual Meeting and until their successors are duly elected and qualified and one Class III trustee will be elected to serve until the 2003 Annual Meeting and until his successor is duly elected and qualified.

      The Board of Trustees has nominated Marcus E. Bromley and James D. Motta to serve as the Class I trustees and C. Jordan Clark to serve as the Class III trustee. All of the nominees are currently serving as trustees of Gables. The Board of Trustees anticipates that the nominees will continue to serve, if elected, as trustees. However, if any of the nominees should be unable to accept election, the proxies will be voted for the election of such other person or persons as the Board of Trustees may recommend. The Board of Trustees will consider a nominee for election to the Board of Trustees recommended by a shareholder of record if the shareholder submits the nomination in compliance with the requirements of Gables’ bylaws. See “Other Matters – Shareholder Proposals” for a summary of these requirements.

Vote Required

      Trustees must be elected by a plurality of the votes cast at the annual meeting. This means that the three nominees receiving the highest number of “yes votes” will be elected as trustees. Votes may be cast FOR or WITHHELD FROM each nominee. Votes cast FOR the nominees will count as “yes votes”; votes that are WITHHELD FROM the nominees will be excluded entirely from the vote and will have no effect.

      Furthermore, if you hold your common shares in your own name as a holder of record, and you fail to vote your shares, either in person or by proxy, the votes represented by your shares will be excluded entirely from the vote and will have no effect. If, however, your common shares are held by a broker, bank or other nominee (i.e., in “street name”) and you fail to give instructions as to how you want your shares voted, the broker, bank or other nominee may vote the shares in their own discretion.

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Recommendation

      The Board of Trustees unanimously recommends a vote FOR the nominees.

Information Regarding Nominees, Other Trustees and Named Executive Officers

      The following biographical descriptions set forth certain information with respect to the three nominees for election as trustees at the annual meeting, the incumbent trustees who are not up for election at this annual meeting and the named executive officers who are not trustees. This information has been furnished by the respective individuals. References in these descriptions to “Gables’ predecessor” mean the Atlanta, Houston or Dallas Divisions of Trammell Crow Residential. The following information is as of February 28, 2001:

Nominees for Election as Trustees – Term Expiring 2004

      Marcus E. Bromley. Mr. Bromley is a trustee of Gables. He most recently served as Chairman of the Board of Trustees and Executive Chairman from April 1999 through December 31, 1999. Prior to becoming Executive Chairman in April 1999, Mr. Bromley was Chairman of the Board of Trustees and Chief Executive Officer, positions he held since Gables’ initial public offering in January 1994. He also served as President of Gables from the time of the initial public offering until December 1995. Mr. Bromley joined Gables’ predecessor in 1982 and was responsible for overseeing the development and lease-up of multifamily properties in the Southeastern United States. Prior to that, he was Chief Financial Officer for a large engineering firm and Assistant Treasurer for the Amelia Island Company. Mr. Bromley received his MBA from the University of North Carolina at Chapel Hill and his bachelor’s degree in economics from Washington and Lee University. He is a former president of the Atlanta Apartment Association and currently serves on the Board of Directors of the National Multi-Housing Council and Rescheck, Inc. Mr. Bromley also serves on the Board of Advisors for The School of Commerce, Economics and Politics at Washington and Lee University and the Shoptaw Group, a real estate investment company. He is 51 years old.

      James D. Motta. Mr. Motta is a trustee of Gables. He is currently President and Chief Executive Officer of St. Joe/Arvida Company, a major real estate development company headquartered in Boca Raton, Florida. Throughout its 41-year history, Arvida has built more than 50 master-planned communities comprising more than 35,000 new homes and developed approximately 5 million square feet of commercial and industrial facilities. In November 1997, the assets of Arvida were acquired by the St. Joe Company. Mr. Motta joined Arvida in 1980 and, prior to becoming President and Chief Executive Officer in April 1995, held various positions, including President of certain divisions, Executive Vice President and Chief Operating Officer. Mr. Motta is a graduate of the University of Florida and a licensed general contractor and licensed real estate broker in the state of Florida. He is an active member of the Urban Land Institute and serves on its Recreation Development Council. Mr. Motta is on the Board of Directors of Corrections Property Trust, the Board of Directors of the Broward Workshop, a member of the Association of Florida Community Developers and a founding member of Education Partners, Inc., a company that strives to bring world-class educational experience to public and private school systems. He is 44 years old.

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Nominee for Election as Trustee – Term Expiring 2003

      C. Jordan Clark.Mr. Clark has served as Senior Vice President of Gables since Gables’ initial public offering in January 1994 and, since 1997, as Chief Investment Officer in charge of Gables’ development, acquisition and disposition efforts. In November 2000 he was appointed to the Board of Trustees. He joined Gables’ predecessor in 1986 as a development associate. Prior to that, Mr. Clark was curator of the 3M art collection in Minnesota. He received his MBA from the University of North Carolina at Chapel Hill and holds a master’s degree in art history from the University of Virginia and an undergraduate degree in English from Davidson College. Mr. Clark is a member of the Multifamily Council of the Urban Land Institute and is a member of the Board of the National Association of Home Builders Multifamily Council. He is 45 years old.

Incumbent Trustees – Term Expiring 2002

      John W. McIntyre. Mr. McIntyre is a trustee of Gables. He is a former Vice Chairman of the Board of Directors of Citizens and Southern Corporation, a bank holding company, and former Chairman of the Board of Directors and Chief Executive Officer of Citizens and Southern Georgia Corporation and Citizens and Southern National Bank. Mr. McIntyre is a director or trustee of a number of organizations, including the Invesco Global Health Science Fund, the Invesco Mutual Funds and affiliated entities, and the Kaiser Foundation Health Plan of Georgia. Mr. McIntyre received his bachelor’s degree in business administration from Emory University School of Business and attended the Business Executive Management Program at Stanford University Graduate School of Business. He is 70 years old.

      Chris D. Wheeler. Mr. Wheeler is Chairman of the Board of Trustees, President and Chief Executive Officer of Gables. He succeeded Mr. Bromley as Chairman of the Board of Trustees on January 1, 2000 and as Chief Executive Officer in April 1999. Prior to that, he served as a trustee and Senior Vice President of Gables since Gables’ acquisition of the business and properties of Trammell Crow Residential’s South Florida operations in April 1998. Previously, Mr. Wheeler had 16 years experience with various Trammell Crow entities. He was Group Managing Partner responsible for all Trammell Crow Residential multifamily residential development and management in South Florida, the South Central United States, and the Mid-Atlantic and Northeast United States. Mr. Wheeler graduated with honors from the California Institute of Technology with a major in applied physics. He received his MBA from Harvard Graduate School of Business in 1980. Mr. Wheeler currently serves as Chairman of the Architectural Review Board in the town of Gulf Stream, Florida and is a Director of the Delray Beach Public Library Board. In addition to being a member of the Urban Land Institute, he also serves as a Director on the National Multi-Housing Council. He is 44 years old.

Incumbent Trustees – Term Expiring 2003

      Lauralee E. Martin. Ms. Martin is a trustee of Gables. Since 1996, Ms. Martin has served as Chief Financial Officer of Heller Financial Inc., an international commercial finance company. Ms. Martin reports directly to the Chairman and oversees the treasury operations, tax, asset distribution, investor relations and controller functions. From 1993 to 1996, Ms. Martin served as Senior Group President of Heller. Prior to joining Heller, she held various positions at General Electric Credit Corporation, including President of General Electric Mortgage and Manager of Construction Lending Operations. Ms. Martin received her MBA from the University of Connecticut and her bachelor’s degree from Oregon State University. She is 50 years old.

