Home Properties Sells Apartments for $23.7 Mil

PASSAIC, NJ-Home Properties of Rochester, NY has sold the 137-unit Towers Apartments here and the 227-unit Mountainside Apartments in Garnerville, NY for a total of $23.7 million. The buyer was not identified.

The sale price equates to about $65,200 per unit, according to Norman Leenhouts, chairman and co-CEO of Home Properties. “The net proceeds were used to reduce short-term debt previously incurred to fund value-added acquisitions,” according to Leenhouts.

“These communities were purchased as part of a large portfolio acquisition in 1998,” he continues. “Although located in a market expected to produce above-average growth, these particular properties didn’t fully meet our long-term hold criteria. They were not positioned to produce our required return on invested capital considering current market value.”

Home Properties’ gain on the sale is about $7 million, which will be reported in the company’s 4th quarter. The sale price equates to a cap rate of about 9.2% based on the properties’ 2001 budgeted net operating income after allocating 3% of rental revenues for expenses and before normalized capital expenditures.