CALCULATION
OF REGISTRATION FEE
|
Title
of Each Class of Securities
to
be Registered
|
Amount
to be
Registered
|
Proposed
Maximum
Offering
Price Per
Unit
or Share(1)
|
Proposed
Maximum
Aggregate
Offering
Price(1)
|
Amount
of
Registration
Fee(1)
|
|
Common
Stock, $0.01 par value per share
|
2,570,800
shares
|
---
|
---
|
---
|
|
(1)
|
Pursuant
to Rule 415(a)(6) under the Securities Act of 1933, as amended, a
registration filing fee of $6,257.32 related to the 2,570,800 shares of
common stock included herein that were previously registered on
Registration Statement No. 333-141879 pursuant to the prospectus
supplement filed by Home Properties, Inc. on December 3, 2009, will
continue to apply to such unsold
securities.
|
Filed
pursuant to Rule 424(b)(5)
Registration
Statement No. 333-165165
Prospectus
Supplement, dated March 3, 2010
To
Prospectus dated March 3, 2010
HOME
PROPERTIES, INC.
2,570,800
Shares of Common Stock
_________________________________
On
December 3, 2009, we entered into a sales agreement with Merrill Lynch, Pierce,
Fenner & Smith Incorporated and BMO Capital Markets Corp. (which we refer to
collectively as the “Sales Agents”) relating to the offering of our common
stock, par value $0.01 per share, made by this prospectus supplement and the
accompanying prospectus.
In
accordance with the terms of the sales agreement, we could initially offer and
sell up to 3,700,000 shares of our common stock from time to time through one of
the Sales Agents, acting as our sales agent, of which 871,600 shares of common
stock had been issued as of December 31, 2009. As of the date of this
prospectus supplement, we may offer and sell up to 2,570,800 shares of our
common stock from time to time through one of the Sales Agents, acting as our
sales agent. Sales of the shares will be made by means of ordinary
brokers’ transactions on the New York Stock Exchange, or NYSE, or otherwise at
market prices prevailing at the time of sale or negotiated transactions, or as
otherwise agreed with either Sales Agent. Each Sales Agent is
entitled to compensation not to exceed 2% of the gross sales price per share for
any shares sold by that Sales Agent as our sales agent. Subject to
the terms and conditions of the sales agreement, each Sales Agent will use its
reasonable efforts to sell on our behalf any shares of common stock to be
offered by us under the sales agreement. The offering of common stock
pursuant to the sales agreement will terminate upon the earlier of (1) the sale
of all the shares of our common stock subject to the sales agreement, and (2)
the termination of the sales agreement by the Sales Agents or us.
Under the
terms of the sales agreement, we also may sell shares to either of the Sales
Agents as principal, at a price per share to be agreed upon at the time of
sale. If we sell shares to a Sales Agent acting as principal, we will
enter into a separate terms agreement with that Sales Agent, and we will
describe the agreement in a separate prospectus supplement or pricing
supplement. If a Sales Agent engages in special selling efforts, as
that term is used in Regulation M under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), the Sales Agent will receive from us a commission
to be agreed upon at the time of sale.
Our
common stock is listed on the New York Stock Exchange under the symbol
“HME.” The last reported sale price of our common stock on the New
York Stock Exchange on March 2, 2010, was $45.40 per share.
Investing in our common stock
involves various risks. See “Risk Factors” beginning on page
S-3 of this prospectus supplement and on page 1 of the accompanying prospectus
and the risks disclosed in our periodic reports incorporated by reference in
this prospectus supplement and the accompanying prospectus.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
BofA
Merrill
Lynch BMO
Capital Markets
_________________________________
The date
of this prospectus supplement is March 3, 2010
TABLE
OF CONTENTS
Prospectus Supplement
|
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
1
|
|
The
Company
|
2
|
|
The
Offering
|
2
|
|
Risk
Factors
|
3
|
|
Use
of Proceeds
|
3
|
|
Plan
of Distribution
|
4
|
|
Where
You Can Find More Information
|
6
|
|
Legal
Matters
|
7
|
|
Experts
|
7
|
PROSPECTUS
|
Home
Properties
|
1
|
|
Risk
Factors
|
1
|
|
About
This Prospectus
|
1
|
|
Where
You Can Find More Information
|
2
|
|
Use
of Proceeds
|
3
|
|
Ratio
of Earnings to Fixed Charges
|
3
|
|
Ratio
of Earnings to Combined Fixed Charges and Preferred Stock
Dividends
|
4
|
|
Description
of Capital Stock
|
4
|
|
Description
of Debt Securities
|
12
|
|
Federal
Income Tax Considerations
|
19
|
|
Other
Tax Consequences
|
35
|
|
Plan
of Distribution
|
35
|
|
Experts
|
37
|
|
Legal
Matters
|
37
|
We are
providing information to you about our common stock and this offering in two
separate documents. This prospectus supplement describes the specific
terms of this offering and also adds to and updates information contained in the
accompanying prospectus. In addition, the accompanying prospectus
provides general information about securities we may offer from time to time,
including the common stock being offered by this prospectus
supplement. Some of the information in the accompanying prospectus
may not apply to this offering. If the information in this prospectus
supplement is inconsistent with the prospectus, you should rely on this
prospectus supplement. The prospectus and this prospectus supplement form a part
of a registration statement filed by us with the Securities and Exchange
Commission.