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      Mike E. Miles. Dr. Miles is a trustee of Gables and is currently self-employed in an investment management and consulting capacity. From 1994 to 1999, he was Portfolio Manager and Head of Real Estate Research for the Fidelity Real Estate Asset Manager, a series of institutional investment vehicles that combine public securities with direct real estate ownership. Prior to joining Fidelity, Dr. Miles was Executive Vice President of the Prudential Realty Group and Managing Director of Prudential Real Estate Investors. He previously held full-time academic positions at the University of North Carolina at Chapel Hill, the University of Wisconsin – Madison, and the University of Hawaii – Manoa. Before entering academia, he served as Vice President, Finance for Alpert Invest Corporation, a real estate development firm. Dr. Miles received his bachelor’s degree from Washington and Lee University, his MBA from Stanford University, and his Ph.D. from the University of Texas at Austin. He is 54 years old.

Named Executive Officers Who Are Not Trustees

      Marvin R. Banks, Jr. Mr. Banks is Senior Vice President, Secretary and Chief Financial Officer of Gables, and has been since Gables’ initial public offering in January 1994. He is responsible for corporate financings, financial reporting, accounting and tax matters. Mr. Banks joined Gables’ predecessor in 1987 and, since 1990, was the Chief Financial Officer for certain divisions. Prior to joining Gables’ predecessor, he was a CPA with Ernst & Young, where he specialized in the financial services and construction industries. Mr. Banks is a graduate of the University of Texas at Austin with a bachelor’s degree in accounting and a member of the Urban Land Institute. He is 39 years old.

      Catherine K. Cabell. Ms. Cabell is Senior Vice President of REIT property operations for Gables. Prior to obtaining that role in May 1999, she served as Vice President of property operations in Texas since Gables’ initial public offering in January 1994. Ms. Cabell is currently responsible for the overall performance of more than 50 apartment communities in the states of Texas and Tennessee. She joined Gables’ predecessor in 1988 as Senior Regional Manager for Houston and then assumed responsibility for the entire portfolio in Texas in 1991 as Senior Vice President. Ms. Cabell has a total of 21 years in property management with experience in asset management of office, retail and multifamily product. She attended Radford University and has served on the board of the Houston Apartment Association, Texas Apartment Association and National Multi-Housing Council. She is 45 years old.

      Michael M. Hefley. Mr. Hefley is Senior Vice President and Chief Operating Officer of Gables. Prior to assuming these roles in May 1999, Mr. Hefley served as Vice President of fee-managed operations since Gables’ acquisition of the business and properties of Trammell Crow Residential’s South Florida operations in April 1998. Previously, Mr. Hefley was with Trammell Crow Residential for 13 years where he began his career as District Manager in Maryland and Virginia. He relocated to South Florida in 1985 and later became Executive Vice President for the Florida region. Mr. Hefley has a total of 18 years in the real estate and property management business. He holds a bachelor’s degree in business from Southwest Texas State University and is an active member of the Palm Beach, Broward and Dade Apartment Associations. He is 42 years old.

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Board of Trustees and Committees

      Gables is ordinarily managed by an eight member Board of Trustees. There are currently only seven members due to a vacancy created by the recent passing of David M. Holland. Each of the seven members are independent of management, except Mr. Wheeler and Mr. Clark. The Board of Trustees is divided into three classes, and the members of each class of trustees serve for staggered three-year terms. The Board is composed of three Class I Trustees (consisting at present of Mr. Bromley and Mr. Motta only), two Class II Trustees (Mr. McIntyre and Mr. Wheeler), and three Class III Trustees (Mr. Clark, Ms. Martin and Dr. Miles). The terms of the Class II and Class III trustees will expire upon the election and qualification of trustees at the annual meetings of shareholders held in 2002 and 2003, respectively. At each annual meeting of shareholders, trustees will be re-elected or elected for a full term of three years to succeed those trustees whose terms are expiring.

      Gables GP, Inc. is a wholly-owned subsidiary of Gables Residential Trust and the sole general partner of Gables Realty Limited Partnership (the “Operating Partnership”), the entity through which Gables Residential Trust principally conducts its business operations. The Board of Directors of Gables GP, Inc. and the Board of Trustees of Gables Residential Trust each have the same members.

      The Board of Trustees met five times in 2000. Each incumbent trustee attended at least 75% of the aggregate of the total number of meetings of the Board of Trustees and meetings of the committees of the Board of Trustees of which he or she was a member.

      Compensation Committee. The Board of Trustees has established a Compensation Committee, currently consisting of Dr. Miles, as Chairman, and Mr. McIntyre and Mr. Motta. Mr. Holland also served on the Compensation Committee during 2000. The Compensation Committee exercises all powers of the Board of Trustees in connection with the compensation of executive officers, including incentive compensation and benefit plans. The Compensation Committee also has authority to grant awards under the Fourth Amended and Restated 1994 Share Option and Incentive Plan (the “1994 Share Option Plan” or “Plan”) and cash and equity bonuses under Gables’ Incentive Compensation Plan. The Compensation Committee met five times in 2000.

      Audit Committee. The Board of Trustees has established an Audit Committee currently consisting of Mr. McIntyre, as Chairman, Mr. Bromley and Ms. Martin. The Audit Committee, among other things, is responsible for (1) making recommendations concerning the engagement of independent public accountants, (2) reviewing the plans and results of the audit engagement with the independent public accountants, (3) approving professional services provided by the independent public accountants, (4) reviewing the independence of the independent public accountants, (5) considering the range of audit and non-audit fees, (6) reviewing the adequacy of Gables’ internal accounting controls and (7) performing such other oversight functions as may be requested time to time by the Board of Trustees. The Audit Committee met five times in 2000.

      Investment Committee. Each of the Board of Directors of Gables GP, Inc. and the Board of Trustees of Gables has established an Investment Committee of its respective Board, currently consisting of Ms. Martin, as Chairman, Mr. Bromley, Mr. Motta and Mr. Wheeler. In general, the Investment Committee of Gables GP, Inc. has authority to cause Gables GP, Inc., as general partner of the Operating Partnership, to make investment decisions on behalf of the Operating Partnership; provided, however, that the general subject matter of any such decision must have been previously approved by the full Board of Directors of Gables GP, Inc. The Investment Committee of Gables has authority to enable Gables to guarantee indebtedness with respect to duly approved transactions entered into or to be entered into by the Operating Partnership. The Investment Committees of Gables GP, Inc. and Gables met seven times in 2000.

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      Nominating Committee. The Board of Trustees has established a Nominating Committee currently consisting of Mr. Wheeler, as Chairman, Mr. Clark and Dr. Miles. Mr. Holland also served on the Nominating Committee during 2000. The Nominating Committee is primarily responsible for making recommendations to the Board with respect to (1) the size, composition, structure, functions, policies and practices of the Board and its committees, (2) the qualifications to be sought in the selection of persons to be considered for election to the office of Trustee and each committee of the Board, (3) the procedures for identifying and recruiting qualified candidates for election to the office of Trustee, (4) the candidates for election to fill vacancies in the office of Trustee and each committee of the Board, (5) the slate of nominees for election to the office of Trustee at each annual meeting of shareholders, and (6) the evaluation of the Board’s performance, its relationship with management, and of individual trustees. The Nominating Committee met two times in 2000.

COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS

Trustee Compensation

      Trustees of Gables who are also employees receive no additional compensation for their services as trustees. During 2000, each non-employee trustee received for his or her service as a trustee a quarterly trustee’s fee of $5,000, $1,300 per day for personal attendance at any meetings of the full Board of Trustees, and $500 per day for personal attendance at any committee meetings held on days on which no meetings of the full Board of Trustees were held. In addition, in 2000, the Investment Committee chairman received $5,000 and the other committee chairmen each received $2,500. Non-employee trustees may elect to waive part or all of such fees in exchange for common share grants under the 1994 Share Option Plan.

      Under the 1994 Share Option Plan, following the 2000 annual meeting of shareholders, each of Gables’ non-employee trustees received 250 unrestricted common shares and an option to purchase 2,500 common shares at the market price on the date of grant. All such options vest one year after the date of grant.

