Home Properties Acquires Apartment Community
ROCHESTER, N.Y., Feb. 24, 2015 /PRNewswire/ -- Home Properties, Inc. (NYSE: HME) today announced that on February 19, 2015 it purchased Longbrook Apartments in Matawan, New Jersey and renamed it Sutton Pointe Apartments. The 241-unit community was purchased for $31 million in cash, which equates to approximately $128,600 per apartment unit.
At closing, Sutton Pointe was 87.1% occupied at monthly rents averaging $1,243. The property is located along Sutton Drive within walking distance of the Aberdeen-Matawan Train Station and less than one mile from Exit 120 of the Garden State Parkway, making it a 45-minute drive from Manhattan.
"This property currently operates at the lower end of its submarket and is an ideal candidate for Home Properties' unique upgrade and repositioning strategy," said Edward J. Pettinella, President and Chief Executive Officer. "We plan to increase occupancy, improve operating efficiency by sharing certain management functions and amenities jointly with our adjacent property of Barrington Gardens, and reposition the entire community. We believe the acquisition will be immediately accretive."
The 51-year-old property consists of 19 garden-style, 2-story buildings. Buildings are of wood-frame construction with brick veneer and wood trim exterior over concrete block basement/crawl spaces. Roofs are pitched with asphalt shingles. Stack washers and dryers are provided in all apartments with the exception of six buildings. Common area amenities include three central laundry areas as well as a pool and fitness center.
During the first four years of ownership, the Company expects to invest $8.6 million to correct deferred maintenance, improve curb appeal, build a community/leasing center, reposition the overall community and upgrade individual apartments as residents move out. Management anticipates a 6.1% first year capitalization rate after allocating 2.7% of rental revenues for management and overhead expenses and before normalized capital expenditures.
Forward-Looking Statements
This release contains forward-looking statements. Although the Company believes expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that may cause actual results to differ are described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission and include general economic and local real estate conditions, weather and other conditions that might affect operating expenses, the timely completion of repositioning and new development activities within anticipated budgets, the actual pace of future acquisitions and dispositions, and continued access to capital to fund growth. The Company assumes no obligation to update or supplement forward-looking statements because of subsequent events.
About Home Properties
Home Properties is a publicly traded multifamily real estate investment trust that owns, operates, acquires and repositions apartment communities in suburbs of major metropolitan areas, primarily along the East Coast of the United States. An S&P 400 Company, Home Properties owns and operates 122 communities containing 42,386 apartment units. For more information, please visit the Company's website at www.homeproperties.com
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SOURCE Home Properties, Inc.
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