SAN FRANCISCO--(BUSINESS WIRE)--BRE Properties, Inc. (NYSE:BRE), a leading owner, operator and developer of high-quality apartment communities in targeted growth markets in California and Seattle, announced today the acquisition of Jefferson at Hollywood for a purchase price of $120.5 million. The community of 270 apartment homes is located in the resurgent Hollywood sub-market of Los Angeles, California.
Built in 2010, the Class A community is in an irreplaceable, transit-oriented location in one of California’s most dynamic urban sub-markets, across from the Metro Red Line’s Highland subway station and one-half mile from the Hollywood Freeway (U.S. Route 101). The community has walking access to the neighborhood’s vibrant dining scene, top performing retailers, famous theatres and world-class Hollywood amenities. Recognized as the center of entertainment industry, the Hollywood sub-market has experienced a significant revitalization in recent years with an estimated $4 billion of public and private investment, resulting in increasing demand by employers in the entertainment and media industries for office and studio space.
The community was acquired on an unencumbered basis with proceeds from the Company’s revolving credit facility. In connection with the acquisition, the Company intends to dispose of several slower growth, non-core communities through a reverse like-kind exchange. The exchange is expected to be completed by the first quarter of 2014.
“This transaction is a component of our strategy to improve the Company’s portfolio quality by disposing of non-core communities and recycling capital into our high-barrier, in-fill development pipeline as well as select acquisitions such as Jefferson at Hollywood,” commented Constance B. Moore, President and Chief Executive Officer.
The Jefferson at Hollywood was acquired at a discount to replacement cost and is expected to generate a first-year net operating income-to-purchase price yield of 4.0%.
About BRE Properties
BRE Properties, based in San Francisco, California, focuses on the development, acquisition and management of apartment communities located primarily in the major metropolitan markets of Southern and Northern California and Seattle. As of September 30, 2013, BRE owns 75 multifamily communities (totaling 21,396 homes) and has a joint venture interest in an additional apartment community (totaling 252 homes). BRE Properties is a real estate investment trust (REIT) listed in the S&P MidCap 400 Index. For more information on BRE Properties, please visit our website at www.breproperties.com.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Except for the historical information contained herein, this news release contains forward-looking statements regarding the Company’s capital resources, portfolio performance and results of operations, and is based on the Company’s current expectations and judgment. You should not rely on these statements as predictions of future events because there is no assurance that the events or circumstances reflected in the statements can be achieved or will occur. Forward-looking statements are identified by words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates,” or “anticipates” or their negative form or other variations, or by discussions of strategy, plans or intentions. The following factors, among others, could affect actual results and future events: defaults or nonrenewal of leases, increased interest rates and operating costs, failure to obtain necessary outside financing, difficulties in identifying properties to acquire and in effecting acquisitions, failure to successfully integrate acquired properties and operations, inability to dispose of assets that no longer meet our investment criteria under applicable terms and conditions, risks and uncertainties affecting property development and construction (including construction delays, cost overruns, inability to obtain necessary permits and public opposition to such activities), failure to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended, and increases in real property tax rates. The Company’s success also depends on general economic trends, including interest rates, tax laws, governmental regulation, legislation, population changes and other factors, including those risk factors discussed in the section entitled “Risk Factors” in the Company’s most recent Annual Report on Form 10-K as they may be updated from time to time by the Company’s subsequent filings with the Securities and Exchange Commission, or SEC. Do not rely solely on forward-looking statements, which only reflect management’s analysis. The Company assumes no obligation to update this information. For more details, refer to the Company’s SEC filings, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.