Prospect Towers collapse costs owner $12M

By David Jones | July 28, 2010 06:45PM

300 Prospect Avenue

Equity Residential said the collapse at the Prospect Towers apartment
complex in Hackensack, N.J., will cost the building $12 million, after
factoring in $8 million in insurance reimbursements.

An investigation continues into the July
16 incident, when an outdoor garage collapsed at the 300 Prospect
Avenue property, forcing the evacuation of hundreds of residents.

The collapse was one of the biggest residential accidents in recent
memory in New Jersey, leading the city of Hackensack to order
inspections at dozens of high-rise buildings.

Prospect Towers consists of a 203-unit mid-rise building and an
18-story high rise with 157 apartments. Residents remain in the
mid-rise building, but the 18-story tower is not expected to be
repaired until mid-November, according to the company. Residents
previously reported that a water leak was suspected of leading to the
collapse and published reports say that cracks in the garage were first
reported in 2005.

The costs include lost rental income, as well as restoration of water,
electrical and safety systems and temporary housing for the evacuated
residents.

The publicly traded company estimates that the collapse will cost it 2
cents a share in the third quarter and 3 cents a share for the full
year. The company expects to earn between $2.14 and $2.20 per share for
the year, compared with previous guidance of $1.95 to $2.15.

Sam Davis, the attorney representing several tenants, was not immediately available for comment.

The Chicago-based real estate investment firm owns or has a stake in 492 properties around the country.