PHILADELPHIA — Apartment Investment and Management Co. (Aimco) (NYSE: AIV) has agreed to purchase six apartment communities in the metropolitan Philadelphia area for $445 million. The seller is the portfolio’s developer, Philadelphia-based Dranoff Properties Inc.
“The timing is right to sell six of our premier properties to Aimco and become a major investor in the company,” says Carl Dranoff, founder and CEO of Dranoff Properties. “Aimco’s expansion and commitment to Philadelphia make it an ideal steward of these trophy assets that we carefully built, owned and managed. I am incredibly enthusiastic about the future of Dranoff Properties as we begin our third decade.”
The portfolio comprises 1,006 existing apartment homes, 110 apartment homes under construction and 185,000 square feet of office and retail space. Three of the properties are situated in Philadelphia’s Center City district, and the others are located in University City, Lower Merion Township and Camden, N.J.
The acquisitions are expected to close in the second quarter, except for the purchase of the Lower Merion asset, which is under construction and expected to close in the first half of 2019 following its completion.
Aimco is initially funding the acquisition with $290 million of existing property debt, $65 million borrowed on the company’s bank line and $90 million in operating partnership units. The company expects to also fund the acquisition using proceeds from selling Chestnut Hill Village, a 704-unit community built in 1963 in northeast Philadelphia.
Following the acquisition, Aimco’s Philadelphia portfolio will span 3,208 apartment homes. Citigroup acted as exclusive financial advisor to Aimco in the sale.
Aimco is a Denver-based REIT that owns 180 properties in 22 states and Washington, D.C., housing roughly 25,000 residents. The company’s stock price closed on Monday, April 16 at $40.81 per share, down from $44.59 last year.
Dranoff Properties develops apartment communities, condominiums and entertainment-based projects throughout metro Philadelphia. The company owns roughly 2,000 multifamily units and has about 700 units in its development pipeline.
— John Nelson