Real estate giant sheds 11 rental housing assets
Blackstone is offloading nearly $1 billion worth of apartment properties, selling 11 complexes across the southeastern US to real estate investment trust Equity Residential.
The $964 million deal will see Equity Residential acquire 3,572 rental units located in Atlanta, Dallas/Fort Worth, and Denver - markets where the REIT has been actively expanding its footprint.
Expected to close in the third quarter of 2024, the sale includes properties managed by Blackstone Real Estate Income Trust, Blackstone Real Estate Partners, and Blackstone Property Partners.
“This transaction represents an excellent outcome for our investors and demonstrates the strong institutional demand for high-quality assets,” senior managing director Asim Hamid said in Blackstone’s media release. “Rental housing remains one of our highest-conviction themes, and we continue to see strong fundamentals in attractive markets. We’re pleased to have worked with EQR on this transaction, who will be an excellent steward of these properties going forward.”
The properties, averaging eight years old, are seen as an attractive opportunity to expand Equity Residential’s footprint in high-growth markets and add to its portfolio of high-end rental properties.
“We are pleased to add these high-quality, well-located properties to our growing portfolios in Atlanta, Dallas/Ft. Worth and Denver at pricing that is attractive compared to replacement costs,” said Alec Brackenridge, executive vice president and chief investment officer of Equity Residential. “This transaction is a significant step in our goal of generating a higher percentage of our annual net operating income from these strong growth expansion markets.”
Read next: Blackstone acquires apartment REIT for $10 billion
The portfolio sale also comes as Equity Residential reaffirms its previously issued earnings guidance for the second quarter of 2024. The company said the transaction will not impact its previously announced financial projections.
Equity Residential has investments in 299 properties consisting of 79,738 apartment units. The S&P 500 company focuses on acquiring, developing, and managing residential properties in cities that attract affluent long-term renters.
Eastdil Secured, RBC Capital Markets, Santander and Sumitomo Mitsui Banking Corporation (SMBC) acted as Blackstone's financial advisors on the deal, with Simpson Thacher & Bartlett LLP serving as legal counsel. Equity Residential was represented by Neal Gerber & Eisenberg LLP, Hogan Lovells, and Bryan Cave Leighton Paisner LLP.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