      Gables has adopted a deferred compensation program for non-employee trustees pursuant to which non-employee trustees may elect to receive, on a deferred basis, common shares in lieu of cash fees. These trustees may also elect to defer receipt of common shares granted to them as non-cash compensation. During the term of deferral, credits in the form of additional common shares are made to the non-employee trustees’ deferral accounts to reflect dividends paid on the common shares previously credited to the accounts. All deferred amounts will be settled in common shares, either in a lump sum or annual installments, following termination of membership on the Board of Trustees.

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Executive Compensation

      Summary Compensation Table. The following table sets forth the compensation awarded to the Chief Executive Officer and the four other most highly compensated executive officers whose total salary and bonus exceeded $100,000 during each of the fiscal years ended December 31, 2000, 1999 and 1998.

Summary Compensation Table

									Long-Term
									Compensation Awards
				Annual Compensation					Restricted
									Share					All Other
				Salary		Bonus			Awards			Options		Compensation(1)
Name and Principal Position		Year		($)		($)			($)			(#)		($)
Chris D. Wheeler(2)			2000	$	338,000	$	372,358	(3)	$	184,275	(4)		0	$	2,052
	Chairman of the Board,		1999		301,781		409,844	(5)		254,531	(6)		200,000		1,769
	President and Chief		1998		142,500		199,100	(7)		117,015	(8)		156,300		643
	Executive Officer
C. Jordan Clark			2000		260,000		277,523	(9)		122,850	(10)		0		2,917
	Senior Vice President and		1999		250,000		188,406	(11)		152,719	(12)		0		2,480
	Chief Investment Officer		1998		182,500		260,879	(13)		126,387	(14)		150,000		3,492
Michael M. Hefley(15)			2000		234,000		256,203	(16)		122,850	(17)		0		2,033
	Senior Vice President and		1999		188,233		198,078	(18)		144,234	(19)		0		1,753
	Chief Operating Officer
Marvin R. Banks, Jr.			2000		234,000		244,503	(20)		122,850	(21)		0		5,610
	Senior Vice President and		1999		225,000		127,438	(22)		101,813	(23)		0		5,360
	Chief Financial Officer		1998		176,250		242,784	(24)		184,976	(25)		100,000		6,301
Catherine K. Cabell(26)			2000		188,700		146,513	(27)		30,713	(28)		0		2,100
	Senior Vice President, REIT		1999		173,333		106,495	(29)		20,519	(30)		0		2,000
	Property Operations

(1)	2000 amounts include Gables’ matching contribution under its 401(k) plan ($1,400 for Mr. Wheeler, $2,100 for Mr. Clark, $1,400 for Mr. Hefley, $5,250 for Mr. Banks, and $2,100 for Ms. Cabell) and the value of premiums paid by Gables for split-dollar life insurance coverage for 2000 ($652 for Mr. Wheeler, $817 for Mr. Clark, $633 for Mr. Hefley, $360 for Mr. Banks, and $0 for Ms. Cabell.
(2)	Mr. Wheeler was originally hired as a Senior Vice President in April 1998. In April 1999, Mr. Wheeler succeeded Mr. Bromley in the role of Chief Executive Officer and his base salary was increased to $325,000. On January 1, 2000, Mr. Wheeler succeeded Mr. Bromley as Chairman of the Board of Trustees.
(3)	Amount consists of (i) $310,960 which was paid in cash in 2001 and (ii) 2,249 unrestricted shares awarded on February 28, 2001 valued at $27.30 per share.
(4)	Consists of 6,750 restricted shares awarded on February 28, 2001 valued at $27.30 per share. These restricted shares vest in three equal annual installments beginning January 1, 2002. Dividends are payable on these restricted shares.
(5)	Amount consists of (i) $325,000 which was paid in cash in 2000 and (ii) 3,750 unrestricted shares awarded on January 17, 2000 valued at $22.625 per share.

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(6)	Consists of 11,250 restricted shares awarded on January 17, 2000 valued at $22.625 per share. These restricted shares vest in three equal annual installments beginning January 1, 2001. Dividends are payable on these restricted shares. The value of such restricted shares as of December 31, 2000 was $315,000.
(7)	Amount consists of (i) $140,615 which was paid in cash in 1999 and (ii) 2,666 unrestricted shares awarded on April 1, 1999 valued at $21.9375 per share.
(8)	Consists of 5,334 restricted shares awarded on April 1, 1999 valued at $21.9375 per share. These restricted shares vest in two equal annual installments beginning April 1, 2000. Dividends are payable on these restricted shares. The value of such restricted shares (both vested and unvested) as of December 31, 2000 was $149,352.
(9)	Amount consists of (i) $236,600 which was paid in cash in 2001 and (ii) 1,499 unrestricted shares awarded on February 28, 2001 valued at $27.30 per share.
(10)	Consists of 4,500 restricted shares awarded on February 28, 2001 valued at $27.30 per share. These restricted shares vest in three equal annual installments beginning January 1, 2002. Dividends are payable on these restricted shares.
(11)	Amount consists of (i) $137,500 which was paid in cash in 2000 and (ii) 2,250 unrestricted shares awarded on January 17, 2000 valued at $22.625 per share.
(12)	Consists of 6,750 restricted shares awarded on January 17, 2000 valued at $22.625 per share. These restricted shares vest in three equal annual installments beginning January 1, 2001. Dividends are payable on these restricted shares. The value of such restricted shares as of December 31, 2000 was $189,000.
(13)	Amount consists of (i) $218,750 which was paid in cash in 1999 and (ii) 1,812 unrestricted shares awarded on February 9, 1999 valued at $23.25 per share.
(14)	Consists of 5,436 restricted shares awarded on February 9, 1999 valued at $23.25 per share. These restricted shares vest in three equal annual installments beginning January 1, 2000. Dividends are payable on these restricted shares. The value of such restricted shares (both vested and unvested) as of December 31, 2000 was $152,208.
(15)	Mr. Hefley was originally hired as a Vice President in April 1998. In May 1999, Mr. Hefley assumed the role of Chief Operating Officer at which time he became an executive officer of Gables and his base salary was increased to $225,000. Accordingly, there is no compensation information provided for 1998.
(16)	Amount consists of (i) $215,280 which was paid in cash in 2001 and (ii) 1,499 unrestricted shares awarded on February 28, 2001 valued at $27.30 per share.
(17)	Consists of 4,500 restricted shares awarded on February 28, 2001 valued at $27.30 per share. These restricted shares vest in three equal annual installments beginning January 1, 2002. Dividends are payable on these restricted shares.

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(18)	Amount consists of (i) $150,000 which was paid in cash in 2000 and (ii) 2,125 unrestricted shares awarded on January 17, 2000 valued at $22.625 per share.
(19)	Consists of 6,375 restricted shares awarded on January 17, 2000 valued at $22.625 per share. These restricted shares vest in three equal annual installments beginning January 1, 2001. Dividends are payable on these restricted shares. The value of such restricted shares as of December 31, 2000 was $178,500.
(20)	Amount consists of (i) $203,580 which was paid in cash in 2001 and (ii) 1,499 unrestricted shares awarded on February 28, 2001 valued at $27.30 per share.
(21)	Consists of 4,500 restricted shares awarded on February 28, 2001 valued at $27.30 per share. These restricted shares vest in three equal annual installments beginning January 1, 2002. Dividends are payable on these restricted shares.
(22)	Amount consists of (i) $93,500 which was paid in cash in 2000 and (ii) 1,500 unrestricted shares awarded on January 17, 2000 valued at $22.625 per share.
(23)	Consists of 4,500 restricted shares awarded on January 17, 2000 valued at $22.625 per share. These restricted shares vest in three equal annual installments beginning January 1, 2001. Dividends are payable on these restricted shares. The value of such restricted shares as of December 31, 2000 was $126,000.
(24)	Amount consists of (i) $181,125 which was paid in cash in 1999, (ii) 1,000 unrestricted shares awarded on April 1, 1998 valued at $27.0625 per share, and (iii) 1,488 unrestricted shares awarded on February 9, 1999 valued at $23.25 per share.
(25)	Consists of (i) 3,000 restricted shares awarded on April 1, 1998 valued at $27.0625 per share which vest in three equal annual installments beginning April 1, 1999 and (ii) 4,464 restricted shares awarded on February 9, 1999 valued at $23.25 per share which vest in three equal annual installments beginning January 1, 2000. Dividends are payable on all of these restricted shares. The value of such restricted shares (both vested and unvested) as of December 31, 2000 was $208,992.
(26)	In May 1999, Ms. Cabell was appointed to the role of Senior Vice President of REIT Property Operations at which time she became an executive officer of Gables. Accordingly, there is no compensation information provided for 1998.
(27)	Amount consists of (i) $136,275 which was paid in cash in 2000 and 2001 and (ii) 375 unrestricted shares awarded on February 28, 2001 valued at $27.30 per share.
(28)	Consists of 1,125 restricted shares awarded on February 28, 2001 at $27.30 per share. These restricted shares vest in three equal annual installments beginning January 1, 2002. Dividends are payable on these restricted shares.
(29)	Amount consists of (i) $99,670 which was paid in cash in 1999 and 2000 and (ii) 312 unrestricted shares awarded on March 3, 2000 valued at $21.875 per share.

