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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-13136
HOME PROPERTIES OF NEW YORK, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 16-1455126
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
850 CLINTON SQUARE
ROCHESTER, NEW YORK 14604
(Address of principal executive offices)
Registrant's telephone number, including area code: (716) 546-4900
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------
Common Stock, $.01 par value New York Stock Exchange
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
The aggregate market value of the shares of common stock held by non-affiliates
(based upon the closing sale price on the New York Stock Exchange) on March 21,
2001 was approximately $604,038,813. As of March 21, 2001, there were 21,941,112
shares of common stock, $.01 par value outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The proxy statement to be issued in connection with the Company's 2001 Annual
Meeting of Stockholders is incorporated by reference into Items 11, 12 and 13 of
Part III of this Report.
HOME PROPERTIES OF NEW YORK, INC.
TABLE OF CONTENTS
PART I.
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 4A. Executive Officers and Key Employees
PART II.
Item 5. Market of the Registrant's Common Equity and Related
Shareholder Matters
Item 6. Selected Financial and Operating Information
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
PART III.
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Item 13. Certain Relationships and Related Transactions
PART IV.
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K
PART I
ITEM 1. BUSINESS
THE COMPANY
Home Properties of New York, Inc. ("Home Properties" or the "Company")
is a self-administered and self-managed real estate investment trust
("REIT") that owns, manages, acquires, rehabilitates and develops
apartment communities. The Company's properties are regionally focused
in the Northeastern, Mid-Atlantic and Midwestern United States. It was
formed to continue and expand the operations of Home Leasing
Corporation ("Home Leasing"). The Company completed an initial public
offering of 5,408,000 shares of common stock (the "IPO") on August 4,
1994.
The Company conducts its business through Home Properties of New York,
L.P. (the "Operating Partnership"), a New York limited partnership in
which the Company held a 62.5% partnership interest as of December 31,
2000 (62.4% at December 31, 1999) and two management companies (the
"Management Companies") - Home Properties Management, Inc. ("HP
Management") and Home Properties Resident Services, Inc. ("HP Resident
Services") (formerly Conifer Realty Corporation), both of which are
Maryland corporations.
Home Properties, through its affiliates described above, as of December
31, 2000, operated 319 communities with 50,912 apartment units. Of
these, 39,041 units in 147 communities are owned outright (the "Owned
Properties"), 8,325 units in 136 communities are managed and partially
owned by the Company as general partner, and 3,546 units in 36
communities are managed for other owners (collectively, the "Managed
Properties"). The Management Companies and the Operating Partnership,
to a limited extent, are also involved in certain development
activities.
The Owned Properties and the Managed Properties (collectively, the
"Properties") are concentrated in the following market areas:
APARTMENTS OWNED AND MANAGED AT 12/31/00
APTS. MANAGED
APTS. AS APTS. APT.
MARKET AREA OWNED GENERAL PARTNER FEE MANAGED TOTALS
----------- ----- --------------- ----------- ------
Baltimore, MD 6,787 0 2,055 8,842
Eastern, PA 6,276 0 0 6,276
Detroit, MI 5,693 0 108 5,801
Rochester, NY 2,975 1,686 700 5,361
Northern, NJ 2,657 352 0 3,009
Northern VA/DC Area 2,591 0 103 2,694
Buffalo, NY 2,519 156 119 2,794
Chicago, IL 2,018 0 0 2,018
Syracuse, NY 1,564 1,333 199 3,096
Central VA 1,244 0 0 1,244
Long Island, NY 1,184 0 0 1,184
Hudson Valley, NY 911 299 0 1,210
South Bend, IN 706 168 0 874
Portland, ME 596 0 0 596
Hamden, CT 498 0 0 498
Delaware 432 0 0 432
Columbus, OH 242 1,124 0 1,366
Western PA 148 2,077 177 2,402
Other NYS Areas 0 1,130 85 1,215
---------- ----- ------- -------
TOTAL # OF UNITS 39,041 8,325 3,546 50,912
====== ===== ===== ======
Total Number of Communities 147 136 36 319
The Company's mission is to provide investors with dependable financial
returns that exceed those of comparable investments. The Company
intends to pursue this mission in a socially responsible manner, by
remaining committed to improving the quality of life for its residents,
enhancing the broader communities in which the Company operates and
providing employees with opportunities for growth and accomplishment.
The Company's business strategy includes: (i) aggressively managing and
improving its communities to achieve increased net operating income;
(ii) acquiring additional apartment communities with attractive returns
at prices significantly below replacement costs; and (iii) maintaining
a conservative capital structure with cost effective access to the
capital markets.
STRUCTURE
The Company was formed in November, 1993 as a Maryland corporation and
is the general partner of the Operating Partnership. On December 31,
2000, it owned a 62.5% interest in the Operating Partnership - one
percent as general partner and the remainder as a limited partner
through its wholly owned subsidiary, Home Properties Trust. A portion
of the limited partner interests held by Home Properties Trust as of
December 31, 2000 consisted of all of the Class A Limited Partnership
Interests (1,666,667 interests or 3.9% of the total interests in the
Operating Partnership), all of the Series B Limited Partnership Units
(2,000,000 units or 4.7% of the total) and all of the Series C, D, and
E Limited Partnership Units (1,150,000 units, or 2.7% of the total).
Those preferred interests in the Operating Partnership have rights and
preferences that mirror the rights and preferences of the holders of
the related series of preferred shares in the Company held by the State
of Michigan Retirement Systems, GE Capital Equity Investment, Inc., an
affiliate of Prudential Real Estate Investors, Teachers Insurance and
Annuity Association of America, affiliates of AEW Capital Management
and Pacific Life Insurance Company, and The Equitable Life Assurance
Society of the United States. The remaining units (21,143,312 or 50.1%
of the total) held by Home Properties Trust have basically the same
rights as the other limited partner interests (the "Units") in the
Operating Partnership. Those other Units are owned by certain
individuals who acquired Units in the Operating Partnership as partial
consideration for their interests in entities owning apartment
communities purchased by the Operating Partnership, as well as certain
officers of the Company.
The Operating Partnership is a New York limited partnership formed in
December, 1993. Holders of Units in the Operating Partnership may
redeem a Unit for one share of the Company's common stock or cash equal
to the fair market value at the time of the redemption, at the option
of the Company. Management expects that it will continue to utilize
Units as partial consideration for a significant portion of its
acquisition properties.
Both of the Management Companies were formed to comply with the
technical requirements of federal income tax laws. Both are Maryland
corporations and, effective January 1, 2001, both have elected to
convert to taxable REIT subsidiaries under the Tax Relief Extension Act
of 1999. HP Management was formed in January, 1994 and HP Resident
Services was formed in December, 1995 under the name Conifer Realty
Corporation. As of December 31, 2000, the Operating Partnership held
95% of the economic interest in both Management Companies, with Nelson
and Norman Leenhouts (the "Leenhoutses") holding the remaining five
percent interest. The Management Companies manage, for a fee, certain
of the residential, commercial and development activities of the
Company and provide construction, development and redevelopment
services for the Company.
In September 1997, Home Properties Trust ("QRS") was formed as a
Maryland real estate trust and as a qualified REIT subsidiary, with
100% of its shares being owned by the Company. The QRS has been
admitted as a limited partner of the Operating Partnership and the
Company transferred all but one percent of its interest in the
Operating Partnership to the QRS.
The Company currently has approximately 2,100 employees and its
executive offices are located at 850 Clinton Square, Rochester, New
York 14604. Its telephone number is (716) 546-4900.
OPERATING STRATEGIES
The Company will continue to focus on enhancing the investment returns
of its Properties by: (i) acquiring apartment communities at prices
below new construction costs and repositioning those properties for
long-term growth; (ii) reinforcing its decentralized company
orientation by encouraging employees' personal improvement and by
providing extensive training; (iii) enhancing the quality of living for
the Company's residents by improving the quality of service and
physical amenities available at each community every year; (iv) readily
adopting new technology so that the time and cost spent on
administration can be decreased and the time spent attracting and
serving residents can be increased; (v) continuing to utilize its
written "Pledge" of customer satisfaction that is the foundation on
which the Company has built its name-brand recognition; and (vi)
engaging in aggressive cost controls and taking advantage of volume
discounts, thus benefiting from economies of scale while constantly
improving the level of customer service.
ACQUISITION, SALE AND DEVELOPMENT STRATEGIES
The Company's core strategy is to grow primarily through acquisitions
in geographic regions that have similar climates, easy access to the
Company's headquarters, enough apartments available for acquisition to
achieve a critical mass and minimal investment ownership by other
apartment REITs. Targeted markets also possess other characteristics
similar to the Company's existing markets, including a limited amount
of new construction, acquisition opportunities below replacement costs,
a mature housing stock and stable or moderate job growth. The Company
expects that its growth will be focused in select metropolitan areas
within the Northeast, Mid-Atlantic and Midwestern regions of the United
States, where it has already established a presence. Continued
geographic specialization is expected to have a greater impact on
operating efficiencies than widespread accumulation of properties. The
Company will pursue acquisition of individual properties as well as
larger portfolios. It may also consider strategic investments in other
apartment companies.
The Company is also contemplating the sale of several of its mature
communities. The Company has identified about two dozen communities
with over 5,000 units for potential sale. The total estimated value of
these communities is $200 million. The majority of these communities
are in the Upstate New York markets of Syracuse, Buffalo and Rochester.
Others are spread over several markets, where they are less efficient
to operate due to their remote locations and/or their small size. The
Company will not sell, however, unless it achieves targeted prices at
levels which would allow it to reinvest the proceeds at higher returns,
either by repurchasing shares of the Company's common stock or making
acquisitions with repositioning potential. Several of these properties
were originally acquired through UPREIT transactions, so that sales
will have to be matched with suitable acquisitions using tax deferred
exchanges.
Effective December 31, 2000, the Company sold its affordable housing
development operations to Conifer, LLC. With the growth in the
Company's owned portfolio of market-rate properties, a conclusion was
reached that the affordable development activities required a
disproportionate allocation of financial and management resources. The
Company intends to minimize its involvement in the complex development
and re-development of apartment communities utilizing various
government programs. The Company retained property management
operations for 8,325 apartment units in 136 existing affordable
communities. These activities are expected to generate ongoing
management fees and incentive management fees and participation in
residual value. They also increase the Company's volume purchasing
ability, provide a pipeline for future acquisitions and position the
Company to build market rate or affordable communities when and if
market factors warrant.
FINANCING AND CAPITAL STRATEGIES
The Company intends to adhere to the following financing policies: (i)
maintaining a ratio of debt-to-total market capitalization (total debt
of the Company as a percentage of the market value of outstanding
diluted common stock and Units plus total debt) of approximately 50% or
less; (ii) utilizing primarily fixed rate debt; (iii) varying debt
maturities to avoid significant exposure to interest rate changes upon
refinancing; and (iv) maintaining a line of credit so that it can
respond quickly to acquisition opportunities.
On December 31, 2000, the Company's debt was approximately $833 million
and the debt-to-total market capitalization ratio was 40% based on the
year-end closing price of the Company's stock at $27.9375. The weighted
average interest rate on the Company's mortgage debt as of December 31,
2000 was 7.4% and the weighted average maturity was approximately 11
years. Debt maturities are staggered. As of December 31, 2000, the
Company had an unsecured line of credit facility from M&T Bank of $100
million. This facility is available for acquisition and other corporate
purposes and bears an interest rate at 1.25% over the one-month LIBOR
rate. As of December 31, 2000, there were no outstanding borrowings on
the line of credit.
Management expects to continue to fund a significant portion of its
continued growth by taking advantage of its UPREIT structure and using
Units as currency in acquisition transactions. The Company issued
approximately $59 million worth of Units as partial consideration in
acquisition transactions during 2000.
The Company also intends to continue to structure other creative equity
transactions to raise capital with limited transaction costs. In 2000,
$115 million of Series C, D and E Convertible Cumulative Preferred
Stock ("Series C Preferred", "Series D Preferred" or "Series E
Preferred") was issued in four private sales to Prudential Real Estate
Investors, Teachers Insurance and Annuity Association of America, AEW
Capital Management, Pacific Life Insurance Company, and The Equitable
Life Assurance Society of the United States.
Approximately $57 million was also raised in 2000 under the Company's
Dividend Reinvestment and Direct Stock Purchase Plan (the "Dividend
Reinvestment Plan"). Effective April 10, 2001, the Dividend
Reinvestment Plan will be amended to reduce the discount from the
current market price from 3% to 2%. The maximum amount that can be
invested without the Company's prior permission will also be reduced
from $5,000 to $1,000. These changes were intended to minimize amounts
raised under the Dividend Reinvestment Plan at a time when the
Company's common stock is trading at below the Company's estimate of
net asset value.
In 2000, the Company also announced a 1,000,000 share increase in
management's authorization to buy back the Company's outstanding common
stock. Shares may be repurchased through the open market or privately
negotiated transactions. The Company's strategy is to opportunistically
repurchase shares at a discount to its underlying net asset value,
thereby continuing to build value for long-term shareholders. In 2000,
the Company repurchased 468,600 of its shares of common stock for an
aggregate price of $12,664,000 (an average of $27.03 per share).
COMPETITION
The Company competes with other multifamily developers and other real
estate companies in seeking properties for acquisition, potential
residents and land for development. The Company's Properties are
primarily in developed areas where there are other properties of the
same type which directly compete for residents. The Company, however,
believes that its focus on service and resident satisfaction will
enable it to maintain its historic occupancy levels. The Company also
believes that the moderate level of new construction of multifamily
properties in its markets in 2000 will not have a material adverse
effect on its turnover rates, occupancies or ability to increase rents
and minimize operating expenses. To date, the Company has faced limited
competition in acquiring properties from other REIT's or other
operators from outside the region. The Company may encounter
competition from others as it seeks attractive properties in a broader
geographic area. Given the perceived depth of available opportunities,
management does not believe that increased competition will pose a
significant problem.
MARKET ENVIRONMENT
The markets in which Home Properties operates can be characterized as
stable, with moderate levels of job growth. Occupancies are relatively
high, and new apartment construction activity is low relative to the
existing multifamily rental housing stock. Zoning restrictions, a
scarcity of land and high construction costs make new development
difficult to justify in many of the Company's markets. After
considering the obsolescence of older communities and the conversion of
rental housing to condominiums or co-ops, the Company views the net
increase in the multifamily rental housing stock in the Company's
markets as representing only a fraction of the estimated number of new
units needed to satisfy increased demand.
New construction in the Company's markets for the past two decades has
been limited, with most of the existing housing stock built before
1980. In 2000, Home Properties' markets represented 18% of the total
estimated existing U.S. multifamily housing stock, but only 10% of the
country's estimated net new supply of multifamily housing units.
An analysis of future multifamily supply compared to projected
multifamily demand can indicate whether a particular market is
tightening, softening or in equilibrium. The fourth to last column in
the Multifamily Supply and Demand table on page 9 reflects current
estimated net new multifamily supply as a percentage of new multifamily
demand for the Company's markets and the United States. Net new
multifamily supply as a percent of new multifamily demand for 2000 in
the Home Properties' markets was approximately 49%, compared to a
national average of 98%.
The third to the last column in the Multifamily Supply and Demand table
on page 9 shows the net new multifamily supply as percent of existing
multifamily housing stock. In the Company's markets, net new supply
only represents 0.6% of the existing multifamily housing stock. This
compares to the national average net new multifamily supply estimates
at 1.0% of the multifamily housing stock.
The information on the Market Demographics table on page 8 was compiled
by the Company from the sources indicated on the table. The methods
used includes estimates and, while the Company feels that the estimates
are reasonable, there can be no assurance that the estimates are
accurate. There can also be no assurance that the historical
information included on the table will be consistent with future
trends.
MARKET DEMOGRAPHICS
December December Multifamily
Job Job Units as
Growth Growth 2000 % of 2000
% of 2000 Trailing Trailing December Median Total Multifamily
Owned Number of 12 Months 12 Months Unemployment Home Housing Housing
MSA Market Area Units Households % Change Actual Rate Value Stock (5) Stock (6)
- ----------------------- ----- ---------- --------- ---------- ------------ ------- ------------ -----------
Baltimore, MD 17.4% 950,188 1.6% 19,800 3.7% 129,467 18.5% 188,331
Eastern PA (1) 16.1% 2,069,722 1.1% 28,700 3.3% 135,245 15.4% 344,607
Detroit, MI 14.6% 1,708,276 0.9% 20,100 3.0% 104,648 15.8% 286,501
Rochester, NY 7.6% 411,605 0.9% 5,000 3.7% 99,920 13.3% 58,729
Northern NJ (2) 6.8% 2,057,057 1.3% 34,500 3.1% 223,064 18.4% 409,146
Northern VA/DC 6.6% 1,791,422 2.9% 78,000 5.8% 197,199 30.5% 588,903
Buffalo, NY 6.5% 456,925 0.6% 3,200 4.9% 88,804 10.8% 53,074
Downstate NY (3) 5.3% 1,527,607 1.7% 34,700 2.5% 241,048 14.4% 239,178
Chicago, IL 5.2% 2,895,994 0.8% 33,500 4.2% 157,200 28.2% 873,600
Syracuse, NY 4.0% 275,352 2.1% 7,400 4.3% 86,360 14.9% 45,317
Central/Southern VA 3.2% 959,558 1.5% 18,900 2.0% 108,352 18.7% 195,041
South Bend, IN 1.8% 97,678 (0.2%) (300) 2.7% 74,839 12.7% 13,313
Portland, ME 1.5% 95,473 1.5% 2,300 2.6% 157,013 15.9% 17,498
Hamden, CT 1.3% 199,570 (0.3%) (800) 1.5% 197,237 19.8% 43,427
Delaware 1.1% 219,475 1.7% 5,600 3.9% 137,350 17.5% 40,888
Columbus, OH 0.6% 578,507 1.3% 11,600 2.2% 106,975 19.6% 122,353
Western PA 0.4% 957,066 0.6% 6,200 3.8% 73,424 12.9% 134,599
- ---------------------- ------ ---------- --------- ---------- ------------ ------- ------------ -----------
HOME PROPERTIES
MARKETS 100.0% 17,251,475 1.2% 308,400 3.2% 136,361 17.4% 3,649,699
- ---------------------- ------ ---------- --------- ---------- ------------ ------- ------------ -----------
United States 103,192,376 1.4% 1,821,000 3.9% 110,180 17.7% 20,368,491
(1) Eastern Pennsylvania is defined for this report as Philadelphia, PA MSA &
Allentown-Bethlehem-Easton MSA.
(2) Northern New Jersey is defined for this report as Middlesex-Somerset-
Hunterdon MSA, Bergen-Passaic MSA,
Monmouth-Ocean MSA, & Newark MSA.
(3) Downstate New York is defined for this report as the Hudson
Valley Region of Dutchess Co MSA, Newburgh NY-PA MSA, Putnam &
Ulster Counties; Long Island, NY (Nassau-Suffolk MSA);
Westchester County MSA; & Rockland County MSA.
(4) Western Pennsylvania is defined for this report as Pittsburgh, PA MSA.
(5) Based on 1990 U.S. Census figures.
(6) 2000 MULTIFAMILY HOUSING STOCK = 2000 total housing stock
multiplied by the % of multifamily housing stock in each MSA
market (based on 1990 U.S. Census figures).
SOURCES: BUREAU OF LABOR STATISTICS (BLS); CLARITAS, INC.; US CENSUS BUREAU
- MANUFACTURING & CONSTRUCTION DIV.; NEW YORK STATE DEPARTMENT OF
LABOR, DIV. OF RESEARCH AND STATISTICS.
DATA COLLECTED IS DATA AVAILABLE AS OF MARCH 9, 2001 AND IN SOME CASES
MAY BE PRELIMINARY.
BLS is the principal fact-finding agency for the Federal Government in
the broad field of labor economics and statistics.
Claritas Inc. is a leading provider of precision marketing solutions
and related products/services.
U.S. Census Bureau's parent federal agency is the U.S. Dept. of
Commerce, which promotes American business and trade.
MULTIFAMILY SUPPLY AND DEMAND
Estimated Estimated
Estimated Net New Net New
Estimated Estimated 2000 Multifamily Multifamily
2000 Estimated 2000 New Supply as a Supply as a Expected
New 2000 Net New Multifamily % of New % of the Expected Excess
Supply of Multifamily Multifamily Household Multifamily Multifamily Excess Revenue
MSA Market Area Multifamily Obsolescence(8) Supply(9) Demand(10) Demand Stock Demand(11) Growth
(7) (12)
- ------------------------ ------------- ----------------- ----------- ----------- ------------ ------------ ------------ --------
Baltimore, MD 1,814 942 872 2,443 35.7% 0.5% 1,571 0.8%
Eastern PA (1) 2,545 1,723 822 2,940 28.0% 0.2% 2,118 0.6%
Detroit, MI 2,524 1,433 1,092 2,122 51.4% 0.4% 1,030 0.4%
Rochester, NY 523 294 230 444 51.8% 0.4% 214 0.4%
Northern NJ (2) 4,618 2,046 2,572 4,223 60.9% 0.6% 1,651 0.4%
Northern VA/DC 8,358 2,945 5,414 15,867 34.1% 0.9% 10,453 1.8%
Buffalo, NY 672 265 406 231 175.9% 0.8% (175) (0.3%)
Downstate NY (3) 2,468 1,196 1,272 3,334 38.2% 0.5% 2,062 0.9%
Chicago, IL 8,451 4,368 4,083 6,309 64.7% 0.5% 2,226 0.3%
Syracuse, NY 67 227 (159) 735 (21.7%) (0.4%) 894 2.0%
Central/Southern VA 888 975 (87) 2,354 (3.7%) 0.0% 2,441 1.3%
South Bend, IN 616 67 549 (25) (2168.7%) 4.1% (574) (4.3%)
Portland, ME 39 87 (49) 244 (19.9%) (0.3%) 292 1.7%
Hamden, CT 235 217 18 (106) (16.5%) 0.0% (123) (0.3%)
Delaware 675 204 471 655 71.9% 1.2% 184 0.4%
Columbus, OH 4,260 612 3,648 1,518 240.3% 3.0% (2,130) (1.7%)
Western PA (4) 1,005 673 332 533 62.3% 0.2% 201 0.1%
- ------------------------ ------------- ----------------- ----------- ----------- ------------ ------------ ------------ -----------
HOME PROPERTIES MARKETS 39,758 18,248 21,510 43,546 49.4% 0.6% 22,036 0.6%
- ------------------------ ------------- ----------------- ----------- ----------- ------------ ------------ ------------ -----------
United States 312,001 101,842 210,158 215,032 97.7% 1.0% 4,874 0.0%
(1)-(6) SEE FOOTNOTES PRIOR PAGE
(7) ESTIMATED 2000 NEW SUPPLY OF MULTIFAMILY = Multifamily permits (2000 figures U.S. Census Bureau, Mfg. & Constr.
Div., 5+ permits only) adjusted by the average % of permits resulting in a construction start (estimated at 95%).
(8) ESTIMATED 2000 MULTIFAMILY OBSOLESCENCE = 0.5% of 2000 multifamily housing stock.
(9) Estimated 2000 NET NEW MULTIFAMILY SUPPLY = Estimated 2000 New Supply of Multifamily minus Estimated 2000
multifamily obsolescence.
(10)Estimated 2000 NEW MULTIFAMILY HOUSEHOLD DEMAND = Trailing 12 month job growth (Nonfarm, not seasonally adjusted
payroll employment figures) (12/31/99-12/31/00) multiplied by the
expected % of new household formations resulting from new jobs (66.7%) and the % of multifamily households
in each market (based on 1990 U.S. Census figures).
(11)EXPECTED EXCESS DEMAND = Estimated 2000 New Multifamily Household Demand minus Estimated 2000 Net New
Multifamily Supply.
(12)EXPECTED EXCESS REVENUE GROWTH = Expected Excess Demand divided by 2000 Multifamily Housing Stock. This percentage
is expected to reflect the relative impact that changes in the supply and demand for multifamily housing units
will have on occupancy rates and/or rental rates in each market, beyond the
impact caused by broader economic factors such as inflation
and interest rates.
REGULATION
Many laws and governmental regulations are applicable to the Properties
and changes in the laws and regulations, or their interpretation by
agencies and the courts, occur frequently. Under the Americans with
Disabilities Act of 1990 (the "ADA"), all places of public
accommodation are required to meet certain federal requirements related
to access and use by disabled persons. In addition, the Fair Housing
Amendments Act of 1988 (the "FHAA") requires apartment communities
first occupied after March 13, 1990 to be accessible to the
handicapped. Non-compliance with the ADA or the FHAA could result in
the imposition of fines or an award of damages to private litigants.
Management believes that the Owned Properties are substantially in
compliance with present ADA and FHAA requirements.
Under various laws and regulations relating to the protection of the
environment, an owner of real estate may be held liable for the costs
of removal or remediation of certain hazardous or toxic substances
located on or in its property. These laws often impose liability
without regard to whether the owner was responsible for, or even knew
of, the presence of such substances. The presence of such substances
may adversely affect the owner's ability to rent or sell the property
or use the property as collateral. Independent environmental
consultants have conducted "Phase I" environmental audits (which
involve visual inspection but not soil or groundwater analysis) on
substantially all of the Owned Properties. Phase I audit reports did
not reveal any environmental liability that would have a material
adverse effect on the Company. In addition, the Company is not aware of
any environmental liability that management believes would have a
material adverse effect on the Company. There is no assurance that
Phase I reports would reveal all environmental liabilities or that
environmental conditions not known to the Company may exist now or in
the future which would result in liability to the Company for
remediation or fines, either under existing laws and regulations or
future changes to such requirements.
Under the Federal Fair Housing Act and state fair housing laws,
discrimination on the basis of certain protected classes is prohibited.
Violation of these laws can result in significant damage awards to
victims. The Company has a strong policy against any kind of
discriminatory behavior and trains its employees to avoid
discrimination or the appearance of discrimination. There is no
assurance, however, that an employee will not violate the Company's
policy against discrimination and thus violate fair housing laws. This
could subject the Company to legal actions and the possible imposition
of damage awards.
ITEM 2. PROPERTIES
As of December 31, 2000, the Owned Properties consisted of 147
multifamily residential properties containing 39,041 apartment units.
At the time of the IPO (August 4, 1994), Home Properties owned 11
communities containing 3,065 units and simultaneously with the closing
of the IPO acquired an additional four communities containing 926
units. From the time just prior to the IPO to December 31, 2000, the
Company therefore experienced a compounded annualized growth rate of
49% in the number of apartment units it owned. In 2000, Home Properties
acquired 5,384 apartment units in 22 communities for a total purchase
price of approximately $328 million.
The Owned Properties are generally located in established markets in
suburban neighborhoods and are well maintained and well leased. Average
economic occupancy at the Owned Properties held throughout 1999 and
2000 was 94.7% for 2000. The Owned Properties are typically two and
three story garden style apartment buildings in landscaped settings and
a majority are of brick or other masonry construction. The Company
believes that its strategic focus on appealing to middle income and
senior residents and the quality of the services it provides to such
residents result in low turnover. Average turnover at the Owned
Properties was approximately 41.5% for 2000, which is significantly
below the national average of 65% for garden apartments.
Resident leases are generally for one year terms and security deposits
equal to one month's rent are generally required.
Certain of the Owned Properties secure mortgage loans. See
Schedule III contained herein.
The table on the following pages illustrates certain of the important
characteristics of the Owned Properties as of December 31, 2000.
