AVALONBAY COMMUNITIES, INC. (NYSE:AVB) announced today that it
purchased Verona Apartments, a community of 220 homes in downtown
Bellevue, WA, on behalf of its secured investment management fund,
AvalonBay Value Added Fund II, L.P. (“Fund II”). The acquisition price
was $33.1 million (or $150,500 per home), reflecting a discount of
approximately 45% below the Company’s estimate of replacement cost.
Built in 1994, the community is a four story mid-rise over two levels of
parking and is located near the Company’s existing Avalon Bellevue
community. Verona provides easy access to I-405 and over 12 million
square feet of retail, entertainment and office space in downtown
Bellevue.
Fund II is a private, discretionary investment vehicle with total equity
commitments of $400 million (including a $125 million equity commitment
from AvalonBay). Fund II can employ leverage of up to 65%, allowing for
an investment capacity of approximately $1.1 billion. Fund II has a term
of ten years, plus two one-year extension options. The acquisition of
Verona Apartments is Fund II’s first investment.
The Company is actively seeking new acquisition opportunities. Fund II’s
investment strategy is to acquire and operate multifamily apartment
communities primarily in AvalonBay's high barrier-to-entry markets of
the Northeast, Mid-Atlantic, Midwest, and West Coast regions of the U.S.
with the objective of creating value through redevelopment, enhanced
operations and/or pricing efficiency. Fund II will serve as the
exclusive vehicle through which AvalonBay will acquire apartment
communities for a period of three years from the initial closing date of
August 26, 2008 or until 90% of its committed capital is invested,
subject to limited exceptions. Fund II will not include or involve
AvalonBay's development activities.
About AvalonBay Communities, Inc.
As of March 31, 2009, the Company owned or held a direct or indirect
ownership interest in 173 apartment communities containing 50,291
apartment homes in ten states and the District of Columbia, of which 12
communities were under construction and seven communities were under
reconstruction. AvalonBay is in the business of developing,
redeveloping, acquiring, and managing apartment communities in high
barrier-to-entry markets of the United States. More information on
AvalonBay, an S&P 500 company, may be found on the Company’s Web site at http://www.avalonbay.com.
Copyright © 2009 AvalonBay Communities, Inc. All Rights Reserved
AvalonBay Communities, Inc.
Lili F. Dunn
Senior Vice
President Investments
703-317-4643
