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WALTHAM, MA-Home Properties purchased Gardencrest Apartments, a 696-unit residential complex. The Rochester, NY-based REIT acquired the property from the DeVincent family for $85.4 million or $122,000 per apartment.

The complex is divided into 64 buildings sited on 33.6 acres located in the heart of the metro west corridor on Route 60 near Route 128, about nine miles northwest of Boston. The property is currently 95% occupied with monthly rents averaging $1,004. The buildings were constructed in several phases between 1948 and 1973 and include two- and three-story structures. The average unit size is 877 sf with 11 studio apartments, 138 one-bedroom units, 500 two-bedroom units and 47 three-bedroom units. The acquisition is the first in the state for Home Properties, the sixth largest publicly traded REIT in the country.

Meredith & Grew Inc.’s David L. Pergola, executive vice president, Anthony W. Biette, vice president and Sarah B. Lagosh, financial analyst represented the owners in the transaction.

Home Properties says it will spend over $10 million in community-wide improvements during the first few years of operation. Renovations will include new windows, a new community center, new heating and air conditioning systems and an expanded parking area.

The company anticipates a 7% first year unleveraged return on acquisition and capital improvement costs. It contends that while rent increases for existing residents will be gradual, cash flow is expected to increase substantially over time from higher rents. Because the market rate for apartments is approximately 45% higher than the current rental rates in the complex there are opportunities for rental rate increases.

Home Properties currently operates 290 communities containing 50,537 units. The company also manages 2.2 million sf of commercial space.

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