In making
your investment decision, you should rely only on the information contained or
incorporated by reference in this prospectus supplement and the accompanying
prospectus and any relevant free writing prospectus. We have not, and
neither Sales Agent has, authorized anyone to provide you with any other
information. If you receive any information not authorized by us, you
should not rely on it. We are not, and the Sales Agents are not,
making an offer to sell the common stock in any jurisdiction where the offer or
sale is not permitted. You should not assume that the information
contained or incorporated by reference in this prospectus supplement or the
accompanying prospectus or any relevant free writing prospectus is accurate as
of any date other than its respective date.
References
to “Home Properties,” “we,” “our,” “us,” or “the company” in this prospectus
supplement refer to, unless the context otherwise requires, Home Properties,
Inc., a Maryland corporation, Home Properties, L.P., a New York limited
partnership (which we refer to as the “operating partnership”) and
their subsidiaries.
This
prospectus supplement, the accompanying prospectus, and the information
incorporated by reference in them include “forward-looking statements” within
the meaning of the safe harbor provisions of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Exchange Act. Some
examples of forward-looking statements include statements related to
acquisitions (including any related pro forma financial information), future
capital expenditures, potential development and redevelopment opportunities,
projected costs and rental rates for development and redevelopment projects,
financing sources and availability, and the effects of environmental and other
regulations on our business or prospects. Although we believe that
the expectations reflected in those forward-looking statements are based upon
reasonable assumptions, those statements are subject to known and unknown
uncertainties, including risks which we believe are not currently material to
our business and prospects but that may adversely affect our results or
operations in the future. The actual events or results may differ
materially and we can give no assurance that our expectations will be
achieved. Some of the words used to identify forward-looking
statements include “believes,” “anticipates,” “plans,” “expects,” “seeks,”
“estimates,” and similar expressions. Information which is not based
on historical facts is forward-looking and is not a representation that the
results or conditions described in such statements will be achieved or that our
current plans and objections will be realized. You should exercise
caution in interpreting forward-looking statements because they involve known
and unknown risks, uncertainties and other factors which are, in some cases,
beyond our control and which could materially affect our actual results,
performance or achievements.
Factors
that may cause our actual results to differ materially from our stated
expectations include, among others:
· general
economic conditions,
· local
real estate conditions in the markets where our properties are
located,
· the
weather and other conditions that might affect operating expenses,
· the
timely completion of repositioning activities and development within anticipated
budgets,
· the
actual pace of future development, acquisitions and sales, and
· continued
access to capital to fund growth.
For a
more detailed discussion of some of the risk factors we have identified, see the
section entitled “Risk Factors” below and in the accompanying prospectus as well
as the risks described in our periodic reports incorporated by reference in this
prospectus supplement and the accompanying prospectus.
You are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the date they are
made. We do not undertake to update our forward-looking statements to
reflect the impact of circumstances or events that arise after the date of the
forward-looking statements, except as required by applicable law.
1
THE
COMPANY
Home
Properties is a self-administered and self-managed real estate investment trust,
or REIT, that owns, operates, acquires, develops and rehabilitates apartment
communities. The company’s properties are regionally focused,
primarily in selected Northeast, Mid-Atlantic and Southeast Florida markets
along the East Coast of the United States. The company was formed in
November 1993 to continue and expand the operations of Home Leasing
Corporation.
Home
Properties conducts its business through its operating partnership and a
management company – Home Properties Resident Services, Inc., which is a
Maryland corporation. At December 31, 2009, the company held
approximately 74.7% (71.7% at December 31, 2008) of the limited partnership
units in the Operating Partnership.
