Post Properties (PPS) narrowed its loss in the first quarter to $421,000, or 1 cent a share, as the company  redeemed a portion of preferred stock.

The Atlanta-based firm’s net loss improved by 87% compared to the first quarter of 2010, when Post Properties reported a net loss of $3.1 million, or 6 cents a share. In the 2010 fiscal year, the firm posted a loss of $14.5 million.

Post Properties redeemed all outstanding shares of its 7-5/8% Series B cumulative stock for $49.6 million. This cost the company $1.8 million in the first quarter. Still, Post Properties said it plans to sell 4 million more shares.

“The company has an at-the-market common equity program for the sale of up to 4 million shares of common stock,” Post Properties said in its release. “The company expects to use this program in 2011 as an additional source of capital and liquidity.”

Revenue from continuing operations improved 6% during the three months ended March 31, up to $73.5 million from $69.1 million a year earlier.

Interest income dropped nearly 48% compared to the year ago period, down to $92,000. However, this amount increased from the fourth quarter of 2010 when interest income hit $86,000.

Post Properties said it has begun the third phase of its Post Midtown Square in Houston, Texas — a 124-unit apartment building with street-level retail space. The company expects the $21.8 million project to yield 6.8%. Post Properties closed 12 condominium units in Atlanta and Austin, Texas, during the first quarter, which generated a gross revenue of $13.7 million.

As of March 31, Post Properties had $2 billion in real estate assets on its balance sheet.

Write to Christine Ricciardi.

Follow her on Twitter @HWnewbieCR.