Communities Wholly Owned
and Managed by Home Properties
(4)
Avg (2) (3) 2000 1999 2000 1999
Apt 2000 2000 Avg Avg Avg Mo Avg Mo
# Age Size % Res. % % Rent Rent 12/31/00
Of In Year (Sq Mature Turn- Occu- Occu- Rate Rate Total Cost
REGIONAL AREA Apts Years Acq Ft) Res. over pancy pancy Per Apt Per Apt (000)
- ------------- ---- ----- ---- ----- ------ ----- ----- ----- ------- ------- ---------
CORE COMMUNITIES (1)
CT-Hamden Apple Hill
Apartments 498 29 1998 789 26% 31% 95% 96% $804 $751 $27,736
IL-Chicago Colonies Apartments 672 27 1998 656 7% 57% 91% 85% 602 568 $28,153
IN-South Bend Candlewood
Apartments 310 16 1998 1,000 12% 61% 91% 90% 660 639 $14,542
MD-Baltimore Carriage House
Apartments 50 35 1998 786 25% 26% 96% 98% 537 513 $1,353
MD-Baltimore Country Village
Apartments 344 30 1998 868 25% 44% 95% 95% 645 609 $15,595
MD-Baltimore Morningside Heights
Apartments 1,050 36 1998 870 7% 40% 93% 93% 617 584 $44,164
MD-Baltimore Rolling Park
Apartments 144 28 1998 1,125 11% 34% 96% 98% 654 606 $6,373
MD-Baltimore Strawberry Hill
Apartments 145 36 1998 780 7% 48% 93% 95% 573 547 $4,326
ME-Portland Mill Co. Gardens 96 50 1998 550 31% 50% 97% 97% 546 506 $2,459
ME-Portland Redbank Village 500 57 1998 836 35% 29% 94% 95% 604 553 $18,124
MI-Detroit Canterbury Square 336 29 1997 789 5% 45% 98% 98% 702 667 $14,782
MI-Detroit Carriage Hill
Apartments 168 35 1998 783 44% 35% 98% 98% 720 687 $7,472
MI-Detroit Carriage Park
Apartments 256 34 1998 777 15% 42% 96% 95% 671 643 $11,323
MI-Detroit Charter Square 494 30 1997 914 2% 48% 97% 98% 773 734 $25,398
MI-Detroit Cherry Hill Club
Apartments 164 29 1998 878 8% 44% 96% 90% 587 561 $6,225
MI-Detroit Cherry Hill Village
Apartments 224 35 1998 742 10% 43% 96% 96% 656 619 $8,701
MI-Detroit Fordham Green 146 25 1997 869 12% 55% 93% 95% 783 745 $7,120
MI-Detroit Golfview Manor 44 42 1997 662 15% 50% 94% 96% 499 475 $743
MI-Detroit Greentrees
Apartments 288 30 1997 863 10% 48% 92% 93% 606 566 $11,011
MI-Detroit Kingsley Apartments 328 31 1997 792 25% 53% 94% 94% 647 617 $15,214
MI-Detroit Oak Park Manor 298 46 1997 887 15% 27% 98% 98% 680 634 $11,415
MI-Detroit Parkview Gardens 483 47 1997 731 7% 44% 95% 92% 563 532 $9,585
MI-Detroit Scotsdale
Apartments 376 26 1997 790 5% 43% 97% 96% 635 602 $14,913
MI-Detroit Southpointe Square 224 30 1997 776 12% 50% 96% 96% 594 565 $6,332
MI-Detroit Stephenson House 128 34 1997 668 20% 59% 93% 96% 634 593 $3,518
MI-Detroit Woodland Gardens 337 35 1997 719 8% 54% 96% 97% 689 659 $14,638
NJ-Northern East Hill Gardens 33 43 1998 695 20% 9% 99% 96% 910 828 $2,095
NJ-Northern Lakeview Apartments 106 32 1998 492 20% 21% 98% 95% 844 780 $6,282
NJ-Northern Oak Manor
Apartments 77 45 1998 775 41% 14% 99% 97% 1,185 1,074 $5,642
NJ-Northern Pleasant View
Gardens Apartments 1,142 33 1998 745 25% 25% 95% 94% 799 739 $60,161
NJ-Northern Pleasure Bay
Apartments 270 30 1998 667 25% 20% 97% 95% 672 635 $9,339
NJ-Northern Royal Gardens 550 33 1997 800 10% 23% 96% 95% 847 796 $26,865
NJ-Northern Towers, The 137 39 1998 916 80% 14% 98% 97% 992 943 $7,889
NJ-Northern Wayne Village 275 36 1998 725 40% 17% 97% 96% 861 804 $16,777
NJ-Northern Windsor Realty 67 48 1998 675 20% 28% 95% 96% 805 747 $4,223
NY-Buffalo Emerson Square 96 31 1997 650 32% 30% 98% 99% 566 546 $3,302
NY-Buffalo Fairways Apartments 32 40 1997 900 25% 41% 98% 97% 683 650 $1,316
NY-Buffalo Garden Village 315 29 1994 850 78% 29% 96% 97% 638 620 $10,812
NY-Buffalo Idylwood 720 31 1995 700 10% 61% 96% 95% 594 577 $23,063
NY-Buffalo Paradise Lane at
Raintree 324 29 1997 676 19% 44% 98% 96% 603 584 $11,243
NY-Buffalo Raintree Island 504 29 1985 704 30% 47% 97% 97% 625 604 $17,355
NY-Buffalo Williamstowne
Village 528 29 1985 708 100% 16% 95% 91% 628 619 $19,406
NY-Downstate Carriage Hill 140 28 1996 845 0% 52% 96% 94% 837 805 $6,064
NY-Downstate Cornwall Park 75 34 1996 1,320 11% 33% 96% 94% 1,194 1,046 $6,293
NY-Downstate Coventry Village 94 26 1998 718 31% 31% 97% 95% 994 910 $4,521
NY-Downstate Lakeshore Villas 152 26 1996 956 25% 40% 93% 97% 708 642 $6,614
NY-Downstate Lake Grove 368 31 1997 879 14% 37% 95% 96% 992 893 $26,081
NY-Downstate Mid-Island Estates 232 36 1997 690 30% 28% 97% 94% 888 827 $12,355
NY-Downstate Mountainside
Apartments 227 28 1998 759 64% 18% 97% 98% 833 789 $9,613
NY-Downstate Patricia Apartments 100 27 1998 770 26% 24% 98% 98% 916 834 $5,699
NY-Downstate Sunset Gardens 217 30 1996 662 14% 42% 89% 93% 646 600 $6,943
NY-Rochester 1600 East Avenue 164 42 1997 800 71% 106% 77% 81% 1,320 1,324 $13,337
NY-Rochester 1600 Elmwood 210 41 1983 891 7% 61% 93% 95% 823 778 $11,510
NY-Rochester Brook Hill 192 29 1994 999 10% 40% 94% 93% 843 812 $10,884
NY-Rochester Finger Lakes Manor 153 30 1983 924 46% 55% 92% 92% 745 712 $8,019
NY-Rochester Hamlet Court 98 30 1996 696 48% 28% 95% 94% 659 635 $3,421
NY-Rochester Hill Court South 95 37 1997 730 50% 26% 97% 96% 607 584 $3,319
NY-Rochester Ivy Ridge
Apartments 135 37 1997 740 42% 44% 96% 95% 603 578 $4,530
NY-Rochester Newcastle
Apartments 197 26 1982 873 28% 57% 91% 96% 719 693 $10,732
NY-Rochester Northgate Manor 224 38 1994 800 29% 55% 86% 91% 650 627 $10,127
NY-Rochester Perinton Manor 224 31 1982 928 37% 32% 96% 96% 764 738 $11,677
NY-Rochester Pines of Perinton 508 24 1998 818 25% 24% 98% 99% 522 515 $9,473
NY-Rochester Riverton Knolls 240 27 1983 911 7% 71% 85% 86% 820 768 $13,651
NY-Rochester Spanish Gardens 220 27 1994 1,030 30% 40% 94% 97% 641 618 $11,955
NY-Rochester Springcreek 82 28 1984 913 50% 29% 98% 97% 569 554 $3,170
NY-Rochester The Meadows 113 30 1984 890 46% 39% 96% 93% 641 615 $5,353
NY-Rochester Woodgate Place 120 28 1997 1,100 5% 67% 96% 96% 727 696 $5,465
NY-Syracuse Candlewood Garden 126 30 1996 855 25% 44% 97% 98% 518 498 $3,545
NY-Syracuse Conifer Village 199 22 1994 499 95% 19% 100% 100% 566 566 $9,307
NY-Syracuse Fairview Heights 210 37 1965 798 5% 111% 94% 95% 780 743 $10,330
NY-Syracuse Harborside Manor 281 28 1995 823 12% 12% 95% 95% 595 576 $9,071
NY-Syracuse Pearl Street 60 30 1995 855 5% 65% 91% 90% 511 488 $1,614
NY-Syracuse Village Green 448 15 1994 908 28% 61% 92% 94% 630 610 $18,115
NY-Syracuse Westminster Place 240 29 1996 913 8% 51% 96% 96% 576 551 $8,160
OH-Columbus Weston Gardens 242 28 1998 804 10% 66% 89% 93% 513 467 $8,040
PA-Eastern Beechwood Gardens 160 34 1998 775 10% 29% 96% 98% 625 599 $4,632
PA-Eastern Cedar Glen
Apartments 110 34 1998 726 60% 27% 92% 96% 462 445 $3,235
PA-Eastern Chesterfield
Apartments 247 28 1997 812 16% 40% 96% 94% 714 664 $12,118
PA-Eastern Curren Terrace 318 30 1997 782 10% 45% 94% 97% 756 707 $15,755
PA-Eastern Executive House 100 36 1997 696 50% 62% 95% 93% 798 724 $5,980
PA-Eastern Glen Manor 174 25 1997 667 30% 37% 96% 97% 616 591 $6,320
PA-Eastern Lansdowne Group-
Karen Court 49 38 1997 844
PA-Eastern Lansdowne Group-
Landon Court 44 31 1997 873
PA-Eastern Lansdowne Group-
Marshall House*(5) 63 72 1997 653 30% 57% 95% 96% 652 627 $9,383
PA-Eastern Lansdowne Group-
Patricia Court 66 33 1997 838
PA-Eastern New Orleans Park 308 30 1997 693 18% 44% 95% 94% 657 612 $14,152
PA-Eastern Racquet Club East
Apartments 467 30 1998 850 15% 40% 96% 95% 802 769 $26,830
PA-Eastern Sherry Lake
Apartments 298 36 1998 811 15% 45% 96% 96% 888 826 $19,594
PA-Eastern Springwood
Apartments 77 27 1997 755 35% 92% 92% 90% 629 595 $2,857
PA-Eastern Valley Park South 384 28 1996 987 25% 55% 96% 95% 792 745 $20,775
PA-Eastern Valley View
Apartments 176 28 1997 769 10% 78% 93% 89% 688 646 $8,171
PA-Eastern Village Square 128 28 1997 795 15% 51% 95% 95% 733 650 $6,291
PA-Western Cloverleaf Village 148 43 1997 716 25% 57% 89% 89% 572 535 $4,616
VA-No. VA/DC Braddock Lee
Apartments 254 46 1998 758 20% 27% 94% 97% 839 780 $14,983
VA-No. VA/DC Park Shirlington
Apartments 294 46 1998 758 12% 27% 96% 97% 872 811 $16,890
Core Communities
Total/Weighted Avg 23,530 33 800 23% 42% 95% 95% $701 $664 $1,038,555
(1)"Core Communities" represents the 23,530 apartment units owned consistently throughout 1999 and 2000.
(2)"Mature Residents" is the percentage of residents aged 55 years or older as of December 31, 2000.
(3)"Resident Turnover" reflects, on an annual basis, the number of moveouts; divided by the total number of apartment units.
(4)"Average % Occupancy" is the average economic occupancy for the 12 months ended December 31, 1999 and 2000.
For communities acquired during 1999 and 2000, this is the average occupancy
from the date of acquisition.
(5)The Lansdowne Group consolidated figures are reflected in the Marshall House line.
Communities Wholly Owned
and Managed by Home Properties
(4)
Avg (2) (3) 2000 1999 2000 1999
Apt 2000 2000 Avg Avg Avg Mo Avg Mo
# Age Size % Res. % % Rent Rent 12/31/00
Of In Year (Sq Mature Turn- Occu- Occu- Rate Rate Total Cost
REGIONAL AREA Apts Years Acq Ft) Res. over pancy pancy Per Apt Per Apt (000)
- ------------- ---- ----- ---- ----- ------ ----- ----- ----- ------- ------- ---------
1999 Acquisition
Communities
DE HP of Newark 432 33 1999 856 10% 0% 89% 95% $592 $551 $20,310
IL-Chicago Colony Apartments 783 28 1999 704 5% 57% 98% 98% 782 744 $43,063
IN-South Bend Maple Lane 396 18 1999 950 15% 66% 90% 95% 629 627 $18,353
MD-Baltimore Bonnie Ridge 966 35 1999 1,023 12% 52% 88% 92% 863 840 $52,986
MD-Baltimore Canterbury
Apartments 618 23 1999 933 15% 47% 97% 96% 628 613 $26,650
MD-Baltimore Country Club
Apartments 150 36 1999 783 5% 49% 92% 92% 623 579 $5,518
MD-Baltimore Doub Meadow 95 20 1999 1,037 2% 44% 98% 98% 587 608 $3,979
MD-Baltimore Falcon Crest 396 32 1999 993 20% 52% 89% 86% 674 649 $16,411
MD-Baltimore Gateway Village 132 12 1999 965 3% 37% 98% 98% 804 770 $8,057
MD-Baltimore Laurel Pines 236 37 1999 680 0% 49% 91% 93% 710 683 $8,535
MD-Baltimore Owings Run 504 6 1999 1,142 5% 47% 93% 95% 860 839 $38,358
MD-Baltimore Pavilion Apartments 432 33 1999 951 42% 30% 95% 97% 1,115 1,096 $33,446
MD-Baltimore Selford Townhomes 102 14 1999 1,115 2% 37% 96% 95% 814 768 $5,834
MD-Baltimore Shakespeare Park 82 18 1999 833 50% 12% 99% 100% 616 600 $3,995
MD-Baltimore Tamarron Apartments 132 14 1999 1,097 4% 34% 99% 98% 875 851 $9,986
MD-Baltimore Timbercroft
Townhomes 284 29 1999 990 25% 14% 100% 93% 623 615 $8,656
MD-Baltimore Village Square 370 33 1999 1,045 8% 19% 97% 98% 704 665 $16,594
MI-Detroit Lakes Apartments 434 14 1999 948 1% 63% 96% 88% 859 810 $27,193
MI-Detroit Springwells Park 303 60 1999 1,014 20% 54% 95% 92% 917 872 $19,497
PA-Eastern Arbor Crossing 134 32 1999 667 25% 31% 96% 98% 659 645 $5,657
PA-Eastern Glen Brook 173 38 1999 689 20% 27% 96% 93% 634 624 $6,849
PA-Eastern Hill Brook Place 274 33 1999 709 11% 35% 97% 92% 652 642 $11,876
PA-Eastern Racquet Club South 103 32 1999 821 15% 38% 93% 88% 668 613 $4,964
PA-Eastern Ridgeway Court 66 28 1999 800 15% 45% 93% 91% 645 610 $2,303
PA-Eastern Ridley Brook 244 39 1999 731 28% 27% 98% 99% 669 649 $10,623
VA-Central Carriage Hill 664 34 1999 949 86% 18% 95% 97% 763 752 $37,790
VA-Central Riverdale 580 36 1999 925 11% 53% 93% 95% 592 575 $16,621
VA-No. VAIDC Manor, The 198 27 1999 844 7% 48% 93% 96% 754 680 $8,360
VA-No. VAIDC Seminary Hill 296 41 1999 884 4% 32% 94% 94% 886 849 $13,947
VA-No. VA/DC Seminary Towers 548 37 1999 875 5% 31% 94% 93% 896 872 $28,273
1999 Total/
Weighted Average 10,127 29 914 17% 40% 94% 94% $759 $711 $514,684
(1)"Core Communities" represents the 23,530 apartment units owned consistently throughout 1999 and 2000.
(2)"Mature Residents" is the percentage of residents aged 55 years or older as of December 31, 2000.
(3)"Resident Turnover" reflects, on an annual basis, the number of moveouts; divided by the total number of
apartment units.
(4)"Average % Occupancy" is the average economic occupancy for the 12 months ended December 31, 1999 and 2000. For
communities acquired during 1999 and 2000, this is the average occupancy
from the date of acquisition.
(5)The Lansdowne Group consolidated figures are reflected in the Marshall House line.
Communities Wholly Owned
and Managed by Home Properties
(4)
Avg (2) (3) 2000 1999 2000 1999
Apt 2000 2000 Avg Avg Avg Mo Avg Mo
# Age Size % Res. % % Rent Rent 12/31/00
Of In Year (Sq Mature Turn- Occu- Occu- Rate Rate Total Cost
REGIONAL AREA Apts Years Acq Ft) Res. over pancy pancy Per Apt Per Apt (000)
- ------------- ---- ----- ---- ----- ------ ----- ----- ----- ------- ------- ---------
2000 Acquisition
Communities
IL-Chicago Blackhawk 371 40 2000 860 10% N/A 96% N/A $753 N/A $17,599
IL-Chicago Cypress Place 192 31 2000 855 0% N/A 100% N/A 635 N/A $10,079
MD-Baltimore Elmwood Terrace 504 28 2000 1038 5% N/A 92% N/A 607 N/A $20,796
MD-Baltimore Old Friends 51 113 2000 834 1% N/A 96% N/A 733 N/A $2,266
MI-Detroit Bayberry 120 34 2000 950 0% N/A 98% N/A 725 N/A $5,852
MI-Detroit Deerfield Woods 144 25 2000 800 4% N/A 98% N/A 679 N/A $5,879
MI-Detroit Hampton Court 182 29 2000 972 0% N/A 89% N/A 577 N/A $6,011
MI-Detroit Macomb Manor 216 32 2000 867 60% N/A 97% N/A 601 N/A $8,914
NY-Downstate Bayview/Colonial 160 34 2000 882 0% N/A 98% N/A 782 N/A $10,069
NY-Downstate Eastwinds 96 35 2000 888 35% N/A 97% N/A 781 N/A $6,039
NY-Downstate Maple Tree 84 50 2000 937 45% N/A 97% N/A 829 N/A $5,283
NY-Downstate Ryder Apartments 24 40 2000 817 35% N/A 96% N/A 850 N/A $1,509
NY-Downstate Southbay Manor 61 41 2000 849 8% N/A 90% N/A 884 N/A $3,097
NY-Downstate Terry Apartments 65 25 2000 722 70% N/A 98% N/A 806 N/A $4,092
PA-Eastern Bryn Mawr 316 50 2000 900 25% N/A 95% N/A 841 N/A $22,950
PA-Eastern Castle Club 158 34 2000 974 24% N/A 98% N/A 697 N/A $10,294
PA-Eastern Devon 628 38 2000 1299 7% N/A 94% N/A 896 N/A $44,975
PA-Eastern Golf Club 399 32 2000 821 7% N/A 93% N/A 808 N/A $26,569
PA-Eastern Malvern 363 30 2000 900 22% N/A 95% N/A 835 N/A $27,629
PA-Eastern Trexler Park 249 27 2000 1000 20% N/A 95% N/A 812 N/A $16,897
VA-No. VA/DC East Meadow 150 30 2000 1035 20% N/A 98% N/A 1,018 N/A $13,118
VA-No. VA/DC Orleans Village 851 33 2000 1040 2% N/A 99% N/A 966 N/A $67,416
2000 Total/
Weighted Average 5,384 38 978 13% N/A 96% N/A $795 N/A $337,333
Owned Portfolio
Total/Weighted Avg 39,041 33 854 20% 41% 94% 94% $723 $684 $1,890,572
(1)"Core Communities" represents the 23,530 apartment units owned consistently throughout 1999 and 2000.
(2)"Mature Residents" is the percentage of residents aged 55 years or older as of December 31, 2000.
(3)"Resident Turnover" reflects, on an annual basis, the number of moveouts; divided by the total number of
apartment units.
(4)"Average % Occupancy" is the average economic occupancy for the 12 months ended December 31, 1999 and 2000.
For communities acquired during 1999 and 2000, this is the average occupancy from the date of acquisition.
(5)The Lansdowne Group consolidated figures are reflected in the Marshall House line.
PROPERTY DEVELOPMENT
Management believes that new construction of market rate multifamily
apartments is not economically feasible in most of its
markets. Therefore, Home Properties' prior development and
redevelopment activities were limited to government-assisted
multifamily housing. In 1996, the Operating Partnership acquired
substantially all of the assets of C.O.F., Inc. (formerly
Conifer Realty, Inc.) and Conifer Development, Inc.
(collectively, "Conifer"), a developer and manager of
government-assisted multifamily housing.
Effective December 31, 2000, the Company sold its affordable housing
development operations to Conifer, LLC. Conifer, LLC is led by Richard
J. Crossed, a former Executive Vice President and director of the
Company. The Company retained property management operations for 8,325
apartment units in 136 existing affordable communities.
The Company has retained the ability to develop new communities, both
affordable and market rate, but does not plan to focus on this
activity. Rather, it plans to engage in development activity only on a
very selective basis.
PROPERTY MANAGEMENT
As of December 31, 2000, the Managed Properties consist of: (i) 8,325
apartment units where Home Properties is the general partner of the
entity that owns the property; (ii) 3,546 apartment units managed for
others; (iii) commercial properties which contain approximately 1.0
million square feet of gross leasable area; (iv) a master planned
community known as Gananda; (v) a 140-lot Planned Unit Development
known as College Greene; (vi) a 202-lot Planned Unit Development known
as Riverton; and (vii) 153 acres of vacant land in Old Brookside, the
development of which, if it occurs, will be managed by HP Management.
Management fees are based on a percentage of rental revenues or costs
and, in certain cases, revenues from sales. The Company may pursue the
management of additional properties not owned by the Company, but will
only do so when such additional properties can be effectively and
efficiently managed in conjunction with other properties owned or
managed by Home Properties.
The table on the following pages details managed communities broken
down by market area.
MANAGED COMMUNITIES BY MARKET AREA
COMMUNITIES MANAGED AS GENERAL PARTNER
# of
COMMUNITY NAME CITY APTS.
UPSTATE NEW YORK
BUFFALO, NY AREA
Linda Lane Apartments Cheektowaga 156
ROCHESTER, NY AREA
200 East Avenue Rochester 77
Abraham Lincoln Rochester 69
Ambassador Apartments Rochester 54
Brown Square Village II Ontario 32
College Greene Senior Apartments N. Chili 110
East Court Apartments Rochester 85
Evergreen Hills Macedon 232
Fort Hill Canandaigua 57
Geneva Garden Apartments Geneva 53
Highland Park Dundee 91
Huntington Park Apartments Rochester 75
Jefferson Park Fairport 69
Lima Manor Apartments Lima 32
Maple Apartments Alfred 24
Monica Place Rochester 21
Nichols Schoolhouse Apartments Nichols 13
Sandy Creek Albion 24
Springside Meadows Apartments West Henrietta 54
St. Bernard's Park Rochester 59
St. Bernard's Park II Rochester 88
St. Michael's Senior Housing Rochester 28
St. Patrick's Apartments Elmira 39
Totiakton Manor Honeoye Falls 56
Village Square Painted Post 75
Walnut Hill Dundee 59
Washington Park Castile 24
YWCA Rochester 86
SYRACUSE, NY AREA
Candlelight Lane Apartments Liverpool 244
Church Street Apartments Port Byron 39
Circle Drive Apartments I Sidney 32
Circle Drive Apartments II Sidney 24
Ellis Hollow Ithaca 100
Greenway Place Apartments Syracuse 43
Lenox Landing Syracuse 32
Linderman Creek Ithaca 56
Macartovin Utica 66
Mayrose Apartments Oneonta 32
Meadowview I Central Square 60
Meadowview II Central Square 46
Meadowview III Central Square 24
Northcliffe Apartments Cortland 58
Norwich Senior Housing Norwich 32
Oak Square Apartments Oneonta 30
Read Memorial Senior Apartments Hancock 28
Schoolhouse Apartments Waterville 56
Schoolhouse Gardens Groton 28
Sherburne Senior Housing Sherburne 29
Wedgewood Apartments Kirkville 70
Wedgewood II Senior Apartments Kirkville 24
Windsor Place Apartments N. Syracuse 180
DOWNSTATE NEW YORK
HUDSON VALLEY NY AREA
Greencourt Apartments Mt. Vernon 76
Hillside Terrace Poughkeepsie 64
South 15th Apartments Mt. Vernon 66
Terrace View Apartments Yonkers 48
Trinity Senior Apartments Yonkers 45
OTHER NEW YORK STATE AREAS
ALBANY, NY AREA
Adam Lawrence Apts Corinth 40
Apple Meadow Village Hudson 48
Apple Meadow Village Hudson 10
Cynthia Meadows Greenwich 36
Louis Apartments Coxsackie 24
Peppertree Apartments Coxsackie 24
Peppertree Park Coxsackie 24
Riverwood Apartments I Stillwater 24
Riverwood Apartments II Stillwater 24
SOUTHERN TIER NY AREA
Arcade Manor Arcade 24
Belmont Village Court Belmont 24
Blairview Apartments Blairsville 42
Bolivar Manor Bolivar 24
Canisteo Manor Canisteo 24
Carrollton Heights Limestone 18
Cattaraugus Manor Cattaraugus 24
Little Valley Estates Little Valley 24
Maple Leaf Apartments Franklinville 24
Portville Manor Portville 24
Portville Square Portville 24
Yorkshire Corners Delevan 24
WATERTOWN, NY AREA
Albert Carriere Apartments Rouses Point 56
Black Brook Senior Housing Au Sable Forks 24
Bonnie View Terrace Apts Wilmington 24
Canton Manor Apartments Canton 30
Champion Apartments West Carthage 32
Champion Apartments II West Carthage 32
Hunters Run Dexter 40
LaFarge Senior Housing Lafargeville 24
Lakeside Manor Apartments Schroon Lake 24
Ledges Evans Mills 100
Maple Ridge Senior Housing Malone 40
Penet Square Apartments Lafargeville 24
Pontiac Terrace Apartments Oswego 70
Roderick Rock Senior Housing Rouses Point 24
Webster Manor Apts Malone 32
WESTERN PENNSYLVANIA
ERIE, PA AREA
Arlington Manor Greenville 48
Brandy Spring Apartments Mercer 40
Bridgeview Apartments Emlenton 36
Connellsville Heights Connellsville 36
Creekside Apartments Leechburg 30
Derry Round House Derry 26
Freedom Apartments Ford City 28
Green Meadow Apartments (Knolls) Pittsburgh 1,072
Greenwood Apartments Mt. Pleasant 36
Harrison City Commons Harrison City 38
Independence Apartments Mt. Pleasant 28
Lake City Apartments Lake City 44
Lake Street Apartments Girard 32
Liberty Apartments Brookville 28
Lincoln Woods Apartments Warren 44
Little Creek (Isabella Estates) Saxonburg 26
Mercer Manor Mercer 26
Millwood Arms Ford City 28
Oswayo Apartments Shinglehouse 18
Parkview Apartments Brookway 24
Rivercourt Apartments Tionesta 18
Scottdale Plaza Apartments Scottdale 22
COMMUNITIES MANAGED AS GENERAL PARTNER
# of
COMMUNITY NAME CITY APTS.
WESTERN PENNSYLVANIA
ERIE, PA AREA - CONTINUED
Seneca Woods Apartments Seneca 40
Sheffield Country Manor Sheffield 24
Silver Maples Apartments Ulysses 24
Summit Manor Cresson 24
Taylor Terrace W. Pittsburgh 30
Tionesta Manor Tionesta 36
Tower View Apartments Tower City 25
Townview Apartments St. Mary's 36
Tremont Station Tremont 24
Washington Street Apartments Conneautville 30
Woodside Apartments Grove City 32
Wright Village Sandy Lake 24
INDIANA
Dunedin Apartments South Bend 168
NORTHERN/CENTRAL OHIO
Briggs/Wedgewood Apartments Columbus 868
Cherrywood Apartments Toledo 176
Sunset West Apartments Conneaut 40
Villas of Geneva Geneva 40
NEW JERSEY
Leland Gardens Plainfield 256
Millstream Apartments Washington 96
Township
TOTAL COMMUNITIES MANAGED
AS GENERAL PARTNER 8,325
COMMUNITIES FEE MANAGED
# of
COMMUNITY NAME CITY APTS.
UPSTATE NEW YORK
BUFFALO, NY AREA
Stonegate Apartments Williamsville 119
ROCHESTER, NY AREA
Bernard Housing Dansville 32
Brown Square Village I Ontario 60
Fight Village Rochester 246
Foster Block Clifton 44
Springs
Glen Valley Apartments Watkins Glen 32
Hudson Housing Rochester 55
Pinehurst Honeoye Falls 68
St. Joseph's Apartments Elmira 66
Towpath Manor Palmyra 65
Towpath Manor II Palmyra 32
SYRACUSE, NY AREA
Academy Court Syracuse 29
Courtyard at James Syracuse 73
Moses DeWitt House Syracuse 37
Seneca Garden Apartments Syracuse 60
OTHER NEW YORK STATE AREAS
ALBANY, NY AREA
Council Meadows Burnt Hills 25
Green Meadow Apts Chester 36
WATERTOWN, NY AREA
Bateman Hotel Lowville 24
WESTERN PENNSYLVANIA
ERIE, PA AREA
Brookville Apartments Brookville 16
Buchanan Court Warren 18
Rose Square Connellsville 11
Rose Terrace Bradford 32
Spring Street Apartments 1 Corry 48
Spring Street Apartments 2 Corry 28
Springboro Country Place Springboro 24
BALTIMORE, MD
2400 Pennsylvania Avenue Washington 103
Allenbee Garden Apartments Forestville 36
Annapolis Roads Apartments Annapolis 282
Chesapeake Bay Apartments Annapolis 108
Dunfield Townhomes Baltimore 312
Fox Hall Baltimore 720
Green Ridge House Greenbelt 101
Hyattsville House Hyattsville 65
Silver Hill Gardens Suitland 324
Towne Crest Apartments Gaithersburg 107
DETROIT, MI
Woodward Heights Apartments Royal Oak 108
TOTAL COMMUNITIES FEE MANAGED 3,546
SUPPLEMENTAL PROPERTY INFORMATION
At December 31, 2000, none of the Properties have an individual net
book value equal to or greater than ten percent of the total assets of
the Company or would have accounted for ten percent or more of the
Company's aggregate gross revenues for 2000.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to certain legal proceedings. All such
proceedings, taken together, are not expected to have a material
adverse effect on the Company's liquidity, financial position or
results of operations. The Company is also subject to a variety of
legal actions for personal injury or property damage arising in the
ordinary course of its business, most of which are covered by
liability insurance. While the resolution of these matters cannot be
predicted with certainty, management believes that the final outcome
of such legal proceedings and claims will not have a material adverse
effect on the Company's liquidity, financial position or results of
operations.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
- ------ -------------------------------------------------
None.
ITEM 4A. EXECUTIVE OFFICERS AND KEY EMPLOYEES
The following table sets forth, as of March 21, 2001, the eight
executive officers and certain of the key employees of the Company,
together with their respective ages, positions and offices.
