ROCHESTER, N.Y., April 9, 2013 /PRNewswire/ -- Home Properties (NYSE:HME) today announced the March 2013 sale of two properties with a combined total of 511 units for $109.1 million.
Falkland Chase, a property containing 450 apartment units, was sold for $98 million, or approximately $218,000 per unit. The property, located in downtown Silver Spring, Maryland, consists of three parcels at the intersections of 16 th Street NW, East-West Highway and Colesville Road. The north parcel of Falkland Chase currently contains 182 garden apartments and has final site plan approval for development of a maximum of 1,250 multifamily residential units in four high-rise buildings and 70,000 square feet of retail space.
Net proceeds to Home Properties, after closing costs and $35.9 million in debt repayments, were $60.3 million. The weighted average historical capitalization rate on the sale is 5.5% after applying a 2.7% management fee and before capital expenditures. A gain of approximately $36 million will be recorded in the 2013 first quarter."The sale of Falkland Chase monetizes the value of entitlements we obtained to increase the density on the north parcel of this property," said Edward J. Pettinella, Home Properties' President and CEO. "The sale also is consistent with our strategy to lighten our development exposure and D.C. region geographic concentration." Home Properties purchased Falkland Chase in September 2003. South Bay Manor, a property containing 61 units located in Sayville, New York, was sold for $11.1 million, or approximately $182,000 per unit. Net proceeds to Home Properties, after closing costs and $6.5 million in debt assumed by the buyer, were $4.4 million. The weighted average historical capitalization rate on the sale is 6.4% after applying a 2.7% management fee and before capital expenditures. A gain of approximately $5 million will be recorded in the 2013 first quarter. Home Properties purchased South Bay Manor in September 2000. The Company said it expects to use proceeds from both sales to reduce secured debt and for property acquisitions, property upgrades and development costs.