Home Properties Focuses Almost Exclusively on DC, Baltimore

WASHINGTON, DC-New York-based Home Properties has picked up three new properties--two of which are in the DC area. The two transactions, which total $173.1 million, make up a considerable portion of the $325 million that was set aside in its guidance for acquisitions here. In fact, Home Properties invested nearly the entire $325 million in the DC and Baltimore area, except for one property that it just acquired in Brookhaven, New York for $31.3 million.

It is possible the company may acquire additional properties beyond its guidance, Charis Warshof, head of investor relations, tells GlobeSt.com. Baltimore and the DC area “are markets that we like very much,” she says. Besides its acquisition spree, the company also recently delivered two apartment buildings in Silver Spring, MD and Huntington, VA that it is starting to lease. Warshof says the company has nothing specific in the pipeline.

One of the its newly-acquired local properties is Charleston Place, an 858-unit, 26-building garden-style community located in Ellicott City, MD, which traded for $103 million, or $120,000 per apartment unit. Home Properties assumed three fixed-rate notes with an aggregate principal balance of $70.8 million that mature in September 2015. The company will invest another $6.8 million on upgrades. It expects to realize a 6.2% first-year cap rate.

Another is the 364-unit Courts at Fair Oaks in Fairfax County, VA, which Home Properties purchased from a from a real estate fund of Pantzer Properties. It was purchased for $70.1 million, or approximately $193,000 per unit. The purchase included the assumption of a $46-million, fixed-rate mortgage at 5.66%, which matures August 2019. The property is 95.1% occupied. Home Properties plans to spend $1.8 million in capital improvements and anticipates a 5.9% first-year cap rate.

The third apartment building, the 257-unit Crescent Club, which traded at $122,000 per unit, is 95.3% occupied. Home Properties expects to invest $6.1 million and anticipates a 6.2% first-year cap rate on this acquisition.

Other investments the company has made in this area include the Greens at Columbia, a 187,952-square-foot, 168-unit garden apartment complex in Colombia, MD, for $25.6 million and the Village in Potomac Falls in Sterling, VA, which it acquired for $38.5 million. It also acquired four properties in the Baltimore area in recent months.