As of
December 31, 2009, we operated 107 communities with 36,947 apartment
units. Of these, we own and manage 35,797 units in 105 communities,
we partially own as general partner and manage 868 units in one community, and
we manage 282 units in one community for other owners.
THE
OFFERING
|
Issuer
|
Home
Properties, Inc., a Maryland corporation
|
|
Common
Stock Offered
|
Up
to 3,700,000 shares of our common stock, par value $0.01 per share, of
which 2,570,800 shares remain unsold. 871,600 shares of common
stock have been issued as of December 31, 2009.
|
|
Use
of Proceeds
|
We
intend to use the net proceeds from any common stock sold in this offering
for general corporate purposes, which may include the repayment of
indebtedness, working capital, capital expenditures, acquisitions,
development and redevelopment of apartment communities. Pending
use for these purposes, we may invest proceeds from the sale of the
securities in short-term marketable securities. See “Use of
Proceeds.”
|
|
Risk
Factors
|
Before
deciding to invest in shares of our common stock, you should read
carefully the risks set forth under the caption “Risk Factors” beginning
on page S-3 of this prospectus supplement and on page 1 of the
accompanying prospectus, and the risks described in our periodic reports
incorporated by reference in this prospectus supplement and the
accompanying prospectus.
|
|
New
York Stock Exchange Symbol
|
HME
|
2
RISK
FACTORS
An
investment in our common stock is subject to uncertainties and
risks. Please carefully consider the risk factors described below, in
the accompanying prospectus, and in our periodic reports filed with the
Securities and Exchange Commission, including the risk factors incorporated by
reference from our most recent annual report on Form 10-K, as updated by our
quarterly reports on Form 10-Q, as well as other information we include or
incorporate by reference in this prospectus supplement and the accompanying
prospectus. See “Where You Can Find More Information”
below. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also impair our business or
prospects. The risk factors we describe contain or refer to certain
forward-looking statements. You should review the explanation of the
limitations of forward-looking statements contained in the “Special Note
Regarding Forward-Looking Statements.”
The market value
of our common stock could be substantially affected by various factors.
Market volatility may adversely affect the market price of our common
stock. As with other publicly traded securities, the market price of
our common stock depends on many factors, which may change from time to time,
including:
· our
financial condition, performance, liquidity and prospects;
· the
market for similar securities issued by REITs;
· changes
in estimates by analysts;
· our
ability to meet analysts’ estimates;
· our
compliance with generally accepted accounting principles;
· prevailing
interest rates;
· our
credit rating; and
· general
economic, capital markets and real estate market conditions.
Our issuance of
additional capital stock or debt securities, whether or not convertible, and
sales of our common stock upon exchange of operating partnership units may
reduce the market price for shares of our common stock and dilute the ownership
interests of existing stockholders. We cannot predict the
effect, if any, that future issuances of our capital stock or debt securities,
including sales pursuant to the sales agreement, by holders of operating
partnership units, or other stockholders, or the availability of our securities
for future sale, will have on the market price of our common
stock. Issuances of substantial amounts of our common stock or any
preferred stock, warrants, options or debt securities convertible into or
exercisable or exchangeable for common stock in the public market, or the
perception that such issuances might occur, could negatively impact the market
price of our common stock. Our issuance of any additional equity
securities could be dilutive to holders of our common stock, including
purchasers of common stock in this offering.
In
addition, we may issue additional stock in the future to raise capital, directly
into the capital markets or pursuant to our stock purchase and dividend
reinvestment plan, or to provide equity compensation.
Legislative or
regulatory action could adversely affect purchasers of our common
stock. In recent years, numerous legislative, judicial and
administrative changes have been made in the provisions of the federal income
tax laws applicable to investments in common stock. Changes are
likely to continue to occur in the future, and we cannot assure you that any of
these changes will not adversely affect the value of our stock. Any
of these changes could have an adverse effect on a stockholder from an
investment in our common stock or on the market value or resale potential of our
common stock.
USE
OF PROCEEDS
We intend
to use the net proceeds from the sale of our common stock in this offering for
general corporate purposes, which may include the repayment of indebtedness,
working capital, capital expenditures, acquisitions, development and
redevelopment of apartment communities. As of December 31, 2009,
sales of our common stock in this offering had generated $39.8 million in gross
proceeds. Pending use for these purposes, we may invest proceeds from
the sale of the securities in short-term marketable securities. The
precise amount and timing of sales of any common stock will be dependent on
market conditions and the availability and cost of other funds to
us.
