Blackstone Real Estate Advisors, based in New York and London, paid $480 million in cash, assumed $145 million of debt and gave Security Capital a five-year note for $115 million at 12% in its first year, with annual increases of 100 basis points.

"The sale of Homestead is in keeping with Security Capital's stated intention to exit businesses that do not fit the company's current strategy,'' explains Security Capital vice chairman C. Ronald Blankenship. "This strategy is to focus capital in six private real estate operating divisions that will lead the industry in high sustainable return on equity and earnings growth. This transaction places the company in an even stronger position to execute its strategy, as well as to fund additional share repurchases."

Occupancy at Homestead Village properties was 76.9% for the third quarter. September occupancy was down to 71.7%, 11 percentage points lower than September 2000.

Security Capitals companies and divisions include assisted living division BelmontCorp, office facilities company CarrAmerica Realty Corp., City Center Retail Trust, parking facilities division InterPark, industrial real estate company ProLogis Trust and neighborhood retail center company Regency Centers Corp.

Financial advisors in the deal were Salomon Smith Barney for Security Capital and Bear, Stearns & Co. Inc. for Blackstone.

Homestead Village locations in the suburban Chicago market include Lombard, Naperville, Schaumburg, Vernon Hills and Westmont.

Instant Insights /

Homestead Village Chain Sells For $740 Mil

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