NAME AGE POSITION
Norman P. Leenhouts 65 Chairman, Co-Chief Executive Officer and Director of Home
Properties, Chairman and Director of HP Management and Chairman
and Director of HP Resident Services
Nelson B. Leenhouts 65 President, Co-Chief Executive Officer and Director of Home
Properties,President, Chief Executive Officer and Director
of HP Management and Director and President of HP Resident Services.
Edward J. Pettinella 49 Executive Vice President and Director of Home Properties
David P. Gardner 45 Senior Vice President and Chief Financial Officer of Home
Properties, HP Resident Services and HP Management
Ann M. McCormick 45 Senior Vice President, General Counsel and Secretary of Home
Properties and HP Management and General Counsel and Secretary of
HP Resident Services
Scott A. Doyle 39 Senior Vice President, Residential Property Management of Home
Properties
Johanna A. Falk 36 Senior Vice President, Information Systems of Home Properties
Robert J. Luken 36 Vice President, Treasurer and Controller of Home Properties, HP
Resident Services and HP Management
William E. Beach 54 Vice President, Commercial Property Management of Home Properties
and HP Management
William L. Brown 57 Vice President, Residential Property Management of Home Properties
Andrew J. Burke 39 Vice President, Marketing
Lavonne R. Childs 38 Vice President, Web Assisted HP Resident Services of Home
Properties
Douglas Erdman 42 Vice President, Residential Property Management of Home Properties
Rhonda Finehout 50 Vice President, Residential Property Management of Home
Properties and HP Resident Services
Timothy A. Florczak 45 Vice President, Education
Gerald B. Korn 54 Vice President, Mortgage Finance of Home Properties
Laurie Leenhouts 44 Vice President, Residential Property Marketing of Home Properties
and HP Management
Paul O'Leary 49 Vice President, Acquisitions and Due Diligence of Home Properties
Bernard J. Quinn 44 Vice President, Residential Property Management of Home Properties
James E. Quinn, Jr. 45 Vice President, Residential Property Management of Home Properties
Alan Regan 37 Vice President, Affordable Housing
Sharon Sanfratello 46 Vice President, Residential Property Management of Home Properties
John E. Smith 50 Vice President, Acquisitions of Home Properties
William C. Stein 50 Vice President, Human Resources
Eric Stevens 45 Vice President, Residential Property Management of Home
Properties and HP Resident Services
Richard J. Struzzi 47 Vice President, Development of Home Properties and HP Management
Robert C. Tait 43 Vice President, Commercial Property Management of Home Properties
and HP Management
Marilyn Thomas 50 Vice President, Residential Property Management of Properties and
HP Resident Services
Information regarding Nelson and Norman Leenhouts and Edward Pettinella
is set forth below under "Board of Directors" in Item 10.
DAVID P. GARDNER has served as Senior Vice President of the Company
since August, 2000, and Vice President and Chief
Financial Officer of HP Management and HP Resident Services
since their inception. Mr. Gardner joined Home Leasing
Corporation in 1984 as Vice President and Controller. In 1989, he
was named Treasurer of Home Leasing and Chief Financial
Officer in December, 1993. From 1977 until joining Home Leasing,
Mr. Gardner was an accountant at Cortland L. Brovitz & Co.
Mr. Gardner is a graduate of the Rochester Institute of Technology and
is a Certified Public Accountant.
ANN M. MCCORMICK has served as Senior Vice President since August,
2000, and Vice President and General Counsel and Secretary of the
Company and HP Management since their inception. She has also served as
Secretary and General Counsel of HP Resident Services since 1998 and as
a Vice President since December, 2000. Mrs. McCormick joined Home
Leasing in 1987 and was named Vice President, Secretary and General
Counsel in 1991. Prior to joining Home Leasing, she was an associate
with the law firm of Nixon, Hargrave, Devans & Doyle. Mrs. McCormick is
a graduate of Colgate University and holds a Juris Doctor from Cornell
University.
SCOTT A. DOYLE has served as Senior Vice President since August,
2000, and Vice President of the Company since 1997. He has
also served as a Vice President of HP Resident Services since
December, 2000. He joined Home Properties in 1996 as a
Regional Property Manager. Mr. Doyle has been in property
management for 17 years. Prior to joining Home Properties he
worked with CMH Properties, Inc., Rivercrest Realty Associates and
Arcadia Management Company. Mr. Doyle is a graduate of
S.U.N.Y. at Plattsburgh, New York.
JOHANNA A. FALK has served as a Senior Vice President since August,
2000, and Vice President of the Company since 1997. She has also served
as a Vice President of HP Resident Services since December, 2000. She
joined the Company in 1995 as an investor relations specialist and is
currently responsible for the Information Systems Department. Prior to
joining the Company, Mrs. Falk was employed as a marketing manager at
Bausch & Lomb Incorporated and Champion Products, Inc. and as a
financial analyst at Kidder Peabody. She is a graduate of Cornell
University and holds a Masters Degree in Business Administration from
the Wharton School of The University of Pennsylvania.
ROBERT J. LUKEN has served as Treasurer of the Company since August,
2000, and Controller since 1996 and as a Vice President
since 1997. He has also served as a Vice President and Controller
of HP Resident Services and HP Management since 1998.
Prior to joining the Company, he was the Controller of
Bell Corp. of Rochester and an Audit Supervisor for
PricewaterhouseCoopers LLP. Mr. Luken is a graduate of St. John
Fisher College and is a Certified Public Accountant.
WILLIAM E. BEACH has served as Vice President of the Company and HP
Management since their inception. He joined Home Leasing in 1972 as a
Vice President. Mr. Beach is a graduate of Syracuse University and is a
Certified Property Manager (CPM) as designated by the Institute of Real
Estate Management.
WILLIAM L. BROWN has served as a Vice President of the Company since
2000. He joined the Company in 1998 when the Company acquired the
multi-family assets owned by the Siegel Organization in Baltimore,
Maryland. Mr. Brown had served as an Executive Vice President of the
Siegel Organization since 1970. He is a graduate of the University of
Baltimore.
ANDREW J. BURKE has served as Vice President of the Company since
February, 2001. He joined the Company in 2000 as Director of Marketing.
Prior to joining Home Properties, he was employed by Xerox Corporation
as a business manager and by Boise Cascade Corporation as a senior
marketing manager. Mr. Burke is a graduate of Bowdoin College and holds
a Masters of Management (MBA) from the J.J. Kellogg Graduate School of
Management, Northwestern University.
LAVONNE R. CHILDS has served as Vice President of the Company since
1997 and as Vice President, Web Assisted HP Resident Services since
August, 2000. She has also served as a Vice President of HP Resident
Services since December, 2000. She joined Home Properties in December
of 1996 as a Regional Property Manager. Mrs. Childs has been in
property management for 15 years. Prior to joining Home Properties, she
worked with Walden Residential, United Dominion Realty Trust and
Winthrop Management.
DOUGLAS F. ERDMAN has served as Vice President of the Company
since 1999. He has also served as a Vice President of HP
Resident Services since December, 2000. Prior to joining Home
Properties, he was President of Community Realty Company,
Inc., a Washington D. C. based real estate firm providing
commercial and multi-family property management, commercial
leasing, brokerage, general contracting, and real estate
development services. Mr. Erdman is a graduate of Towson
University, is a Certified Property Manager (CPM) and holds
real estate brokers licenses in Maryland, Virginia and
Washington D. C. Mr. Erdman serves on the Multi-housing Council of
the Urban Land Institute and on the Board of Directors
of JFGH, an organization of group homes for disabled adults.
RHONDA K. FINEHOUT has served as a Vice President of the Company and HP
Resident Services since 1998. She joined the Company in 1996 as a
regional property manager with responsibilities in market rate, rural
development, low income housing tax credit and fee managed properties.
Ms. Finehout is a graduate of the State University of New York at
Oswego.
TIMOTHY A. FLORCZAK has served as a Vice President of the Company
since its inception. He joined Home Leasing in 1985 as a
Vice President. Prior to joining Home Leasing, Mr. Florczak was
Vice President of Accounting of Marc Equity Corporation.
Mr. Florczak is a graduate of the State University of New York at
Buffalo.
GERALD B. KORN has served as a Vice President and been employed at the
Company since 1998. From 1984 until 1998, he was employed by Rochester
Community Savings Bank in various capacities, including as a Senior
Vice President in charge of the bank's national commercial real estate
portfolio. Prior to 1984, Mr. Korn was employed for 11 years as a FDIC
Bank Examiner. Mr. Korn is a graduate of the Rochester Institute of
Technology.
LAURIE A. LEENHOUTS has served as a Vice President of the Company since
its inception and has been a Vice President of HP Management since
1998. She joined Home Leasing in 1987 and has served as a Vice
President since 1992. Ms. Leenhouts is a graduate of the University of
Rochester. She is the daughter of Norman Leenhouts.
PAUL O'LEARY has served as a Vice President of the Company since its
inception. He joined Home Leasing in 1974 and has served as Vice
President of Home Leasing since 1978. Mr. O'Leary is a graduate of
Syracuse University and is a Certified Property Manager (CPM) as
designated by the Institute of Real Estate Management.
BERNARD J. QUINN has served as Vice President of the Company
since 2000. He joined the Company in 1997 and served as a
Property Manager in the Philadelphia region until 2000 when he
was appointed Regional Leader of the New Jersey region.
Prior to joining the Company, Mr. Quinn was employed by Mill
Creek Realty in Philadelphia. Mr. Quinn is a graduate of
Villanova University.
JAMES E. QUINN, JR. has served as Vice President of the Company and
of HP Resident Services since 1998. He has also served
a Vice President of HP Resident Services since December, 2000. He
joined the Company in 1997 as the regional leader for the
Philadelphia region. Prior to joining the Company, Mr. Quinn was
Vice President of Mill Creek Realty Group. Mr. Quinn is a
graduate of Drexel University.
ALAN REGAN has served as Vice President of the Company since
February, 2001. He joined the Company in 2000 as Director of
Affordable Housing. Prior to joining Home Properties, Mr. Regan
was the Chief Operating Officer with Landsman Development
Corporation. Mr. Regan is a graduate of Fredonia State College.
SHARON SANFRATELLO has served as a Vice President of the Company
since 1998. She joined Home Properties in 1993 as a
property manager. Mrs. Sanfratello has been in property management
for 19 years. Prior to joining Home Properties, Mrs.
Sanfratello worked for Beacon Residential.
JOHN E. SMITH joined Home Properties as Vice President of Acquisitions
in 1997. Prior to joining the Company, Mr. Smith was
general manager for Direct Response Marketing, Inc. and Executive
Vice President for The Equity Network, Inc. Mr. Smith was
Director of Investment Properties at Hunt Commercial Real
Estate for 20 years. He has been a Certified Commercial
Investment Member (CCIM) since 1982, a New York State Certified
Instructor and has taught commercial real estate courses in
four states.
WILLIAM C. STEIN has served Home Properties as a Vice President
since 2000. He joined Home Properties in 2000 as its
Director of Human Resources. Prior to joining the Company, Mr.
Stein was Director of Human Resources for The Gleason
Works. Mr. Stein had previously been Manager of Human Resources for
Unisys Corporation (formerly Burroughs Corporation and
Nu-Kote International). He holds an undergraduate degree in
Psychology from St. John Fisher College and a Masters in Labor
Relations from St. Francis College.
ERIC STEVENS has served as a Vice President of the Company and HP
Resident Services since 1998. He joined the Company in 1996 in
connection with the merger with Conifer. At Conifer, he was a property
manager for 13 years in the affordable housing area, including working
with the Low Income Housing Tax Credit Program, New York State Housing
Finance Agency, New York State Division of Housing and Community
Renewal and the U.S. Department of Housing and Urban Development. Mr.
Stevens is on the Board of Directors of the Housing Council in Monroe
County, Inc. Mr. Stevens is a graduate of Babson College.
RICHARD J. STRUZZI has served as a Vice President of the Company and HP
Management since their inception. He has also served as a Vice
President of HP Resident Services since December, 2000. He joined Home
Leasing in 1983 as a Vice President. Mr. Struzzi is a graduate of the
State University of New York at Potsdam and holds a Masters Degree in
Public School Administration from St. Lawrence University. He is the
son-in-law of Nelson Leenhouts.
ROBERT C. TAIT has served as a Vice President of the Company and HP
Management since their inception. He joined Home Leasing in 1989 and
served as a Vice President of Home Leasing since 1992. Prior to joining
Home Leasing, he was a manufacturing/industrial engineer with Moscom
Corp. Mr. Tait is a graduate of Princeton University, holds a Masters
Degree in Business Administration from Boston University and holds the
Real Property Administrator Degree from the Building Owners and
Managers International Institute. Married to Amy L. Tait, he is the
son-in-law of Norman Leenhouts.
MARILYN THOMAS has served as a Vice President of the Company and HP
Resident Services since 1999. She joined the Company in 1998. Prior to
joining Home Properties, Mrs. Thomas was a Vice President at
Patterson-Erie Corporation for 15 years, working in the affordable
housing, market rate apartment and development areas. Mrs. Thomas is a
licensed Pennsylvania real estate broker and has been a Certified
Property Manager since 1988.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
- ------ -----------------------------------------------------------------
The Common Stock has been traded on the New York Stock Exchange
("NYSE") under the symbol "HME" since July 28, 1994. The following
table sets forth for the previous two years the quarterly high and low
sales prices per share reported on the NYSE, as well as all
distributions paid.
HIGH LOW DISTRIBUTION
1999
First Quarter $26-1/8 $22-15/16 $.48
Second Quarter $29-1/8 $22-1/4 $.48
Third Quarter $28-7/8 $26-1/16 $.48
Fourth Quarter $28-1/8 $24-13/16 $.53
2000
First Quarter $29 $25-3/4 $.53
Second Quarter $30 $26-1/2 $.53
Third Quarter $31-9/16 $28-3/16 $.53
Fourth Quarter $28-15/16 $25-9/16 $.57
As of March 21, 2001, the Company had approximately 5,500 shareholders.
It has historically paid distributions on a quarterly basis in the
months of February, May, August and November. The Credit Agreement
relating to the Company's $100 million line of credit provides that the
Company may not pay any distribution if a distribution, when added to
other distributions paid during the three immediately preceding fiscal
quarters, exceeds the greater of: (i) 90% of funds from operations and
110% of cash available for distribution; and (ii) the amounts required
to maintain the Company's status as a REIT.
Item 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial and operating data on
a historical basis for the Company and should be read in conjunction
with the financial statements appearing elsewhere in this Form 10-K.
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Revenues:
Rental Income $298,860 $217,591 $137,557 $64,002 $42,214
Other Income 20,188 16,872 11,686 5,695 3,456
------- ------- ------- ------- --------
TOTAL REVENUES 319,048 234,463 149,243 69,697 45,670
------- ------- ------- ------ -------
Expenses:
Operating and maintenance 128,034 95,200 63,136 31,317 21,859
General & administrative 13,235 10,696 6,685 2,255 1,482
Interest 56,792 39,558 23,980 11,967 9,208
Depreciation & amortization 52,430 37,350 23,191 11,200 8,077
Loss on available-for-sale
securities - 2,123 - - -
Non-recurring acquisition expense - 6,225 - - -
------- ------- -------- ---------- -----------
TOTAL EXPENSES 250,491 191,152 116,992 56,739 40,626
------- ------- ------- ------ -------
Income before gain (loss) on
disposition of property,
minority interest and
extraordinary item 68,557 43,311 32,251 12,958 5,044
Gain (loss) on disposition of property (1,386) 457 - 1,283 -
-------- ------- ------- ------ -----------
Income before minority interest
and extraordinary item 67,171 43,768 32,251 11,675 5,044
Minority interest 25,715 17,390 12,603 4,248 897
------ ------ ------ ----- ------
Income before extraordinary item 41,456 26,378 19,648 7,427 4,147
Extraordinary item, prepayment
penalties, net of allocation
to minority interest - (96) (960) (1,037) -
------- -------- ------- ------ -----------
Net income before preferred
dividends 41,456 26,282 18,688 6,390 4,147
Preferred dividends (12,178) (1,153) - - -
------- --------- ------- ---------- ----------
Net income available to common
shareholders $29,278 $25,129 $18,688 $6,390 $4,147
======= ======= ======= ====== ======
Net income per common share:
Basic $1.42 $1.34 $1.34 $ .86 $ .74
===== ===== ===== ======= =======
Diluted $1.41 $1.34 $1.33 $ .84 $ .74
===== ===== ===== ======= =======
Cash dividends declared per
common share $2.16 $1.97 $1.83 $ 1.74 $ 1.69
===== ===== ===== ====== ======
Balance Sheet Data:
Real estate, before accumulated
depreciation $1,895,269 $1,480,753 $940,788 $525,128 $261,773
Total assets 1,871,888 1,503,617 1,012,235 543,823 248,631
Total debt 832,783 669,701 418,942 218,846 105,176
Stockholders' equity 569,528 448,390 361,956 151,432 83,030
Other Data:
Funds from Operations (1) $120,854 $89,132 $56,260 $24,345 $13,384
Cash available for distribution $107,300 $78,707 $49,044 $21,142 $11,022
(2)
Net cash provided by operating
activities $127,197 $90,526 $60,548 $27,285 $14,241
Net cash used in investing
activities ($178,445) ($190,892) ($297,788) ($102,460) ($25,641)
Net cash provided by financing
activities $56,955 $71,662 $266,877 $77,461 $12,111
Weighted average number of
shares outstanding:
Basic 20,639,241 18,697,731 13,898,221 7,415,888 5,601,027
Diluted 20,755,721 18,800,907 14,022,329 7,558,167 5,633,004
Total communities owned at end
of period 147 126 96 63 28
Total apartment units owned at
end of period 39,041 33,807 23,680 14,048 7,176
Item 6. SELECTED FINANCIAL DATA (CONTINUED)
-----------------------------------
(1) Management considers funds from operations ("FFO") to be an appropriate
measure of performance of an equity REIT. Effective January 1, 2000 the
National Association of Real Estate Investment Trusts ("NAREIT")
clarified the White Paper definition of FFO as income (loss) before
gains (losses) from the sale of property and extraordinary items,
before minority interest in the Operating Partnership, plus real estate
deprecation. Management believes that in order to facilitate a clear
understanding of the combined historical operating results of the
Company, FFO should be considered in conjunction with net income as
presented in the consolidated financial statements included elsewhere
herein. FFO does not represent cash generated from operating activities
accordance with generally accepted accounting principles and is not
necessarily indicative of cash available to fund cash needs. FFO should
not be considered as an alternative to net income as an indication of
the Company's performance or to cash flow as a measure of liquidity.
For the year ended December 31, 1999, the Company's previously reported
FFO excluded a nonrecurring loss on available-for-sale securities of
$2,123 and a non-recurring acquisition expense of $6,225 in conformance
with the NAREIT definition of FFO calculations then in place ("Original
Definition"). The Company has adopted NAREIT's new FFO calculation,
pursuant to NAREIT's White Paper dated October 1999, which modifies the
FFO calculation to include certain nonrecurring charges ("Clarified
Definition"). Although both FFO calculations are presented in the table
below, the Company believes the comparison of FFO using the Original
Definition represents the best guide to investors of comparable
operations and growth between years.
The calculation of FFO for the previous five years are presented as
follows:
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Net income available to common
Shareholders $29,278 $25,129 $18,688 $6,390 $4,147
Preferred dividends 12,178 1,153 - - -
Minority interest 25,715 17,390 12,603 4,248 897
Extraordinary item - 96 960 1,037 -
Non-recurring expense - 6,225 294 - -
Depreciation from real property(1) 52,297 37,473 23,715 11,387 8,332
Loss from sale of property 1,386 1,666(2) - 1,283 8
---------- ------------ ------------- --------- ------------
FFO (original definition) $120,854 $89,132 $56,260 $24,345 $13,384
Non-recurring expense - (6,225) (294) - -
Loss on available-for-sale
securities (2,123) - -
------------- ---------- ------------- ------------ -------------
- -
FFO (clarified definition) $120,854 $80,784 $55,966 $24,345 $13,384
======== ======= ======= ======= =======
Weighted average common shares/units outstanding:
Basic 35,998.3 31,513.8 22,871.7 11,373.9 6,813.2
======== ======== ======== ======== =======
Diluted 41,128.4 32,044.9 22,995.8 11,516.1 6,845.1
======== ======== ======== ======== =======
(1)Includes amounts passed through from unconsolidated investments.
(2)Includes the loss from disposition of property investment separately
disclosed as loss on available-for-sale securities.
All REITs may not be using the strict White Paper definition for new
FFO. Accordingly, the above presentation may not be comparable to other
similarly titled measures of FFO of other REITs.
Quarterly information on Funds from Operations for the two most recent years is
as follows:
2000 1ST 2ND 3RD 4TH TOTAL
---- --- --- --- --- -----
Funds from Operations before minority
interest $25,407 $29,788 $33,106 $32,553 $120,854
Weighted Average Shares/Units:
Basic 34,123.2 35,846.3 36,820.1 37,261.3 35,998.3
Diluted 37,586.7 40,249.9 43,162.4 43,625.1 41,128.4
1999 1ST 2ND 3RD 4TH TOTAL
---- --- --- --- --- -----
Funds from Operations before minority
interest $16,915 $19,627 $25,189 $27,403 $89,132
Weighted Average Shares/Units:
Basic 27,810.1 28,530.2 34,485.9 35,116.1 31,513.8
Diluted 27,898.4 28,634.8 34,630.9 36,904.1 32,044.9
Item 6. SELECTED FINANCIAL DATA NOTES (CONTINUED)
-----------------------------------------
(2) Cash Available for Distribution is defined as Funds from Operations
less an annual reserve for anticipated recurring, non-revenue
generating capitalized costs of $375 ($350 for 1996-1997 and $300 for
1995) per apartment unit, $94 per manufactured home site and $.25 per
square foot for the 35,000 square foot ancillary convenient shopping
area at Wedgewood, which was sold in 1999. It is the Company's policy
to fund its investing activities and financing activities with the
proceeds of its Line of Credit or new debt or by the issuance of
additional Units in the Operating Partnership.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
- ------ ----------------------------------------------------------------------
OVERVIEW
The following discussion is based primarily on the Consolidated
Financial Statements of Home Properties of New York, Inc. This should
be read in conjunction with the financial statements appearing
elsewhere in this report. Certain capitalized terms, as used herein,
are defined in the Notes to the Consolidated Financial Statements.
The Company is engaged primarily in the ownership, management,
acquisition and development of residential apartment communities in
the Northeastern, Mid-Atlantic and Midwestern United States. As of
December 31, 2000, the Company operated 319 apartment communities with
50,912 apartments. Of this total, the Company owned 147 communities,
consisting of 39,041 apartments, managed as general partner 136
partnerships that owned 8,325 apartments and fee managed 3,546
apartments for affiliates and third parties. The Company also fee
manages 1.0 million square feet of office and retail properties.
This annual report contains forward-looking statements. Although the
Company believes expectations reflected in such forward-looking
statements are based on reasonable assumptions, it can give no
assurance that its expectations will be achieved. Factors that may
cause actual results to differ include general economic and local real
estate conditions, the weather and other conditions that might affect
operating expenses, the timely completion of repositioning activities
within anticipated budgets, the actual pace of future acquisitions, and
continued access to capital to fund growth.
RESULTS OF OPERATIONS
COMPARISON OF YEAR ENDED DECEMBER 31, 2000 TO YEAR ENDED DECEMBER 31,
1999.
The Company owned 95 communities with 23,530 apartment units throughout
1999 and 2000 where comparable operating results are available for the
years presented (the "2000 Core Properties"). For the year ending
December 31, 2000, the 2000 Core Properties showed an increase in
rental revenues of 5.8% and a net operating income increase of 7.6%
over the 1999 year-end period. Property level operating expenses
increased 5.3%. Average economic occupancy for the 2000 Core Properties
increased from 94.6% to 94.7%, with average monthly rental rates
increasing 5.7% to $701.
A summary of the 2000 Core Property net operating income is as follows:
2000 1999 % CHANGE
---- ---- --------
Rent $187,491,000 $177,286,000 5.8%
Property Other Income 7,412,000 5,606,000 32.2%
-------------- -------------- -----
Total Income 194,903,000 182,892,000 6.6%
Operating and Maintenance ( 83,756,000) (79,570,000) (5.3%)
-------------- ------------ ------
Net Operating Income $111,147,000 $103,322,000 7.6%
============ ============ =====
During 2000, the Company acquired a total of 5,384 apartment units in
22 newly-acquired communities (the "2000 Acquisition Communities"). In
addition, the Company experienced full year results for the 10,127
apartment units in 30 apartment communities (the "1999 Acquisition
Communities") acquired during 1999. The inclusion of these acquired
communities generally accounted for the significant changes in
operating results for the year ended December 31, 2000.
The Company also disposed of one property during 2000, a 150-unit
community located in Pittsburgh, Pennsylvania, which had partial
results for 2000 (the "2000 Disposed Community").
For the year ended December 31, 2000, operating income (income before
loss on disposition of property, minority interest and extraordinary
item) increased by $25,246,000 when compared to the year ended December
31, 1999. The increase was primarily attributable to the following
factors: an increase in rental income of $81,269,000 and an increase in
other income of $3,316,000. These changes were partially offset by an
increase in operating and maintenance expense of $32,834,000, an
increase in general and administrative expense of $2,539,000, an
increase in interest expense of $17,234,000, an increase in
depreciation and amortization of $15,080,000 and loss on
available-for-sale securities and non-recurring acquisition expense
totaling $8,348,000 only affecting 1999.
Of the $81,269,000 increase in rental income, $47,376,000 is
attributable to the 1999 Acquisition Communities and $24,204,000 is
attributable to the 2000 Acquisition Communities, offset in part by a
$516,000 reduction attributable to the 2000 Disposed Community. The
balance of $10,205,000 is a 5.8% increase from the 2000 Core Properties
due primarily to an increase of 5.7% in weighted average rental rates,
plus an increase in occupancy from 94.6% to 94.7%.
Property other income, which consists primarily of income from
operation of laundry facilities, administrative fees, garage and
carport rentals net profits from corporate apartments and miscellaneous
charges to residents, increased in 2000 by $4,511,000. Of this
increase, $1,847,000 is attributable to the 1999 Acquisition
Communities, $884,000 is attributable to the 2000 Acquisition
Communities and $1,806,000 represents a 32.2% increase from the 2000
Core Properties, offset in part by a $26,000 reduction attributable to
the 2000 Disposed Community. The increase for the 2000 Core Properties
included a one-time benefit from a favorable insurance settlement of
$239,000. Without this, property other income still increased 28%.
Interest and dividend income increased in 2000 by $654,000, primarily
attributable to an increase in loans to one of its Management Companies
used to acquire land held in inventory for future development, as well
as increased levels of cash reserves invested. Dividend income of
$714,000 in 1999 from investments in marketable securities did not
continue in 2000.
Other income reflects the net contribution from management and
development activities after allocating certain overhead and interest
expense. The net contribution decreased by $1,849,000, or 64% from 1999
to 2000. Gross development fees revenues decreased $1,462,000, and
gross management fee revenues increased $80,000.
Effective December 31, 2000, the Company sold its affordable housing
development operations to the key personnel that ran the division.
While the selling price of approximately $6,700,000 was close to the
book value of the related assets that were sold, after transaction
costs, a loss on sale was incurred of $924,000.
As a result, going forward, development fee income ($4.8 million in
2000) should essentially disappear, with a corresponding decrease in
general and administrative costs of approximately $2.6 million, all
netted and reported in other income. The proceeds from the sale will
temporarily produce increased interest income before those proceeds are
reinvested on a longer term basis in property acquisitions.
Of the $32,834,000 increase in operating and maintenance expenses,
$20,354,000 is attributable to the 1999 Acquisition Communities,
$8,604,000 is attributable to the 2000 Acquisition Communities and a
reduction of $310,000 is attributable to the 2000 Disposed Community.
The balance for the 2000 Core Properties, a $4,186,000 increase in
operating expenses or 5.3%, is primarily a result of increases in gas
utilities, personnel expenses, property insurance and real estate
taxes.
Increases in utility expenses were a large contributor to operating and
maintenance expense increases for the year, and will continue to
unfavorably affect results in 2001. Natural gas prices were very
volatile in 2000. While it has always been the Company's policy to
limit some of its exposure to this volatility by purchasing fixed price
contracts, the Company's past experience has been that this has been
expensive insurance.
Looking back the last ten years, the prices of natural gas has been
relatively stable. Historically, at the beginning of each heating
season, rates experienced some pressures but started settling back down
around January. The 1999/2000 heating season did not follow this same
pattern. Rates continued to climb during the summer months instead of
leveling off. This unusual pattern made it more difficult to execute
fixed price contracts. the Company has previously revised the earnings
outlook for 2001, indicating utility costs will increase by
approximately $5,500,000.
The months of December, 2000 and January, 2001 yielded prices for
natural gas topping out at over $10 per decatherm. For deliveries in
March, 2001 the price has reduced to approximately $5.00 per decatherm.
The Company is planning during March through May of 2001 to negotiate
fixed pricecontracts for close to 90% of its exposure for the 2001/2002
heating season.
Management of the Company remains optimistic that these higher expenses
will eventually be absorbed by our residents. Further rent increases
have been passed on to residents as leases (which typically have a one
year term) are renewed. The greatest opportunity will be during late
spring and summer of 2001, when a large percentage of leases are
scheduled for renewal.
