ROCHESTER, N.Y., June 23 /PRNewswire-FirstCall/ -- Home Properties (NYSE: HME) today announced that on June 17, 2010, it purchased Annapolis Roads Apartments in Annapolis, Maryland, a property it had managed for the prior owner since 2000. The total purchase price for the 282-unit property of $32.5 million equates to approximately $115,000 per apartment unit. Consideration included the assumption of an existing $20.1 million loan, $7.5 million in cash and $4.9 million in Operating Partnership (OP) units in Home Properties, L.P. For purposes of determining the number of OP units issued, a value of $50.00 per unit was set. The property is currently 96.1% occupied at monthly rents averaging $1,255. In 2007, Home Properties acquired two other properties in Maryland owned by related sellers. Closing costs of approximately $350,000 will be expensed and included in general and administrative expenses in the second quarter of 2010.
Annapolis Roads was built in three phases between 1974 and 1979. It consists of 282 apartments in eleven residential buildings. The property is located in Anne Arundel County, Maryland, off Bay Ridge Road, which is a direct route into historic Annapolis, the state capital, and only 30 minutes from Washington, D.C. Buildings have brick exteriors with concrete block foundations and pitched asphalt-shingled roofs. Windows are double-pane aluminum-framed sliders. The apartment mix consists of 88 one-bedroom, 182 two-bedroom and 12 three-bedroom units. The two- and three-bedroom units have two full bathrooms. The average unit size is 991 square feet. Units built in the first phase are supplied with heat from central gas-fired boilers. Units built in later phases use oil fuel for heat and hot water. All apartments have central air conditioning and individual washers and dryers. Amenities include a community center with a recreation room, business and fitness centers, a swimming pool with a large sundeck and a picnic area.
The Company expects to spend approximately $2.9 million over the next three years to correct deferred maintenance and building deficiencies; improve curb appeal, landscaping, roofs, and mechanical systems; and completely upgrade apartments, unit-by-unit, with new kitchens and baths, appliances, flooring, lighting, interior doors and trim. Management anticipates a 6.6% weighted average first year capitalization rate on this acquisition after allocating 3.0% of rental revenues for management and overhead expenses and before normalized capital expenditures.
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, other conditions that might affect operating expenses, the timely completion of repositioning activities within anticipated budgets, the actual pace of future acquisitions and sales, 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, Mid-Atlantic and Southeast Florida markets. Currently, Home Properties operates 111 communities containing 37,597 apartment units. Of these, 36,729 units in 110 communities are owned directly by the Company and 868 units are partially owned and managed by the Company as general partner. For more information, visit Home Properties' website at homeproperties.com.
SOURCE Home Properties