CLEVELAND, Sept. 19 /PRNewswire-FirstCall/ -- Associated Estates Realty
Corporation (NYSE: AEC) announced today completion of the previously
announced $132.2 million refinancing of loans on five properties located in
Florida and Maryland. The interest rates on the new loans are fixed at 6.09
percent for terms of seven years.
The proceeds from the refinancing were used to:
- defease the existing mortgages on the five properties, which principal
balances totaled $67.6 million.
- prepay, in full, $54.6 million of debt on three other properties
located in Florida and Ohio.
- fund defeasance costs associated with the defeasance of the five loans,
pay transactions costs and for other general corporate purposes.
On an annualized basis, interest savings from this transaction are
estimated to be approximately $1.1 million, as the average interest rates
on the eight loans either defeased or prepaid was approximately 7.5
percent.
"This is an important step in our plan to reduce the overall cost of
our debt and to improve our operating cash flow," said Lou Fatica, vice
president, chief financial officer and treasurer. The Company noted that
its previously announced FFO guidance for 2006 already reflected the impact
of this transaction.
Based in Richmond Heights, Ohio, Associated Estates Realty Corporation
is one of the largest multifamily real estate investment trusts (REITs) in
the nation. The Company directly or indirectly owns, manages or is a joint
venture partner in 103 multifamily properties containing a total of 21,348
units located in 10 states. For more information about the Company, please
visit its website at: http://www.aecrealty.com.
Safe Harbor Statement
This news release contains forward-looking statements based on current
judgments and knowledge of management, which are subject to certain risks,
trends and uncertainties that could cause actual results to vary from those
projected, including but not limited to, expectations regarding the
Company's 2006 performance, which are based on certain assumptions.
Accordingly, readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date of this news
release. These forward-looking statements are intended to be covered by the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The words "expects," "projects," "believes," "plans," "anticipates,"
and similar expressions are intended to identify forward-looking
statements. Investors are cautioned that the Company's forward-looking
statements involve risks and uncertainty, that could cause actual results
to differ from estimates or projections contained in these forward-looking
statements, including without limitation the following: changes in the
economic climate in the markets in which the Company owns and manages
properties, including interest rates, the ability of the Company to
consummate the sales of properties pursuant to its current plan, the
overall level of economic activity, the availability of consumer credit and
mortgage financing, unemployment rates and other factors; risks of a
lessening of demand for the multifamily units owned or managed by the
Company; competition from other available multifamily units and changes in
market rental rates; increases in property and liability insurance costs;
changes in real estate taxes and other operating expenses (e.g., cleaning,
utilities, repair and maintenance costs, insurance and administrative
costs, security, landscaping, staffing and other general costs); weather
and other conditions that might adversely affect operating expenses;
expenditures that cannot be anticipated such as utility rate and usage
increases, unanticipated repairs, and real estate tax valuation
reassessments or millage rate increases; inability of the Company to
control operating expenses or achieve increases in revenues; the results of
litigation filed or to be filed against the Company; changes in tax
legislation; risks of personal injury claims and property damage related to
mold claims because of diminished insurance coverage; catastrophic property
damage losses that are not covered by the Company's insurance; risks
associated with property acquisitions such as environmental liabilities,
among others; changes in government regulations affecting properties the
rents of which are subsidized and certain aspects of which are regulated by
the United States Department of Housing and Urban Development ("HUD") and
other properties owned by the Company; inability to renew current contracts
with HUD for rent-subsidized properties at existing rents; changes in or
termination of contracts relating to third party management and advisory
business; risks related to the Company's joint ventures; and risks related
to the perception of residents and prospective residents as to the
attractiveness, convenience and safety of the Company's properties or the
neighborhoods in which they are located.
SOURCE Associated Estates Realty Corporation
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Related links:
http://www.aecrealty.com/
CONTACT:
Kimberly Kanary, Investor Relations and
Corporate Communications of Associated Estates Realty
Corporation, +1-216-797-8752, or kkanary@aecrealty.com
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