CHICAGO – Equity Residential said it entered into an agreement to sell a portfolio of its assets to a joint venture of the Real Estate Principal Investment Area of Goldman, Sachs & Co. and Greystar Real Estate Partners LLC for $1.5 billion. 

The transaction values the 27 properties at approximately $187,000 per apartment unit and a capitalization rate in the mid to high 5% range. 
 
The assets under contract for sale are as follows:
 
Market                                              Units                        Purchase Price (millions)
Washington DC, N. NJ              2,105                  $517.7
FL                                         1,896                  $276.7
Phoenix                                 1,575                  $180.3
Denver                                   1,003                 $156.0
Southern CA                            720                   $180.8
San Francisco Bay                    711                    $188.5
Total                                                  8,010                      $1,500
 
Equity Residential said in a relese that it granted the buyer the right to exclude up to 8% of the value of these assets from their purchase. As a result, Goldman Sachs and Greystar have the contractual right to acquire all of the assets for $1.5 billion, but are obligated to purchase not less than $1.38 billion of assets.
 
“With this transaction we will have made significant progress selling assets in our exit markets and non-core assets in primary markets to fund our share of the acquisition of Archstone,” David J. Neithercut, Equity Residential’s President and CEO, says in the release. 
 
The buyers have deposited $150 million in escrow and have waived their due diligence contingency. The transaction is expected to be completed in two separate closings during the first quarter.
 
“Demand for multifamily assets remains very strong and we are pleased that our original pricing expectations were met by this transaction,” Neithercut says.