ROCHESTER—Three upstate real estate property companies have acquired the Upstate New York portfolio of locally based Home Properties Inc. for $252 million. Home Properties reports the sale closed on Dec. 6 for the portfolio, which consists of 18 rental properties containing 4,567 units. The purchasers are Dawn Homes Management, Tri-City Rentals of Albany, NY and Morgan Management based here. Company officials also report that the firm was relieved of its obligations under a $6.4-million capitalized lease as part of the sales transaction.
With the deal, Home Properties no longer owns or manages any properties in its home base of Rochester, NY.
Back in October, as GlobeSt.com reported, Home Properties announced it had signed a definitive contract for the sale of the Upstate New York portfolio. At that time, company officials said the portfolio consists of: four properties (1,644 units) in Buffalo, nine properties (1,680 units) in Rochester and five properties (1,243 units) in the Syracuse/Ithaca market.
The sale reaps net proceeds to Home Properties of approximately $171.3 million, after closing costs and approximately $71.8 million in debt repayments by the company. Home Properties says it expects to use the net proceeds for property acquisitions in its targeted East Coast markets as well as the retirement of its 9.0% Series F Cumulative Redeemable Preferred Stock on or after March 25, 2007.
One of the property acquisitions is expected to be a 1,387-unit apartment property located in Alexandria, VA, which will be acquired later this month for approximately $143 million.
Commenting on the sale, Edward Pettinella, Home Properties president and CEO states, "The sale of Home Properties' Upstate New York portfolio, combined with our exit from the Michigan market in June 2006, completes the realignment of our geographic footprint. We have achieved our stated objective of exiting lower growth markets to focus on selected high barrier-to-entry, higher growth markets along the eastern seaboard which will enhance the company's future financial performance."
The REIT owns, operates, acquires and rehabilitates apartment communities primarily in the Northeast, Mid-Atlantic and Southeast Florida. Currently, Home Properties operates 127 communities containing 39,124 apartment units. Of these, 35,555 units in 122 communities are owned directly by the company; 868 units are partially owned and managed by the firm as general partner; and 2,701 units are managed for other owners.
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