3
An
affiliate of BMO Capital Markets Corp. is a lender under our unsecured revolving
credit facility. To the extent we use the net proceeds of this offering to repay
debt outstanding under that facility, that lender will receive a pro rata
portion of the net proceeds used to repay the debt.
PLAN
OF DISTRIBUTION
We have
entered into a sales agreement with Merrill Lynch, Pierce, Fenner & Smith
Incorporated and BMO Capital Markets Corp. to act as our sales
agents. We may issue and sell over a period of time and from time to
time up to 3,700,000 shares of our common stock through the Sales
Agents. Of the initial 3,700,000 shares of our common stock available
for sale under the sales agreement, 2,570,800 shares
remain. Sales of the shares to which this prospectus supplement
and the accompanying prospectus relate, if any, will be made by means of
ordinary brokers’ transactions on the NYSE, or otherwise at market prices
prevailing at the time of sale or negotiated transactions, or as otherwise
agreed with the Sales Agents. As our sales agents, the Sales Agents
will not engage in any transactions that stabilize our common
stock.
The Sales
Agents will offer the shares of our common stock subject to the terms and
conditions of the sales agreement on a daily basis or as otherwise agreed upon
by us and either Sales Agent. We will designate the maximum amount of
shares of common stock to be sold through one of the Sales Agents on a daily
basis or otherwise determine such maximum amount together with that Sales
Agent. Subject to the terms and conditions of the sales agreement,
each Sales Agent will use its reasonable efforts to sell on our behalf all of
the shares of common stock so designated or determined. We may
instruct the Sales Agents not to sell shares of common stock if the sales cannot
be effected at or above the price designated by us in any such
instruction. We or the Sales Agents may suspend the offering of
shares of common stock being made through either of the Sales Agents under the
sales agreement upon proper notice to the other party.
For its
service as sales agent in connection with the sale of shares of our common stock
that may be offered hereby, we will pay a fee not to exceed 2% of the gross
sales price per share for any shares sold by that Sales Agent acting as our
sales agent. The remaining sales proceeds, after deducting any
expenses payable by us and any transaction fees imposed by any governmental,
regulatory, or self-regulatory organization in connection with the sales, will
equal our net proceeds from the sale of such shares. If a Sales Agent
engages in special selling efforts, as that term is used in Regulation M under
the Exchange Act, the Sales Agent will receive from us a commission to be agreed
upon at the time of sale.
The Sales
Agents will provide written confirmation to us following the close of trading on
the NYSE each day in which shares of common stock are sold by one of the Sales
Agents for us under the sales agreement. Each confirmation will
include the number of shares sold on that day, the gross sales price per share,
the compensation payable by us to the applicable Sales Agent and the proceeds to
us net of such compensation.
Settlement
for sales of common stock will occur, unless the parties agree otherwise, on the
third business day following the date on which any sales were made in return for
payment of the proceeds to us net of compensation paid by us to the applicable
Sales Agent. There is no arrangement for funds to be received in an
escrow, trust or similar arrangement.
We will
deliver to the NYSE copies of this prospectus supplement and the accompanying
prospectus pursuant to the rules of the NYSE. Unless otherwise
required, we will report at least quarterly the number of shares of common stock
sold through the Sales Agents under the sales agreement, the net proceeds to us,
and the compensation paid by us to the Sales Agents in connection with the sales
of common stock.
The Sales
Agents have determined that our common stock is an “actively-traded security”
excepted from the requirements of Rule 101 of Regulation M under the Exchange
Act by Rule 101(c)(1) under that Act. If a Sales Agent or we have reason to
believe that the exemptive provisions set forth in Rule 101(c)(1) of Regulation
M under the Exchange Act are not satisfied, that party will promptly notify the
other and sales of common stock under the sales agreement will be suspended
until that or other exemptive provisions have been satisfied in the judgment of
the Sales Agent and us.
4
Under the
terms of the sales agreement, we also may sell shares to Merrill Lynch, Pierce,
Fenner & Smith Incorporated or to BMO Capital Markets Corp. as principal, at
a price agreed upon at the time of sale. If we sell shares to Merrill
Lynch, Pierce, Fenner & Smith Incorporated or to BMO Capital Markets Corp.,
as principal, we will enter into a separate terms agreement with that Sales
Agent setting forth the terms of such transaction, and we will describe the
agreement in a separate prospectus supplement or pricing
supplement.
