CLEVELAND, Sept. 18 /PRNewswire-FirstCall/ — Associated Estates Realty Corporation (NYSE: AEC) announced today the Company’s intention to exit the affordable housing business. The Company currently manages for third party owners 30 Low Income Housing Tax Credit (LIHTC), Section 8 and Section 202 affordable properties totaling 4,816 units located in Ohio, Pennsylvania and Florida and owns or partially owns 12 Section 8 affordable properties (“Company Owned”).
All “Company Owned” affordable properties have been placed on the market for sale. The owner of 23 of the 30 managed properties recently notified the Company of its intent to self-manage those properties, effective January 1, 2008. The Company plans to transition the remaining third party managed properties over the next three to six months. The Company will continue to operate and manage the “Company Owned” properties pending the sale of those properties, which is expected to occur over the next 12 to 18 months.
The Company expects to incur approximately $200,000 in severance costs associated with the elimination of certain positions at its corporate office. The Company said net fees from its affordable housing, third party management
segment is expected to contribute approximately $0.03 per share of FFO for 2007. For 2008, the Company expects to identify cost savings to offset the loss of the net fees.
Associated Estates Realty Corporation, based in Richmond Heights, Ohio, is a real estate investment trust (“REIT”) and is a member of the Russell 2000. For more information about the Company, please visit its website at www.aecrealty.com.
For more information, please contact:
Vice President of Investor Relations
SOURCE Associated Estates Realty Corporation
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