The operating expense ratio (the ratio of operating and maintenance
expense compared to rental and property other income) for the 2000 Core
Properties was 43.0% and 43.5% for 2000 and 1999, respectively. This
0.5% reduction is a result of the 6.6% increase in total rental and
property other income achieved through ongoing efforts to upgrade and
reposition properties for maximum potential. In general, the Company's
operating expense ratio is higher than that experienced in other parts
of the country due to relatively high real estate taxes in its markets
and the Company's practice, typical in its markets, of including
heating expenses in base rent.
General and administrative expenses increased in 2000 by $2,539,000, or
24% from $10,696,000 in 1999 to $13,235,000 in 2000. As the Company
expands geographically, travel and lodging expenses have increased,
along with expenses associated with new and expanding regional offices.
In addition, personnel costs have increased to handle the growing owned
portfolio, which increased in size by 15% as of December 31, 2000
compared to a year ago. The percentage of G&A compared to total revenue
was 4.1% for 2000 compared to 4.6% for 1999.
Interest expense increased in 2000 by $17,234,000 as a result of the
acquisition of the 2000 Acquisition Communities and full year interest
expense for the 1999 Acquisition Communities. The 1999 Acquisition
Communities, costing in excess of $480,000,000, were acquired with
$203,000,000 of assumed debt in addition to the use of UPREIT Units.
The 2000 Acquisition Communities, costing in excess of $322,000,000,
were acquired with $163,000,000 of assumed debt, in addition to the use
of UPREIT Units. In addition, amortization from deferred charges
relating to the financing of properties totaling $566,000 and $516,000
was included in interest expense for 2000 and 1999, respectively.
During 2000, the Company reported a loss on disposition of property of
$1,386,000. This includes $417,000 from the sale of Payne Hill in
Pittsburgh, $924,000 from the sale of the affordable housing
development business and $45,000 from the sale of a small general
partnership interest.
COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO YEAR ENDED DECEMBER 31,
1998.
The Company owned 62 communities with 14,048 apartment units throughout
1998 and 1999 where comparable operating results are available for the
years presented (the "1999 Core Properties"). For the year ending
December 31, 1999, the 1999 Core Properties showed an increase in
rental revenues of 5.3% and a net operating income increase of 9.0%
over the 1998 year-end period. Property level operating expenses
increased 1.7%. Average economic occupancy for the 1999 Core Properties
increased from 94.0% to 94.5%, with average monthly rental rates
increasing 4.8% to $661.
A summary of the 1999 Core Property net operating income is as follows:
1999 1998 % CHANGE
---- ---- --------
Rent $105,388,00 $100,048,000 5.3%
Property Other Income 3,255,000 2,816,000 15.6%
------------- -------------- -----
Total Income 108,643,000 102,864,000 5.6%
Operating and Maintenance ( 48,653,000) ( 47,840,000) ( 1.7%)
------------ ------------- -------
Net Operating Income $59,990,000 $55,024,000 9.0%
=========== =========== ======
During 1999, the Company acquired a total of 10,127 apartment units in
30 newly-acquired communities (the "1999 Acquisition Communities"). In
addition, the Company experienced full year results for the 9,632
apartment units in 34 newly acquired apartment communities (the "1998
Acquisition Communities") acquired during 1998. The inclusion of these
acquired communities generally accounted for the significant changes in
operating results for the year ended December 31, 1999.
The Company also disposed of one property, a 35,000 square foot
ancillary shopping center located adjacent to a multi-family community,
which had partial results for 1999 (the 1999 "Disposed Communities").
For the year ended December 31, 1999, operating income (income before
loss on disposition of property, minority interest and extraordinary
item) increased by $11,060,000 when compared to the year ended December
31, 1998. The increase was primarily attributable to the following
factors: an increase in rental income of $80,034,000 and an increase in
other income of $5,186,000. These changes were partially offset by an
increase in operating and maintenance expense of $32,064,000, an
increase in general and administrative expense of $4,011,000, an
increase in interest expense of $15,578,000 and an increase in
depreciation and amortization of $14,159,000 and a loss on
available-for-sale securities and non-recurring acquisition expense
totaling $8,348,000 not previously incurred.
Of the $80,034,000 increase in rental income, $35,554,000 is
attributable to the 1998 Acquisition Communities and $39,295,000 is
attributable to the 1999 Acquisition Communities, offset in part by a
$155,000 reduction attributable to the 1999 Disposed Community. The
balance of $5,340,000 is a 5.3% increase from the 1999 Core Properties
due primarily to an increase of 4.8% in weighted average rental rates,
plus an increase in occupancy from 94.0% to 94.5%.
Property other income, which consists primarily of income from
operation of laundry facilities, administrative fees, garage and
carport rentals and miscellaneous charges to residents, increased in
1999 by $3,264,000. Of this increase, $1,358,000 is attributable to the
1998 Acquisition Communities, $1,191,000 is attributable to the 1999
Acquisition Communities and $439,000 represents a 15.6% increase from
the 1999 Core Properties, offset in part by a $28,000 reduction
attributable to the 1999 Disposed Community. In addition, $304,000
represents the increase in the net results for limited partnerships
accounted for on the equity method.
Interest and dividend income increased in 1999 by $1,990,000, primarily
attributable to an increase in construction loans and advances made to
affiliated tax credit development partnerships, as well as increased
levels of cash reserves invested. Dividend income of $714,000 and
$147,000 in 1999 and 1998, respectively, from investments in marketable
securities, were not expected to continue into 2000.
Other income reflects the net contribution from management and
development activities after allocating certain overhead and interest
expense. The net contribution decreased by $68,000, or 2% from 1998 to
1999. Increased activities in government assisted housing contributed
to an 11.5% annual increase in gross management and development fee
revenues. These revenue gains were offset by increased outlays to
expand the staff and carrying costs associated with land in inventory
for future development.
Of the $32,064,000 increase in operating and maintenance expenses,
$16,302,000 is attributable to the 1998 Acquisition Communities,
$14,980,000 is attributable to the 1999 Acquisition Communities and a
reduction of $31,000 is attributable to the 1999 Disposed Community.
The balance for the 1999 Core Properties, an $813,000 increase in
operating expenses of 1.7%, is primarily a result of increases in
utility expenses, real estate taxes, and snow removal costs.
The operating expense ratio (the ratio of operating and maintenance
expense compared to rental and property other income) for the 1999 Core
Properties was 44.8% and 46.5% for 1999 and 1998, respectively. This
1.7% reduction is a result of the 5.6% increase in total rental and
property other income achieved through ongoing efforts to upgrade and
reposition properties for maximum potential. In general, the Company's
operating expense ratio is higher than that experienced in other parts
of the country due to relatively high real estate taxes in its markets
and the Company's practice, typical in its markets, of including
heating expenses in base rent. The exposure to savings in heating costs
have been reduced as the number of units in the entire portfolio,
including heat in base rent, has been reduced from 85% at December 31,
1998 to 70% at December 31, 1999.
General and administrative expenses increased in 1999 by $4,011,000, or
60% from $6,685,000 in 1998 to $10,696,000 in 1999. As the Company
expands geographically, travel and lodging expenses have increased,
along with expenses associated with new and expanding regional offices.
In addition, personnel costs have increased to handle the growing owned
portfolio, which increased in size by 41% as of December 31, 1999
compared to a year ago. The percentage of G&A compared to total revenue
was 4.6% and 4.5% for 1999 and 1998, respectively.
Interest expense increased in 1999 by $15,578,000 as a result of the
acquisition of the 1999 Acquisition Communities and full year interest
expense for the 1998 Acquisition Communities. The 1998 Acquisition
Communities, costing in excess of $376,000,000, were acquired with
$81,000,000 of assumed debt in addition to the use of UPREIT Units. The
1999 Acquisition Communities, costing in excess of $480,000,000, were
acquired with $203,000,000 of assumed debt, in addition to the use of
UPREIT Units. Amortization relating to interest rate reduction
agreements of $198,000 and $335,000 was included in interest expense
during 1999 and 1998, respectively. In addition, amortization from
deferred charges relating to the financing of properties totaling
$516,000 and $457,000 was included in interest expense for 1999 and
1998, respectively. Finally, $294,000 of unamortized fees related to a
standby loan facility, which allowed the Company to enter into a
non-contingent contract for a 17 property portfolio acquisition, were
written off during the third quarter of 1998, as the facility was only
partially used and quickly repaid.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal liquidity demands are expected to be
distributions to the common and preferred stockholders and Operating
Partnership unitholders, capital improvements and repairs and
maintenance for the properties, acquisition of additional properties,
stock repurchases and debt repayments. The Company may also engage in
transactions whereby it acquires equity ownership in other public or
private companies that own portfolios of apartment communities.
The Company intends to meet its short-term liquidity requirements
through net cash flows provided by operating activities and the line of
credit. The Company considers its ability to generate cash to be
adequate to meet all operating requirements and make distributions to
its stockholders in accordance with the provisions of the Internal
Revenue Code, as amended, applicable to REITs.
To the extent that the Company does not satisfy its long-term liquidity
requirements through net cash flows provided by operating activities
and the line of credit described below, it intends to satisfy such
requirements through the issuance of UPREIT Units, proceeds from the
Dividend Reinvestment Plan ("DRIP"), property debt financing, or
issuing additional common shares or shares of the Company's preferred
stock. As of December 31, 2000, the Company owned 29 properties, with
4,470 apartment units, which were unencumbered by debt.
In May, 1998, the Company's Form S-3 Registration Statement was
declared effective relating to the issuance of up to $413.8 million
shares of common stock or other securities. The available balance on
the shelf registration statement at December 31, 2000 was $227,390,000.
In September, 1999, the Company completed the sale of $50 million of
Series B Preferred stock in a private transaction with GE Capital. The
Series B Preferred stock carries an annual dividend rate equal to the
greater of 8.36% or the actual dividend paid on the Company's common
shares into which the preferred shares can be converted. The stock has
a liquidation preference of $25.00 per share, a conversion price of
$29.77 per share, and a five-year, non-call provision.
In December, 1999, the Class A limited partnership interests held by
the State of Michigan Retirement Systems (originally issued in
December, 1996 for $35 million) were converted to Series A Convertible
Cumulative Preferred shares ("Series A Preferred") which retain the
same material rights and preferences that were associated with the
limited partnership interests. The conversion had no effect on reported
results of operations and permits the Company to continue to use
favorable tax depreciation methods.
In May and June, 2000, the Company completed the sale of $60 million of
Series C Preferred Stock in a private transaction with affiliates of
Prudential Real Estate Investors ("Prudential"), Teachers Insurance and
Annuity Association of America ("Teachers"), affiliates of AEW Capital
Management and Pacific Life Insurance Company. The Series C Preferred
Stock carries an annual dividend rate equal to the greater of 8.75% or
the actual dividend paid on the company's common shares into which the
preferred shares can be converted. The stock has a conversion price of
$30.25 per share and a five-year, non-call provision. As part of the
Series C Preferred Stock transaction, the Company also issued 240,000
warrants to purchase common shares at a price of $30.25 per share,
expiring in five years.
In June, 2000, the Company completed the sale of $25 million of series
D Preferred Stock in a private transaction with The Equitable Life
Assurance Society of the United States. The Series D Preferred Stock
carries an annual dividend rate equal to the greater of 8.775% or the
actual dividend paid on the Company's common shares into which the
preferred shares can be converted. The stock has a conversion price of
$30 per share and a five-year, no-call provision.
In December, 2000, the Company completed the sale of $30 million of
Series E Preferred Stock in a private transaction, again with
affiliates of Prudential and Teachers. The Series E Preferred Stock
carries an annual dividend rate equal to the greater of 8.55% or the
actual dividend paid on the Company's common shares into which the
preferred shares can be converted. The stock has a conversion price of
$31.60 per share and a five-year, non-call provision. In addition, as
part of the Series E Preferred Stock transaction, the Company issued
warrants to purchase 285,000 common shares at a price of $31.60 per
share, expiring in five years.
In anticipation of the issuance of convertible preferred securities in
May, 2000, the Company obtained an investment grade rating from Fitch,
Inc. The Company was assigned an initial corporate credit rating of
"BBB" (Triple-B), with a rating of "BBB-" (Triple-B Minus) for Series C
through E convertible preferred stock.
The issuance of UPREIT Units for property acquisitions continues to be
a significant source of capital. During 2000, 3,583 apartment units in
eight separate transactions were acquired for a total cost of
$203,000,000, using UPREIT Units valued at approximately $59,000,000
with the balance paid in cash or assumed debt. During 1999, 8,147
apartment units in four separate transactions were acquired for a total
cost of $389,000,000, using UPREIT Units valued at approximately
$149,000,000 with the balance paid in cash or assumed debt.
In 1997, the Company's Board of Directors approved a stock repurchase
program under which the Company may repurchase up to one million shares
of its outstanding common stock. The Board's action did not establish a
target price or a specific timetable for repurchase. At December 31,
1999, there was approval remaining to purchase 795,100 shares. In 2000,
the Board of Directors approved a 1,000,000-share increase in the stock
repurchase program. During 2000, the Company repurchased 468,600 shares
at a cost of $12,664,000. Approval to repurchase 1,326,500 shares of
common stock remains at December 31, 2000. With shares trading at a
significant discount to internal calculations of net asset value of
$32.50 per share, the Company anticipates increasing activity of share
repurchases during 2001.
In November, 1995, the Company established a Dividend Reinvestment
Plan. The Plan provides the stockholders of the Company an opportunity
to automatically invest their cash dividends at a discount of 3% from
the market price. In addition, eligible participants may make monthly
payments or other voluntary cash investments in shares of common stock,
typically purchased at discounts, which have varied between 2% and 3%.
During 1999, $49,000,000 of common stock was issued under this plan,
with an additional $57,000,000 of common stock issued in 2000.
The DRIP has been amended, effective April 10, 2001, in order to reduce
dilution from issuing new shares at or below the underlying net asset
value. The discount on reinvested dividends and optional cash purchases
will be reduced from 3% to 2%. The maximum monthly investment (without
receiving approval from the Company) is being reduced from $5,000 to
$1,000. Management believes that these changes will significantly
reduce participation in the Plan. However, if the volume is still large
after a few months transition period, the Company will shift to
fulfilling investment orders with open market purchases, rather than
continuing to issue new shares.
As of December 31, 2000, the Company had an unsecured line of credit
from M&T Bank of $100,000,000 with no outstanding borrowings.
Borrowings under the facility bear interest at 1.25% over the one-month
LIBOR rate. The line of credit expires on September 1, 2002.
As of December 31, 2000, the weighted average rate of interest on the
Company's mortgage debt is 7.4% and the weighted average maturity of
such indebtedness is approximately eleven years. Mortgage debt of $833
million was outstanding with 99% at fixed rates of interest with
staggered maturities. This limits the exposure to changes in interest
rates, minimizing the effect of interest rate fluctuations on results
of operations and financial condition.
The Company's net cash provided by operating activities increased from
$90,526,000 for the year ended December 31, 1999 to $127,197,000 for
the year ended December 31, 2000. The increase was principally due to
the acquisition of the 1999 and 2000 Acquisition Communities.
Net cash used in investing activities decreased from $190,892,000 in
1999 to $178,445,000 in 2000. The level of properties purchased
decreased in 2000 to $328 million from $487 million, while the amount
of mortgages assumed and UPREIT units issued decreased by $131 million,
such that the net cash invested in properties decreased, accounting for
most of the year over year decrease.
The Company's net cash provided by financing activities decreased from
$71,662,000 in 1999 to $56,955,000 in 2000. The major source of
financing in 2000 was $168,462,000 of proceeds from sales of preferred
and common stock used to fund property acquisitions and additions. In
1999, proceeds from the sale of preferred stock, common stock and net
debt proceeds totaling $145,987,000 were used to fund property
acquisitions and additions.
CAPITAL IMPROVEMENTS
Total capital improvement expenditures increased from $61,034,000 in
1999 to $92,603,000 in 2000. Of the $92,603,000 in total expenditures,
$9,258,000 is attributable to the 2000 Acquisition Communities and
$28,438,000 is attributable to the 1999 Acquisition Communities. The
balance of $54,907,000 is allocated between the 2000 Core Properties of
$54,041,000 and $866,000 for corporate office expenditures.
Recurring, non-revenue enhancing capital replacements typically include
carpeting and tile, appliances, HVAC equipment, new roofs, site
improvements and various exterior building improvements. Funding for
these capital replacements are provided by cash flows from operating
activities. The Company estimates that during 2000, approximately $375
per unit was spent on capital replacements to maintain the condition of
its properties.
The schedule below summarizes the breakdown of capital improvements:
Non-recurring
Recurring Capital Revenue Enhancing Combined Capital
REPLACEMENTS UPGRADES IMPROVEMENTS
2000 Core Properties $ 8,823,000 $45,218,000 $54,041,000
1999 Acquisition Communities 3,792,000 24,646,000 28,438,000
2000 Acquisition Communities 939,000 8,319,000 9,258,000
Corporate office expenditures* N/A N/A 866,000
----------------- ----------------- --------------
$13,554,000 $78,183,000 $92,603,000
=========== =========== ===========
*No distinction is made between recurring or non-recurring expenditures
for the corporate office.
The $78,183,000 incurred to fund non-recurring, revenue enhancing
upgrades included, among other items, the following: construction of 13
new community centers; the installation of 5,500 new, energy-efficient
refrigerators, nearly 13,500 new windows and other energy conservation
measures; and the modernization of over 4,350 kitchens, 5,150
bathrooms, and 2,950 new air conditioners. Management believes that
these upgrades contributed significantly towards achieving 7.6% average
growth in net operating income at the 2000 Core Properties. For the
combined Acquisition Communities, substantial rehabilitations were
incurred as part of management's acquisition and repositioning
strategies. The pace of capital replacements was accelerated to improve
the overall competitive condition of the properties. Funding for these
capital improvements was provided by the line of credit and equity
proceeds.
During 2001, management expects that the communities will benefit
further from improvements completed in 2000 and plans to continue to
fund similar non-recurring, revenue enhancing upgrades in addition to
normal capital replacements.
ENVIRONMENTAL ISSUES
Phase I environmental audits have been completed on substantially all
of the Owned Properties. There are no recorded amounts resulting from
environmental liabilities as there are no known contingencies with
respect thereto. Furthermore, no condition is known to exist that would
give rise to a material liability for site restoration or other costs
that may be incurred with respect to the sale or disposal of a
property.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company is not aware of any pronouncements which would have a
material adverse effect on the Company's liquidity, financial position
or results of operations.
INFLATION
Substantially all of the leases at the communities are for a term of
one year or less, which enables the Company to seek increased rents
upon renewal of existing leases or commencement of new leases. These
short-term leases minimize the potential adverse effect of inflation on
rental income, although residents may leave without penalty at the end
of their lease terms and may do so if rents are increased
significantly.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
See Note 4 - Mortgage Notes Payable in the Consolidated Financial
Statements of the Company concerning interest rate risk and Exhibit 99
- Debt Summary Schedule.
Item 8. Financial Statements and Supplemental Data
The financial statements and supplementary data are listed under Item
14(a) and filed as part of this report on the pages indicated.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors
The Board of Directors (the "Board") currently consists of twelve
members. The terms for all of the directors of Home Properties expire
at the 2001 Shareholders' Meeting.
The information sets forth, as of March 21, 2001, for each director of
the Company such director's name, experience during the last five
years, other directorships held, age and the year such director was
first elected as director of the Company.
Year First
NAME OF DIRECTOR AGE ELECTED DIRECTOR
---------------- --- ----------------
Burton S. August, Sr. 85 1994
William Balderston, III 73 1994
Alan L. Gosule 60 1996
Leonard F. Helbig, III 55 1994
Roger W. Kober 67 1994
Nelson B. Leenhouts 65 1993
Norman Leenhouts 65 1993
Edward J. Pettinella 49 2001
Albert H. Small 75 1999
Clifford W. Smith, Jr. 54 1994
Paul L. Smith 65 1994
Amy L. Tait 42 1993
BURTON S. AUGUST, SR. has been a director of the Company since
August, 1994. Mr. August is currently a director of Monro
Muffler Brake, Inc., a publicly traded company where Mr. August
served as Vice President from 1969 until he retired in
1980. Mr. August is Honorary Vice Chairman of the Board of Trustees
of Rochester Institute of Technology, on the Board of
Directors of Park Ridge Health Systems and Hillside Children's
Center Foundation, on the cabinet of the Al Sigl Center and
on the Finance Committee of the United Way of Greater Rochester.
WILLIAM BALDERSTON, III has been a director of the Company since
August, 1994. From 1991 to the end of 1992, he was an Executive Vice
President of The Chase Manhattan Bank, N.A. From 1986 to 1991, he was
President and Chief Executive Officer of Chase Lincoln First Bank,
N.A., which was merged into The Chase Manhattan Bank, N.A. He is a
Trustee of the University of Rochester and a member of the Board of
Governors of the University of Rochester Medical Center. Mr. Balderston
is also a Trustee of the Genesee Country Village Museum, as well as a
member of the Board of the Genesee Valley Conservancy. Mr. Balderston
is a graduate of Dartmouth College.
ALAN L. GOSULE, has been a director of the Company since December,
1996. Mr. Gosule has been a partner in the law firm of Clifford Chance
Rogers & Wells LLP, New York, New York, since August, 1991 and prior to
that time was a partner in the law firm of Gaston & Snow. He serves as
Chairman of the Clifford Chance Rogers & Wells LLP Tax Department and
Real Estate Securities practice group. Mr. Gosule is a graduate of
Boston University and its Law School and received a LL.M. from
Georgetown University. Mr. Gosule also serves on the Boards of
Directors of 32 funds of the Pilgrim Capital Corporation, the Simpson
Housing Limited Partnership, F.L. Putnam Investment Management Company,
and Colonnade Partners. Clifford Chance Rogers & Wells LLP acted as
counsel to Coopers & Lybrand, LLP in its capacity as advisor to the
State Treasurer of the State of Michigan in connection with its
investment of retirement funds in the Operating Partnership and Mr.
Gosule was the nominee of the State Treasurer under the terms of the
investment agreements relating to the transaction.
LEONARD F. HELBIG, III has been a director of the Company since August,
1994. Since 1999 Mr. Helbig has served as President, Financial Services
for Cushman & Wakefield. Prior to that, Mr. Helbig was the Executive
Managing Director of the Asset Services and Financial Services Groups
since 1984. He joined Cushman & Wakefield in 1980 and is also a member
of that firm's Board of Directors and Executive Committee. Mr. Helbig
is a member of the Urban Land Institute, the Pension Real Estate
Association and the International Council of Shopping Centers. Mr.
Helbig is a graduate of LaSalle University and holds the MAI
designation of the American Institute of Real Estate Appraisers.
ROGER W. KOBER has been a director of the Company since August, 1994.
Mr. Kober is currently a director of RGS Energy Corporation and its
wholly owned subsidiary, Rochester Gas and Electric Corporation. He was
employed by Rochester Gas and Electric Corporation from 1965 until his
retirement on January 1, 1998. From March, 1996 until January 1, 1998
Mr. Kober served as Chairman and Chief Executive Officer of Rochester
Gas and Electric Corporation. He is also a member of the Board of
Trustees of Rochester Institute of Technology. Mr. Kober is a graduate
of Clarkson College and holds a Masters Degree in Engineering from
Rochester Institute of Technology.
NELSON B. LEENHOUTS has served as President, Co-Chief Executive Officer
and a director of the Company since its inception in 1993. He has also
served as President and Chief Executive Officer and a director of HP
Management since its formation. He has been a director of HP Resident
Services since its formation, President since 2000 and a Vice President
since 1998. Nelson Leenhouts was the founder, and a co-owner, together
with Norman Leenhouts, of Home Leasing, and served as President of Home
Leasing from 1967. He is a director of Hauser Corporation and a member
of the Board of Directors of the National Multi Housing Council. Nelson
Leenhouts is a graduate of the University of Rochester. He is the twin
brother of Norman Leenhouts.
NORMAN P. LEENHOUTS has served as Chairman of the Board of Directors,
Co-Chief Executive Officer and a director of the Company since its
inception in 1993. He has also served as Chairman of the Board of HP
Management since its formation. He has been a director of HP Resident
Services since its formation and Chairman since 2000. Norman Leenhouts
is a co-owner, together with Nelson Leenhouts, of Home Leasing and
served as Chairman of Home Leasing from 1971. He is a director of
Hauser Corporation and Rochester Downtown Development Corporation and
is a member of the Board of Trustees of Roberts Wesleyan College. He is
a graduate of the University of Rochester and is a certified public
accountant. He is the twin brother of Nelson Leenhouts.
EDWARD J. PETTINELLA has served as a Director and Executive Vice
President of the Company since February, 2001. From 1997 until
February, 2001, Mr. Pettinella served as President, Charter One Bank
(NY Division) and Executive Vice President of Charter One Financial,
Inc. From 1980 through 1997, Mr. Pettinella served in several
managerial capacities for Rochester Community Savings Bank, Rochester,
NY, including the positions of Chief Operating Officer and Chief
Financial Officer. Mr. Pettinella serves on the Board of Directors of
the YMCA of Greater Rochester, State University at Geneseo, Geneseo
Foundation, Syracuse University School of Business, Rochester Chamber
of Commerce, United Way of Greater Rochester, Rochester Economic
Development Corporation, and the Memorial Art Gallery. Mr. Pettinella
is a graduate of the State University at Geneseo and holds an MBA from
Syracuse University.
ALBERT H. SMALL has been a director of the Company since July,
1999. Mr. Small, who has been active in the construction
industry for 50 years, is President of Southern Engineering
Corporation. Mr. Small is a member of the Urban Land Institute,
National Association of Home Builders and currently serves on the
Board of Directors of the National Symphony Orchestra,
National Advisory Board Music Associates of Aspen, Department of
State Diplomatic Rooms Endowment Fund, James Madison
Council of the Library of Congress, Tudor Place Foundation,
The Life Guard of Mount Vernon, Historical Society of
Washington, DC and the National Archives Foundation. Mr. Small is
a graduate of the University of Virginia. In connection
with the acquisition of a portfolio of properties located in the
suburban markets surrounding Washington, D.C., Mr. Small
and others received approximately 4,086,000 of operating
partnership units in Home Properties of New York, L.P. Mr. Small
is the nominee of the former owners of that portfolio under the terms
of the acquisition documents.
CLIFFORD W. SMITH, JR. has been a director of the Company since
August, 1994. Mr. Smith is the Epstein Professor of Finance
of the William E. Simon Graduate School of Business Administration
of the University of Rochester, where he has been on the
faculty since 1974. He has written numerous books and articles
on a variety of financial, capital markets and risk
management topics and has held editorial positions for a variety of
journals. Mr. Smith is a graduate of Emory University
and has a PhD from the University of North Carolina at Chapel Hill.
PAUL L. SMITH has been a director of the Company since August,
1994. Mr. Smith was a director, Senior Vice President and
the Chief Financial Officer of the Eastman Kodak Company from 1983
until he retired in 1993. He is currently a director of
Performance Technologies, Inc. and ConstellationBrands, Inc. He
is also a member of the Board of Trustees of the George
Eastman House and Ohio Wesleyan University. Mr. Smith is a graduate
of Ohio Wesleyan University and holds an MBA Degree in
finance from Northwestern University.
AMY L. TAIT has served as a director of the Company since its inception
in 1993. Effective February 15, 2001, Mrs. Tait resigned her full-time
position as Executive Vice President of the Company and as a director
of HP Management. She is currently a principal of Tait Realty Advisors,
LLC, and has entered into a consulting agreement with the Company. Mrs.
Tait joined Home Leasing in 1983 and held several positions with the
Company, including Senior and Executive Vice President and Chief
Operating Officer. She currently serves on the M & T Bank Advisory
Board and the boards of the United Way of Rochester, Geva Theatre, the
Al Sigl Center, and The Commission Project. Mrs. Tait is a graduate of
Princeton University and holds an MBA from the William E. Simon
Graduate School of Business Administration of the University of
Rochester. She is the daughter of Norman Leenhouts.
See Item 4A in Part I hereof for information regarding executive
officers of the Company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES ACT OF 1934.
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's executive officers and
directors, and persons who own more than 10% of a registered class of
the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and
the New York Stock Exchange. Officers, directors and greater than 10%
shareholders are required to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that
no other reports were required during the fiscal year ended December
31, 2000, all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than 10% beneficial owners
were satisfied.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by
reference to the Company's proxy statement to be issued in connection
with the Annual Meeting of the Stockholders of the Company to be held
on May 1, 2001 under "Executive Compensation", which proxy statement
will be filed within 120 days after the end of the Company's fiscal
year.
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------- ----------------------------------------------------------------
The information required by this Item is incorporated herein by
reference to the Company's proxy statement to be issued in connection
with the Annual Meeting of Stockholders of the Company to be held on
May 1, 2001 under "Security Ownership of Certain Beneficial Owners and
Management", which proxy statement will be filed within 120 days after
the end of the Company's fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- ------- ----------------------------------------------
The information required by this Item is incorporated herein by
reference to the Company's proxy statement to be issued in connection
with the Annual Meeting of Stockholders of the Company to be held on
May 1, 2001 under "Certain Relationships and Transactions", which proxy
statement will be filed within 120 days after the end of the Company's
fiscal year.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- ------- ---------------------------------------------------------------
(a) 1 and 2. Financial Statements and Schedules
The financial statements and schedules listed below are filed
as part of this annual report on the pages indicated.
HOME PROPERTIES OF NEW YORK, INC.