In
connection with the sale of common stock through a Sales Agent on our behalf,
that Sales Agent may be deemed to be an “underwriter” within the meaning of the
Securities Act, and the compensation paid to the Sales Agents may be deemed to
be underwriting commissions or discounts. We have agreed in the sales
agreement to provide indemnification and contribution to the Sales Agents
against certain civil liabilities, including liabilities under the Securities
Act.
In the
ordinary course of its business, the Sales Agents and/or its affiliates have in
the past performed, and may continue to perform, investment banking, broker
dealer, lending, financial advisory or other services for us for which they have
received, or may receive, separate fees.
We
estimate that the total expenses of the offering payable by us, excluding
commissions and discounts payable to the Sales Agents under the sales agreement,
will be approximately $125,000.
The
offering of common stock pursuant to the sales agreement will terminate upon the
earlier of (1) the sale of 3,700,000 shares of our common stock and (2) the
termination of the sales agreement, pursuant to its terms, by the Sales Agents
or us.
5
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and special reports, proxy statements and other information
with the SEC. You may read and copy reports, statements or other
information at the SEC’s public reference facilities in Washington D.C., at 100
F Street, N.E., Washington D.C. 20549. You may call the SEC at
1-800-SEC-0330 for further information on the public reference
facilities. Our SEC filings are also available to the public from
commercial document retrieval services and at the web site maintained by the SEC
at http://www.sec.gov. You can also review copies of our SEC filings
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005. You may also find copies of our periodic reports,
proxy statements and other SEC filings on our website at www.homeproperties.com
(information on our website is not part of or incorporated by reference in this
prospectus supplement or the accompanying prospectus).
We have
filed with the SEC a registration statement on Form S-3 covering the shares of
common stock offered by this prospectus supplement. This prospectus
supplement and the accompanying prospectus are part of that registration
statement and, as permitted by the SEC’s rules, does not contain all the
information set forth in the registration statement. For further
information, you may refer to the registration statement and to the exhibits and
schedules filed as part of the registration statement. You can review
and copy the registration statement and its exhibits and schedules at the public
reference facilities maintained by the SEC as described above. The
registration statement, including its exhibits and schedules, is also available
on the SEC’s web site. We will also file and distribute or make
available a prospectus supplement with respect to any securities we, or a
selling securities holder, may sell under the registration
statement. This prospectus supplement must be read in conjunction
with the accompanying prospectus.
The SEC
allows us to “incorporate by reference” into this prospectus supplement and the
accompanying prospectus information in other documents we file with the SEC,
which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is
considered to be part of this prospectus supplement and the information that we
file with the SEC later, but prior to the completion of any particular sale of
our common stock offered by this prospectus supplement, will automatically
update and supersede this information. We incorporate by reference
the documents listed below, as amended, and any future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus supplement and prior to the completion of any
particular sale of our common stock offered by this prospectus supplement (other
than, in each case, documents or information deemed to have been furnished and
not filed in accordance with SEC rules):
|
·
|
Annual
Report on Form 10-K for the year ended December 31, 2009, and filed with
the SEC on February 26, 2010;
|
|
·
|
Our
definitive Proxy Statement dated April 2, 2009, and filed with the SEC on
April 1, 2009, in connection with our Annual Meeting of Stockholders held
on May 5, 2009;
|
|
·
|
Current
Report on Form 8-K filed on February 18, 2010;
and
|
|
·
|
The
description of the common stock set forth in our registration statement on
Form 8-A, dated June 8, 1994, including all amendments and reports
filed for the purpose of updating that
description.
|
Information
in this prospectus supplement and the accompanying prospectus supersedes related
information in the documents listed above, and information incorporated herein
and therein from subsequently filed documents supersedes related information in
this prospectus supplement, the accompanying prospectus and the previously
incorporated documents.
6
You may
request a copy of these filings, other than an exhibit to a filing unless that
exhibit is specifically incorporated by reference into that filing, at no cost,
by writing to or calling us at the following address:
Attention:
Investor Relations
850
Clinton Square
Rochester,
New York 14604
Telephone
number: (585) 546-4900
LEGAL
MATTERS
Certain
legal matters in connection with this offering have been passed upon for us by
Nixon Peabody LLP. Sidley Austin LLP has acted as counsel to the Sales
Agents.
EXPERTS
The
financial statements and management’s assessment of the effectiveness
of internal control over financial reporting (which is included in Management’s
Report on Internal Control over Financial Reporting) incorporated in
this prospectus supplement by reference to the Annual Report on Form
10-K for the year ended December 31, 2009, have been so incorporated in reliance
on the report of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of said firm as
experts in auditing and accounting.
7
PROSPECTUS