Blackstone Inc. has agreed to buy rental apartment owner Preferred Apartment Communities Inc. for $5.8 billion in a deal that demonstrates strong investor demand for multifamily properties in the Sunbelt states.
Atlanta-based Preferred Apartments has more than 40 rental apartment properties with approximately 12,000 units in states including Georgia, Florida, North Carolina and Tennessee. Blackstone’s all-cash purchase values the real estate investment trust at $25 per share, according to the companies.
There are also 54 shopping centers near Preferred Apartments, which are connected to grocery stores. About 70% of the value of the deal is in its rental apartments.
In a written statement, Jacob Werner, co-head of America’s acquisition of Blackstone Real Estate, called Preferred Apartment properties “high-quality multifunctional properties in key sunbelt markets” and retail properties “need-oriented assets located in increasingly populated areas”. as described. Positioned for continued growth.”
Multi-family properties, especially in high-growth Sunbelt states, have been one of the hottest commercial property types in recent years as businesses move to those areas. Owners have been able to raise rents well above the rate of inflation during the COVID-19 pandemic.
Blackstone, one of the largest commercial property owners in the world, has been a big investor in rental apartments for years. The firm is buying Preferred Apartments through its largest fund, Blackstone Real Estate Income Trust, which has raised more than $50 billion since its launch five years ago and targets mostly individual investors.
Preferred Apartments owns a total of 107 properties in 13 states, mostly in the southeast as of September 30. Properties also include some office properties and preferred equity investments collateralized by multifamily properties that are newly built and under construction.
The purchase price represents a premium of about 39% over Preferred Apartments’ share price on February 9, the day Bloomberg reported that both parties were exploring a possible deal.
The sale is expected to close in the second quarter of this year, subject to the approval of preferred apartment stockholders and other conditions. The merger agreement gives Preferred Apartments a 30-day “go-shop” period to market the company to other potential bidders.
According to the written statement, “no assurance can be given that this process will result in a better offer.”
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