CONSOLIDATED FINANCIAL STATEMENTS
PAGE
Report of Independent Accountants F-2
Consolidated Balance Sheets
as of December 31, 2000 and 1999 F-3
Consolidated Statements of Operations
for the Years Ended December 31, 2000, 1999 and 1998 F-4
Consolidated Statements of Stockholders' Equity
for the Years Ended December 31, 2000, 1999 and 1998 F-5
Consolidated Statements of Comprehensive Income
for the Years Ended December 31, 2000, 1999 and 1998 F-6
Consolidated Statements of Cash Flows
for the Years Ended December 31, 2000, 1999 and 1998 F-7
Notes to Consolidated Financial Statements F-8
Schedule III:
Real Estate and Accumulated Depreciation F-27
(a) 3. Exhibits
2.1 Agreement among Home Properties of New York, Inc. and Philip J. Solondz, Daniel Solondz and Julia
Weinstein relating to Royal Gardens I, together with Amendment No. 1.
2.2 Agreement among Home Properties of New York, Inc. and Philip Solondz and Daniel Solondz relating to
Royal Gardens II, together with Amendment No. 1.
2.3 Purchase and Sale Agreement dated July 25, 1997 by and between Home Properties of New York, L.P. and
Louis S. and Molly S. Wolk Foundation.
2.4 Purchase and Sale Agreement dated April 30, 1997 between Home Properties of New York, L.P. and Briggs
Wedgewood Associates, L.P.
2.5 Agreement and Plan of Merger, dated July 31, 1997 between Home Properties of New York, L.P. and
Chesfield Partnership.
2.6 Agreement and Plan of Merger dated July 31, 1997 between Home Properties of New York, L.P. and Valspring
Partnership.
2.7 Agreement and Plan of Merger, dated July 31, 1997 between Home Properties of New York, L.P. and Exmark
Partnership.
2.8 Agreement and Plan of Merger, dated July 31, 1997 between Home Properties of New York, L.P. and New
Orleans East Limited Partnership.
2.9 Agreement and Plan of Merger, dated July 31, 1997 between Home Properties of New York, L.P. and Glenvwk
Partnership.
2.10 Agreement and Plan of Merger, dated July 31, 1997 between Home Properties of New York, L.P. and PK
Partnership.
2.11 First Amendment to Agreement and Plan of Merger, dated September 1, 1997 between Home Properties of New
York, L.P. and PK Partnership and its partners.
2.12 First Amendment to Agreement and Plan of Merger, dated September 1, 1997 between Home Properties of New
York, L.P. and NOP Corp. and Norpark Partnership.
2.13 Contribution Agreement dated July 31, 1997 between Home Properties of New York, L.P. and Lamar
Partnership.
2.14 Agreement and Plan of Merger, dated July 31, 1997 between Home Properties of New York, L.P. and Curren
Partnership.
2.15 Contribution Agreement, dated October __, 1997 between Home Properties of New York, L.P. and
Berger/Lewiston Associates Limited Partnership; Stephenson-Madison Heights Company Limited Partnership;
Kingsley-Moravian Company Limited Partnership; Woodland Garden Apartments Limited Partnership;
B&L Realty Investments Limited Partnership; Southpointe Square Apartments Limited Partnership;
Greentrees Apartments limited Partnership; Big Beaver-Rochester Properties Limited Partnership;
Century Realty Investment Company Limited Partnership.
2.16 Agreement among Home Properties of New York, L.P. and Erie Partners, L.L.C. relating to Woodgate Place
Apartments, together with Amendment No. 1
2.17 Agreement among Home Properties of New York, L.P. and Mid-Island Limited Partnership relating to
Mid-Island Estates, together with Amendment No. 1.
2.18 Purchase and Sale Agreement among Home Properties of New York, L.P. and Anthony M. Palumbo and Daniel
Palumbo.
2.19 Purchase and Sale Agreements dated June 17, 1997 among Home Properties of New York, L.P. and
various individuals relating to Hill Court Apartments South and Hudson Arms Apartments, together
with a letter amendment dated September 24, 1997.
2.20 Contract of Sale, dated October 20,1997 between Home Properties of New York, L.P. and Hudson Palisades
Associates relating to Cloverleaf Apartments.
2.21 Contribution Agreement, dated November 17, 1997 among Home Properties of New York, L.P. and various
trusts relating to Scotsdale Apartments.
2.22 Contribution Agreement, dated November 7, 1997 among Home Properties of New York, L.P. and Donald
Schefmeyer and Stephen W. Hall relating to Candlewood Apartments, together with Amendment No. One dated
December 3, 1997.
2.23 Purchase and Sale Agreement dated November 26, 1997 among Home Properties of New York, L.P. and Cedar
Glen Associates.
2.24 Contribution Agreement dated March 2, 1998 among Home Properties of New York, L.P., Braddock Lee Limited
Partnership and Tower Construction Group, LLC.
2.25 Contribution Agreement dated March 2, 1998 among Home Properties of New York, L.P., Park Shirlington
Limited Partnership and Tower Construction Group, LLC.
2.26 Contract of Sale between Lake Grove Associates Corp. and Home Properties of New York, L.P., dated
December 12, 1996, relating to the Lake Grove Apartments.
2.27 Form of Contribution Agreement among Home Properties of New York, L.P. and Strawberry Hill Apartment
Company LLLP, Country Village Limited Partnership, Morningside Six, LLLP, Morningside North
Limited Partnership and Morningside Heights Apartment Company Limited Partnership with schedule
setting forth material details in which documents differ from form.
2.28 Form of Purchase and Sale Agreement relating to the Kaplan Portfolio with schedule setting forth
material details in which documents differ from form.
2.29 Form of Contribution Agreement relating to the CRC Portfolio with schedule setting forth material
details in which documents differ from form.
2.30 Form of Contribution Agreement relating to the Mid-Atlantic Portfolio with Schedule setting
forth material details in which documents differ from form.
2.31 Contribution Agreement among Home Properties of New York, L.P., Leonard Klorfine, Ridley Brook
Associates and Greenacres Associates.
2.32 Purchase and Sale Agreement among Home Properties of New York, L.P. and Chicago Colony Apartments
Associates.
2.33 Contribution Agreement among Home Properties of New York, L.P., Gateside-Bryn Mawr Company, L.P.,
Willgold Company, Gateside-Trexler Company, Gateside-Five Points Company, Stafford Arms,
Gateside-Queensgate Company, Gateside Malvern Company, King Road Associates and Cottonwood Associates
2.34 Form of Contribution Agreement between Old Friends Limited Partnership and Home Properties of New York,
L.P. and Home Properties of New York, Inc., along with Amendments Number 1 and 2 thereto
2.35 Form of Contribution Agreement between Deerfield Woods Venture Limited Partnership and Home Properties
of New York, L.P.
2.36 Form of Contribution Agreement between Macomb Apartments Limited Partnership and Home Properties of New
York, L.P.
2.37 Form of Contribution Agreement between Home Properties of New York, L.P. and Elmwood Venture Limited
Partnership
2.38 Form of Sale Purchase and Escrow Agreement between Bank of America as Trustee and Home Properties of New
York, L.P.
2.39 Form of Contribution Agreement between Home Properties of New York, L.P., Home Properties of New York,
Inc. and S&S Realty, a New York General Partnership (South Bay)
2.40 Form of Contribution Agreement between Hampton Glen Apartments Limited Partnership and Home Properties
of New York, L.P.
2.41 Form of Contribution Agreement between Home Properties of New York, L.P. and Axtell Road Limited
Partnership
2.42 Form of Contribution Agreement between Elk Grove Terrace II and III, L.P., Elk Grove Terrace, L.P. and
Home Properties of New York, L.P.
3.1 Articles of Amendment and Restatement of the Articles of Incorporation of Home Properties of New York,
Inc.
3.2 Articles of Amendment of the Articles of Incorporation of Home Properties of New York, Inc.
3.3 Articles of Amendment of the Articles of Incorporation of Home Properties of New York, Inc.
3.4 Amended and Restated Articles Supplementary of Series A Senior Convertible Preferred Stock of Home
Properties of New York, Inc.
3.5 Series B Convertible Preferred Stock Articles Supplementary of Home Properties of New York, Inc.
3.6 Series C Convertible Preferred Stock Articles Supplementary of Home Properties of New York, Inc.
3.7 Series D Convertible Preferred Stock Articles Supplementary of Home Properties of New York, Inc.
3.8 Series E Convertible Preferred Stock Articles Supplementary of Home Properties of New York, Inc.
3.9 Amended and Restated By-Laws of Home Properties of New York, Inc. (Revised 12/30/96).
4.1 Form of certificate representing Shares of Common Stock.
4.2 Agreement of Home Properties of New York, Inc. to file instruments defining the rights of holders of
long-term debt of it or its subsidiaries with the Commission upon request.
4.3 Credit Agreement between Manufacturers and Traders Trust Company, Home Properties of New York, L.P. and
Home Properties of New York, Inc.
4.4 Amendment Agreement between Manufacturers and Traders Trust Company, Home Properties of New York, L.P.
and Home Properties of New York, Inc. amending the Credit Agreement.
4.5 Mortgage Spreader, Consolidation and Modification Agreement between Manufacturers and Traders Trust
Company and Home Properties of New York, L.P., together with form of Mortgage, Assignment of Leases and
Rents and Security Agreement incorporated therein by reference.
4.6 Mortgage Note made by Home Properties of New York, L.P. payable to Manufacturers and Traders Trust
Company in the principal amount of $12,298,000.
4.7 Spreader, Consolidation, Modification and Extension Agreement between Home Properties of New York, L.P.
and John Hancock Mutual Life Insurance Company, dated as of October 26, 1995, relating to indebtedness
in the principal amount of $20,500,000.
4.8 Amended and Restated Stock Benefit Plan of Home Properties of New York, Inc.
4.9 Amended and Restated Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and Employee Stock
Purchase Plan.
4.10 Amendment No. One to Amended and Restated Dividend Reinvestment, Stock Purchase, Resident Stock Purchase
and Employee Stock Purchase Plan.
4.11 Amendment No. Two to Amended and Restated Dividend Reinvestment, Stock Purchase, Resident Stock Purchase
and Employee Stock Purchase Plan.
4.12 Amended and Restated Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and Employee Stock
Purchase Plan.
4.13 Amendment No. Three to Amended and Restated Dividend Reinvestment, Stock Purchase, Resident Stock
Purchase and Employee Stock Purchase Plan.
4.14 Directors' Stock Grant Plan.
4.15 Director, Officer and Employee Stock Purchase and Loan Program.
4.16 Home Properties of New York, Inc., Home Properties of New York, L.P. Executive Retention Plan.
4.17 Home Properties of New York, Inc. Deferred Bonus Plan.
4.18 Fourth Amended and Restated Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and Employee
Stock Purchase Plan.
4.19 Directors Deferred Compensation Plan.
4.20 Agency Fee and Warrant Agreement
4.21 Form of Warrant
4.22 Agency Fee and Warrant Agreement, Amendment No. 1
4.23 Home Properties of New York, Inc. Amendment Number One to the Amended and Restated Stock Benefit Plan
4.24 Fifth Amended and Restated Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and Employee
Stock Purchase Plan
4.25 Sixth Amended and Restated Dividend Reinvestment, Stock Purchase, Resident Stock Purchase and Employee
Stock Purchase Plan
10.1 Second Amended and Restated Agreement of Limited Partnership of Home Properties of New York, L.P.
10.2 Amendments No. One through Eight to the Second Amended and Restated Agreement of Limited Partnership of
Home Properties of New York, L.P.
10.3 Articles of Incorporation of Home Properties Management, Inc.
10.4 By-Laws of Home Properties Management, Inc.
10.5 Articles of Incorporation of Conifer Realty Corporation
10.6 Articles of Amendment to the Articles of Incorporation of Conifer Realty Corporation changing the name
to Home Properties HP Resident Services, Inc.
10.7 By-Laws of Conifer Realty Corporation
10.8 Home Properties Trust Declaration of Trust, dated September 19, 1997.
10.9 Employment Agreement between Home Properties of New York, L.P. and Norman P. Leenhouts.
10.10 Amendments No. One, Two and Three to the Employment Agreement between Home Properties of New York, L.P.
and Norman P. Leenhouts.
10.11 Employment Agreement between Home Properties of New York, L.P. and Nelson B. Leenhouts.
10.12 Amendments No. One, Two and Three to the Employment Agreement between Home Properties of New York, L.P.
and Nelson B. Leenhouts.
10.13 Indemnification Agreement between Home Properties of New York, Inc. and certain officers and directors.
10.14 Indemnification Agreement between Home Properties of New York, Inc. and Richard J. Crossed
10.15 Indemnification Agreement between Home Properties of New York, Inc. and Alan L. Gosule.
10.16 Registration Rights Agreement among Home Properties of New York, Inc., Home Leasing Corporation,
Leenhouts Ventures, Norman P. Leenhouts, Nelson B. Leenhouts, Amy L. Tait, David P. Gardner, Ann M.
McCormick, William E. Beach, Paul O'Leary, Richard J. Struzzi, Robert C. Tait, Timothy A. Florczak and
Laurie Tones.
10.17 Agreement of Operating Sublease, dated October 1, 1986, among KAM, Inc., Morris Massry and Raintree
Island Associates, as amended by Letter Agreement Supplementing Operating Sublease dated October 1,
1986.
10.18 Form of Term Promissory Note payable to Home Properties of New York, Inc. by officers and directors in
association with the Executive and Director Stock Purchase and Loan Program.
10.19 Form of Pledge Security Agreement executed by officers and directors
in connection with Executive and Director Stock Purchase and Loan
Program.
10.20 Schedule of Participants, loan amounts and shares issued in
connection with the Executive and Director Stock Purchase and Loan
Program.
10.21 Subordination Agreement between Home Properties of New York, Inc. and The Chase Manhattan Bank relating
to the Executive and Director Stock Purchase and Loan Program.
10.22 Partnership Interest Purchase Agreement, dated as of December 23, 1996 among Home Properties of New
York, Inc., Home Properties of New York, L.P. and State of Michigan Retirement Systems.
10.23 Registration Rights Agreement, dated as of December 23, 1996 between Home Properties of New York, Inc.
and State of Michigan Retirement Systems.
10.24 Lock-Up Agreement, dated December 23, 1996 between Home Properties of New York, Inc. and State of
Michigan Retirement Systems.
10.25 Agreement, dated as of April 13, 1998, between Home Properties of New York, Inc. and the Treasurer of
the State of Michigan.
10.26 Amendment No. Nine to the Second Amended and Restated Agreement of Limited Partnership to the Operating
Partnership.
10.27 Master Credit Facility Agreement by and among Home Properties of New York, Inc., Home Properties of New
York, L.P., Home Properties WMF I LLC and Home Properties of New York, L.P. and P-K Partnership doing
business as Patricia Court and Karen Court and WMF Washington Mortgage Corp., dated as of August 28,
1998.
10.28 First Amendment to Master Credit Facility Agreement, dated as of December 11, 1998 among Home Properties
of New York, Inc., Home Properties of New York, L.P., Home Properties WMF I LLC and Home Properties of
New York, L.P. and P-K Partnership doing business as Patricia Court and Karen Court and WMF Washington
Mortgage Corp. and Fannie Mae.
10.29 Second Amendment to Master Credit Facility Agreement, dated as of August 30, 1999 among Home Properties
of New York, Inc., Home Properties of New York, L.P., Home Properties WMF I LLC and Home Properties of
New York, L.P. and P-K Partnership doing business as Patricia Court and Karen Court and WMF Washington
Mortgage Corp. and Fannie Mae.
10.30 Amendments No. Ten through Seventeen to the Second Amended and Restated Limited Partnership Agreement.
10.31 Amendments No. Eighteen through Twenty-Five to the Second Amended and Restated Limited Partnership
Agreement.
10.32 Credit Agreement, dated 8/23/99 between Home Properties of New York, L.P., the Lenders Party hereto and
Manufacturers and Traders Trust Company, as Administrative Agent.
10.33 Amendment No. Twenty-Seven to the Second Amended and Restated Limited Partnership Agreement
10.34 Amendments Nos. Twenty-Six, Twenty-Eight through Thirty to the Second Amended and Restated Limited
Partnership Agreement
10.35 Registration Rights Agreement between Home Properties of New York, Inc. and GE Capital Equity
Investments, Inc., dated September 29, 1999.
10.36 Amendment to Partnership Interest Purchase Agreement and Exchange Agreement
10.37 2000 Stock Benefit Plan
10.38 Purchase Agreement between Home Properties of New York, Inc., The Prudential Insurance Company of
America and Teachers Insurance and Annuity Association of America
10.39 Purchase Agreement between Home Properties of New York, Inc. and The Equitable Life Assurance Society of
the United States
10.40 Purchase Agreement between Home Properties of New York, Inc. and the Pacific Life Insurance Company and
AEW Capital Management
10.41 Home Properties of New York, L.P. Amendment Number One to Executive Retention Plan
10.42 Amendments Nos. Thirty-One and Thirty-Two to the Second Amended and Restated Limited Partnership
Agreement
10.43 Form of Purchase and Sale Agreement between Blackhawk Apartments Limited Partnership and Home Properties
of New York, L.P.
10.44 Form of Purchase and Sale Agreement between Home Properties of New York, L.P. and Caesar Figoni
10.45 Form of Real Estate Purchase Agreement between Smith Property Holdings Orleans, LLC and Home Properties
of New York, L.P.
10.46 Purchase Agreement between Home Properties of New York, Inc., The Prudential Insurance Company of
America and Teachers Insurance and Annuity Association of America
10.47 Employment Agreement between Home Properties of New York, L.P., Home Properties of New York, Inc. and
Edward J. Pettinella, and Amendment No. 1 thereto.
10.48 Consulting Agreement between Home Properties of New York, L.P. and Amy L. Tait
10.49 Amendment No. Thirty Three to the Second Amended and Restated Limited Partnership Agreement
10.50 Amendment No. Thirty Five to the Second Amended and Restated Limited Partnership Agreement
10.51 Amendment No. Forty Two to the Second Amended and Restated Limited Partnership Agreement
10.52 Amendment No. Thirty Four, Thirty Six through Forty One, Forty Three and Forty-Four to the Second
Amended and Restated Limited Partnership Agreement
10.53 Purchase and Sale Agreement among Home Properties of New York, L.P., Conifer Realty Corporation and
Conifer Realty, LLC, and Amendments Nos. One and Two thereto
11 Computation of Per Share Earnings Schedule.
21 List of Subsidiaries of Home Properties of New York, Inc.
23 Consent of PricewaterhouseCoopers LLP.
99 Additional Exhibits -- Debt Summary Schedule
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this reportto be signed on its
behalf by the undersigned thereunto duly authorized.
HOME PROPERTIES OF NEW YORK, INC.
/S/ NORMAN P. LEENHOUTS
-----------------------
Norman P. Leenhouts
Director, Chairman of the Board of Directors
and Co-Chief Executive Officer
(Co-Principal Executive Officer)
Date: March 22, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, the report
has been signed by the following persons on behalf of Home Properties of New
York, Inc. and in the capacities and on the dates indicated.
Signature Title Date
/S/ NORMAN P. LEENHOUTS Director, Chairman of the March 22, 2001
- -----------------------
Norman P. Leenhouts Board of Directors and
Co-Chief Executive Officer
(Co-Principal Executive Officer)
/S/ NELSON B. LEENHOUTS Director, President and March 22, 2001
- -----------------------
Nelson B. Leenhouts Co-Chief Executive Officer
(Co-Principal Executive Officer)
/S/ EDWARD J. PETTINELLA Director, Executive Vice President March 22, 2001
- ---------------------------
Edward J. Pettinella
/S/ DAVID P. GARDNER Senior Vice President, Chief Financial March 22, 2001
- ---------------------------
David P. Gardner Officer (Principal Financial and
Accounting Officer)
/S/ ROBERT J. LUKEN Vice President, Treasurer and Controller March 22, 2001
- ---------------------------
Robert J. Luken
/S/ BURTON S. AUGUST, SR. Director March 22, 2001
- ---------------------------
Burton S. August, Sr.
/S/ WILLIAM BALDERSTON, III Director March 22, 2001
- ---------------------------
William Balderston, III
/S/ ALAN L. GOSULE Director March 22, 2001
- ---------------------------
Alan L. Gosule
/S/ LEONARD F. HELBIG, III Director March 22, 2001
- ---------------------------
Leonard F. Helbig, III
/S/ ROGER W. KOBER Director March 22, 2001
- ---------------------------
Roger W. Kober
/S/ ALBERT H. SMALL Director March 22, 2001
- ---------------------------
Albert H. Small
/S/ CLIFFORD W. SMITH, JR. Director March 22, 2001
- ---------------------------
Clifford W. Smith, Jr.
/S/ PAUL L. SMITH Director March 22, 2001
- ------------------
Paul L. Smith
/S/ AMY L. TAIT Director March 22, 2001
- ---------------------------
Amy L. Tait
HOME PROPERTIES OF NEW YORK, INC.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
PAGE
Report of Independent Accountants F-2
Consolidated Balance Sheets
as of December 31, 2000 and 1999 F-3
Consolidated Statements of Operations
for the Years Ended December 31, 2000, 1999 and 1998 F-4
Consolidated Statements of Stockholders' Equity
for the Years Ended December 31, 2000, 1999 and 1998 F-5
Consolidated Statements of Comprehensive Income
for the Years Ended December 31, 2000, 1999 and 1998 F-6
Consolidated Statements of Cash Flows
for the Years Ended December 31, 2000, 1999 and 1998 F-7
Notes to Consolidated Financial Statements F-8
Schedule III:
Real Estate and Accumulated Depreciation F-27
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Home Properties of New York, Inc.
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) and (2) on page 41 present fairly, in all material
respects, the financial position of Home Properties of New York, Inc. at
December 31, 2000 and 1999, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 2000 in conformity
with accounting principles generally accepted in the United States of America.
In addition, in our opinion, the financial statement schedule listed in the
index appearing under Item 14(a)(1) and (2) on page 41 presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements. These financial statements
and financial statement schedule are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits. We conducted
our audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP
Rochester, New York
January 29, 2001
HOME PROPERTIES OF NEW YORK, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 and 1999
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
2000 1999
---- ----
ASSETS
Real estate:
Land $247,483 $194,468
Buildings, improvements and equipment 1,647,786 1,286,285
----------- -----------
1,895,269 1,480,753
Less: accumulated depreciation ( 153,324) ( 101,904)
------------ ------------
Real estate, net 1,741,945 1,378,849
Cash and cash equivalents 10,449 4,742
Cash in escrows 36,676 28,281
Accounts receivable 11,510 6,842
Prepaid expenses 13,505 9,423
Deposits 877 897
Investment in and advances to affiliates 45,048 63,450
Deferred charges 3,825 2,610
Other assets 8,053 8,523
-------------- --------------
Total assets $1,871,888 $1,503,617
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $832,783 $618,901
Line of Credit - 50,800
Accounts payable 18,577 11,765
Accrued interest payable 5,236 3,839
Accrued expenses and other liabilities 7,197 6,391
Security deposits 18,290 14,918
------------ ------------
Total liabilities 882,083 706,614
----------- -----------
Commitments and contingencies
Minority interest 371,544 299,880
------------ -----------
8.36% Series B convertible cumulative preferred stock,
liquidation preference of $25.00 per share; 2,000,000 shares
issued and outstanding, net of issuance costs 48,733 48,733
------------- ------------
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized; 2,816,667 and
1,666,667 shares issued and outstanding
at December 31, 2000 and 1999, respectively 149,000 35,000
Common stock, $.01 par value; 80,000,000
shares authorized; 21,565,681 and 19,598,464 shares
issued and outstanding at December 31, 2000 and
1999, respectively 216 196
Excess stock, $.01 par value; 10,000,000
shares authorized; no shares issued - -
Additional paid-in capital 483,453 461,345
Distributions in excess of accumulated earnings ( 53,517) ( 38,294)
Officer and director notes for stock purchases ( 9,624) ( 9,857)
--------------- ---------------
Total stockholders' equity 569,528 448,390
------------ ------------
Total liabilities and stockholders' equity $1,871,888 $1,503,617
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
HOME PROPERTIES OF NEW YORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
2000 1999 1998
---- ---- ----
Revenues:
Rental income $298,860 $217,591 $137,557
Property other income 11,389 6,878 3,614
Interest and dividend income 7,746 7,092 5,102
Other income 1,053 2,902 2,970
---------- ---------- ----------
Total Revenues 319,048 234,463 149,243
-------- -------- --------
Expenses:
Operating and maintenance 128,034 95,200 63,136
General and administrative 13,235 10,696 6,685
Interest 56,792 39,558 23,980
Depreciation and amortization 52,430 37,350 23,191
Loss on available-for-sale securities - 2,123 -
Non-recurring acquisition expense - 6,225 -
-------------- ---------- ---------------
Total Expenses 250,491 191,152 116,992
-------- -------- --------
Income before gain (loss) on disposition of
property, minority interest and
extraordinary item 68,557 43,311 32,251
Gain (loss) on disposition of property (1,386) 457 -
----------- ----------- --------------
Income before minority interest and
extraordinary item 67,171 43,768 32,251
Minority interest 25,715 17,390 12,603
--------- --------- ---------
Income before extraordinary item 41,456 26,378 19,648
Extraordinary item, prepayment
penalties, net of $78 in 1999 and $595 in 1998
allocated to minority interest - ( 96) ( 960)
-------------- ------------- -----------
Net income before preferred dividends 41,456 26,282 18,688
Preferred dividends ( 12,178) ( 1,153) -
---------- ---------- --------------
Net income available to common shareholders $29,278 $25,129 $18,688
======= ======= =======
Basic earnings per share data:
Income before extraordinary item $1.42 $ 1.35 $ 1.41
Extraordinary item - ($ .01) ($ .07)
------- ----------- -----------
Net income available to common shareholders $1.42 $ 1.34 $ 1.34
===== ======== ==========
Diluted earnings per share data:
Income before extraordinary item $1.41 $ 1.35 $ 1.40
Extraordinary item - ($ .01) ($ .07)
------- --------- ----------
Net income available to common shareholders $1.41 $ 1.34 $ 1.33
===== ======== ==========
Weighted average number of shares outstanding:
Basic 20,639,241 18,697,731 13,898,221
========== ========== ==========
Diluted 20,755,721 18,800,907 14,022,329
========== ========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
HOME PROPERTIES OF NEW YORK, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Preferred Distributions Officer/
Stock at Additional in Excess Director
Liquidation COMMON STOCK Paid-In of Accumulated Treasury Notes for
Preference Share Amount Capital Accumulated Comprehensive Stock
Earnings Income Stock Purchase
----------- -------- -------- -------- ----------- ------------- -------- ----------
Balance, January 1, 1998 $ - 9,317,556 $ 93 $176,021 ($19,700) $ - ($ 426) ($ 4,556)
Issuance of common stock, net 8,301,072 83 205,483 ( 5,236)
Interest on notes for stock ( 151)
Purchase
Net income 18,688
Unrealized loss on available-
for-sale securities (1,607)
Conversion of UPREIT Units for 75,972 1 800
Stock
Purchase of treasury stock ( 59,600) (1,437)
Adjustment of minority interest 19,510
Dividends paid ($1.83 per share) (25,610)
----------- -------- -------- ------- -------- ----------- --------- --------
Balance, December 31, 1998 - 17,635,000 177 401,814 (26,622) (1,607) (1,863) ( 9,943)
Issuance of common stock, net 2,025,288 20 50,290
Conversion of partnership
interest for 1,666,667 shares
of Series A Preferred stock 35,000 448
Payments on notes for stock 226
purchase
Interest on notes for stock ( 140)
purchase
Net income 26,282
Change in unrealized loss on
available-for-sale securities 1,607
Conversion of UPREIT Units for 63,476 1 1,322
stock
Purchase and retirement of ( 125,300) (2) (4,835) 1,863
treasury stock
Adjustment of minority interest 12,306
Preferred dividends (1,057)
Dividends paid ($1.97 per share) (36,897)
----------- -------- -------- ------- -------- ----------- ---------- --------
Balance, December 31, 1999 35,000 19,598,464 196 461,345 (38,294) - - ( 9,857)
Issuance of common stock, net 2,108,275 21 55,914
Issuance of preferred stock, net 114,000 (1,706)
Payments on notes for stock 375
purchase
Interest on notes for stock (142)
purchase
Net income 41,456
Conversion of UPREIT Units for 327,542 3 7,385
stock
Purchase and retirement of ( 468,600) (4) (12,600)
treasury stock
Adjustment of minority interest (26,825)
Preferred dividends (12,179)
Dividends paid ($2.16 per share) (44,500)
----------- -------- -------- ------- -------- ----------- ---------- --------
Balance, December 31, 2000 $ 149,000 21,565,681 $ 216 $483,453 ($53,517) $ - $ - ($9,624)
========== ========== ==== ======== ========= =========== ========== ========
-
The accompanying notes are an integral part of these consolidated financial
statements.
