San Francisco-based BRE Properties Inc. has sold 4,909 apartment units in three cities for $280 million as part of a plan to invest in core Western U.S. markets. In the sale, 22 apartment communities in Las Vegas; Tucson, Ariz.; and Albuquerque, N.M., were sold to an affiliate of DRA Advisors Inc., a New York-basedconsulting firm. DRA is contributing sale assets to a joint venture in which BRE will retain an interest.
In its new business plan, BRE will focusand acquisition efforts in its core markets of San Francisco, Los Angeles, San Diego, Seattle and Denver. As part of the growth plan, BRE has promoted CFO LeRoy Carlson to CEO, and appointed Edward Lange as CFO.
Due to the sale, BRE will record a one-time loss of approximately $35 million in the third quarter. However, the company expects growth earnings from existing assets and operations in its core markets to offset short-term earnings losses.
The venture will be capitalized with a $180 million first mortgage provided by Washington, D.C.-based Freddie Mac; $20 million in mortgages; investments of $68 million from DRA; and $12 million from BRE.