Company officials attribute the positive response to the availability of high loan to value and low interest rate financing. The anticipated average cap rate is projected to be approximately 9% (before a reserve for capital expenditures), which exceeds management's expectations when it initially announced this sale/reinvestment program. The first closing is expected to occur at the end of the second quarter or early in the third quarter.
Home Properties chairman and co-chief executive officer Norman Leenhouts says, "We have had an excellent response from the market... at prices well above our undepreciated historical cost. This is true even though the properties are located in markets having the least potential for future growth relative to our remaining portfolio."
He continues that the company has also purchased much of the natural gas it requires and therefore will not have to issue revised earnings guidance that was necessary last winter. In addition, the firm anticipates that its residents will accept rent increases that reflect what he termed higher operating costs and the impact of inflation.
For the quarter ended Mar. 31, 2001, Home Properties reports its Funds From Operations amounted to $26,953,000, or $0.60 per share, compared with $25,407,000, or $0.68 per share, for the same quarter last year.
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