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Bay Apartment Communities completes acquisition of Rivershore Apartments.

SAN JOSE, Calif.--(BUSINESS WIRE)--May 3, 1995--Bay Apartment Communities (NYSE:BYA) has completed its acquisition of Rivershore Apartments, a 245-apartment home community in Bay Point, Calif., in the San Francisco Bay Area.

Bay announced a definitive agreement for the acquisition in October, 1994 and assumed management of the apartment home community at that time. Due to federal income tax laws regarding tax-exempt bonds and the recent restructuring of Rivershore's tax-exempt bonds, Bay was not able to complete the transaction until after a six month option period.

Bay purchased the community for $13,165,000, including the assumption of approximately $10,700,000 in tax-exempt debt. The Rivershore bonds currently bear interest at an all-in floating interest rate of 6.5 percent and carry a long-term credit enhancement from the Federal National Mortgage Association (FNMA) which Bay will also assume with the purchase. The FNMA credit enhancement provides for a AAA-rated credit enhancement on the bonds until their maturity on December 1, 2022. Bay intends to refinance the bonds and fix the interest rate on them at less than seven percent this summer. The company expects the refinanced bonds to carry a AAA return for 30 years with a fully amortized payment schedule over that period.

Rivershore's current occupancy level is 95.1 percent, up from 93 percent when Bay assumed management of the property. The community had a trailing twelve month return of 8.3 percent. The community contains 44 one-bedroom, one-bath apartments, 145 two-bedroom, two-bath apartments, and 56 three-bedroom, two-bath apartments. It was built in 1985. Bay plans to extensively renovate the community. The approximately $500,000 refurbishing will include exterior painting, new landscaping, construction of a new leasing pavilion and enhanced security features.

Bay Apartment Communities is a fully integrated multifamily real estate investment trust focused on the acquisition, development and management of high quality apartments in Northern California. The company owns and manages 23 apartment communities containing more than 5,400 apartment homes in the San Francisco Bay Area, metropolitan Sacramento and Fresno, Calif.

CONTACT: Bay Apartment Communities

Gilbert M. Meyer, 408/983-1500
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Publication:Business Wire
Date:May 3, 1995
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