Home Properties To Sell Upstate NY Rentals

ROCHESTER-Home Properties Inc. has signed a definitive contract with an investment group to sell its Upstate New York portfolio that consists of 18 rental apartment properties totaling 4,567 units in Rochester, Syracuse, Ithaca and Buffalo. When the transaction closes, which is expected by either December of this year or January 2007, the locally based firm will have no property holdings in its home base of Rochester.

David P. Gardner, executive vice president and CFO of Home Properties, would not disclose the purchase price for the portfolio. The company states that the buyers are a “team of three regional property owners and developers” who banded together and made the offer for the portfolio. The buying venture has provided a $6-million non-refundable deposit in connection with the transaction. Company officials say the net proceeds of the sale, after allocating approximately $79 million in debt repayments, will be used for a combination of common share repurchase, debt repayment and property acquisitions in the company’s East Coast markets.

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. While executives of the firm had discussed the possible sale for a while, Gardner says the company first announced its availability in August upon its release of its Q2 2006 financials. CB Richard Ellis is the broker on the portfolio sale.

The move “is consistent with our strategy of focusing our operations in high-barrier, high-growth markets along the East Coast,” states Edward J. Pettinella, Home Properties’ president and CEO. “As anticipated, there was considerable interest in the properties. We are very pleased with the pricing level we were able to achieve.”Home Properties operates 142 communities containing 42,878 apartment units. Of those, 39,309 units in 137 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.