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(30) Consists of 938 restricted shares awarded on March 3, 2000 valued at $21.875 per share. These restricted shares vest in three equal annual installments beginning January 1, 2001. Dividends are payable on these restricted shares. The value of such restricted shares as of December 31, 2000 was $26,264.

      Option Exercises and Year-End Holdings. The following table sets forth the aggregate number of options exercised in 2000 and the value of options held at the end of 2000 by the Chief Executive Officer and the other named executive officers.

Aggregated Option Exercises in Fiscal Year 2000
and Fiscal Year-End 2000 Option Values

					Number of
					Securities				Value of
					Underlying				Unexercised
					Unexercised				In-the-Money
					Options				Options at
	Shares				at Fiscal Year-End				Fiscal Year-End
	Acquired				(#)				($)
	On		Value
	Exercise		Realized		Exercisable/				Exercisable/
Name	(#)		($)		Unexercisable				Unexercisable
Chris D. Wheeler		0		0		70,866	/	285,434	$	276,572	/	$	738,290
C. Jordan Clark		0		0		47,900	/	150,000		295,325	/		187,500
Michael M. Hefley		0		0		4,200	/	2,100		1,575	/		788
Marvin R. Banks, Jr.		0		0		29,868	/	100,000		196,149	/		125,000
Catherine K. Cabell		9,500	$	47,344		5,267	/	0		36,970	/		0

Employment and Severance Agreements

      Gables currently has employment agreements with each of Mr. Wheeler, Mr. Hefley, Mr. Clark and Mr. Banks that will continue in effect through January 1, 2002. The employment agreements automatically renew for additional one-year terms unless a notice to the contrary effect is given by either party. Pursuant to their employment agreements, Mr. Wheeler is serving as Chairman of the Board of Trustees, President and Chief Executive Officer; Mr. Hefley is serving as Senior Vice President and Chief Operating Officer; Mr. Clark is serving as Senior Vice President and Chief Investment Officer; and Mr. Banks is serving as Senior Vice President and Chief Financial Officer.

      Each employment agreement provides for an annual review of base salary. In addition, the Compensation Committee may provide for additional compensation as a bonus, should it determine that such compensation is appropriate in its discretion based on merit, Gables’ financial performance and other criteria. See “Incentive Compensation Plan” and “Compensation Committee Report on Executive Compensation” for a more detailed description of bonus compensation. Pursuant to their employment agreements, Gables is, in general, required to purchase policies of life insurance for the benefit of each of the executive officers in the amount of $1,000,000 per policy. Gables maintains a comprehensive medical plan for the benefit of the executive officers and that of their immediate families, and pays or reimburses each of the executive officers for the cost of disability insurance and provides them with a car allowance currently equal to approximately $600 per month. Each of the executive officers has agreed to devote substantially all of their working time to

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Gables’ business. Pursuant to their employment agreements, Gables has also agreed to indemnify each of the executive officers to the full extent permitted by law and subject to Gables’ charter and bylaws with respect to any actions commenced against such executive officer in his capacity as an officer or trustee or former officer or trustee of Gables or any affiliate of Gables for which he may serve in such capacity, and to advance any expenses incurred by such executive officers and trustees in defending such actions.

      Under the terms of the employment agreements (as modified by the senior executive severance agreements discussed below), if the employment of an executive officer is terminated during the year (1) by Gables without “good reason” (as defined in the employment agreement), or (2) by the executive officer by reason of a “force out” (as defined in the employment agreement), the terminated employee will be entitled to (a) immediately vest in any outstanding stock options and grants of restricted shares, and (b) receive a severance payment (the “Severance Amount”) equal to his base salary and the higher of (x) his bonus for the preceding year or (y) any approved bonus for any period that had closed prior to the date of termination but had not yet been paid. Upon termination of the employment of an executive officer by reason of death, his estate will be entitled to receive a payment equal to the Severance Amount, except that the amount of such benefit shall be zero if the proceeds of life insurance payable in connection with the employment agreement equals or exceeds $1,000,000. In addition, upon any termination of employment within six months following a “change of control” (as defined in the employment agreement), the terminated employee will be entitled to immediately vest in any outstanding stock options and grants of restricted shares. The employment agreements also provide that, if an executive officer is terminated for “good reason” or voluntarily terminates his employment (other than termination which occurs within six months following a “change of control”), such individual will not, without the prior written consent of the Board of Trustees, directly or indirectly, compete with Gables with respect to any multifamily apartment residential real estate property development, construction, acquisition or management activities then undertaken or being considered by Gables for a period of twelve months following the termination of employment with Gables.

      During the term of the employment agreement and for a period of twelve months following the termination of employment (other than termination which occurs within six months following a “change of control”), the executive officer will not, directly or indirectly, (1) solicit or induce any present or future employee of Gables to accept employment with the executive officer or any person or entity associated with the executive officer, (2) employ, or cause any person or entity associated with the executive officer to employ, any present or future employee of Gables without providing Gables prior written notice of such proposed employment, or (3) either for himself or for any other person or entity, compete for or solicit the third party owners with whom Gables has an existing property management agreement.

      In addition, the Board of Trustees has approved senior executive severance agreements for each of Mr. Wheeler, Mr. Hefley, Mr. Clark and Mr. Banks. The Board approved these agreements in order to reinforce and encourage the continued attention and dedication of these executive officers. Generally, under the terms of the severance agreements, if the employment of the executive is terminated within 24 months following a “change in control” (as defined in the severance agreement), (1) by Gables for any reason other than for “cause” (as defined in the severance agreement) or the death of the executive or (2) by the executive for “good reason” (as defined in the severance agreement), the executive shall be entitled to an amount equal to three times the sum of executive’s (i) most recent annual base salary, (ii) the cash bonus awarded for the prior fiscal year, if any, and (iii) the value of the entire restricted stock grant awarded for the prior fiscal year, if any (the “Change in Control Payment”). Mr. Wheeler shall be entitled to the Change in Control Payment if his employment is terminated within 24 months following a “change in control” by Gables or by the executive for any reason other than the death of the executive. The amount of any Change in Control Payment to any executive shall be reduced by any Severance Amount paid or payable to such executive by Gables pursuant to the employment agreements discussed above.

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Share Performance Graph

      The following graph provides a comparison of cumulative total shareholder returns among Gables, the Standard & Poor’s (“S&P”) 500 Index, and the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) Equity Residential REIT Total Return Index (the “Equity Residential REIT Index”), an industry index of 19 equity residential REITs (including Gables). The share performance graph assumes an investment of $100 in each of Gables and the two indexes on January 1, 1996, and the reinvestment of any dividends. Equity Residential REITs are defined as those with 75% or more of their gross invested book value of assets invested directly or indirectly in the equity ownership of residential real estate. Upon written request, Gables will provide any shareholder with a list of the REITs included in the Equity Residential REIT Index. The historical information set forth below is not necessarily indicative of future performance. Data for the S&P 500 Index and the Equity Residential REIT Index were provided to Gables by NAREIT.

