ELLICOTT CITY, MD. — Home Properties (NYSE: HME) has acquired the 1,350-unit Howard Crossing, a multifamily property located at 8730 Town and County Blvd. in Ellicott City, for $186 million. The sale price equates to approximately $138,000 per unit.
“This newly acquired property is located less than one mile from Charleston Manor, an 858-unit property we acquired in September 2010 that has exceeded our underwriting expectations,” says Edward Pettinella, president and CEO of Home Properties. “Based on our familiarity with this submarket, we expect Howard Crossing will achieve similar success.”
The property is 92.6 percent leased, with an average monthly rent of $1,111. The property offers 680 one-bedroom units and 670 two-bedroom units, with an average size of 854 square feet. Ninety-one percent of the units offer stacked washers and dryers in the units. Amenities include two pools, a business center, fitness center, basketball courts and tennis courts.
Home Properties funded the purchase with proceeds from the issuance of $40 million on unsecured senior guaranteed notes, which are due on June 27, 2019, and have a 4.16 percent interest rate. Additionally, a line of credit and a $100 million unsecured bank demand loan with the same terms and rate at the line of credit were used.
The company plans to invest $12 million during the first three years of ownership to upgrade individual units and exteriors to improve marketing and retention while reducing future repair and operating costs. Home Properties also plans to correct deferred maintenance, improve landscaping, HVAC and electric service, replace roofs, asphalt and concrete and upgrade kitchens.
Home Properties is a publicly traded REIT that owns, manages, develops, acquires and rehabilitates multifamily communities. The company’s portfolio includes 127 communities containing 44,232 apartment units in the Northeast and Mid-Atlantic regions. It’s stock price closed at $62.40 per share on Monday, up from $60.20 a year earlier.
— Savannah Duncan