HOME PROPERTIES OF NEW YORK, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(IN THOUSANDS)
2000 1999 1998
---- ---- ----
Net income available to common shareholders $29,278 $25,129 $18,688
Comprehensive income:
Change in unrealized loss on available-for-sale securities - 1,607 (1,607)
-------- ------- -------
Net comprehensive income $29,278 $26,736 $17,081
======= ======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
HOME PROPERTIES OF NEW YORK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(IN THOUSANDS)
2000 1999 1998
---- ---- ----
Cash flows from operating activities:
Net income before preferred dividends $ 41,456 $26,282 $18,688
-------- ------- -------
Adjustments to reconcile net income before preferred
dividends to net cash provided by operating activities:
Equity in income of affiliates 1,746 ( 201) 146
Income allocated to minority interest 25,715 17,390 12,603
Extraordinary item allocated to minority interest - ( 78) ( 595)
Depreciation and amortization 52,995 38,066 24,405
Unrealized loss on available-for-sale securities - - 1,607
Loss on available-for-sale securities - 2,123 -
Loss (Gain) on disposition of property 1,386 ( 457) -
Changes in assets and liabilities:
Other assets ( 8,488) (2,884) ( 6,236)
Accounts payable and accrued liabilities 12,387 10,285 9,930
-------- ------ -------
Total adjustments 85,741 64,244 41,860
-------- ------ ------
Net cash provided by operating activities 127,197 90,526 60,548
-------- ------ ------
Cash flows used in investing activities:
Purchase of properties and other assets, net of mortgage
notes assumed and UPREIT Units issued (106,438) (130,789) (225,490)
Additions to properties ( 92,603) ( 61,034) ( 42,896)
Deposits on property 20 ( 722) 430
Advances to affiliates ( 33,481) ( 48,888) ( 54,105)
Payments on advances to affiliates 42,311 39,916 35,922
Proceeds from sale of properties 11,746 1,099 -
Sale (purchase) of available-for-sale securities - 9,526 ( 11,649)
--------- --------- ----------
Net cash used in investing activities (178,445) (190,892) (297,788)
-------- --------- --------
Cash flows from financing activities:
Proceeds from sale of preferred stock, net 112,294 48,733 -
Proceeds from sale of common stock, net 56,168 50,397 200,179
Purchase of treasury stock ( 12,664) ( 2,974) ( 1,437)
Proceeds from mortgage notes payable 84,432 32,978 187,481
Payments of mortgage notes payable ( 33,517) ( 36,345) ( 60,536)
Proceeds from line of credit 97,000 104,700 156,800
Payments on line of credit (147,800) ( 53,900) (165,550)
Additions to deferred loan costs ( 1,781) ( 576) ( 2,329)
Additions to cash escrows, net ( 8,395) ( 10,850) ( 7,220)
Dividends and distributions paid ( 88,782) ( 60,501) ( 40,511)
---------- --------- ----------
Net cash provided by financing activities 56,955 71,662 266,877
--------- -------- -------
Net increase (decrease) in cash and cash equivalents 5,707 ( 28,704) 29,637
Cash and cash equivalents:
Beginning of year 4,742 33,446 3,809
-------- --------- ---------
End of year $ 10,449 $ 4,742 $33,446
======== ========= =======
The accompanying notes are an integral part of these consolidated financial
statements.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1 ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION
Home Properties of New York, Inc. (the " Company " ) was formed in
November 1993, as a Maryland corporation and is engaged primarily in
the ownership, management, acquisition, rehabilitation and development
of apartment communities in the Northeastern, Mid-Atlantic and
Midwestern United States. The Company conducts its business through
Home Properties of New York, L.P. (the "Operating Partnership"), a New
York limited partnership. As of December 31, 2000, the Company operated
319 apartment communities with 50,912 apartments. Of this total, the
Company owned 147 communities, consisting of 39,041 apartments, managed
as general partner 136 partnerships that owned 8,325 apartments and fee
managed 3,546 apartments for affiliates and third parties. The Company
also fee managed 1.0 million square feet of office and retail
properties.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts
of the Company and its 62.5% (62.4% at December 31, 1999) partnership
interest in the Operating Partnership. The remaining 37.5% (37.6% at
December 31, 1999) is reflected as Minority Interest in these
consolidated financial statements. Investments in which the Company
does not have control are presented on the equity method. All
significant intercompany balances and transactions have been eliminated
in these consolidated financial statements.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REAL ESTATE
Real estate is recorded at cost. Costs related to the acquisition,
development, construction and improvement of properties are
capitalized. Interest costs are capitalized until construction is
substantially complete. When retired or otherwise disposed of, the
related cost and accumulated depreciation are cleared from the
respective accounts and the net difference, less any amount realized
from disposition, is reflected in income. There was $260, $263 and $189
of interest capitalized in 2000, 1999 and 1998, respectively. Ordinary
repairs and maintenance are expensed as incurred.
The Company reviews its properties on a quarterly basis to determine if
its carrying costs will be recovered from future operating cash flows.
In cases where the Company does not expect to recover its carrying
costs, the Company recognizes an impairment loss. No such losses have
been recognized to date.
DEPRECIATION
Properties are depreciated using a straight-line method over the
estimated useful lives of the assets as follows: buildings,
improvements and equipment - 5-40 years; and tenant improvements - life
of related lease. Depreciation expense charged to operations was
$52,221, $37,176 and $23,067 for the years ended December 31, 2000,
1999 and 1998, respectively.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows, cash and
cash equivalents include all cash and highly liquid investments
purchased with original maturities of three months or less. The Company
estimates that the fair value of cash equivalents approximates the
carrying value due to the relatively short maturity of these
instruments.
CASH IN ESCROWS
Cash in escrows consists of cash restricted under the terms of various
loan agreements to be used for the payment of property taxes and
insurance as well as required replacement reserves and tenant security
deposits for residential properties.
DEFERRED CHARGES
Costs relating to the financing of properties are deferred and
amortized over the life of the related agreement. The straight-line
method, which approximates the effective interest method, is used to
amortize all financing costs. The range of the terms of the agreements
are from 1-23 years. Accumulated amortization was $1,270, $1,165 and
$2,592 as of December 31, 2000, 1999 and 1998, respectively.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
ADVERTISING
Advertising expenses are charged to operations during the year in which
they were incurred. Advertising expenses incurred and charged to
operations were approximately $5,366, $3,966 and $2,891 for the years
ended December 31, 2000, 1999 and 1998, respectively.
REVENUE RECOGNITION
The Operating Partnership leases its residential properties under
leases with terms generally one year or less. Rental income is
recognized when earned. Property other income, which consists primarily
of income from operation of laundry facilities, administrative fees,
garage and carport rentals and miscellaneous charges to residents, is
recognized when earned.
The Operating Partnership earns development and other fee income from
properties in the development phase. This fee income is recognized on
the percentage of completion method.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company has elected to be taxed as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended,
commencing with the taxable year ended December 31, 1994. As a result,
the Company generally will not be subject to Federal or State income
taxation at the corporate level to the extent it distributes annually
at least 95% (reduced to 90% effective January 1, 2001) of its REIT
taxable income to its shareholders and satisfies certain other
requirements. Accordingly, no provision has been made for federal
income taxes in the accompanying consolidated financial statements for
the years ended December 31, 2000, 1999 and 1998. Stockholders are
taxed on dividends and must report such dividends as either ordinary
income, capital gains, or as return of capital.
EARNINGS PER SHARE
Basic Earnings Per Share ("EPS") is computed as net income available to
common shareholders divided by the weighted average number of common
shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur from common shares issuable through
stock-based compensation including stock options and the conversion of
any cumulative convertible preferred stock. The exchange of an
Operating Partnership Unit for common stock will have no effect on
diluted EPS as unitholders and stockholders effectively share equally
in the net income of the Operating Partnership.
Income before extraordinary item, extraordinary item and net income
available to common shareholders are the same for both the basic and
diluted calculation. The reconciliation of the basic and diluted
earnings per share for the years ended December 31, 2000, 1999 and 1998
is as follows:
2000 1999 1998
---- ---- ----
Net Income before preferred dividends $41,456 $26,282 $18,688
Less: Preferred dividends (12,178) (1,153) -
------- ------- -------
Net income available to common shareholders $29,278 $25,129 $18,688
======= ======= =======
Basic weighted average number of shares
outstanding 20,639,241 18,697,731 13,898,221
Effect of dilutive stock options 116,480 103,176 124,108
---------- ----------- -----------
Diluted weighted average number of shares
outstanding 20,755,721 18,800,907 14,022,329
========== ========== ==========
Basic earnings per share $1.42 $1.34 $1.34
===== ===== =====
Diluted earnings per share $1.41 $1.34 $1.33
===== ===== =====
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2 SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (CONTINUED)
EARNINGS PER SHARE (CONTINUED)
Unexercised stock options to purchase 1,270,300 (including warrants of
525,000 issued with the Series C and E Preferred Stock issuance) ,
713,600 and 138,500 shares of the Company's common stock were not
included in the computations of diluted EPS because the options'
exercise prices were greater than the average market price of the
Company's stock during the years ended December 31, 2000, 1999 and
1998, respectively. For the year ended December 31, 2000, the 4,816,667
shares of the Series A, B, C, D and E Convertible Cumulative Preferred
Stock (7,112,381 common stock equivalents) on an as-converted basis has
an antidilutive effect and is not included in the computation of
diluted EPS.
3 INVESTMENT IN AND ADVANCES TO AFFILIATES
The Company has investments in and advances to approximately 143
limited partnerships where the Company acts as managing general
partner. In addition, there are investments in other affiliated
entities. The following is summarized financial information for the
investment in and advances to affiliates carried under the equity
method of accounting as of December 31, 2000 and 1999 and for each of
the three years ended December 31, 2000.
2000 1999
Balance Sheets:
Real estate, net $293,616 $269,088
Other assets 34,023 36,228
---------- ----------
Total assets $327,639 $305,316
======== ========
Mortgage notes payable $257,834 $224,760
Advances from general partner 21,957 39,717
Other liabilities 18,558 12,379
Partners' equity 29,290 28,460
--------- ---------
Total liabilities and partners' equity $327,639 $305,316
======== ========
2000 1999 1998
---- ---- ----
Operations:
Gross revenues $44,053 $42,059 $38,958
Operating expenses ( 26,627) ( 26,683) ( 21,078)
Mortgage interest expense ( 12,198) ( 10,398) ( 8,036)
Depreciation and amortization ( 12,964) ( 11,257) ( 10,725)
--------- -------- ---------
Net loss ( $ 7,736) ($ 6,279) ($ 881)
========= ======== ==========
Company's share (included in property other income) $ 45 $ 45 ($ 259)
========= ======== ==========
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3 INVESTMENT IN AND ADVANCES TO AFFILIATES (CONTINUED)
Reconciliation of interests in the underlying net assets to the
Company's carrying value of property investments in and advances to
affiliates:
2000 1999
---- ----
Partners' equity, as above $29,290 $28,460
Equity of other partners 24,217 24,784
-------- --------
Company's share of investments in limited partnerships 5,073 3,676
Advances to limited partnerships, as above 21,957 39,717
-------- --------
Company's investment in and advances to limited partnerships 27,030 43,393
Company's investment in Management Companies (see Note 9) ( 1,516) 275
Company's advances to Management Companies 19,534 19,782
-------- --------
Carrying value of investments in and advances to affiliates $45,048 $63,450
======= =======
4 MORTGAGE NOTES PAYABLE
The Company's mortgage notes payable are summarized as follows:
2000 1999
---- ----
Fixed rate mortgage notes payable $823,488 $612,566
Variable rate mortgage notes payable 9,295 6,335
---------- -----------
Total mortgage notes payable $832,783 $618,901
======== ========
Mortgage notes payable are collateralized by certain apartment
communities and mature at various dates from November, 2001 through
June, 2036. The weighted average interest rate of the Company's
variable rate notes and credit facility was 6.54% at December 31, 2000.
The weighted average interest rate of the Company's fixed rate notes
was 7.41% and 7.39% at December 31, 2000 and 1999, respectively.
Principal payments on the mortgage notes payable for years subsequent
to December 31, 2000 are as follows:
2001 $13,918
2002 55,964
2003 49,235
2004 28,798
2005 39,297
Thereafter 645,571
--------
$832,783
========
The Company determines the fair value of the mortgage notes payable
based on the discounted future cash flows at a discount rate that
approximates the Company's current effective borrowing rate for
comparable loans. Based on this analysis, the Company has determined
that the fair value of the mortgage notes payable approximates $858,743
at December 31, 2000.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4 MORTGAGE NOTES PAYABLE (CONTINUED)
The Company has incurred prepayment penalties on debt restructurings
which are accounted for as extraordinary items in the statement of
operations. Prepayment penalties were approximately $0, $174 and $1,555
for the years ended December 31, 2000, 1999 and 1998, respectively. The
2000 paydowns totaled $25,067 from two debt instruments which were
refinanced by two new borrowings in excess of $39,000. The 1999
paydowns totaled $13,669 from four debt instruments which were paid off
from available cash on hand.
5 LINE OF CREDIT
As of December 31, 2000, the Company had an unsecured line of credit
from M&T Bank of $100,000 with no outstanding borrowings. The facility
expires on September 1, 2002. Borrowings bear interest at 1.25% over
the one-month LIBOR rate. The LIBOR interest rate was 6.56% at December
31, 2000.
6 MINORITY INTEREST
Minority interest in the Company relates to the interest in the
Operating Partnership not owned by Home Properties of New York, Inc.
Units in the Operating Partnership ("UPREIT Units") are exchangeable on
a one-for-one basis into common shares. On December 30, 1996, $35
million was raised in a private placement through the sale of a Class A
Limited Partnership Interest to a state pension fund. The interest,
which can be converted into 1,666,667 shares of common stock, will
receive a preferred return equal to the greater of: (a) 9.25% on the
original investment during the first two years ending on December 30,
1998, declining to 9.0% up to and including December 30, 2003; or (b)
the actual dividends paid to common shareholders on 1,666,667 shares.
On December 22, 1999, the holder of the Class A Limited Partnership
Interest converted its ownership to Series A Preferred stock.
The changes in minority interest for the two years ended December 31
are as follows:
2000 1999
---- ----
Balance, beginning of year $299,880 $204,709
Issuance of UPREIT Units associated with
property acquisitions 58,616 149,483
Adjustment from minority interest to stockholders' equity 26,825 ( 12,306)
Exchange of UPREIT Units for Shares ( 7,387) ( 1,323)
Exchange of partnership interests for Series A Preferred stock - ( 35,448)
Net income 25,714 17,312
Distributions (32,104) ( 22,547)
--------- --------
Balance, end of year $371,544 $299,880
======== ========
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7 PREFERRED STOCK AND STOCKHOLDERS' EQUITY
PREFERRED STOCK
On May 22, 2000 and June 19, 2000, the Company privately placed 400,000
and 200,000 of its 8.75% Series C convertible cumulative preferred
stock ("Series C Preferred"), $100 liquidation preference per share.
These offerings generated net proceeds of approximately $60 million.
The net proceeds were used to fund acquisitions and property upgrades.
The Series C Preferred Shares are convertible at any time by the holder
into Common Shares at a conversion price of $30.25 per Common Share,
equivalent to a conversion ratio of 3.3058 Common Shares for each
Series C preferred Share (equivalent to 1,983,471 Common Shares
assuming 100% converted). The Series C Preferred Shares are
non-callable for five years. Each Series C Preferred Share will receive
the greater of a quarterly distribution of $2.1875 per share or the
dividend paid on a share of common stock on an as-converted basis. The
Company also issued 240,000 additional warrants to purchase common
shares at a price of $30.25 per share, expiring in five years.
On June 5, 2000, the Company privately placed 250,000 of its 8.78%
Series D convertible cumulative preferred stock ("Series D Preferred"),
$100 liquidation preference per share. This offering generated net
proceeds of approximately $25 million. The net proceeds were used to
fund Company acquisitions and property upgrades. The Series D Preferred
shares are convertible at any time by the holder into Common Shares at
a conversion price of $30.00 per Common Share, equivalent to a
conversion ratio of 3.333 Common Shares for each Series D Preferred
Share (equivalent to 833,333 Common Shares assuming 100% converted).
The Series D Preferred Shares are non-callable for five years. Each
Series D Preferred Share will receive the greater of a quarterly
distribution of $2.195 per share or the dividend paid on a share of
common stock on an as-converted basis.
On December 22, 2000, the company privately placed 300,000 of its 8.55%
Series E convertible cumulative preferred stock ("Series E Preferred"),
$100 liquidation preference per share. This offering generated net
proceeds of approximately $30 million. The net proceeds were used to
pay down Company borrowings. The Series E Preferred shares are
convertible at any time by the holder into Common Shares at a
conversion price of $31.60 per Common Share, equivalent to a conversion
ratio of 3.1646 Common Shares for each Series E Preferred Share
(equivalent to 949,367 Common Shares assuming 100% converted). The
Series E Preferred Shares are non-callable for five years. Each Series
E Preferred Share will receive the greater of a quarterly distribution
of $2,1375 per share or the dividend paid on a share of common stock on
an as-converted basis. In addition, the company issued warrants to
purchase 285,000 common shares at a price of $31.60 per share, expiring
in five years.
On September 30, 1999, the Company privately placed 2,000,000 of its
8.36% Series B convertible cumulative preferred stock ("Series B
Preferred"), $25 liquidation preference per share. This offering
generated net proceeds of approximately $48.7 million after offering
costs of $1.3 million. The net proceeds were used to pay down Company
borrowings. The Series B Preferred shares are convertible at any time
by the holder into Common Shares at a conversion price of $29.77 per
Common Share, equivalent to a conversion ratio of .8398 Common Shares
for each Series B Preferred Share (equivalent to 1,679,543 Common
Shares assuming 100% converted). The Series B Preferred Shares are
non-callable for five years. Each Series B Preferred Share will receive
the greater of a quarterly distribution of $0.5225 per share or the
dividend paid on a share of common
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7 PREFERRED STOCK AND STOCKHOLDERS' EQUITY (CONTINUED)
PREFERRED STOCK (CONTINUED)
stock on an as converted basis. The Company has determined that the
Series B Preferred shares contain certain contingent provisions that
could cause such shares to be redeemable at the option of the holder
and has presented this class of preferred stock outside of
stockholders' equity.
On December 22, 1999, the holder of the Class A limited partnership
interests converted its ownership to 9% Series A Preferred stock,
liquidation preference of $21.00 per Common Share, total shares
outstanding of 1,666,667. The conversion to preferred stock occurred at
the Company's request and permits the Operating Partnership to continue
to use favorable tax depreciation methods. The Series A Preferred
shares are convertible at any time by the holder on a one-for-one basis
into Common Shares. Each Series A Preferred share will receive a
quarterly distribution equal to the greater of 9% per annum multiplied
by the liquidation preference or the dividend paid on a share of common
stock. The current dividend of $.57 per quarter (effective with the
November, 2000 dividend) is equivalent to an annualized rate of $2.28
per share, which exceeds the 9% preferred return. On and after December
30, 2003, each preferred share will receive the dividend paid on a
share of common stock as long as the actual distributions paid in each
of the prior eight consecutive quarters equaled or exceeded a 9.25%
annual return. Any unconverted interest can be redeemed without premium
by the Company after December 30, 2006.
DIVIDEND REINVESTMENT PLAN
The Company has adopted the Dividend Reinvestment, Stock Purchase,
Resident Stock Purchase and Employee Stock Purchase Plan (the "DRIP" ).
The DRIP provides the stockholders of the Company an opportunity to
automatically invest their cash dividends at a discount of 3% from the
market price. In addition, eligible participants may make monthly or
other voluntary cash investments, also typically at a discount, which
has varied between 2% and 3% from the market price, in shares of common
stock. A total of $57 million, $49 million, and $72 million, net of
officer and director notes, was raised through this program during
2000, 1999 and 1998, respectively.
Effective April 10, 2001, the DRIP will be amended to reduce the
discount from the current market price from 3% to 2%. The maximum
amount that can be invested without the Company's prior permission will
also be reduced from $5,000 to $1,000.
OFFICER AND DIRECTOR NOTES FOR STOCK PURCHASES
On August 12, 1996, eighteen officers and the six independent directors
purchased an aggregate of 208,543 shares of Common Stock through the
DRIP at the price of $19.79. The purchases were financed 50% from a
bank loan and 50% by a recourse loan from the Company. The Company
loans bear interest at 7% per annum and mature in August, 2016. The
Company loans are subordinate to the above-referenced bank loans, and
are collateralized by pledges of the 208,543 common shares. The loans
are expected to be repaid from the regular quarterly dividends paid on
the shares of common stock pledged, after the corresponding bank loans
are paid in full.
On November 10, 1997, twenty-one officers and five of the independent
directors purchased an aggregate of 169,682 shares of common stock
through the DRIP at the price of $26.66. The purchases were financed
50% from a bank loan and 50% by a recourse loan from the Company.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7 PREFERRED STOCK AND STOCKHOLDERS' EQUITY (CONTINUED)
OFFICER AND DIRECTOR NOTES FOR STOCK PURCHASES (CONTINUED)
The Company loans bear interest at 6.7% per annum and mature in
November, 2017. The Company loans are subordinate to the
above-referenced bank loans, and are collateralized by pledges of the
169,682 common shares. The loans are expected to be repaid from the
regular quarterly dividends paid on the shares of common stock pledged,
after the corresponding bank loans are paid in full.
STOCK PURCHASE AND LOAN PLAN
In May, 1998, the Company adopted the Director, Officer and Employee
Stock Purchase and Loan Plan (the "Stock Purchase Plan"). The program
provides for the sale and issuance, from time to time as determined by
the Board of Directors, of up to 500,000 shares of the Company's Common
Stock to the directors, officers and key employees of the Company for
consideration of not less than 97% of the market price of the Common
Stock. The Stock Purchase Plan also allows the Company to loan the
participants up to 100% of the purchase price (50% for non-employee
directors).
On August 12, 1998, thirty officers/key employees and the six
independent directors purchased an aggregate of 238,239 shares of
common stock through the Stock Purchase Plan at the price of $24.11.
The purchases for the officers/key employees were financed 100% by a
recourse loan from the Company (50% for non-employee directors). The
loans bear interest at 7.13% per annum and mature on the earlier of the
maturity of the 1996 and 1997 phases of the loan program or August,
2018. The loans are collateralized by pledges of the common stock and
are expected to be repaid from the regular quarterly dividends paid on
the shares.
DIVIDENDS
Stockholders are taxed on dividends and must report such dividends as
either ordinary income, capital gains, or as return of capital. The
appropriate amount of each per common share is as follows:
ORDINARY INCOME RETURN OF CAPITAL
1998 79.4% 20.6%
1999 85.6% 14.4%
2000 91.0% 9.0%
TOTAL SHARES/UNITS OUTSTANDING
At December 31, 2000, 21,565,681 common shares, 7,112,381 convertible
preferred shares (on a diluted basis) and 15,854,496 UPREIT Units were
outstanding for a total of 44,532,558.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8 SEGMENT REPORTING
The Company is engaged in one primary business segment - the ownership
and management of market rate apartment communities (segregated as Core
and Non-core properties). Company management views each apartment
community as a separate component of the operating segment.
Non-segment revenue to reconcile total revenue consists of
unconsolidated management and development fees and interest income.
Non-segment assets to reconcile to total assets include cash, cash in
escrows, accounts receivable, prepaid expenses, deposits, investments
in and advances to affiliates, deferred charges and other assets.
Core properties consist of all apartment communities which have been
owned more than one full calendar year. Therefore, the 2000 Core
represents communities owned as of December 31, 1998. Non-core
properties consist of apartment communities acquired during 1999 and
2000, such that full year comparable operating results are not
available.
The accounting policies of the segment is the same as those described
in Note 1.
The Company assesses and measures segment operating results based on a
performance measure referred to as Funds from Operations ("FFO"). The
National Association of Real Estate Investment Trusts defines FFO as
net income (loss), before gains (losses) from the sale of property,
extraordinary items, plus real estate depreciation including
adjustments for unconsolidated partnerships and joint ventures. FFO is
not a measure of operating results or cash flows from operating
activities as measured by generally accepted accounting principles and
it is not indicative of cash available to fund cash needs and should
not be considered an alternative to cash flows as a measure of
liquidity.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8 SEGMENT REPORTING (CONTINUED)
The revenues, profit (loss), and assets for the reportable segment are
summarized as follows for the years ended December 31, 2000, 1999, and
1998.
2000 1999 1998
---- ---- ----
REVENUES
Apartments owned
Core properties $ 194,903 $182,892 $141,171
Non-core properties 115,346 41,577 -
Reconciling items 8,799 9,994 8,072
------------ ---------- ----------
Total Revenue $ 319,048 $234,463 $149,243
========== ======== ========
PROFIT (LOSS)
Funds from operations:
Apartments owned
Core properties $ 111,147 $103,322 $78,035
Non-core properties 71,068 25,947 -
Reconciling items 8,799 9,994 8,072
------------- -------- --------
Segment contribution to FFO 191,014 139,263 86,107
General & administrative expenses ( 13,235) ( 10,696) ( 6,685)
Interest expense ( 56,792) ( 39,558) (23,980)
Unconsolidated depreciation 383 458 733
Non-recurring amortization - - 294
Non-real estate depreciation/amort. ( 516) ( 335) ( 209)
-------------- ---------- -----------
Funds from Operations 120,854 89,132 56,260
Depreciation - apartments owned ( 51,914) (37,015) (22,982)
Unconsolidated depreciation ( 383) ( 458) ( 733)
Non-recurring amortization - - ( 294)
Non-recurring acquisition expense - ( 6,225) -
Loss on available-for-sale securities - ( 2,123) -
Gain (loss) on disposition of properties ( 1,386) 457 -
Minority interest in earnings ( 25,715) (17,390) (12,603)
Extraordinary items, net of minority interest ( 96) ( 960)
--------------- ---------- ---------
-
Net Income before preferred dividends $ 41,456 $26,282 $18,688
=========== ======= =======
ASSETS
Apartments owned $1,741,945 $1,378,849 $875,161
Reconciling items 129,943 124,768 137,074
--------- ------------ ------------
Total Assets $1,871,888 $1,503,617 $1,012,235
========== ========== ==========
REAL ESTATE CAPITAL EXPENDITURES
New property acquisitions $ 328,021 $480,564 $376,735
Apartment improvements 92,603 61,034 42,896
------------ --------- ---------
Total Real Estate Capital Expenditures $ 420,624 $541,598 $419,631
========== ======== ========
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9 MANAGEMENT COMPANIES
Certain property management, leasing and development activities are
performed by Home Properties Management, Inc. and Home Properties
Resident Services, Inc. (formerly Conifer Realty Corp.) (the
"Management Companies"). The Management Companies issued non-voting
common stock to the Operating Partnership in exchange for management
contracts for residential, commercial, and development managed
properties and certain other assets. This exchange entitles the
Operating Partnership to receive 99% of the economic interest of each
Management Company. The remaining 1% economic interest and voting stock
were issued to certain inside directors of the Company. On December 31,
1998, additional shares representing a 4% economic interest were sold
and issued to the same inside directors. Therefore, effective January
1, 1999, the Operating Partnership is entitled to receive 95% of the
economic interest of each Management Company.
The Management Companies receive development, construction and other
fee income from properties in the development phase. This fee income is
recognized on the percentage of completion method. The Management
Companies are accounted for under the equity method.
The Management Companies provide property management and administrative
services to certain real estate and other entities. In consideration
for these services, the Management Companies receive monthly management
fees generally based on a percentage of revenues or costs incurred.
Management fees are recognized as revenue when they are earned.
The Company's share of income from the Management Companies was
($1,791), $156, and $113 for the years ended December 31, 2000, 1999
and 1998, respectively. Summarized combined financial information of
the Management Companies at and for the years ended December 31, 2000,
1999 and 1998 is as follows:
2000 1999 1998
---- ---- ----
Management fees $ 3,716 $ 3,778 $ 3,471
Development and construction management fees 3,991 5,567 4,581
General and administrative ( 7,364) (7,449) (6,953)
Interest expense ( 1,937) (1,242) ( 681)
Other expenses ( 292) ( 490) ( 304)
-------- ---------- ---------
Net income ($1,886) $ 164 $ 114
======= ========= =========
Total assets $21,965 $21,699 $11,288
======= ======= =======
Total liabilities $23,526 $21,375 $10,848
======= ======= =======
10 TRANSACTIONS WITH AFFILIATES
The Company and the Management Companies recognized management and
development fee revenue, interest income and other miscellaneous income
from affiliated entities of $15,088, $15,199 and $13,492 for the years
ended December 31, 2000, 1999 and 1998, respectively.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10 TRANSACTIONS WITH AFFILIATES (CONTINUED)
The Company leases its corporate office space from an affiliate. The
lease required an annual base rent of $336 through June, 2000 and $335
from July, 2000 through the August, 2003 lease expiration. The lease
also requires the Company to pay a pro rata portion of property
improvements, real estate taxes and common area maintenance. Rental
expense was $712, $698 and $619 for the years ended December 31, 2000,
1999 and 1998, respectively.
From time to time, the Company advances funds as needed to the
Management Companies which total $19,534 and $19,782 at December 31,
2000 and 1999, respectively, and bear interest at 1% over prime.
11 COMMITMENTS AND CONTINGENCIES
GROUND LEASE
The Company has a non-cancelable operating ground lease for one of its
properties. The lease expires May 1, 2020, with options to extend the
term of the lease for two successive terms of twenty-five years each.
The lease provides for contingent rental payments based on certain
variable factors. The lease also requires the lessee to pay real estate
taxes, insurance and certain other operating expenses applicable to the
leased property. Ground lease expense was $201, $194 and $186 including
contingent rents of $131, $124 and $116 for the years ended December
31, 2000, 1999 and 1998, respectively. At December 31, 2000, future
minimum rental payments required under the lease are $70 per year until
the lease expires.
401(K) SAVINGS PLAN
The Company participates in a contributory savings plan. Under the
plan, the Company will match 75% of the first 4% of participant
contributions. The matching expense under this plan was $512, $398 and
$208 for the years ended December 31, 2000, 1999 and 1998,
respectively.