S&P 500 Index:
Jan ‘96:	$	100.00
Dec ‘96:		118.91
Dec ‘97:		158.59
Dec ‘98:		203.92
Dec ‘99:		246.80
Dec ‘00:		224.33

Equity Residential REIT Index:
Jan ‘96:	$	100.00
Dec ‘96:		126.26
Dec ‘97:		146.50
Dec ‘98:		133.65
Dec ‘99:		147.98
Dec ‘00:		200.56

Gables Residential Trust:
Jan ‘96:	$	100.00
Dec ‘96:		133.21
Dec ‘97:		139.20
Dec ‘98:		126.21
Dec ‘99:		142.83
Dec ‘00:		181.61

1994 Share Option Plan

      Gables adopted the 1994 Share Option Plan to provide incentives to officers, employees and non-employee trustees. The Plan provides for the grant of options to purchase a specified number of common shares or the grant of restricted shares or unrestricted shares. The total number of options and common shares that may be issued under the Plan is currently limited to the greater of 2,952,895 or 9% of the sum of (1) the total number of common shares outstanding at the time of any grant under the 1994 Share Option Plan and (2) the total number of common shares issuable upon the exchange of common units of limited partnership in the Operating Partnership that are outstanding at any such time (other than common units held by Gables or its subsidiaries).

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Incentive Compensation Plan

      Each year, Gables establishes an incentive compensation plan (the “Incentive Compensation Plan”) for certain officers of Gables. This plan provides for the bonus such officers may receive if certain company and business unit performance objectives established for each individual are achieved. The bonus paid to each executive officer is based upon, among other factors, (1) an evaluation of company performance measured by comparison to the performance of the industry sector in which Gables competes and (2) an evaluation of individual performance of his or her direct functional responsibilities, as well as his or her role in achieving company-wide objectives. The weight given to such factors varies depending on the officer’s functional and company-wide responsibilities.

      The restricted and unrestricted shares awarded for 2000 under the Incentive Compensation Plan were shares previously acquired by Gables pursuant to its common equity repurchase program, rather than shares reserved for issuance under the 1994 Share Option Plan.

Deferred Compensation Plan

      Gables has adopted a deferred compensation plan for key employees pursuant to which executive officers and certain other key employees may elect to defer receipt of up to 50% of total cash compensation for any year. All deferred amounts are credited to a participant’s deferral account on the dates such amounts would otherwise have been paid. Credits are also made to deferral accounts to reflect interest at a rate currently equal to 8.5% per year. All deferred amounts, including interest, will be settled in cash, either in a lump sum or annual installments, following termination of employment.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Introduction

      Gables’ executive compensation program is intended to attract, retain and reward experienced, highly motivated executives who contribute to Gables’ growth. As of the date of this report, the Compensation Committee of the Board of Trustees is composed of the four non-employee trustees whose names appear below this report. The Compensation Committee is responsible for setting base salaries for the Chief Executive Officer and the executive officers who report directly to the Chief Executive Officer, as well as administering the Incentive Compensation Plan and determining equity awards to executive officers. In addition to administering executive compensation, the Compensation Committee also administers the 1994 Share Option Plan, reviews and makes recommendations regarding benefit plans and reviews from time to time succession planning for senior management.

Compensation Committee Philosophy During 2000

      The fundamental principles of Gables’ 2000 executive compensation program were as follows:

• Executive base salaries were kept at amounts approximating median levels in the industry.

• A part of each executive officer’s compensation was contingent on performance and was awarded by the Compensation Committee as a cash bonus following a year-end review. The cash bonus was based on an evaluation of the executive’s individual performance of his direct functional responsibilities, as well as his role in achieving company-wide objectives, taking into

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	consideration the performance of other companies in the industry sector in which Gables competes, specifically with respect to the executive’s equivalent business functions.
•	Executive officers were given equity-based awards as a long-term incentive both to perform effectively and to remain with Gables, with the size of the awards being based solely on an evaluation of Gables’ performance measured by comparison to the performance of the industry sector in which Gables competes, specifically with respect to annual total return to shareholders.
•	The combination of base salary, annual cash bonus and long-term equity-based awards was targeted to provide the executive officers with compensation that was at or approximated the median level for the industry if Gables achieved a level of performance previously targeted by the Compensation Committee, and at a higher level than the median industry level if Gables’ performance exceeded such target.

      The 2000 executive compensation program was designed to motivate Gables’ executive officers and to better align the incentives of the executive officers with the interest of Gables’ shareholders.

Base Salaries

      As noted above, in administering the 2000 executive compensation program, the Compensation Committee felt that Gables would be best served if executive base salaries were kept at amounts approximating median levels prevailing within the industry. In September 1998, the Compensation Committee, in its efforts to ensure the foregoing and maintain a competitive compensation structure, conducted a review of the compensation structure of other real estate investment trusts within Gables’ industry, and compared them with Gables’ existing compensation structure. Based on that review, Gables’ historical growth and financial performance, and each executive officer’s performance, tenure with Gables and its predecessors, and industry experience, the Compensation Committee established 1999 base salary levels for the Chief Executive Officer and the other executives. These base salaries were subsequently increased 4% effective January 1, 2000 as follows for the following executive officers: $338,000 for Mr. Wheeler (Chairman, President and Chief Executive Officer); $260,000 for Mr. Clark (Senior Vice President and Chief Investment Officer); $234,000 for Mr. Hefley (Senior Vice President and Chief Operating Officer); and $234,000 for Mr. Banks (Senior Vice President and Chief Financial Officer).

      Each of these executive officers has entered into an employment agreement with Gables. See “Compensation of Trustees and Executive Officers — Employment and Severance Agreements.” While such employment agreements automatically renew for additional one-year terms unless a notice to the contrary effect is given by either party, the employment agreements do not provide for annual automatic increases in base salary.

Cash Bonuses

      Under the previously established 2000 Incentive Compensation Plan, cash bonuses for executive officers were determined based on an evaluation of each executive officer’s individual performance as judged against specific goals based on his own business function, as well as his role in discharging company-wide responsibilities and achieving company-wide goals. In determining an executive officer’s bonus, consideration was also given to the performance of companies in the industry sector in which Gables competes, specifically with respect to such executive officer’s equivalent business functions. Based on these evaluations, in February 2001, the Committee awarded the cash bonuses described in “Compensation of Trustees and Executive Officers — Summary Compensation Table.”

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Equity-based Awards

      The Committee continues to believe that the possibility to earn grants of common shares rather than cash serves as a motivating award and an effective tool for retaining experienced and talented executives in the long-term, and also serves to better align the incentives of management with the interests of shareholders. Prior to 2000, the Compensation Committee awarded common shares to executive officers if Gables achieved certain targeted growth rates in its funds from operations per share. During 2000, the Compensation Committee, upon the recommendation of Mr. Wheeler, considered modifications to this objective criterion because the Committee felt that the long-term component of executives’ incentive compensation should be determined on the basis of the annual total return to Gables’ shareholders as measured against the annual total return to shareholders for Gables’ competitors in the company’s industry sector, as measured by the NAREIT Multifamily Sector Index. The Compensation Committee’s reliance on the NAREIT Multifamily Sector Index as the benchmark against which to judge Gables’ executives in terms of annual total return to shareholders was based in part on the fact that the NAREIT indices are widely used by the investment community to determine the relative performance, and therefore the compensation, of investment portfolio managers. The precise methodology used by the Compensation Committee involved ranking the annual total return to Gables’ shareholders for 2000 against the statistical distribution of annual total returns for all companies included in the NAREIT Multifamily Sector Index for 2000. In calculating annual total returns, the Committee compares the ten-day year-end average total return of Gables to the ten-day year-end average total return of the other apartment REITs included in the sector index.

