Home Properties Announces Acquisition; Sells Three Properties

    Business Editors/Real Estate Writers

    ROCHESTER, N.Y.--(BUSINESS WIRE)--Jan. 13, 2005--Home Properties (NYSE:HME) today announced that it acquired an apartment community in Westminster, Maryland and sold three properties: one in Hamden, Connecticut and two in Detroit, Michigan.
    Ridgeview Chase (204 units) was acquired on January 13, 2005 and is located in the City of Westminster, Maryland approximately 20 miles northwest of the Baltimore beltway (I-695), 25 miles from the northern suburbs of Washington, D.C. and 20 miles from the City of Frederick. The total purchase price of $19.7 million, including closing costs, equates to approximately $96,400 per unit. The purchase was funded through the Company's line of credit.
    Ridgeview Chase is currently 96.0% occupied, based on economic occupancy, with monthly rents averaging $967. Built in 1988, the property has 17 three-story buildings on 25 acres. The buildings are wood frame construction on concrete basement foundations with vinyl-sided exterior walls and asphalt shingle pitched roofs. Amenities include a fitness center, large outdoor swimming pool and wading pool, tennis court and play area. The unit mix consists of 12 one-bedroom, 168 two-bedroom and 24 three-bedroom units with an average size of 922 square feet. Each unit is individually metered for electric and has a heat pump as well as a full-size washer and dryer. The Company expects to invest approximately $1.1 million in improvements over the next few years to correct deferred maintenance and remedy property shortcomings; improve signage, asphalt and concrete; replace roofs, gutters, windows and sliders; upgrade kitchens; and add six-panel interior doors. Management expects a 7.1% weighted average first year capitalization rate. (The return is calculated after allocating 3.0% of rental revenues for management and overhead expenses and before normalized capital expenditures of approximately $525 per unit annually.)
    Apple Hill Apartments (498 units) in Hamden, Connecticut was sold on December 23, 2004. The total sales price of $48.1 million equates to approximately $96,700 per unit. The net proceeds, after assumption of $29.5 million in mortgages and closing costs of $0.8 million, were $17.8 million. The Company will record a gain on sale of $20.3 million in the fourth quarter of 2004.
    Parkview Gardens Apartments (484 units) and Golfview Apartments (44 units) in Detroit, Michigan were sold on December 29, 2004. The total sales price for Parkview of $16.0 million equates to approximately $33,000 per unit. The net proceeds, after closing costs of $0.5 million, were $15.5 million. The total sales price for Golfview of $1.5 million equates to approximately $35,000 per unit. The Company will record a combined gain on sale for both properties of approximately $5.5 million in the fourth quarter of 2004.

    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, other conditions that might affect operating expenses, the timely completion of repositioning activities within anticipated budgets, the actual pace of future acquisitions and sales, and continued access to capital to fund growth.

    Home Properties is the sixth largest publicly traded apartment real estate investment trust in the United States. The Company owns, operates, acquires and rehabilitates apartment communities in selected Northeast, Midwest, Mid-Atlantic and Southeast Florida markets. Currently, Home Properties operates 172 communities containing 47,517 apartment units. Of these, 42,001 units in 151 communities are owned directly by the Company; 2,707 units are partially owned and managed by the Company as general partner, and 2,809 units are managed for other owners. For more information, visit Home Properties' Web site at www.homeproperties.com.

--30--ML/ny*

CONTACT: Home Properties David P. Gardner, 585-246-4113 or Charis W. Warshof, 585-295-4237

KEYWORD: CONNECTICUT MICHIGAN MARYLAND NEW YORK INDUSTRY KEYWORD: REAL ESTATE BUILDING/CONSTRUCTION MERGERS/ACQ SOURCE: Home Properties

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