INCENTIVE COMPENSATION PLAN
The Incentive Compensation Plan provides that eligible officers and key
employees may earn a cash bonus based on increases in funds from
operations ("FFO") per share/unit (computed based on the basic
shares/units outstanding). No cash bonuses were payable under the
Incentive Compensation Plan unless the increase in FFO per share, after
giving effect to the bonuses, was equal to or greater than 5%. The
bonus expense charged to operations (including Management Companies)
was $103, $2,190 and $1,997 for the years ended December 31, 2000, 1999
and 1998, respectively.
CONTINGENCIES
The Company is party to certain legal proceedings. All such
proceedings, taken together, are not expected to have a material
adverse effect on the Company. The Company is also subject to a variety
of legal actions for personal injury or property damage arising in the
ordinary course of its business, most of which are covered by liability
insurance. While the resolution of these matters cannot be predicted
with certainty, management believes that the final outcome of such
legal proceedings and claims will not have a material adverse effect on
the Company's liquidity, financial position or results of operations.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11 COMMITMENTS AND CONTINGENCIES (CONTINUED)
CONTINGENCIES (CONTINUED)
In connection with various UPREIT transactions, the Company has agreed
to maintain certain levels of nonrecourse debt associated with the
contributed properties acquired. In addition, the Company is restricted
in its ability to sell certain contributed properties (49% of the owned
portfolio) for a period of time except through a tax deferred Internal
Revenue Code Section 1031 like-kind exchange.
DEBT COVENANTS
The line of credit loan agreements contain restrictions which, among
other things, require maintenance of certain financial ratios and limit
the payment of dividends. At December 31, 2000, the Company was in
compliance with these covenants.
GUARANTEES
The Company has guaranteed a total of $611 of debt associated with two
entities where the Company is the general partner or managing agent. In
addition, the Company has guaranteed the Low Income Housing Tax Credit
to limited partners in 42 partnerships totaling approximately $48,500.
In addition, the Company, acting as general partner in certain
partnerships, is obligated to advance funds to meet partnership
operating deficits. As of December 31, 2000, there were no known
conditions that would make such payments necessary.
EXECUTIVE RETENTION PLAN
Effective February 2, 1999, the Executive Retention Plan provides for
severance benefits and other compensation to be received by certain
employees in the event of a change in control of the Company and a
subsequent termination of their employment without cause or voluntarily
with good cause.
12 STOCK BENEFIT PLAN
The Company has adopted the 1994 Stock Benefit Plan as Amended (the "
Plan " ). Plan participants include officers, non-employee directors,
and key employees of the Company. The Company has reserved 1,596,000
shares for issuance to officers and employees and 154,000 shares for
issuance to non-employee directors. Options granted to officers and
employees of the Company vest 20% for each year of service until 100%
vested on the fifth anniversary. Certain officers' options (264,000)
and directors' options (149,100) vest immediately upon grant. The
exercise price per share for stock options may not be less than 100% of
the fair market value of a share of common stock on the date the stock
option is granted (110% of the fair market value in the case of
incentive stock options granted to employees who hold more than 10% of
the voting power of the Company's common stock). Options granted to
directors and employees who hold more than 10% of the voting power of
the Company expire after five years from the date of grant. All other
options expire after ten years from the date of grant. The Plan also
allows for the grant of stock appreciation rights and restricted stock
awards, however, there were none granted at December 31, 2000. At
December 31, 2000, 170,680 and 346 common shares were available for
future grant of options or awards under the Plan for officers and
employees and non-employee directors, respectively. On February 1,
2000, the Company adopted the 2000 Stock Benefit Plan (the "2000
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12 STOCK BENEFIT PLAN (CONTINUED)
Plan"). Plan participants have been expanded to include directors,
officers, regional managers and on-site property managers. It is
expected that all future awards of stock options will be granted under
the 2000 Plan. The 2000 Plan limits the number of shares issuable under
the plan to 2.2 million, of which 200,000 are to be available for
issuance to the non-employee directors. At December 31, 2000, 1,331,220
and 161,140 common shares were available for future grant of options or
awards under the 2000 plan for officers and employees and non-employee
directors, respectively.
Details of stock option activity during 2000, 1999 and 1998 are as
follows:
Number Option Price
of Shares Per Share
------------------ -----------------
Options outstanding at January 1, 1998 835,502 $17.875-$26.50
(507,809 shares exercisable)
Granted, 1998 217,100 25.125-27.06
Exercised, 1998 ( 240,739) 17.875-20.50
Cancelled, 1998 ( 11,000) 19.00-26.50
------------
Options outstanding at December 31, 1998 800,863 17.875-27.06
(395,441 shares exercisable)
Granted, 1999 610,400 25.688-27.125
Exercised, 1999 ( 96,643) 17.875-26.50
Cancelled, 1999 ( 49,187) 19.00-27.125
------------
Options outstanding at December 31, 1999 1,265,433 17.875-27.125
(448,820 shares exercisable)
Granted, 2000 752,720 28.31-31.375
Exercised, 2000 ( 150,008) 17.875-27.125
Cancelled, 2000 ( 71,480) 19.00-31.375
----------
Options outstanding at December 31, 2000 1,796,665 $17.875-$31.375
(519,434 shares exercisable) =========
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12 STOCK BENEFIT PLAN (CONTINUED)
The following table summarizes information about options outstanding at
December 31, 2000:
Weighted
Average Weighted Weighted
Remaining Average Average
Year Number Contractual Fair Value Number Exercise
GRANTED OUTSTANDING LIFE OF OPTIONS EXERCISABLE PRICE
1994 119,690 4 N/A 119,690 $19.000
1996 91,450 5 $1.01 75,560 19.819
1997 131,205 6 $1.59 88,436 25.455
1998 176,160 7 $1.39 85,164 25.682
1999 546,920 8 $1.60 128,984 25.852
2000 731,240 9 $1.91 21,600 28.313
---------- ---- -------- --------
Totals 1,796,665 6 519,434 $23.448
========= ==== ======= =======
The Company has adopted the disclosure only provisions of Financial
Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Accordingly, no compensation cost has been recognized
for the stock option plan. Had compensation for the Company's stock
option plan been determined based on the fair value at the date of
grant for awards in 2000, 1999, and 1998, the Company's proforma net
income before preferred dividends and proforma basic earnings per
common share would have been $40,956, $26,063 and $18,563 and $1.39,
$1.33 and $1.34, respectively. The fair value of each option grant is
estimated on the date of grant using the Black-Scholes option-pricing
model with the following assumptions used for grants in 2000, 1999 and
1998: dividend yield of 8.101%; expected volatility of 18.97%;
forfeiture rate of 5%; and expected lives of 7.5 years for options with
a lifetime of ten years, and five years for options with a lifetime of
five years. The interest rate used in the option-pricing model is based
on a risk free interest rate ranging from 5.30% to 6.87%.
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13 PROPERTY ACQUISITIONS
For the years ended December 31, 2000, 1999 and 1998, the Company has
acquired the communities listed below:
Cost of
Market Date Year Number Cost of Acquisition
COMMUNITY AREA ACQUIRED CONSTRUCTED OF UNITS ACQUIS. PER UNIT
--------- ---- -------- ----------- -------- ------- --------
Candlewood South Bend 2/9/98 1986 310 $13,506 $44
Cedar Glen Philadelphia 3/2/98 1966 110 2,733 25
2 Property Portfolio Northern VA 3/13/98 1954 548 26,848 49
Apple Hill Hamden, CN 3/27/98 1971 498 23,833 48
4 Property Portfolio Baltimore 4/30/98 1964-80 1,589 53,363 34
Colonies Chicago 6/24/98 1973 672 23,027 34
Racquet Club Philadelphia 7/7/98 1971 467 24,975 53
16 Property Portfolio Northern NJ 7/8/98 1943-80 3,746 148,509 40
Sherry Lake Philadelphia 7/23/98 1965 298 18,000 60
Coventry Village Long Island 7/31/98 1974 94 3,112 33
Rolling Park Baltimore 9/15/98 1972 144 5,753 40
3 Property Portfolio Detroit 9/29/98 1965-66 648 24,213 37
Pines of Perinton Rochester 9/30/98 1976 508 8,863 17
The Manor Northern VA 2/19/99 1973 198 7,119 36
Ridgeway Court Philadelphia 2/26/99 1972 66 2,156 33
Springwells Park Detroit 4/8/99 1940-66 303 18,355 61
Sherwood Gardens Philadelphia 5/27/99 1968 103 4,198 41
7 Property Portfolio Various 7/1/99 1959-82 3,722 176,607 47
Maple Lane South Bend 7/9/99 1982-89 396 17,542 44
12 Property Portfolio Mid-Atlantic 7/15/99 1964-96 3,297 154,168 47
4 Property Portfolio Philadelphia 7/28/99 1962-68 825 32,534 39
The Colony Chicago 9/1/99 1972-78 783 41,887 53
The Lakes Detroit 11/5/99 1986 434 25,907 60
Old Friends Baltimore 2/1/00 1887 51 2,138 39
6 Property Portfolio Philadelphia 3/15/00 1940-75 2,113 141,195 64
2 Property Portfolio Detroit 3/22/00 1969-74 360 14,394 40
Elmwood Terrace Baltimore 6/30/00 1972 504 20,605 41
East Meadow Northern VA 8/1/00 1971 150 13,053 87
Southbay Manor Long Island 9/11/00 1959 61 3,054 49
Hampton Court Detroit 9/29/00 1972 182 5,889 33
Bayberry Detroit 9/29/00 1967 120 5,840 47
Blackhawk Chicago 10/20/00 1971 371 17,542 47
5 Property Portfolio Long Island 11/1/00 1955-75 429 26,968 62
Orleans Village Northern VA 11/16/00 1967 851 67,404 79
Cypress Place Chicago 12/27/00 1969 192 10,075 53
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14 PROFORMA CONDENSED FINANCIAL INFORMATION (UNAUDITED)
The following unaudited proforma information was prepared as if the
2000 transactions related to the acquisitions of 22 apartment
communities in twelve separate transactions and the $115 million Series
B, C, D and E Preferred stock offerings had occurred on January 1,
1999. The proforma financial information is based upon the historical
consolidated financial statements and is not necessarily indicative of
the consolidated results which actually would have occurred if the
transactions had been consummated at the beginning of 1999, nor does it
purport to represent the results of operations for future periods.
For the years ended
December 31,
2000 1999
---- ----
Total revenues $344,352 $283,036
Income before extraordinary item 46,079 32,915
Net income available to common shareholders 33,901 31,662
Per common share data: Income before extraordinary item:
Basic $1.64 $1.70
Diluted $1.63 $1.69
Net income:
Basic $1.64 $1.69
Diluted $1.63 $1.68
Weighted average numbers of shares outstanding:
Basic 20,639,241 18,697,731
Diluted 20,755,721 18,800,907
15 SUPPLEMENTAL CASH FLOW DISCLOSURES
For the years ended December 31, 2000, 1999 and 1998 are as follows:
2000 1999 1998
---- ---- ----
Cash paid for interest $54,829 $36,967 $23,284
Mortgage loans assumed associated with property acquisitions
162,967 203,326 81,094
Issuance of UPREIT Units associated with property and other
acquisitions 58,616 149,488 77,425
Notes issued in exchange for officer and director stock
purchases - - 5,444
Exchange of UPREIT Units/partnership interest for
common/preferred shares 7,388 36,771 801
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16 QUARTERLY FINANCIAL STATEMENT INFORMATION (UNAUDITED)
Quarterly financial information for the years ended December 31, 2000
and 1999 are as follows:
2000
FIRST SECOND THIRD FOURTH
Revenues $72,364 $78,164 $82,007 $86,513
Income before minority interest
and extraordinary item 13,642 16,494 20,003 17,031
Minority interest 5,160 6,401 7,658 6,495
Extraordinary item, net of minority
interest N/A N/A N/A N/A
Net income available to common
shareholders 6,554 7,559 8,555 6,610
Basic earnings per common share:
Income before extraordinary item .33 .37 .41 .31
Extraordinary item N/A N/A N/A N/A
Net income .33 .37 .41 .31
Diluted earnings per common share:
Income before extraordinary item .33 .37 .40 .31
Extraordinary item N/A N/A N/A N/A
Net income .33 .37 .40 .31
1999
FIRST SECOND THIRD FOURTH
Revenues $47,766 $49,640 $66,178 $70,879
Income before minority interest
and extraordinary item 9,354 9,577 9,243 15,594
Minority interest 3,343 3,386 4,137 6,524
Extraordinary item, net of minority
interest N/A N/A (96) N/A
Net income available to common
shareholders 6,011 6,191 4,998 7,929
Basic earnings per common share:
Income before extraordinary item .34 .34 .27 .41
Extraordinary item N/A N/A (.01) N/A
Net income .34 .34 .26 .41
Diluted earnings per common share:
Income before extraordinary item .33 .33 .27 .41
Extraordinary item N/A N/A (.01) N/A
Net income .33 .33 .26 .41
Full year per share data does not equal the sum of the quarterly data
due to the combination of seasonality and a growing number of shares
outstanding.
HOME PROPERTIES OF NEW YORK, INC. SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(IN THOUSANDS)
Initial Costs Total Total
Cost Capital- Cost Cost,
Buildings, ized Buildings, Net of
Improve- Subse- Improve- Accumu- Accumu- Year
ments & quent to ments lated lated of
Encum- Equip- Adjust- Acquisi- & Equip- Depre- Depre- Acqui-
BRANCES LAND MENT MENTS(A) TION LAND MENT TOTAL(B) CIATION CIATION SITION
Apple Hill Apartments 13,935 3,486 20,347 3,903 3,486 24,250 27,736 2030 25,706 1998
Arbor Crossing 2,546 1,072 4,329 256 1,072 4,585 5,657 235 5,422 1999
Bayberry Place 2,516 1,440 4,400 12 1,440 4,412 5,852 30 5,822 2000
Bayview/Colonial 6,131 1,600 8,458 11 1,600 8,469 10,069 37 10,032 2000
Beechwood Gardens 560 3,442 630 560 4,072 4,632 366 4,266 1998
Blackhawk 10,694 2,968 14,574 57 2,968 14,631 17,599 99 17,500 2000
Bonnie Ridge 18,969 4,830 42,769 5,387 4,830 48,156 52,986 1940 51,046 1999
Braddock Lee Apartments 7,000 3,810 8,657 2,516 3,810 11,173 14,983 1097 13,886 1998
Broadlawn 12,479 3,160 17,901 1,889 3,160 19,790 22,950 438 22,512 2000
Brook Hill Apartments 4,684 330 7,920 2,634 330 10,554 10,884 2,130 8,754 1994
Candlewood Apartments 387 2,592 566 387 3,158 3,545 502 3,043 1996
Candlewood Apartments-
Indiana 7,643 1,550 11,956 1,036 1,550 12,992 14,542 1,053 13,489 1998
Canterbury Apartments MD 14,980 4,944 21,368 338 4,944 21,706 26,650 891 25,759 1999
Canterbury Square 6,484 2,352 10,790 1,640 2,352 12,430 14,782 1,405 13,377 1997
Carriage Hill Apartments 570 3,826 1,668 570 5,494 6,064 812 5,252 1996
Carriage Hill Apartments-
Michigan 3,761 840 5,975 657 840 6,632 7,472 535 6,937 1998
Carriage Hill Apartments-
Virginia 19,500 3,984 33,138 668 3,984 33,806 37,790 1,360 36,430 1999
Carriage House Apartments 671 250 860 243 250 1,103 1,353 100 1,253 1998
Carriage Park Apartments 5,421 1,280 8,184 1,859 1,280 10,043 11,323 842 10,481 1998
Castle Club 3,702 948 8,906 440 948 9,346 10,294 204 10,090 2000
Cedar Glen Apartments 715 2,018 502 715 2,520 3,235 260 2,975 1998
Charter Square 10,959 3,952 18,245 3,201 3,952 21,446 25,398 2,284 23,114 1997
Cherry Hill Club Apartments 2,375 492 4,096 1,637 492 5,733 6,225 482 5,743 1998
Cherry Hill Village 4,425 1,120 6,835 746 1,120 7,581 8,701 600 8,101 1998
Chesterfield Apartments 5,327 1,482 8,206 2,430 1,482 10,636 12,118 1,041 11,077 1997
Chestnut Crossing 9,809 2,592 12,699 5,019 2,592 17,718 20,310 622 19,688 1999
Cloverleaf Village 370 2,668 1,578 370 4,246 4,616 485 4,131 1997
Colonies Apartments 12,058 1,680 21,350 5,123 1,680 26,473 28,153 2,207 25,946 1998
The Colony Apartments 15,866 7,830 34,075 1,158 7,830 35,233 43,063 1,268 41,795 1999
Conifer Village Apartments 2,445 358 8,555 394 358 8,949 9,307 1,720 7,587 1994
Cornwall Park Townhouses 439 2,947 2,907 439 5,854 6,293 807 5,486 1996
Country Club 3,960 1,050 3,980 488 1,050 4,468 5,518 202 5,316 1999
Country Village Apartments 6,537 2,236 11,149 2,210 2,236 13,359 15,595 1,088 14,507 1998
Coventry Village 784 2,328 1,409 784 3,737 4,521 286 4,235 1998
Curren Terrace 9,291 1,908 10,956 2,891 1,908 13,847 15,755 1,405 14,350 1997
Cypress Place 6,589 2,304 7,771 4 2,304 7,775 10,079 32 10,047 2000
Deerfield Woods 3,412 864 4,877 138 864 5,015 5,879 114 5,765 2000
Doub Meadow 2,863 760 3,062 157 760 3,219 3,979 129 3,850 1999
East Hill Apartments 231 1,560 304 231 1,864 2,095 163 1,932 1998
East Meadow 2,250 10,803 65 2,250 10,868 13,118 94 13,024 2000
East Winds 960 5,075 4 960 5,079 6,039 22 6,017 2000
Elmwood Terrace 4,631 6,048 14,557 191 6,048 14,748 20,796 188 20,608 2000
Emerson Square 384 2,018 900 384 2,918 3,302 394 2,908 1997
Executive House 2,034 600 3,420 1,960 600 5,380 5,980 548 5,432 1997
Fairview Heights & Fairview
Manor 4,585 580 5,305 2,828 1,617 580 9,750 10,330 4,043 6,287 1985
Fairway Apartments 128 675 513 128 1,188 1,316 167 1,149 1997
Falcon Crest 2,772 11,115 2,524 2,772 13,639 16,411 675 15,736 1999
Finger Lakes Manor
Apartments 3,430 200 4,536 1,882 1,401 200 7,819 8,019 2,722 5,297 1983
Fordham Green 3,039 876 5,280 964 802 6,318 7,120 610 6,510 1997
Garden Village Apartments 4,409 354 8,546 1,912 354 10,458 10,812 2,448 8,364 1994
Gateway Village 6,356 1,320 6,616 121 1,320 6,737 8,057 270 7,787 1999
Glen Brook 3,363 1,414 4,807 628 1,414 5,435 6,849 228 6,621 1999
Glen Manor 3,586 1,044 4,494 782 1,044 5,276 6,320 475 5,845 1997
Golf Club 16,907 3,990 21,229 1,350 3,990 22,579 26,569 502 26,067 2000
Golfview Manor 320 110 541 92 110 633 743 80 663 1997
Greentrees Apartments 4,819 1,152 8,607 1,252 1,152 9,859 11,011 972 10,039 1997
Hamlet Court Apartments 1,736 351 2,351 719 351 3,070 3,421 487 2,934 1996
Hampton Court 3,587 1,274 4,615 122 1,274 4,737 6,011 34 5,977 2000
Harborside Manor 4,068 250 6,113 2,708 250 8,821 9,071 1,813 7,258 1995
Hill Brook Place 5,206 2,192 9,116 568 2,192 9,684 11,876 403 11,473 1999
Hill Court South 333 2,428 558 333 2,986 3,319 335 2,984 1997
Idylwood Apartments 9,121 700 16,927 5,436 700 22,363 23,063 4,326 18,737 1995
Ivy Ridge Apartments 438 3,449 643 434 4,096 4,530 470 4,060 1997
Kingsley Apartments 6,570 1,640 11,670 1,904 1,640 13,574 15,214 1,442 13,772 1997
Lake Grove 7,360 11,952 6,769 7,360 18,721 26,081 2,187 23,894 1997
Lakeshore Villa Apartments 573 3,848 2,193 573 6,041 6,614 785 5,829 1996
Lakeview Apartments 2,940 636 4,552 1,094 636 5,646 6,282 490 5,792 1998
Lansdowne 4,335 1,332 6,944 1,107 1,332 8,051 9,383 907 8,476 1997
Laurel Pines 5,600 944 6,675 916 944 7,591 8,535 309 8,226 1999
Macomb Manor 4,023 1,296 7,357 261 1,296 7,618 8,914 173 8,741 2000
The Manor Apartments 1,386 5,733 1,241 1,386 6,974 8,360 471 7,889 1999
Maple Lane Apartments 12,139 2,547 14,995 811 2,547 15,806 18,353 647 17,706 1999
Maple Tree 840 4,440 3 840 4,443 5,283 20 5,263 2000
Meadows Apartments 208 2,776 1,216 1,153 208 5,145 5,353 1,923 3,430 1984
Mid-Island Estates 6,675 4,176 6,580 1,599 4,160 8,195 12,355 1,044 11,311 1997
Mill Company 1,210 384 1,671 404 384 2,075 2,459 185 2,274 1982
Morningside Apartments 19,066 6,750 28,699 8,715 6,147 38,017 44,164 3,128 41,036 1998
Mountainside Apartments 7,140 1,362 7,083 1,168 1,362 8,251 9,613 652 8,961 1998
New Orleans Park 6,165 1,848 8,886 3,418 1,848 12,304 14,152 1,220 12,932 1997
Newcastle Apartments 6,000 197 4,007 3,684 2,844 197 10,535 10,732 4,120 6,612 1982
Northgate Manor Apartments 4,500 290 6,987 2,850 289 9,838 10,127 2,125 8,002 1994
Oak Manor Apartments 2,900 616 4,111 915 616 5,026 5,642 457 5,185 1998
Oak Park Manor 5,124 1,192 9,188 1,035 1,192 10,223 11,415 1,137 10,278 1997
Old Friends 2,378 255 1,883 128 255 2,011 2,266 49 2,217 2000
Orleans Village 43,745 8,510 58,894 12 8,510 58,906 67,416 256 67,160 2000
Owings Run 32,233 5,537 32,611 210 5,537 32,821 38,358 1,290 37,068 1999
Paradise Lane at Raintree 972 7,134 3,137 972 10,271 11,243 1,358 9,885 1997
Park Shirlington Apartments 8,425 4,410 9,971 2,509 4,410 12,480 16,890 1,249 15,641 1998
Parkview Gardens 8,000 1,207 7,201 1,177 1,207 8,378 9,585 997 8,588 1997
Patricia Apartments 600 4,196 903 600 5,099 5,699 393 5,306 1998
Pavilion 12,598 5,184 25,314 2,948 5,184 28,262 33,446 1,057 32,389 1999
Pearl Street 49 1,189 376 49 1,565 1,614 280 1,334 1995
Perinton Manor Apartments 6,710 224 6,120 3,629 1,704 224 11,453 11,677 4,544 7,133 1982
Pines of Perinton 8,463 1,524 7,339 610 1,524 7,949 9,473 619 8,854 1998
Pleasant View Apartments 31,915 5,710 47,816 6,635 5,710 54,451 60,161 4,708 55,453 1998
Pleasure Bay Apartments 4,640 1,620 6,234 1,485 1,620 7,719 9,339 582 8,757 1998
Racquet Club Apartments 11,783 1,868 23,107 1,855 1,868 24,962 26,830 1,884 24,946 1998
Raintree Island Apartments 7,322 - 6,654 3,217 7,484 - 17,355 17,355 5,397 11,958 1985
Redbank Village 8,450 2,000 14,030 2,094 2,000 16,124 18,124 1,378 16,746 1998
Ridgeway Court 1,104 330 1,826 147 330 1,973 2,303 131 2,172 1999
Ridley Brook 4,636 1,952 7,719 952 1,952 8,671 10,623 350 10,273 1999
Riverdale Apartments 9,900 2,900 12,891 830 2,900 13,721 16,621 589 16,032 1999
Riverton Knolls Apartments 6,768 240 6,640 2,523 4,248 240 13,411 13,651 5,040 8,611 1983
Rolling Park Apartments 2,737 720 5,033 620 720 5,653 6,373 394 5,979 1998
Royal Gardens 11,086 5,500 14,067 7,298 5,500 21,365 26,865 2,425 24,440 1997
Ryder Terrace 240 1,269 - 240 1,269 1,509 6 1,503 2000
1600 East Avenue 1,000 8,527 3,810 1,000 12,337 13,337 1,297 12,040 1997
1600 Elmwood Avenue
Apartments 5,143 303 5,698 3,339 2,170 299 11,211 11,510 5,006 6,504 1983
Scotsdale Apartments 7,875 1,692 11,920 1,301 1,692 13,221 14,913 1,273 13,640 1997
Selford Townhomes 1,224 4,200 410 1,224 4,610 5,834 187 5,647 1999
Seminary Hill 2,960 10,194 793 2,960 10,987 13,947 444 13,503 1999
Seminary Towers 4,871 5,480 19,348 3,445 5,480 22,793 28,273 918 27,355 1999
Shakespeare Park 2,593 492 3,428 75 492 3,503 3,995 140 3,855 1999
Sherry Lake Apartments 6,264 2,384 15,616 1,594 2,384 17,210 19,594 1,278 18,316 1998
Racquet Club So. 3,029 309 3,891 764 309 4,655 4,964 275 4,689 1999
South Bay Manor 1,098 1,956 43 1,098 1,999 3,097 18 3,079 2000
Southpointe Square 2,720 896 4,609 827 896 5,436 6,332 634 5,698 1997
Spanish Gardens Apartments 5,600 373 9,263 2,319 398 11,557 11,955 2,364 9,591 1994
Springcreek Apartments 3,050 128 1,702 745 595 128 3,042 3,170 1,165 2,005 1984
Springwells Park 11,345 1,515 16,840 1,142 1,515 17,982 19,497 845 18,652 1999
Springwood Apartments 1,404 462 1,770 625 462 2,395 2,857 281 2,576 1997
Stephenson House 1,503 640 2,407 471 640 2,878 3,518 330 3,188 1997
Strawberry Hill Apartments 2,033 725 2,694 907 725 3,601 4,326 329 3,997 1998
Sugartown Mews 28,892 6,280 35,534 3,161 6,280 38,695 44,975 853 44,122 2000
Sunset Gardens Apartments 696 4,663 1,584 696 6,247 6,943 911 6,032 1996
Tamarron 5,200 1,320 8,474 192 1,320 8,666 9,986 341 9,645 1999
Terry Apartments 1,926 650 3,436 6 650 3,442 4,092 152 3,940 2000
The Lakes 2,821 23,086 1,286 2,821 24,372 27,193 767 26,426 1999
The Towers 3,990 685 6,088 1,116 685 7,204 7,889 603 7,286 1998
Timbercroft 7,819 1,704 7,015 -63 1,704 6,952 8,656 300 8,356 1999
Trexler Park 10,140 2,490 13,797 610 2,490 14,407 16,897 321 16,576 2000
Valley Park South
Apartments 9,848 2,459 16,461 1,855 2,459 18,316 20,775 2,276 18,499 1996
Valley View Apartments 3,184 1,056 4,959 2,156 1,056 7,115 8,171 723 7,448 1997
Village Green Apartments 8,853 1,043 13,283 3,789 1,103 17,012 18,115 3,149 14,966 1994-1996
Village Square - MD 7,488 2,590 13,295 709 2,590 14,004 16,594 583 16,011 1999
Village Square Apartments 2,630 768 3,581 1,942 768 5,523 6,291 543 5,748 1997
Wayne Village 8,285 1,925 12,895 1,957 1,925 14,852 16,777 1,314 15,463 1998
Westminster Apartments 3,107 860 5,763 1,537 860 7,300 8,160 1,127 7,033 1996
Weston Gardens 2,960 847 4,736 2,457 847 7,193 8,040 617 7,423 1996
William Henry 14,180 4,666 2,214 20,749 4,666 22,963 27,629 508 27,121 2000
Williamstowne Village
Apartments 9,800 390 9,748 5,115 4,153 390 19,016 19,406 6,372 13,034 1985
Windsor Realty 2,000 402 3,300 521 402 3,821 4,223 335 3,888 1998
Woodgate Place 3,368 480 3,797 1,188 480 4,985 5,465 571 4,894 1997
Woodland Gardens 6,174 2,022 10,479 2,137 2,022 12,616 14,638 1,340 13,298 1997
Other Assets 907 - 125 3,665 1,888 2,809 4,697 829 3,868
------- ------- --------- ------ ------- ------- --------- --------- ------- ---------
832,783 247,119 1,368,351 28,303 251,496 247,483 1,647,786 1,895,269 153,324 1,741,945
======= ======= ========= ====== ======= ======= ========= ========= ======= =========
(a) Represents the excess of fair value over the historical cost
of partnership interests as a result of the application of
purchase accounting for the acquisition of non-controlled
interests.