      In February 2001, the Compensation Committee reviewed Gables’ annual total return to shareholders and recognized that it was generally in line with the average annual total return for all of the companies included in the NAREIT Multifamily Sector Index. Based on this performance, the Committee awarded a total of 34,895 common shares to executive officers. One-fourth of each award consisted of unrestricted shares and three-fourths consisted of restricted shares that vest in three equal annual installments beginning on January 1, 2002. As stated above, the Committee believes the grant of the unrestricted shares and the benefit from the vesting of the restricted shares will motivate officers and promote the retention of executives in the longer term.

Compensation of Chief Executive Officer

      In determining the compensation of the Chief Executive Officer, the Compensation Committee applies the same philosophy and procedures as are applied to other executive officers. As discussed above, following its September 1998 and later reviews of executive compensation, the Committee set the 2000 base salary for the Chief Executive Officer position at $338,000.

      In accordance with the incentive criteria established in the 2000 Incentive Compensation Plan described above, for his service as Chairman, President and Chief Executive Officer during 2000, the Committee awarded Mr. Wheeler a cash bonus of $310,960 and granted him 2,249 unrestricted shares and 6,750 restricted shares. The restricted shares are scheduled to vest in three equal annual installments beginning January 1, 2002.

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Policy with Respect to the $1 Million Deduction Limit

      The SEC requires that this report comment upon Gables’ policy with respect to Section 162(m) of the Internal Revenue Code, which limits the deductibility on Gables’ tax return of compensation over $1 million to any of the named executive officers unless the compensation is paid pursuant to a plan which is performance-related, non-discretionary and has been approved by Gables’ shareholders. Gables did not pay any compensation during 2000 that would be subject to Section 162(m). Gables believes that, because it qualifies as a REIT under the Internal Revenue Code and therefore is not subject to federal income taxes on its income to the extent distributed, the payment of compensation that does not satisfy the requirements of Section 162(m) will not generally affect Gables’ net income, although to the extent that compensation does not qualify for deduction under Section 162(m) a larger portion of shareholder distributions may be subject to federal income taxation as dividend income rather than return of capital. Gables does not believe that Section 162(m) will materially affect the taxability of shareholder distributions, although no assurance can be given in this regard due to the variety of factors that affect the tax position of each shareholder. For these reasons, the Compensation Committee’s compensation policy and practices are not directly governed by Section 162(m).

By the Compensation Committee:

Mike E. Miles
David M. Holland
John W. McIntyre
James D. Motta

Compensation Committee Interlocks and Insider Participation

      None of the members of the Compensation Committee has served as an officer of Gables or has any other business relationship or affiliation with Gables, except his or her service as a trustee.

AUDIT COMMITTEE REPORT

      The Board of Trustees has established an Audit Committee, whose members at the beginning of 2000 were Mr. McIntyre, as Chairperson, Ms. Martin, Raymond D. Riddle, a former trustee, and John T. Rippel, a former trustee. Mr. Riddle and Mr. Rippel resigned from the Board of Trustees in August 2000 and November 2000, respectively. Mr. Bromley was appointed to the Audit Committee subsequent to Mr. Rippel’s resignation.

      The Board of Trustees has determined that the members of the Audit Committee meet the independence rules of the NYSE, with the exception of Mr. Rippel and now Mr. Bromley. Mr. Rippel and Mr. Bromley were employees of Gables through May 1999 and December 1999, respectively. As a result, they do not meet the independence rules of the NYSE because three years did not pass between their respective dates of termination of employment with Gables and the time of their respective appointments to the Audit Committee.

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      The NYSE permits the Board of Trustees to appoint to the Audit Committee one trustee who is no longer an employee of Gables, but is not considered independent due to the three-year restriction period mentioned above, under exceptional and limited circumstances, if the Board of Trustees determines in its business judgment that the membership on the Audit Committee by such individual is required by the best interests of Gables and its shareholders. With respect to Mr. Rippel and Mr. Bromley, the Board of Trustees did in fact determine in each case that their membership on the Audit Committee was in the best interests of Gables and its shareholders given their astute financial background and in-depth knowledge of Gables’ business and financial statements.

      The Audit Committee, among other things, (1) makes recommendations concerning the engagement of independent public accountants, (2) reviews the plan and results of the audit engagement with the independent public accountants, (3) approves professional services provided by the independent public accountants, (4) reviews the independence of the independent public accountants, (5) considers the range of audit and non-audit fees, (6) reviews the adequacy of Gables’ internal accounting controls and (7) performs such other oversight functions as may be requested from time to time by the Board of Trustees.

      In respect of the audited financial statements for the year ended December 31, 2000, the Audit Committee (1) reviewed and discussed the financial statements with Gables’ management; (2) discussed with Gables’ independent public accountants the matters required to be discussed by SAS No. 61; and (3) discussed with the auditors their independence and received from the auditors disclosures regarding their independence. The Audit Committee has recommended to the Board of Trustees that the audited financial statements be included in Gables’ Annual Report on Form 10-K for the year ended December 31, 2000, based on its review and the discussions described above.

      The Board of Trustees has adopted a written charter for the Audit Committee. The charter is included as Exhibit A to this Proxy Statement.

      Audit Fees. Gables incurred audit fees aggregating $180,000 for the services rendered in connection with the audited financial statements for the year ended December 31, 2000, in addition to the reviews of the financial statements included in Quarterly Reports on Form 10-Q for 2000.

      Financial Information Systems Design and Implementation Fees.Gables did not engage its auditors for financial information systems design and implementation and therefore did not incur any fees associated therewith.

      All Other Fees. Gables incurred fees of (i) $52,500 for ancillary audit services, (ii) $134,000 for tax compliance services, (iii) $98,000 for tax advisory services and (iv) $15,000 for compensation consulting services. The Audit Committee has determined that the provision of these services is compatible with the maintenance of the auditor’s independence.

Members of the Audit Committee:

John W. McIntyre
Marcus E. Bromley
Lauralee E. Martin

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PRINCIPAL AND MANAGEMENT SHAREHOLDERS

      The following table shows the amount of common shares and common units of limited partnership interest in the Operating Partnership beneficially owned as of February 28, 2001 by:

• each trustee and named executive officer of Gables;

• each person who beneficially owns more than 5% of the outstanding common shares of Gables; and

• the trustees and executive officers of Gables as a group.

      Unless otherwise indicated in the footnotes, all such interests are owned directly, and the indicated person or entity has sole voting and investment power. Beneficial ownership includes (1) shares which could be purchased by the exercise of options within 60 days of February 28, 2001 and (2) common units of limited partnership interests in the Operating Partnership which may be exchanged for common shares on a one-for-one basis.

			Number of					Percent of
Name and Business Address			Shares and Units		Percent of			All Shares
of Beneficial Owners			Beneficially Owned		All Shares(1)			and Units(2)
Trustees and Executive Officers
Chris D. Wheeler(3)				666,888		2.8	%		2.2	%
C. Jordan Clark(4)				212,440		*			*
Michael M. Hefley(5)				168,817		*			*
Marvin R. Banks, Jr.(6)				141,864		*			*
Catherine K. Cabell(7)				21,193		*			*
Marcus E. Bromley(8)				506,331		2.2	%		1.7	%
Lauralee E. Martin(9)				34,388		*			*
John W. McIntyre(10)				29,925		*			*
Mike E. Miles(11)				4,750		*			*
James D. Motta(12)				250		*			*
All trustees and executive officers as a group(13 persons)				2,164,000		8.8	%		7.2	%
	c/o Gables Residential Trust 2859 Paces Ferry Road, Suite 1450
	Atlanta, GA 30339
5% Holders
Ohio PERS				1,500,000		6.5	%		5.0	%
		277 East Town Street Columbus, OH 43215
Perkins, Wolf, McDonnell & Co.(14)				1,283,950		5.5	%		4.3	%
		53 W. Jackson Blvd., Suite 722
		Chicago, IL 60604

*	Less than 1%
(1)	Assumes that all common units held by the person are exchanged for common shares. The total number of shares outstanding used in calculating this percentage assumes that none of the common units held by other persons are exchanged for common shares.

