ROCHESTER, N.Y., Dec.15, 2011 /PRNewswire/ -- Home Properties, Inc. (NYSE: HME) today announced that, on December 15, 2011, it purchased The Gates of Deer Grove in Palatine, Ill. for $20.2 million and, on November 30, 2011, it purchased an apartment community in Herndon, Va. for a total purchase price of $92.75 million. Year-to-date, the Company has purchased $500.8 million in apartment assets.
"With these final two acquisitions for the year, Home Properties' 2011 property purchases have exceeded half a billion dollars," said Edward J. Pettinella, President and CEO of Home Properties. "In 2011, we acquired eight properties in five states containing more than 2,800 apartments, which will add future value for our shareholders."
The Gates of Deer Grove (204 units) was purchased for $20.2 million in cash, which equates to approximately $99,000 per apartment unit. At closing, the property was 98.0% occupied at monthly rents averaging $1,030. The property is located on Dundee Road, a primary east-west highway traversing the northern portion of Palatine, which is a high-density, well-established township in Chicago's northwest suburbs. The Gates of Deer Grove is located between Home Properties' Blackhawk Apartments (371 units) to the west in Elgin and The Colony (783 units) to the east in Mt. Prospect. It is adjacent to a neighborhood shopping center and within easy access to other retailers, as well as Deer Grove Forest Preserve.
Built in 1974, The Gates of Deer Grove was completely renovated in 2008. It consists of 204 units in six three-story garden-style buildings. Buildings have brick and siding exteriors with reinforced concrete slab foundations, wood framing and new pitched shingle roofs, installed during renovation. Windows are double-pane aluminum-framed sliders. There are six studio units, 116 one-bedroom units and 82 two-bedroom units. The average unit size is 896 square feet. Each building has two central boilers that provide hot water heat via radiant baseboards in each unit. Air conditioning is provided via wall electric units in the living room and main bedroom. All utilities are paid by residents. During the 2008 renovation, all kitchen cabinets, countertops, appliances and fixtures were replaced. All bathroom cabinets, countertops and fixtures were repaired or replaced as part of the renovation. Each bathroom is equipped with a bathtub/shower and ceramic tile surround and flooring. Each apartment has an individual balcony or patio, window blinds and intercom. Some units contain washers and dryers and gas fireplaces. Common area amenities include a renovated clubhouse with expanded entertainment amenities including a fitness center, multimedia theater and business center. A new outdoor swimming pool and tennis court were constructed and a new dog park installed. The beautifully landscaped grounds with private pond and fountain are near bicycle and walking paths.
Management anticipates a 6.2% weighted average first year capitalization rate after allocating 2.7% of rental revenues for management and overhead expenses and before normalized capital expenditures.
The Courts at Dulles (411 units) was purchased for $92.75 million in cash, which equates to approximately $226,000 per apartment unit. At closing, the property was 95.6% occupied at monthly rents averaging $1,539. In addition to base rent, utility reimbursement from residents plus other property income totals approximately 6% of base rent on an annual basis.
The A-class property in Fairfax County is situated off Sunrise Valley Drive, which provides direct access to the Dulles Toll Road (VA Route 267) in the Reston/Herndon sub-market, 26 miles west of Washington, D.C., a mile from Dulles International Airport and less than two miles from the future Route 28 Metro station (Silver Line). The market has become a hub for major employers, including corporations and government agencies such as BAE Systems, Cisco Systems, Computer Associates, Federal Express, Lockheed Martin and Sprint. It has a very desirable public school system and excellent nearby entertainment and retail destinations.
Built in 2000, The Courts at Dulles consists of 411 units in 12 four-story garden-style buildings. The exteriors are vinyl-sided with vinyl-clad windows and stone veneer on the ground floor. Roofs are pitched with asphalt shingles. There are 193 one-bedroom units, 179 two-bedroom units and 39 three-bedroom units. The average unit size is 968 square feet. Hydronic gas-fired heating systems and pad-mounted condenser units provide HVAC. All units have hard-wired smoke detectors and wet-pipe sprinkler systems. All utilities are individually metered. Unit amenities include private balconies, patios or terraces, fully equipped kitchens with vinyl tile flooring, bathrooms with garden soaking tubs and ceramic tile flooring, full-size washers and dryers, linen closets, walk-in closets, pantries, track lighting, nine-foot ceilings, crown molding and ceiling fans. In some units there is a gas fireplace with TV shelf and a built-in computer niche. Common area amenities include a resort-style pool with sundeck and fountains; a 24-hour fitness center; an English-style pub lounge with billiards and foosball tables, wet bar and flat-panel television; a resident lounge with fireplace; WiFi; a business center and conference room; barbeque grills; a full-size basketball court and on-site concierge.
During the first four years of ownership, the Company expects to spend a total of approximately $2 million, in addition to normal capital expenditures, to make select improvements.
Acquisition costs of approximately $415,000 for the purchase of both properties will be included in other expense in the 2011 fourth quarter.
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 apartment real estate investment trust that owns, operates, develops, acquires and rehabilitates apartment communities primarily in selected Northeast and Mid-Atlantic markets. Currently, Home Properties owns and operates 124 communities containing 41,909 apartment units. For more information, visit Home Properties' website at homeproperties.com.