Denver-based Apartment Investment and Management Co. (NYSE: AIV) will acquire 100 percent ownership of 11 garden and mid-rise apartment properties with 4,323 apartments located in the Boston area for $500 million.
The real estate investment trust is purchasing the properties from Thomas J. Flatley.
The pro forma average monthly rent for these established communities is $1,263 and the units average 945 square feet in size. Weighted average occupancy for the portfolio is currently 94.6 percent.
"These are very solid properties that make a great addition to the AIMCO portfolio," said Terry Considine, AIMCO chairman and CEO in a released statement.
The total cost of the acquisition will include $500 million for the properties, $6.2 million of initial capital expenditures and $2.5 million in transaction costs. AIMCO will fund this total through borrowing from two institutional lenders, $308.7 million in property debt with fixed interest rates averaging 5.69 percent and with full amortization over 20-year terms. The remainder of the purchase price will be funded initially from AIMCO's credit facility. AIMCO expects to repay the short-term debt from internal operating cash flows and with proceeds from the sale of lower rated properties.
AIMCO currently has more than 200 properties, with more than 38,000 units, in the process of being sold. AIMCO says it expects to complete these dispositions over the next 12 to 15 months with cash proceeds, after the repayment of related property debt and distributions to partners, approximating $300 million. On Aug. 9, AIMCO had $374 million available to borrow on its $400 million credit facility.