Today's Deals: Home Properties Buys Two Assets for $113M

Home Properties wraps up 2011 with over $500 million in acquisitions; NorthMarq arranges a $70 million Freddie Mac mortgage for a community in Michigan; and Iron Gate buys a $106.5 million portfolio in Atlanta.

The Courts at Dulles

Palatine, Il. & Herndon, Va.—Home Properties has passed the $500 million mark in its year-to-date acquisition activity with the company’s final two purchases for 2011. The multifamily stalwart bought The Gates of Deer Grove, a 204-unit community in Palatine, Ill., for $20.2 million on December 15, 2011. Yesterday’s announcement was complimented with news that Home Properties also acquired The Courts at Dulles, a 411-unit community in Herndon, Va., for $92.8 million on November 30, 2011.

“With these two final acquisitions for the year, Home Properties’ 2011 property purchases have exceeded half a billion dollars,” says Edward Pettinella, president and chief executive officer of Home Properties. “In 2011, we acquired eight properties in five states containing more than 2,800 apartments, which will add future value for our shareholders.”

The Gates of Deer Grove was 98 percent occupied at the time of purchase. The asset was built in 1974 and received a complete renovation in 2008. Units average 896 square feet in size. Community amenities include a renovated clubhouse, fitness center, multimedia theater, business center, swimming pool, tennis court and dog park. Home Properties expects the asset to generate a 6.2 percent first year cap rate after allocating 2.7 percent of rental revenues to overhead expenses.

The Courts at Dulles was 95.6 percent occupied at closing. The Class A property was built in 2000 and has monthly rents that average $1,539. Herndon, Va., is located 26 miles west of Washington, D.C. Common amenities include a pool with fountains, a 24-hour fitness center, pub lounge with billiards, foosball and a wet bar, a business center, barbeque grills, a full-size basketball court, and an onsite concierge. Home Properties expects to spend approximately $2 million, in addition to normal capital expenditures, on improvements.

NorthMarq arranges $70M Freddie Mac mortgage for community in Michigan

West Bloomfield, Mich.—Bill Matone, senior vice president and managing director of NorthMarq Capital’s Charlotte regional office, and Sue Blumberg, senior vice president and managing director of NorthMarq’s Chicago Regional office, arranged a first mortgage refinance in the amount of $70 million for Aldingbrooke Apartments, a 667-unit multifamily community located in West Bloomfield, Mich.

Financing was based on a 10-year term and a 30-year amortization schedule and was arranged for the borrower, Allerion Associates LLC, by NorthMarq through its seller-servicer relationship with Freddie Mac. Matone states, “According to the lender, the appraiser and the competition, this property is the nicest multifamily property in the market.”

Iron Gate buys $106.5M portfolio

Villas at Kennesaw

Atlanta—Iron Gate Realty Partners, the newest venture from GFI Capital Resources Group, has completed the purchase of a 1,168-unit portfolio from Davis Development. The $106.5 million sales price equates to $91,181 per unit. The four communities comprising the portfolio are: Villas at Newnan Crossing; Villas at Kennesaw; Villas at Sugarloaf; and Villas at West Ridge.

“Iron Gate recognized the perfect opportunity to buy an off-market transaction from a reputable merchant builder,” says Michael Weiser, president of acquisitions at Iron Gate. “The purchase is part of our strategy to invest in primarily Class A assets given their high demand in today’s market and tremendous growth potential.”

The firm plans to operate the Villas Portfolio to produce an increased cash flow by reducing concessions and tightening up existing expenses.

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