ROCHESTER, NY - Home Properties, Inc. announced that, on October 17, 2011, it purchased an apartment community in Alexandria, Va., for a total purchase price of $205 million. "Based on purchase price, this acquisition is the largest in Home Properties' history and lends itself perfectly to our repositioning strategy as we plan to make major upgrades which will add significant value to the asset," said Edward J. Pettinella, President and CEO of Home Properties.
Newport Village (937 units), conveniently located within the City of Alexandria, was purchased for $205 million in cash, which equates to approximately $219,000 per apartment unit. At closing, the property was 92.1% occupied at monthly rents averaging $1,561. In addition to base rent, utility reimbursement from residents at Newport Village results in other property income totaling approximately 13% of base rent on an annual basis. The property is situated on both sides of West Braddock Road and North Beauregard Street, providing prominent roadside visibility. I-395 is one-half mile to the east, leading north to downtown Washington, D.C., and converting into I-95 3-1/2 miles to the south, while also intersecting with the Capital Beltway (I-495). A prominent infill location, the property is easily accessible to several Metro stations and Reagan National Airport. Some of the region's most significant employment centers and destination locations are close by, including Skyline City, Villages at Shirlington, Pentagon City, the Eisenhower Avenue Corridor with the U.S. Patent and Trademark Office Building, Potomac Yards and Crystal City. In addition, Mark Center, with 6,400 jobs being added as a result of the U.S. Department of Defense's Base Realignment and Closure (BRAC), is one mile from the property.
Newport Village was built in 1969. It consists of 937 units in 31 apartment buildings. The buildings have all-brick facades, arched entryways, decorative cornices and portal windows. Roofs are pitched with asphalt shingles. There are 443 one-bedroom units, 432 two-bedroom units, 20 three-bedroom units and 42 three-bedroom townhouses. The average unit size is 1,061 square feet. The property has a gas-fired central boiler heating system and individually metered electric service. Standard interior amenities include private balconies or patios with French doors, fully equipped eat-in kitchens with ceramic tile floors, oversized walk-in closets and high-speed Internet access. In select units, full-sized washers and dryers and ceiling fans are available. Common area amenities include an Olympic-sized swimming pool with sundeck, clubhouse with 24-hour fitness center and men's and women's locker rooms, outdoor basketball court, picnic/barbecue area and playground.
During the first four years of ownership, the Company expects to spend a total of approximately $17 million, in addition to normal capital expenditures, to upgrade units upon turnover. Full upgrades will include new kitchen cabinets, countertops and appliances. Washers and dryers will be added in units which do not currently have them. The central heating system will be replaced with individually metered high efficiency furnaces in each apartment. Windows will be replaced and electric upgraded.
Acquisition costs of approximately $870,000 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 121 communities containing 41,285 apartment units.