Tarragon Corporation Agrees to Form Joint Ventures With Northland Investment Corporation and to Sell Four Apartment

NEW YORK, NY, Mar 31 (MARKET WIRE) --
Tarragon Corporation (NASDAQ: TARR), a leading mixed-use developer with a
focus on for rent and for sale multifamily housing, today announced that it
has formed two joint ventures with Northland Investment Corporation, a privately
held real estate investment company headquartered in Newton, Massachusetts.

The joint ventures with Northland will own substantially all of the 21,000
rental apartment homes controlled by the two firms. The 83 properties are
located nationwide, with concentrations in Florida, Connecticut, Massachusetts,
North
Carolina, Texas, Tennessee and Arizona. Based on the parties' joint
assessment of their equity in the properties contributed, Tarragon and its
affiliate,
Ansonia, will initially own 22.4 percent of each joint venture and Northland
77.6 percent. The joint ventures will also purchase Bermuda Island in Naples,
Florida, and Northgate in Waverly, Rhode Island, and, when completed later this
year, The Vintage at the Grove in Manchester, Connecticut and Aldridge at
Gateway in Murfreesboro, Tennessee from Tarragon for a total of $166 million.

Tarragon and Northland will also form a joint venture to provide property,
asset
and construction management services to their properties and to third parties.
This entity will employ about 600 people, with headquarters in Massachusetts
and satellite offices in Connecticut, Texas and Florida. The management
services company will be owned in the same proportions as the real estate
joint ventures.

Northland has also agreed to provide Tarragon with a commitment for a $50
million, two-year secured loan, which Tarragon may use to purchase
Tarragondebt at a discount. Tarragon's interest in the real estate joint
ventures would
secure the loan. The closing of this loan is subject to final documentation and
customary loan closing conditions. Tarragon announced on March 27 that it
had obtained a standstill agreement effective through September 20, 2009 from
the
holders of its $125 million of corporate-level, unsecured, subordinated notes,
and that
the Company had been granted an option to purchase the subordinated notes at
a discount.

The formation of the joint ventures is subject to receipt of lender consents
and
satisfaction of other customary closing conditions.

Tarragon Chairman and CEO William S. Friedman commented: "The four
propertysales will generate $16 million in cash and increase our equity in the
joint
venture by $4.4 million. The Vintage at the Grove and Aldridge at Gateway
will be the second and third newly built rental properties sold by Tarragon
this year as part of its merchant building initiative. Total merchant building
sales are expected to reach $220 million in 2008. The formation of the
residential joint ventures and property sales, together, are expected to reduce
Tarragon's consolidated debt by about $600 million. Additionally, the real
estate
joint ventures are expected to have better access to capital and will be better
able to take advantage of opportunities arising out of the current real
estate market dislocation. Tarragon Corporation, in addition to its investment
in the
joint ventures, expects to continue to develop new mixed-use or rental
properties
for sale or for contribution to the real estate joint venture. We also
anticipatecontinuing to liquidate our condominium inventory and, as we free up
capital, investing in other opportunistic real estate ventures."

Forward-looking Statements

Information in this press release includes "forward-looking statements" made
pursuant
of the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 that are based on management's expectations, estimates, projections and
assumptions. Words such as "may," "expects," "anticipates," "intends,"
"estimates,"
and variations of these words and similar expressions are intended to
identify forward-looking statements, which include but are not limited to
anticipated
benefits of the joint ventures with Northland and expected business
opportunities that may be available to Tarragon. Actual results and the
timing of certain events could differ materially from those projected or
contemplated by these forward-looking statements due to a number of factors,
including conditions in the homebuilding industry and residential real estate
and
mortgagemarkets, the satisfaction of the conditions to formation of the joint
ventures
described above, conditions in the capital and financial markets generally,
general economic conditions, interest rates and other risk factors outlined in
Tarragon's SEC reports, including its Annual Report on Form 10-K and other
SEC reports. Tarragon assumes no responsibility to update forward-looking
information contained in this press release.

TARR-G

Contacts:

Broadgate Consultants, LLC
Alan H. Oshiki
(212) 232-2222
Email Contact

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