Great deal on 1,387 apartments.

ROCHESTER, NY: Home Properties, Inc. announced that it purchased the Mount Vernon Square apartment community in Alexandria, Virginia with a total of 1,387 units.

The total purchase price of $144.6 million, including closing costs, equates to approximately $104,300 per apartment unit. Consideration included the assumption of $90.7 million in fixed mortgage debt at an interest rate of 5.23% maturing on January 1, 2013 and $53.9 million in cash from proceeds of the Company's sale of its Upstate New York portfolio in December, 2006. The property is currently 93.5% occupied at monthly rents averaging $1,082. Home Properties negotiated a lease with a purchase option agreement for Mount Vernon Square in December, 2004 and has managed the property since then.

David P. Gardner, Home Properties' executive vice president and chief financial officer said, "We are very pleased with the 7.4% cap rate on this transaction given that the range of cap rates in this market today is approximately 5.5% to 6.0%. At the 5.75% midpoint of this cap rate range, Mount Vernon Square's value is closer to $185 million, $40 million more than the actual purchase price."

Mount Vernon Square was built in phases from 1968 to 1974. It consists of 1,387 garden-style apartments in 127 three- and four-story buildings. The property is located in Fairfax County, less than 10 miles south of Washington, D.C. and within easy commuting distance of major employment centers in the area.

The company expects to spend approximately $4.8 million over the next few years to continue capital improvements it began during the time it was the managing agent for the property.

Management anticipates a 7.4% weighted average first year capitalization rate on this acquisition after allocating 3.0% of rental revenues for management and overhead expenses and before normalized capital expenditures of approximately $525 per unit annually.