Home Properties Sells Two Apartment Properties
Falkland Chase, a property containing 450 apartment units, was sold for $98 million, or approximately $218,000 per unit. The property, located in downtown Silver Spring, Maryland, consists of three parcels at the intersections of 16th Street NW, East-West Highway and Colesville Road. The north parcel of Falkland Chase currently contains 182 garden apartments and has final site plan approval for development of a maximum of 1,250 multifamily residential units in four high-rise buildings and 70,000 square feet of retail space.
Net proceeds to Home Properties, after closing costs and $35.9 million in debt repayments, were $60.3 million. The weighted average historical capitalization rate on the sale is 5.5% after applying a 2.7% management fee and before capital expenditures. A gain of approximately $36 million will be recorded in the 2013 first quarter.
"The sale of Falkland Chase monetizes the value of entitlements we obtained to increase the density on the north parcel of this property," said Edward J. Pettinella, Home Properties' President and CEO. "The sale also is consistent with our strategy to lighten our development exposure and D.C. region geographic concentration."
Home Properties purchased Falkland Chase in September 2003.
South Bay Manor, a property containing 61 units located in Sayville, New York, was sold for $11.1 million, or approximately $182,000 per unit. Net proceeds to Home Properties, after closing costs and $6.5 million in debt assumed by the buyer, were $4.4 million. The weighted average historical capitalization rate on the sale is 6.4% after applying a 2.7% management fee and before capital expenditures. A gain of approximately $5 million will be recorded in the 2013 first quarter.
Home Properties purchased South Bay Manor in September 2000.
The Company said it expects to use proceeds from both sales to reduce secured debt and for property acquisitions, property upgrades and development costs.
The Company included both sales in its guidance assumptions for dispositions in the first quarter of 2013 published on February 7, 2013. First quarter 2013 earnings results are expected to be announced on May 2, 2013, followed by a conference call on May 3, 2013 at 11:00 AM ET.
This release contains forward-looking statements. Although the Company believes expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that may cause actual results to differ include general economic and local real estate conditions, weather and other conditions that might affect operating expenses, the timely completion of repositioning and new development activities within anticipated budgets, the actual pace of future acquisitions and dispositions, and continued access to capital to fund growth.
Home Properties is a publicly traded multifamily real estate investment trust (REIT) that owns, operates, develops, acquires and rehabilitates apartment communities primarily in selected Northeast and Mid-Atlantic markets. An S&P 400 Company, Home Properties owns and operates 119 communities containing 42,124 apartment units. For more information, visit Home Properties' website at www.homeproperties.com.
SOURCE Home Properties