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(2)	Assumes that all common units held by the person are exchanged for common shares. In addition, the total number of shares used in calculating this percentage assumes that all of the common units outstanding held by all persons other than Gables are exchanged for common shares.
(3)	Includes 31,999 common shares (including 16,917 restricted shares), 561,923 common units, and options to purchase 72,966 common shares which are currently exercisable or exercisable within 60 days of February 28, 2001.
(4)	Includes 47,010 common shares (including 10,812 restricted shares), 105,165 common units, options to purchase 47,900 common shares which are currently exercisable, 4,714 common shares owned by Mr. Clark’s minor children, with respect to which common shares Mr. Clark disclaims beneficial ownership, and 7,651 common shares owned by Mr. Clark’s spouse, with respect to which common shares Mr. Clark disclaims beneficial ownership.
(5)	Includes 20,499 common shares (including 10,750 restricted shares), 142,018 common units, and 6,300 options to purchase common shares which are currently exercisable or exercisable within 60 days of February 28, 2001.
(6)	Includes 69,329 common shares (including 9,988 restricted shares), 42,667 common units, and options to purchase 29,868 common shares which are currently exercisable.
(7)	Includes 15,926 common shares (including 2,345 restricted shares) and options to purchase 5,267 common shares which are currently exercisable.
(8)	Includes 105,048 common shares, 155,009 common units, options to purchase 200,000 common shares which are currently exercisable, and 46,274 common shares owned by Mr. Bromley’s minor children, with respect to which common shares Mr. Bromley disclaims beneficial ownership.
(9)	Includes 8,488 common shares, 5,400 common shares held in Ms. Martin’s IRA rollover account, and options to purchase 20,500 common shares which are currently exercisable.
(10)	Includes 4,425 common shares and options to purchase 25,500 common shares which are currently exercisable. Does not include the approximate 2,064 common shares which have been credited to Mr. McIntyre’s deferral account pursuant to Gables’ deferred compensation program for non-employee trustees.
(11)	Includes 4,750 common shares. Does not include the approximate 733 common shares which have been credited to Mr. Miles’ deferral account pursuant to Gables’ deferred compensation program for non-employee trustees.
(12)	Includes 250 common shares.
(13)	The indicated ownership is as of December 31, 2000 and is based solely on a Schedule 13G provided by this entity to Gables. The Schedule 13G indicates that this entity has sole voting and dispositive power with respect to all of the shares reported.
(14)	The indicated ownership is as of December 31, 2000 and is based solely on a Schedule 13G provided by this entity to Gables. The Schedule 13G indicates that this ownership includes 2,550 shares over which it has sole voting and dispositive power and 1,281,400 shares over which it has shared voting and dispositive power.

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Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires Gables’ executive officers and trustees, and persons who own more than 10% of a registered class of Gables’ equity securities, to file reports of ownership and changes in ownership with the SEC and the New York Stock Exchange. Officers, trustees and greater than 10% beneficial owners are required by SEC regulations to furnish Gables with copies of all Section 16(a) forms they file. To Gables’ knowledge, based solely on review of the copies of such reports furnished to Gables and written representations that no other reports were required during the fiscal year ended December 31, 2000, all Section 16(a) filing requirements applicable to Gables’ executive officers, trustees and greater than 10% beneficial owners were satisfied, except that Ms. Martin inadvertently failed to file a Form 4 Statement of Changes in Beneficial Ownership of Securities, relating to the purchase of 1,000 common shares. This transaction was subsequently reported on the 2000 Form 5 Annual Statement of Changes in Beneficial Ownership. In addition, Mr. Bromley inadvertently failed to file in a timely manner four Form 4 Statements of Changes in Beneficial Ownership of Securities, relating to sales of 1,089 common shares by his minor children. Such transactions were subsequently reported on a Form 4 Statement of Changes in Beneficial Ownership of Securities in June 2000.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      During the third quarter of 2000, Gables acquired an apartment community in Austin, Texas comprising 160 apartment homes from TCR Barton Creek, L.P. In consideration for the property, Gables paid $5.7 million in cash and assumed a $14.1 million secured fixed-rate note. At the time of the transaction, Mr. Wheeler, Gables’ Chairman, President and Chief Executive Officer, had a 15% limited partnership interest in TCR Barton Creek, L.P. The purchase price and other terms of this transaction were negotiated at arms’ length between Gables and representatives of the seller. The transaction was reviewed and approved by a vote of the trustees of Gables, other than Mr. Wheeler, in accordance with the conflict of interest policy adopted by the Board of Trustees.

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OTHER MATTERS

Independent Public Accountants

      The accounting firm of Arthur Andersen LLP has served as Gables’ independent public accountants since Gables’ formation in October 1993. A representative of Arthur Andersen LLP will be present at the annual meeting, will be given the opportunity to make a statement if he or she so desires, and will be available to respond to appropriate questions.

Expenses of Solicitation

      The cost of solicitation of proxies will be borne by Gables. In an effort to have as large a representation at the meeting as possible, special solicitation of proxies may, in certain instances, be made personally or by telephone, telegraph or mail by one or more employees of Gables. Gables may also reimburse brokers, banks, nominees and other fiduciaries for postage and reasonable clerical expenses of forwarding the proxy material to their principals who are beneficial owners of Gables’ common shares.

Shareholder Proposals

      Any shareholder proposals submitted pursuant to Exchange Act Rule 14a-8 and intended to be presented at Gables’ 2002 annual meeting must be received in writing at Gables’ principal executive offices on or before November 30, 2001 to be eligible for inclusion in the proxy statement and form of proxy to be distributed by the Board of Trustees in connection with such meeting.

      Any shareholder proposals intended to be presented at Gables’ 2002 annual meeting, other than a shareholder proposal submitted pursuant to Exchange Act Rule 14a-8, must be received in writing at Gables’ principal executive offices no later than March 1, 2002 nor prior to November 16, 2001, together with all supporting documentation required by Gables’ bylaws. Proxies solicited by the Board of Trustees will confer discretionary voting authority with respect to these proposals, subject to SEC rules governing the exercise of this authority.

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Exhibit A

Gables Residential Trust

Audit Committee Charter

I. General Statement of Purpose

      The Audit Committee of the Board of Trustees (the “Audit Committee”) of Gables Residential Trust (the “Company”) assists the Board of Trustees (the “Board”) in general oversight and monitoring of management’s and the independent auditor’s participation in the Company’s financial reporting process, including compliance with related legal and regulatory requirements, and, as requested by the Board, of the Company’s procedures for compliance with other legal and regulatory requirements. The primary objective of the Audit Committee in fulfilling these responsibilities is to promote and preserve the integrity of the Company’s financial statements and the independence and performance of the Company’s external independent auditor.

II. Audit Committee Composition

      The Audit Committee shall consist of at least three members who shall be appointed annually by the Board and shall satisfy the qualification requirements set forth in Sections 303.01 and 303.02 of the New York Stock Exchange Listed Company Manual. The Board shall designate one member of the Audit Committee to be Chairman of the committee.

III. Meetings

      The Audit Committee generally is to meet four times per year in person or by telephone conference call, with any additional meetings as deemed necessary by the Audit Committee. The minutes will be recorded for inclusion in the corporate records as required by Maryland law.

IV. Audit Committee Activities

      The principal activities of the Audit Committee will generally include the following:

      A. Review of Charter

• Review and reassess the adequacy of this Charter annually and submit it to the Board for approval.

      B. Audited Financial Statements and Annual Audit

• Review the overall audit plan with the independent auditor and the members of management who are responsible for maintaining the Company’s accounts and preparing the Company’s financial statements, including the Company’s Chief Financial Officer and/or principal accounting officer or principal financial officer (the Chief Financial Officer and such other officer or officers are referred to herein collectively as the “Senior Accounting Executive”).

A-1

• Review and discuss with management (including the Company’s Senior Accounting Executive) and with the independent auditor:

(i)	the Company’s annual audited financial statements, including any significant financial reporting issues which have arisen in connection with the preparation of such audited financial statements;
(ii)	the effectiveness and adequacy of the Company’s internal financial reporting controls that could significantly affect the integrity of the Company’s financial statements (including evaluations of its Senior Accounting Executive and any other relevant personnel); and
(iii)	major changes in and other questions regarding accounting and auditing principles and procedures.

