ARLINGTON, Va., Dec. 22 /PRNewswire/ -- Charles E. Smith Residential
Realty, Inc.(NYSE: SRW), one of the country's leading multifamily real estate
investment trusts, announced today that it has agreed to acquire a portfolio
of four apartment properties totaling 2,444 units. All of the properties are
located in the Chicago, Illinois area in well established submarkets with high
barriers to entry, exceptionally low vacancy rates, and virtually no new
starts permitted. The four properties will be exchanged for $137 million,
which will include over $30 million in operating partnership units (price
range $31 to $35 per unit), plus closing costs and debt assumption. Smith
Residential also plans to make substantial renovations to the properties over
the next few years, to enable rent increases consistent with the tight Chicago
market. Closing on two of the assets, totaling 566 units, is expected early
in 1999, with the remaining properties to settle by mid-year 1999. The
addition of these properties will increase Smith Residential's portfolio of
properties owned and under construction in the Chicago market to 4,634 units,
making it the largest REIT apartment owner in that market.
"This acquisition is an excellent strategic expansion of our portfolio,"
said Ernest Gerardi, Jr., President of Charles E. Smith Residential. "The
addition of these properties increases our critical mass in the strong Chicago
market, and will further improve our operating efficiencies. Chicago is an
excellent market for us with strong diversified economic growth and
significant constraints on new multifamily rental development, both downtown
and in the nearby suburban submarkets. By renovating these properties we
expect to be able to capture substantially higher value in this tight market."
Mr. Gerardi continued, "This transaction is also another example of a
local property owner/operator recognizing the strength of our company and
strategy by taking a substantial portion of the exchange in operating
partnership units. Considering that we only entered the Chicago market a
little over a year ago, we are extremely pleased that we have been able to
establish such a strong market position -- and reputation -- this quickly."
The properties to be acquired include: Parkwest, a 139-unit high-rise
property in the Lincoln Park section of Chicago; The Terrace, a 427-unit
property near O'Hare Airport in Elk Grove; Countryside, a 720-unit property in
Palatine; and Somerset, a 1,158 unit property in Glendale Heights. All were
constructed between 1968 and 1972 and all are in well-established, high-
occupancy submarkets with extremely limited opportunity for new competitive
development.
Charles E. Smith Residential Realty Inc. is a self-managed real estate
investment trust listed on the New York Stock Exchange (SRW). The Company and
its subsidiaries acquire, develop, and manage multi-family residential
properties; and in addition, provide a full range of real estate services to
other property owners. The Company owns a portfolio of approximately 20,000
apartments units, has over 3,400 units under construction or pre-purchase
agreement, and manages an additional 3,500+ units for other owners. The total
market capitalization of Charles E. Smith Residential Realty, including its
Operating Partnership, is approximately $1.9 billion. Investor information
including press releases about Charles E. Smith Residential Realty is
available on the Company's Web site at http://www.smithreit.com, and also
through PR Newswire "News on Call" by fax 800-758-5804, ext. 101271, or at:
http://www.prnewswire.com.
This news release contains forward-looking statements regarding the
Company's outlook, including statements of goals, intentions, and expectations
regarding or based on assumptions about general economic and market
conditions, competitive dynamics and other factors that, by their nature, are
subject to significant uncertainties, some of which are discussed in the
Company's filings with the Securities and Exchange Commission. Because of
these uncertainties, and the assumptions on which statements in this release
are based, actual future results may differ materially.
SOURCE Charles E. Smith Realty, Inc.
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Related links:
http://www.smithreit.com
CONTACT:
John Kurtz, media, 703-769-1153, or Greg
Samay, investors, 703-769-1029, both of Charles E. Smith Realty,
Inc.
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