CLEVELAND, July 9, 2009 (GLOBE NEWSWIRE) -- Associated Estates Realty Corporation (NYSE:AEC) (Nasdaq:AEC) announced that it completed the sale last month of Chestnut Ridge Apartments, a 468-unit market-rate apartment community located in Pittsburgh, Pennsylvania.
Chestnut Ridge was originally developed in 1986 and acquired by Associated Estates in 1996. The property's physical occupancy at closing was 95.5 percent. The overall sale price of $29.8 million or $63.5 thousand per unit reflects a 7.7% economic cap rate, based on trailing 12 month net operating income, after $500 per unit in capital expenditures and a three percent management fee. Marcus and Millichap acted as real estate broker to the Company.
"Our ability to complete the sale of Chestnut Ridge in an extremely difficult transaction environment at an attractive cap rate underscores the quality of our portfolio and the defensive nature of our suburban locations. The increased level of capital investment in our properties in the last few years aggregated with our continued focus on the fundamentals of property management was reflected in the high level of buyer interest in Chestnut Ridge," said John Shannon, Senior Vice President of Operations.
Net proceeds from the sale of approximately $28.5 million were primarily used to reduce the amount borrowed on the Company's unsecured revolving credit facility. As of June 30, 2009 the Company had $10.0 million outstanding on its $150.0 million unsecured revolving credit facility.
Associated Estates Realty Corporation (AEC), based in Richmond Heights, Ohio, is a real estate investment trust ("REIT") and is a member of the Russell 2000. Associated Estates' portfolio consists of 50 properties totaling 12,451 units in eight states. For more information about the Company, please visit its website at www.associatedestates.com.
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