7/1/2014 | By Sarah Borchersen-Keto
Home Properties is celebrating the 20th anniversary of its listing on the New York Stock Exchange. Pettinella reflected on what the milestone means for the company.
“It’s a huge accomplishment,” he said. Pettinella said the company remains true to the original vision of its founders, namely to buy C-quality assets and upgrade them to B-quality. Today, Home Properties has a market capitalization of about $6.5 billion, Pettinella noted, with approximately 43,000 apartment units, compared with 2,000 units two decades ago.
“Overall, it’s been a great ride,” he said.
Pettinella pointed to a number of events that he feels transformed the overall direction of the company. One was the shift from low-barrier markets in upstate New York to high-growth, high-barrier markets in 10 states on the East Coast and Chicago.
The company also decided to leave the Rust Belt, explained Pettinella, referring to the Home Properties’ former holdings in Detroit, upstate New York and the Ohio Valley.
Meanwhile, Home Properties transitioned from a “secure shop” that borrowed completely from the government-sponsored enterprises (GSEs) to a company with investment-grade ratings, Pettinella said. He noted that the company expects to receive a BBB rating from Standard & Poor’s in August.
Pettinella also discussed the outlook for acquisitions and dispositions at his company, which has stated that it expects to spend at least $250 million on acquisitions in 2014.Home Properties’ geographic areas of interest include Philadelphia, northern New Jersey, Boston and Chicago, Pettinella said.
“Acquisitions are prevalent and we’re very aggressively going after them,” he said.
With respect to dispositions, the company did a large deal in January and expects to do another $140 million of sales this year, Pettinella said.
“That will be predicated on when we do the acquisitions,” Pettinella explained. “It should be a pretty busy year in both acquisitions and dispositions.”