ROCHESTER, NY - Home Properties, Inc. announced that, on October 11, 2011, it purchased an apartment community in Leesburg, VA, for a total purchase price of $20.25 million. Year-to-date, the Company has purchased assets of approximately $183 million.
"The acquisition of Somerset Park plus the expected purchase of at least one other property in the Mid-Atlantic region by year end will bring our total acquisitions for the year to more than $385 million, exceeding the $200 million to $350 million range we projected at the beginning of the year," said Edward J. Pettinella, President and CEO of Home Properties. "We are confident these acquisitions in strategically targeted geographic areas will enhance future value for our shareholders."
Somerset Park (108 units) was purchased for $20.25 million in cash, which equates to $187,500 per apartment unit. The property is currently 98.1% occupied at monthly rents averaging $1,382. Somerset Park is ideally situated within the center of Loudoun County, the nation's wealthiest county with one of the fastest growing populations since 2000 and forecast to grow an additional 20%+ by the end of the decade. Located fewer than two miles from an existing Home Properties' apartment community, The Manor, also in Leesburg, Somerset Park is located approximately 30 miles West/Northwest of Washington, D.C. Just minutes to the Dulles Greenway and Route 7, the property is located at the southeast intersection of the well-travelled, recently completed Battlefield Parkway and Tavistock Drive SE. The property has excellent access to Dulles International Airport as well as entertainment and employment centers in Eastern Loudoun County and Western Fairfax County.
Somerset Park, originally designed and developed in 2006 to be a condominium with luxurious finishes and spacious floor plans, was leased up and converted to a luxury rental apartment community. It consists of 108 units in six two- and three-story garden-style buildings. The buildings are of wood-frame construction with concrete slab and poured foundations. Roofs are pitched with asphalt/composition shingles. There are 72 one-bedroom units and 36 two-bedroom units. The average unit size is 1,036 square feet. All units have individual gas-fired water heaters and forced air furnaces with exterior pad-mounted air conditioning condenser units. Electric service is individually metered. Each unit has a private terrace or deck. Interiors include crown molding, ceiling fans in each bedroom, large double pane windows, 12-inch ceramic tile flooring, maple shaker-style wood cabinetry, high-end appliances, countertops and sinks, full-size washers and dryers, and smart-wiring for security alarms and entertainment/Internet systems. Available interior amenities include garden-style soaking tubs, dual vanity sinks, built-in entertainment centers, bookshelves, and gas fireplaces with marble surrounds. Additional amenities include a well-appointed clubhouse with Wi-Fi, fitness studio, paved walking trails, outdoor grilling and picnic areas and pond night-lit fountain views.
Management anticipates a 5.2% first year capitalization rate on this acquisition. (The return is calculated after allocating 2.7% of rental revenues for management and overhead expenses and before normalized capital expenditures.)
Acquisition costs of approximately $92,000 will be included in other expense in the 2011 fourth quarter.
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 120 communities containing 40,348 apartment units.