• Review and discuss with the independent auditor (outside of the presence of management) how the independent auditor plans to handle its responsibilities under the Private Securities Litigation Reform Act of 1995, and receive assurance from the auditor that Section 10A of the Private Securities Litigation Reform Act of 1995 has not been implicated.

• Review and discuss with the independent auditor (outside of the presence of management) any problems or difficulties that the auditor may have encountered with management or others and any management letter provided by the auditor and the Company’s response to that letter. This review shall include considering any difficulties encountered by the auditor in the course of performing its audit work, including any restrictions on the scope of its activities or its access to information.

• Review and discuss major changes to the Company’s auditing and accounting principles and practices as may be suggested by the independent auditor or management.

• Discuss with the independent auditor such issues as may be brought to the Audit Committee’s attention by the independent auditor pursuant to Statement on Auditing Standards No. 61 (“SAS 61”).

• Based on the Audit Committee’s review and discussions (1) with management of the audited financial statements, (2) with the independent auditor of the matters required to be discussed by SAS 61, and (3) with the independent auditor concerning the independent auditor’s independence, make a recommendation to the Board as to whether the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K.

• Request that the independent auditor provide the Audit Committee with the written disclosures and the letter required by Independence Standards Board Standard No. 1, and review and discuss with the independent auditor the independent auditor’s independence.

A-2

• Prepare the Audit Committee report required by Item 306 of Schedule 14A of the Securities Exchange Act of 1934 (or any successor provision) to be included in the Company’s annual proxy statement.

C. Unaudited Quarterly Financial Statements

• Review and discuss with management and the independent auditor the Company’s quarterly financial statements. Such review shall include discussions by the Chairman of the Audit Committee or the Audit Committee with the independent auditor of such issues as may be brought to the Chairman’s or Audit Committee’s attention by the independent auditor pursuant to Statement on Auditing Standards No. 71.

D. Matters Relating to Selection, Performance and Independence of Independent Auditor

• Recommend to the Board the appointment of the independent auditor.

• Instruct the independent auditor that the independent auditor’s ultimate accountability is to the Board and the Audit Committee.

• Evaluate on an annual basis the performance of the independent auditor and, if necessary in the judgement of the Audit Committee, recommend that the Board replace the independent auditor.

• Recommend to the Board on an annual basis the fees to be paid to the independent auditor.

• Require that the independent auditor provide the Audit Committee with periodic reports regarding the auditor’s independence, which reports shall include but not be limited to a formal written statement setting forth all relationships between the independent auditor and the Company or any of its officers or directors. The Audit Committee shall discuss such reports with the independent auditor, and if necessary in the judgment of the Audit Committee, the committee shall recommend that the Board take appropriate action to ensure the independence of the auditor or replace the auditor.

E. Matters Relating to the Independence of the Audit Committee

• Periodically review the independence of each member of the Audit Committee and promptly bring to the attention of management and the Board any relationships or other matters that may in any way compromise or adversely affect the independence of any member of the Audit Committee or any member’s ability to assist the Audit Committee in fulfilling its responsibilities under this Charter,

A-3

including any such relationship or other matter that may have caused or may in the future cause the Company to fail to comply with the requirements set forth in Sections 303.01 and 303.02 of the New York Stock Exchange Listed Company Manual.

F. General

• The Audit Committee may be requested by the Board to review or investigate on behalf of the Board activities of the Company or of its employees, including, without limitation, compliance with laws, regulations or Company policies outside the financial reporting process, related party transactions, and compliance with the Company’s code of ethics.

• Perform such other oversight functions as may be requested by the Board.

• The Audit Committee shall inquire of management and the independent auditor as to whether, in the preparation or review of the audited financial statements and the quarterly financial statements, management or the auditor have any significant concerns regarding the Company’s qualification as a “real estate investment trust” under the applicable provisions of the federal tax laws.

• In performing its responsibilities, the Audit Committee shall be entitled to rely upon advice and information that it receives in its discussions and communications with management and the independent auditor. The Audit Committee shall have the authority to retain special legal, accounting or other professionals to render advice to the committee. The Audit Committee shall have the authority to request that any officer or employee of the Company, the Company’s outside legal counsel, the Company’s independent auditor or any other professional retained by the Company to render advice to the Company attend a meeting of the Audit Committee or meet with any members of or advisors to the Audit Committee.

• Notwithstanding the responsibilities and powers of the Audit Committee set forth in this Charter, the Audit Committee does not have the responsibility of planning or conducting audits of the Company’s financial statements or determining whether or not the Company’s financial statements are complete, accurate and in accordance with generally accepted accounting principles. Such responsibilities are the duty of management and, to the extent of the independent auditor’s audit responsibilities, the independent auditor. It also is not the duty of the Audit Committee to resolve disagreements, if any, between management and the independent auditor or to ensure compliance with laws, regulations or Company policies.

A-4

ZGRT2B DETACH HERE

PROXY

GABLES RESIDENTIAL TRUST

2859 Paces Ferry Road, Overlook III, Suite 1450, Atlanta, GA 30339
Proxy for Common Shares

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

      The undersigned hereby appoints Chris D. Wheeler and Marvin R. Banks, Jr., and each of them, proxies with full power of substitution to vote for and on behalf of the undersigned at the Annual Meeting of Shareholders of Gables Residential Trust, to be held at the Vinings Club located in the office building of the Company’s headquarters at 2859 Paces Ferry Road, Atlanta, Georgia, 30339 on Tuesday May 15, 2001 at 9:00 a.m. local time, and at any adjournments thereof. The undersigned hereby revokes any proxy previously given in connection with such meeting and acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement and the 2000 Annual Report to Shareholders.

SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE

GABLES RESIDENTIAL TRUST
        c/o EquiServe
        P.O. Box 9398
        Boston, MA 02205-9398

Vote by Telephone Vote by Internet

It’s fast, convenient, and immediate! Call Toll-Free on a Touch-Tone Phone 1-877-PRX-VOTE (1-877-779-8683)	It’s fast, convenient, and your vote is immediately confirmed and posted.
Follow these four easy steps:   1.   Read the accompanying Proxy Statement       Proxy Card	Follow these four easy steps:   1.    Read the accompanying Proxy Statement         Proxy Card.
2.   Call the toll-free number        1-877-PRX-VOTE (1-877-779-8683)	2.   Go to the Website        http://www.eproxyvote.com/gbp
3.   Enter your 14-digit Voter Control Number       located on your Proxy Card above your name	3.   Enter your 14-digit Voter Control Number       located on your Proxy Card above your name.
4.    Follow the recorded instructions	4.    Follow the instructions provided.
Your vote is important! Call1-877-PRX-VOTEanytime!	Your vote is important! Go to http://www.eproxyvote.com/gbp anytime!

Do not return your Proxy Card if you are voting by Telephone or Internet

ZGRT2A DETACH HERE

Please mark
votes as in
this example.

This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. If no instruction is indicated with respect to Item 1 below, the undersigned’s votes will be cast in favor of such matter. PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

1.	To elect two Class I Trustees to hold office until the 2004 Annual Meeting of Shareholders and until their successors are duly elected and qualified and one Class III Trustee to hold office until the 2003 Annual Meeting of Shareholders and until his successor is duly elected and qualified	2.	To consider and act upon any matters incidental to the foregoing or any other matters which may properly come before the meeting or any adjournments thereof.
Class I Nominees:     (01) Marcus E. Bromley, (02) James D.Motta
Class III Nominee:    (03) C. Jordan Clark

	FOR ALL NOMINEES			WITHHELD FROM ALL NOMINEES
	For all nominees except as noted above

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT   

For joint accounts each owner should sign. Executors, administrators, trustees, corporate officers and others acting in a representative capacity should give full title or authority

Signature: Date: Signature: Date: