ROCHESTER, N.Y., Feb. 28, 2014 /PRNewswire/ -- Home Properties (HME) today announced the February 26 sale of Cider Mill, a property containing 864 apartment units located in Montgomery Village, Md., for $110 million, or approximately $127,000 per unit.
Net proceeds to Home Properties, after closing costs and $58.5 million in secured debt repayment, were $47.5 million. The weighted average historical capitalization rate on the sale is 6.9% after applying a 2.7% management fee and before capital expenditures. A gain of approximately $31 million will be recorded in the 2014 first quarter.
"The sale of Cider Mill is consistent with our strategy to lighten our Washington, D.C. region geographic concentration," said Edward J. Pettinella, Home Properties' President and CEO. "We now have 28% of our units in the D.C. region. We believe that is an appropriate level of concentration and expect to remain at roughly that level going forward. Because this property had been largely upgraded and was located in the weakest submarket of our D.C. region, the cap rate on the sale was higher than the average for property dispositions in 2013."
Home Properties purchased Cider Mill in September 2002.
The Company included the sale in its guidance assumptions for dispositions in the first quarter of 2014 published on February 6, 2014. First quarter 2014 earnings results are expected to be announced on May 1, 2014, followed by a conference call on May 2, 2014 at 11:00 AM ET.
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 include general economic and local real estate conditions, weather and other conditions that might affect operating expenses, the timely completion of repositioning activities and development within anticipated budgets, the actual pace of future development, acquisitions and sales, and continued access to capital to fund growth.
Home Properties is a publicly traded apartment real estate investment trust that owns, operates, develops, acquires and rehabilitates apartment communities primarily in suburbs of major metropolitan areas in selected Northeast and Mid-Atlantic markets. An S & P 400 Company, Home Properties owns and operates 119 communities containing 41,494 apartment units. For more information, visit Home Properties' website at www.homeproperties.com.
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