Sale Brings Associated Estates Closer to Exit From Affordable Housing Sector
- Mar 20, 2008
Six months after announcing its plan to empty its portfolio of affordable housing properties, Associated Estates Realty Corp. has taken a big step toward fulfilling its goal with the disposition of 10 of its 11 affordable housing assets, all of which are located in Ohio.The multi-family REIT will make its final departure from the low-income property business with the sale of the last remaining apartment community, which is currently under contract.A private regional buyer snapped up the 995-unit portfolio, which had an average occupancy rate of 99 percent as of the close of 2007. The communities are between 26 and 43 years old. In addition to removing itself from the affordable housing ownership game, Associated discontinued its third-party management activities in the sector. The company had previously managed 30 Low Income Housing Tax Credit Section 8 and Section 202 affordable properties totaling 4,816 units in Florida, Ohio and Pennsylvania; as of Jan. 1, the company had relinquished management responsibilities at all but one of the communities.Associated plans to use the proceeds from the transaction to either finance future acquisitions, pay down debt or address other corporate pursuits. With regard to its remaining portfolio, which now consists solely of market-rate apartment properties, the company will focus on higher growth markets including Florida, Atlanta and the Greater Washington, D.C., area, and will make approximately $100 million in purchases this year.Headquartered in the Cleveland suburb of Richmond Heights, Ohio, Associated owned or managed 64 properties, including the affordable housing assets, accounting for an aggregate 14,450 units in eight states as of the end of 2007. Its portfolio also includes 78 acres of undeveloped land in Ohio and Michigan. Company stock opened at $11.20 today.