(b) The aggregate cost for Federal Income Tax purposes was approximately
$1,554,000
SCHEDULE III
HOME PROPERTIES OF NEW YORK, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(IN THOUSANDS)
Depreciation and amortization of the Company's investments in buildings and
improvements reflected in the consolidated statements of operations are
calculated over the estimated useful lives of the assets as follows:
Buildings and improvements 5-40 years
Tenant improvements Life of related lease
The changes in total real estate assets for the three years ended December 31,
2000, are as follows:
2000 1999 1998
---- ---- ----
Balance, beginning of year $1,480,753 $940,788 $525,128
New property acquisition 328,021 480,473 376,735
Additions 92,603 61,034 42,896
Disposals and retirements ( 6,108) (1,542) (3,971)
---------- ---------- --------
Balance, end of year $1,895,269 $1,480,753 $940,788
========== ========== ========
The changes in accumulated depreciation for the three years ended December 31,
1999, are as follows:
2000 1999 1998
---- ---- ----
Balance, beginning of year $101,904 $65,627 $46,531
Depreciation for the year 52,221 37,177 23,067
Disposals and retirements ( 801) (900) (3,971)
--------- -------- -------
Balance, end of year $153,324 $101,904 $65,627
======== ======== =======
HOME PROPERTIES OF NEW YORK, INC.
FORM 10-K
For Fiscal Year Ended December 31, 2000
Exhibit Index
Exhibit Exhibit Location
Number
2.1 Agreement among Home Properties of New Incorporated by reference to
York, Inc. and Philip J. Solondz, the Form 8- K filed by Home
Daniel Solondz and Julia Weinstein Properties of New York, Inc.
Relating to Royal Gardens I, together with dated 6/6/97
Amendment No. 1 (the "6/6/97 8-K")
2.2 Agreement among Home Properties of New Incorporated by reference to
York, Inc and Philip Solondz and Daniel the 6/6/97 8-K
Solondz relating to Royal Gardens II,
together with Amendment No. 1
2.3 Purchase and Sale Agreement dated July 25, Incorporated by reference to
1997 by and between Home Properties of New the Form 8-K filed Home
York, L.P. and Louis S. and Molly S. Wolk Properties of New York, Inc.
Foundation. dated 9/26/97 (the "9/26/97
8-K")
2.4 Purchase and Sale Agreement dated April 30, Incorporated by reference to
1997 between Home Properties of New York the 9/26/97 8-K.
L.P. and Briggs Wedgewood Associates, L.P.
2.5 Agreement and Plan of Merger, dated July Incorporated by reference to
31, 1997 between Home Properties of New the 9/26/97 8-K.
York, L.P. and Chesfield Partnerhsip.
2.6 Agreement and Plan of Merger dated July 31, Incorporated by reference to
1997 between Home Properties of New York, the 9/26/97 8-K.
L.P. and Valspring Partnership.
2.7 Agreement and Plan of Merger, dated July Incorporated by reference to
31, 1997 between Home Properties of New the 9/26/97 8-K.
York, L.P. and Exmark Partnerhsip.
2.8 Agreement and Plan of Merger, dated July Incorporated by reference to
31, 1997 between Home Properties of New the 9/26/97 8-K.
York, L.P. and New Orleans East Limited
Partnership.
2.9 Agreement and Plan of Merger, dated July Incorporated by reference to
31, 1997 between Home Properties of New the 9/26/97 8-K.
York, L.P. Glenvwk Partnership.
2.10 Agreement and Plan of Merger, dated July Incorporated by reference to
31, 1997 between Home Properties of New the 9/26/97 8-K.
York, L.P. and PK Partnership.
2.11 First Amendment to Agreement and Plan of Incorporated by reference to
Merger, dated September 1, 1997 between the 9/26/97 8-K.
Home Properties of New York, L.P. and PK
Partnership and its partners.
2.12 First Amendment to Agreement and Plan of Incorporated by reference to
Merger, dated September 1, 1997 between the 9/26/97 8-K.
Home Properties of New York, L.P. and NOP
Corp. and Norpark Partnership.
2.13 Contribution Agreement dated July 31, 1997 Incorporated by reference to
between Home Properties of New York, L.P. the 9/26/97 8-K.
and Lamar Partnership.
2.14 Agreement and Plan of Merger, dated July Incorporated by reference to
31, 1997 between Home Properties of New the Form 8-K filed by Home
York, L.P. and Curren Partnership. New York, Inc., dated 10/3/97.
dated 10/3/97.
2.15 Contribution Agreement, dated October __, Incorporated by reference
1997 between Home Properties of New York to the Form 8-K
between Home Properties of New York, L.P. filed by Home Properties of
and Berger/Lewiston Associates Limited New York, Inc. dated 10/7/97.
Partnership; Stephenson-Madison Heights
Company LimitedPartnership; Kingsley-
Moravian Company Limited Partnership;
Woodland Garden Apartments Limited
Partnership; B&L Realty Investments Limited
Partnership; Southpointe Square Apartments
Limited Partnership; Greentrees Apartments
Limited Partnership; Big Beaver-Rochester
Properties Limited Partnership; Century
Realty Investment Company Limited
Partnership.
2.16 Agreement among Home Properties of New York, Incorporated by reference to
L.P. and Erie Partners, L.L.C. Relating the Form 8-K
to Woodgate Place Apartments, filed by Home Properties of
together with Amendment No. 1 dated 10/31/97 (the "10/31/97
8-K").
2.17 Agreement among Home Properties of New York, Incorporated by reference to
L.P. and Mid-Island Limited Partnership the 10/31/97 8-K.
relating to Mid-Island Estates, together
with Amendment No. 1.
2.18 Purchase and Sale Agreement among Home Incorporated by reference to
Properties of New York, L.P. and the 10/31/97 8-K.
Anthony M. Palumbo and Daniel
Palumbo.
2.19 Purchase and Sale Agreements dated June 17, Incorporated by reference to
1997 among Home Properties of New York, the Form 8-K filed by Home
L.P. and various individuals relating to Properties of New York, Inc.
Hill Court Apartments and Hudson Arms dated 2/20/98 (the "2/20/98
Apartments together with a letter 8-K").
Amendment dated September 24, 1997.
2.20 Contract of Sale, dated October 20, 1997 Incorporated by reference to
between Home Properties of New York, L.P. the 2/20/98 8-K.
and Hudson Palisades Associates relating to
Cloverleaf Apartments.
2.21 Contribution Agreement, dated November 17, Incorporated by reference to
1997 among Home Properties of New York, the 2/20/98 8-K.
L.P. and various trusts relating to
Scotsdale Apartments.
2.22 Contribution Agreement, dated November 7, Incorporated by reference to
1997 among Home Properties of New York, the 2/20/98 8-K
L.P. and Donald H. Schefmeyer and Stephen W.
Hall relating to Candlewood Apartments,
together with Amendment No. One dated
December 3, 1997.
2.23 Purchase and Sale Agreement dated November Incorporated by reference to
26, 1997 among Home Properties of New York, the Form 8-K filed by Home
L.P. and Cedar Glen Associates. Properties of New York, Inc.
on 3/24/98 (the
"3/24/98 8-K").
2.24 Contribution Agreement dated March 2, 1998 Incorporated by reference to
among Home Properties of New York, L.P., the 3/24/98 8-K.
Braddock Lee Limited Partnership and Tower
Construction Group, LLC
2.25 Contribution Agreement dated March 2, 1998 Incorporated by reference to
among Home Properties of New York, L.P., the 3/24/98 8-K.
Park Shirlington Limted Partnership and
Tower Construction Group, LLC
2.26 Contract of Sale between Lake Grove Incorporated by reference to
Associates Corp. and Home Properties of the Form 10-K filed by Home
New York L.P., dated December 17, 1996, Properties of New York, Inc.
relating to the Lake Grove Apartments. for the year ended 12/31/96
(the "12/31/96 10K").
2.27 Form of Contribution Agreement among Home Incorporated by reference to
Properties of New York, L.P. and the Form 8-K filed by Home
Strawberry Hill Apartment Company LLLP, Properties of New York, Inc.
Country Village Limited Partnership, on 5/22/98 (the "5/22/98 8-K")
Morningside Six, LLLP,
Morningside North Limited
Partnership and Morningside Heights
Apartment Company Limited Partnership with
schedule setting forth material details in
which documents differ from form.
2.28 Form of Purchase and Sale Agreement Incorporated by reference to
relating to the Kaplan Portfolio with the 5/22/98 8-K
schedule setting forth material details in
which documents differ from form.
2.29 Form of Contribution Agreement dated June 7, Incorporated by reference to
1999, relating to the CRC Portfolio with the Form 8-K filed by Home
schedule setting forth material details in Properties of New York, Inc.
which documents differ from form. on 7/2/99 (the "7/22/99
8-K").
2.30 Form of Contribution Agreement relating to Incorporated by reference to
the Mid-Atlantic Portfolio with schedule the Form 8-K filed by Home
setting forth material details in which Properties of New York, Inc.
documents differ from form. on 7/30/99.
2.31 Contribution Agreement among Home Incorporated by reference to
Properties of New York, L.P., Leonard the Form 8-K filed by Home
Klorfine, Ridley Brook Associates and Properties of New York, Inc.
the Greenacres Associates on 10/5/99 (the "10/5/99
8-K").
2.32 Purchase and Sale Agreement among Home Incorporated by reference to
Properties of New York, L.P. and Chicago the 10/5/99 8-K.
Colony Apartments Associates.
2.33 Contribution Agreement among Home Incorporated by reference to
Properties of New York, L.P., the Form 8-K filed
Gateside-Bryn Mawr Company, L.P., by Home Properties of New
Willgold Company, Gateside-Trexler York,Inc. on 4/5/00.
Company, Gateside-Five Points Company,
Stafford Arms, Gateside-Queensgate Company,
Gateside Malvern Company, King Road
Associates and Cottonwood Associates.
2.34 Form of Contribution Agreement between Old Incorporated by reference to
Friends Limited Partnership and Home the Form 8-K/A filed by Home
Properties of New York, L.P. and Home Properties of New York, Inc.
Properties of New York, Inc., along with on 12/5/00 (the "12/5/00
Amendments Number 1 and 2 thereto
2.35 Form of Contribution Agreement between Incorporated by reference to
Deerfield Woods Venture Limited the 12/5/00 8-K/A.
Partnership and Home Properties of
New York, L.P.
2.36 Form of Contribution Agreement between Incorporated by reference to
Macomb Apartments Limited Partnership the 12/5/00 8-K/A.
and Home Properties of New York, L.P.
2.37 Form of Contribution Agreement between Incorporated by reference to
Home Properties of New York, L.P. and the 12/5/00 8-K/A.
Elmwood Venture Limited Partnership
2.38 Form of Sale Purchase and Escrow Agreement Incorporated by reference to
between Bank of America as Trustee and Home the 12/5/00 8-K/A.
Properties of New York, L.P.
2.39 Form of Contribution Agreement between Home Incorporated by reference to
Properties of New York, L.P., Home the 12/5/00 8-K/A.
Properties of New York, Inc. and S&S
Realty, a New York General Partnership
(South Bay)
2.40 Form of Contribution Agreement between Incorporated by reference to
Hampton Glen Apartments Limited Partnership the 12/5/00 8-K/A.
and Home Properties of New York, L.P.
2.41 Form of Contribution Agreement between Home Incorporated by reference to
Properties of New York, L.P. and Axtell the 12/5/00 8-K/A.
Road Limited Partnership
2.42 Form of Contribution Agreement between Elk Incorporated by reference
Grove Terrace II and III, L.P., Elk Grove to the Form 8-K filed
Terrace, L.P. and Home Properties of New by Home Properties of
York, L.P. New York, Inc. on 1/10/01.
3.1 Articles of Amendment and Restatement of Incorporated by reference to
Articles of Incorporation of Home Home Properties of New York,
Properties of New York, Inc. Registration Statement on
Form S-11, File No. 33-78862
(the "S-11 Registration
Statement").
3.2 Articles of Amendment of the Articles of Incorporated by reference to
Incorporation of Home Properties of New the Home Properties of
York, Inc. New New York, Inc.
Registration
Statement on Form S-3
File No. 333-52601 filed
May 14, 1998 (the "5/14/98
S-3").
3.3 Articles of Amendment of the Articles of Incorporated by reference to
Incorporation of Home Propertis of New 7/2/99 8-K.
York, Inc.
3.4 Amended and Restated Articles Supplementary Incorporated by reference to
of Series A Senior Convertible Preferred the Home Properties of New
Stock of Home Properties of New York, Inc. York, Inc. Registration
Statement on Form S-3,
File No. 333-93761, filed
12/29/99 (the "12/29/99
S-3").
3.5 Series B Convertible Cumulative Preferred Incorporated by reference to
Stock Articles Supplementary to the Amended the Home Properties of New
and Restated Articles of Incorporation of York, Inc. Registration
Home Properties of New York, Inc. Statement on Form S-3,
File No. 333-92023, filed
12/3/99.
3.6 Series C Convertible Cumulatve Preferred Incorporated by reference to
Stock Articles Supplementary to the Amended the Form 8-K filed by Home
and Restated Articles of Incorporation of filed by Home Properties of
Home Properties of New York, Inc. New York, Inc. on 5/22/00
(the "5/22/00 8-K").
3.7 Series D Convertible Cumulatve Preferred Incorporated by reference to
Stock Articles Supplementary to the Amended the Form 8-K filed by Home
and Restated Articles of Incorporation of Properties of New York, Inc.
Home Properties of New York, Inc. on 6/12/00 (the "6/12/00
8-K").
3.8 Series E Convertible Cumulatve Preferred Incorporated by reference to
Stock Articles Supplementary to the Amended the Form 8-K filed by Home
and Restated Articles of Incorporation of Properties of New York, Inc.
Home Properties of New York, Inc. on 12/22/00 (the "12/22/00
8-K).
3.9 Amended and Restated By-Laws of Home Incorporated by reference to
Properties of New York, Inc. (Revised the Form 8-K filed by Home
12/30/96). Properties of New York, Inc.
dated December 23, 1996
(the "12/23/96 8- K").
4.1 Form of certificate representing Shares of Incorporated by reference to
Common Stock. the Form 10- K filed by Home
Properties of New York, Inc.
for the period ended 12/31/94
(the "12/31/94 10-K").
4.2 Agreement of Home Properties of New York, Incorporated by reference to
Inc. to file instruments defining the the 12/31/94 10-K.
rights of holders of long-term debt of it
or its subsidiaries with the Commission
upon request.
4.3 Credit Agreement between Manufacturers Incorporated by reference to
Traders Trust Company, Home Properties of the Form 10-Q filed by Home
New York, L.P. and Home Properties of New Properties of New York, Inc.
York, Inc. for the quarterly period
ended 6/30/94 (the "6/30/94
10-Q").
4.4 Amendment Agreement between Manufacturers Incorporated by reference to
and Traders Trust Company, Home Properties the 12/31/94 10-K.
of New York, L.P. and Home Properties of
New York, Inc. amending the Credit Agreement
4.5 Mortgage Spreader, Consolidation and Incorporated by reference to
Modification Agreement between the 6/30/94 10-Q.
Manufacturers and Traders Trust Company and
Home Properties of New York, L.P.,
together with form of Mortgage, Assignment
of Leases and Rents and Security Agreement
incorporated therein by reference.
4.6 Mortgage Note made by Home Properties Incorporated by reference to
of New York, L.P. payable to Manufacturers the 6/30/94 10-Q.
and Traders Trust Company in the principal
amount of $12,298,000.
4.7 Spreader, Consolidation, Modification and Incorporated by reference to
Extension Agreement between Home Properties the Form 10-K filed by Home
of New York, L.P.and John Hancock Mutual Properties New York, Inc. for
Life Insurance Company, dated as of October the period ended 12/31/95 (the
26, 1995, relating to indebtedness in the "12/31/95 10-K").
principal amount of $20,500,000.
4.8 Amended and Restated Stock Benefit Plan of Incorporated by reference to
Home Properties of New York, Inc. the 6/6/97 8-K.
4.9 Amended and Restated Dividend Incorporated by reference to
Reinvestment, Stock Purchase, Resident the Form 8-K filed by Home
Stock Purchase and Employee Stock Properties of New York, Inc.,
Purchase Plan. dated 12/23/97.
4.10 Amendment No. One to Amended and Restated Incorporated by reference to
Dividend Reinvestment, Stock Purchase, the Home Properties of New
Resident Stock Purchase and Employee Stock York, Inc. Registration
Purchase Plan Statement on Form S-3,
File No. 333-49781, filed
on 4/9/98 (the "4/9/98 S-3").
4.11 Amendment No. Two to Amended and Restated Incorporated by reference to
Dividend Reinvestment, Stock Purchase, the Home Properties of New
Resident Stock Purchase and Employee Stock York Inc. Registration
Purchase Plan Statement on Form S-3,
File No. 333-58799,
filed on 7/9/98
(the "7/9/98 S-3").
4.12 Amended and Restated Dividend Reinvestment, Incorporated by reference to
Stock Purchase, Resident Stock Purchase and Home Properties of New York,
Employee Stock Purchase Plan Inc. Form 10-Q for the Quarter
ended 6/30/98
(the "6/30/98 10-Q").
4.13 Amendment No. Three to Amended and Restated Incorporated by reference to
Dividend Reinvestment, Stock Purchase, the Home Properties of New
Resident Stock Purchase and Employee Stock York, Inc. Registration
Purchase Plan Statement on Form S-3,
Registration No. 333-67733,
filed on 11/23/98
(the "11/23/98 S-3").
4.14 Directors' Stock Grant Plan Incorporated by reference to
the 5/22/98 8-K.
4.15 Director, Officer and Employee Stock Incorporated by reference to
Purchase and Loan Plan 5/22/98 8-K.
4.16 Home Properties of New York, Inc., Home Incorporated by reference to
Properties of New York, L.P. Executive the 7/2/99 8-K.
Retention Plan
4.17 Home Properties of New York, Inc. Deferred Incorporated by reference to
Bonus Plan the 7/2/99 8-K.
4.18 Fourth Amended and Restated Dividend Incorporated by reference to
Reinvestment, Stock Purchase, Resident the Registration Statement on
Stock Purchase and Employee Stock Purchase Form S-3, File No. 333-94815
Plan. filed on 1/18/2000.
4.19 Directors Deferred Compensation Plan Incorporated by reference to
the Home Properties of New
York, Inc. Form 10-K for the
period ended 12/31/99
(the "12/31/99 10-K").
4.20 Agency Fee and Warrant Agreement Incorporated by reference to
the Form 8-K/A filed by Home
Properties of New York, Inc.
on 6/9/00
(the "6/9/00 8-K/A").
4.21 Form of Warrant Incorporated by reference to
the 6/9/00 8-K/A.
4.22 Agency Fee and Warrant Agreement, Amendment Incorporated by reference to
No.1 the Form 8-K filed by Home
Properties of New York, Inc.
on 6/30/00
(the "6/30/00 8-K").
4.23 Home Properties of New York, Inc. Amendment Incorporated by reference to
Number One to the Amended and Restated the Form 10-Q
Stock Benefit Plan of Home Properties of New
York, Inc. for the quarter
ended 3/31/00 (the "3/31/00
10-Q").
4.24 Fifth Amended and Restated Dividend Incorporated by reference
Reinvestment, Stock Purchase, Resident to the Registration
Stock Purchase and Employee Stock Purchase Statement on Form S-3, file
Plan No. 333-54160, filed 1/23/01
4.25 Sixth Amended and Restated Dividend Filed herewith.
Reinvestment and Direct Stock Purchase Plan
10.1 Second Amended and Restated Agreement of Incorporated by reference to
Limited Partnership of Home Properties of the 9/26/97 8-K.
New York, L.P.
10.2 Amendments No. One through Eight to the Incorporated by reference to
Second Amended and Restated Agreement of Form 10-K of Home Properties
Limited Partnership of Home Properties of of New York, Inc. for the
New York, L.P. period ended 12/31/97
(the "12/31/97 10-K").
10.3 Articles of Incorporation of Home Incorporated by reference to
Properties Management, Inc. the S-11 Registration
Statement.
10.4 By-Laws of Home Properties Management, Inc. Incorporated by reference to
S-11 Registration Statement.
10.5 Articles of Incorporation of Conifer Realty Incorporated by reference to
Corporation 12/31/95 10-K.
10.6 Articles of Amendment to the Articles of Filed herewith.
Incorporation of Conifer Realty Corporation
Changing the name to Home Properties
Resident Services, Inc.
10.7 By-Laws of Conifer Realty Corporation. Incorporated by reference to
the 12/31/95 10-K.
10.8 Home Properties Trust Declaration of Trust, Incorporated by reference to
dated September 19, 1997 the 9/26/97 8-K.
10.9 Employment Agreement between Home Incorporated by reference to
Properties of New York, L.P. and Norman the 6/30/94 10-Q.
P. Leenhouts.
10.10 Amendments No. One, Two and Three to the Incorporated by reference to
Employment Agreement between Home the Form 10-K filed by Home
Properties of New York, L.P. and Norman P. Properties of New York, Inc.
Leenhouts for the year ended 12/31/98
(the "12/31/98 10-K").
10.11 Employment Agreement between Home Incorporated by reference to
Properties of New York, L.P. and Nelson B. the 6/30/94 10-Q.
Leenhouts
10.12 Amendments No. One, Two and Three to the Incorporated by reference to
Employment Agreement between Home the 12/31/98 10-K.
Properties of New York, L.P. and Nelson B.
Leenhouts.
10.13 Indemnification Agreement between Home Incorporated by reference to
Properties of New York, Inc. and certain the 6/30/94 10-Q.
officers and directors.
10.14 Indemnification Agreement between Home Incorporated by reference to
Properties of New York, Inc. and Richard J. the 12/31/95 10-K.
Crossed
10.l5 Indemnification Agreement between Home Incorporated by reference to
Properties of New York, Inc. and Alan L. the 12/31/96 10-K.
Gosule.
10.16 Registration Rights Agreement among Home Incorporated by reference to
Properties of New York, Inc., Home Leasing the 6/30/94 10-Q.
Corporation, Leenhouts Ventures, Norman P.
Leenhouts, Nelson B. Leenhouts, Amy L.
Tait, David P. Gardner, Ann M. McCormick,
William Beach, Paul O'Leary, Richard J.
Struzzi, Robert C. Tait, Timothy A.
Florczak and Laurie Tones.
10.17 Agreement of Operating Sublease, dated Incorporated by reference to
October 1, 1986, among KAM, INc., Morris the S-11 Registration
Massry and Raintree Island Associates, as Statement.
amended by Letter Agreement Supplementing
Operating Sublease dated October 1, 1986.
10.18 Form of Term Promissory Note payable to Incorporated by reference to
Home Properties of New York, by the 12/31/96 10-K.
officers and directors in association with
the Executive and Director Stock Purchase
and Loan Program.
10.19 Form of Pledge Security Agreement executed Incorporated by reference to
by officers and directors in connection the 12/31/96 10-K.
with Executive and Director Stock Purchase
and Loan Program.
10.20 Schedule of Participants, loan amounts and Incorporated by reference to
shares issued in connection with the the 12/31/96 10-K.
Executive and Director Stock Purchase and
Loan Program.
10.21 Subordination Agreement between Home Incorporated by reference to
Properties of New York, Inc. and The Chase the 12/31/96 10-K.
Manhattan Bank relating to the Executive
and Director Stock Purchase and Loan
Program.
10.22 Partnership Interest Purchase Agreement, Incorporated by reference to
dated as of December 23, 1996 among Home the 12/23/96 8-K.
Properties of New York, Inc., Home
Properties of New York, L.P. and State
of Michigan Retirement Systems.
10.23 Registration Rights Agreement, dated as of Incorporated by reference to
December 23, 1996 between Home Properties the 12/23/96 8-K.
of New York, Inc. and State of Michigan
Retirement Systems.
10.24 Lock-Up Agreement, dated December 23, 1996 Incorporated by reference to
between Home Properties of New York, Inc. the 12/23/96 8-K.
and State of Michigan Retirement Systems.
10.25 Agreement dated as of April 13, 1998 Incorporated by reference to
between Home Properties of New York, Inc. the Home Properties of New
and the Treasurer of the State of Michigan York, Inc. Form 8-K
filed 4/15/98 (the "4/15/98
8-K").
10.26 Amendment No. Nine to the Second Amended Incorporated by reference to
and Restated Agreement of Limited 5/14/98 S-3.
Partnership of the Operating Partnership
10.27 Master Credit Facility Agreement by and Incorporated by reference to
among Home Properties of New York, Inc., the Home Properties of New
Home Properties of New York, L.P., Home York, Inc. Form 10-Q for the
Properties WMF I LLC and Home Properties quarter ended 9/30/98 (the
of New York, L.P. and P-K Partnership "9/30/98 Form 10-Q").
doing business as Patricia Court and
Karen Court and WMF Washington Mortgage
Corp., dated as of August 28, 1998.
10.28 First Amendment to Master Credit Facility Incorporated by reference to
Agreement, dated as of December 11, 1998 the 12/31/98 10-K.
among Home Properties of New York, Inc.,
Home Properties of New York, L.P., Home
Properties WMF I LLC and Home Properties of
New York, L.P. and P-K Partnership doing
business as Patricia Court and Karen Court
and WMF Washington Mortgage Corp. and
Fannie Mae.
10.29 Second Amendment to Master Credit Facility Incorporated by reference to
Agreement, dated as of August 30, 1999 the 12/31/99 10-K.
among Home Properties of New York, Inc.,
Home Properties of New York, L.P., Home
Properties WMF I LLC and Home Properties of
New York, L.P. and P-K Partnership doing
business as Patricia Court and Karen Court
and WMF Washington Mortgage Corp. and
Fannie Mae
10.30 Amendments Nos. Ten through Seventeen to Incorporated by reference to
the Second Amended and Restated Limited the 12/31/98 10-K.
Partnership Agreement.
10.31 Amendments Nos. Eighteen through Twenty- Incorporated by reference to
Five to the Second Amended and Restated the Home Properties of New
Limited Partnership Agreement York, Inc. Form 10-Q for the
quarter ended 9/30/99
(the "9/30/99 10-Q").
10.32 Credit Agreement, dated 8/23/99 between Incorporated by reference to
Home Properties of New YOrk, L.P., the the 9/30/99 10-Q.
Lenders, Party hereto and Manufacturers and
Traders Trust Company as Administrative
Agent
10.33 Amendment No. Twenty-Seven to the Second Incorporated by reference to
Amended and Restated Limited Partnership the 12/29/99 S-3
Agreement
10.34 Amendments Nos. Twenty-Six and Twenty-Eight Incorporated by reference to
through Thirty to the Second Amended and the 12/31/99 10-K.
Restated Limited Partnership Agreement
10.35 Registration Rights Agreement between Home Incorporated by reference to
Properties of New York, Inc. and GE Captial the 12/31/99 10-K.
Equity Investment, Inc., dated 9/29/99
10.36 Amendment to Partnership Interest Purchase Incorporated by reference to
Agreement and Exchange Agreement the 12/29/99 S-3.
10.37 2000 Stock Benefit Plan Incorporated by reference to
the 12/31/99 10-K.
10.38 Purchase Agreement between Home Properties Incorporated by reference to
of New York, Inc., The Prudential Insurance 5/22/00 8-K.
Company of America and Teachers Insurance
And Annuity Association of America
10.39 Purchase Agreement between Home Properties Incorporated by reference
of New York, Inc. and The Equitable Life to the 6/12/00 8-K.
Assurance Society of the United States.
10.40 Purchase Agreement between Home Properties Incorporated by reference to
of New York, Inc. and the Pacific Life the 6/3/00 8-K.
Insurance Company and AEW Capital
Management
10.41 Home Properties of New York, L.P. Amendment Incorporated by reference to
Number One to Executive Retention Plan the 3/31/00 10-Q.
10.42 Amendments No. Thirty-One and Thirty-Two to Incorporated by reference to
the Second Amended and Restated Limited the 3/31/00 10-Q.
Partnership Agreement
10.43 Form of Purchase and Sale Agreement between Incorporated by reference to
Blackhawk Apartments Limited Partnership the 12/5/00 8-K/A.
and Home Properties of New York, L.P.
10.44 Form of Purchase and Sale Agreement between Incorporated by reference to
Home Properties of New York, L.P. and the 12/5/00 8-K/A.
Caesar Figoni
10.45 Form of Real Estate Purchase Agreement Incorporated by reference
between Smith Property Holdings Orleans, to the 12/5/00 8-K/A.
LLC and Home Properties of New York, L.P.
10.46 Purchase Agreement between Home Properties Incorporated by reference
of New York, Inc., The Prudential Insurance to the 12/22/00 8-K.
Company of America and Teachers Insurance
and Annuity Association of America
10.47 Employment Agreement between Home Filed herewith.
Properties of New York, L.P., Home
Properties of New York Inc. and Edward
J. Pettinella, and Amendment No. One,
thereto
10.48 Consulting Agreement between Home Filed herewith.
Properties of New York, L.P. and
Amy L. Tait
10.49 Amendment No. Thirty Three to the Second Filed herewith
Amended and Restated Limited Partnership
Agreement
10.50 Amendment No. Thirty Five to the Second Filed herewith.
Amended and Restated Limited Partnership
Agreement
10.51 Amendment No. Forty Two to the Second Filed herewith.
Amended and Restated Limited Partnership
Agreement
10.52 Amendments Nos. Thirty Four, Thirty Six Filed herewith.
through Forty One, Forty Three and Forty
Four to the Second Amended and Restated
Limited Partnership Agreement
10.53 Purchase and Sale Agreement among Home Filed herewith
Properties of New York, L.P., Conifer
Realty Corporation and Conifer Realty LLC,
and Amendments Nos. One and Two thereto.
11 Computation of Per Share Earnings Schedule Filed herewith.
21 List of Subsidiaries of Home Properties of Filed herewith.
New York, Inc.
23 Consent of PricewaterhouseCoopers LLP Filed herewith.
99 Additional Exhibits- Debt Summary Schedule Filed herewith.