Blackstone to Buy Preferred Apartment Communities for $5.8B
The REIT has a solid multifamily footprint in the Sunbelt and owns grocery-anchored retail assets as well.
Blackstone Real Estate Income Trust has entered into a definitive agreement to acquire Preferred Apartment Communities in an all-cash deal valued at $5.8 billion, or $25 per share.
PAC’s portfolio, which BREIT is acquiring, includes 44 multifamily communities totaling approximately 12,000 units concentrated largely in Atlanta, Orlando, Tampa, Jacksonville, Charlotte and Nashville, and 54 grocery-anchored retail assets comprising approximately six million square feet located mostly in Atlanta, Orlando, Nashville and Raleigh.
BREIT will also acquire the company’s two Sun Belt office properties and 10 mezzanine / preferred equity investments collateralized by under construction and newly-built multifamily assets.
“We are pleased to acquire Preferred Apartment Communities and its portfolio of high-quality multifamily assets in key Sun Belt markets, which represents a significant majority of the company’s value,” Jacob Werner, co-head of Americas Acquisitions for Blackstone Real Estate, said in prepared remarks.
He also pointed to PAC’s grocery anchored retail portfolio performance, describing it as strong and resilient. “We believe these types of necessity-oriented assets located in areas with growing populations are well-positioned for continued growth,” Werner said.
The purchase price represents a premium of approximately 39% over the unaffected closing stock price on February 9, 2022, the date prior to a media article reporting that the company was exploring strategic options including a sale, and a premium of approximately 60% to the 90-day volume-weighted average price through that date.
When the transaction closes, PAC’s common stock will no longer be listed on the New York Stock Exchange, and PAC will be owned by BREIT.
The transaction has been unanimously approved by PAC’s Board of Directors and is expected to close in the second quarter of 2022, subject to approval by PAC’s stockholders and other customary closing conditions. The merger agreement also includes a 30-day “go-shop” period that will expire on March 18, 2022.
Jones Lang LaSalle Limited, BofA Securities, Lazard Frères & Co. LLC and Wells Fargo Securities LLC are serving as BREIT’s financial advisors, and Simpson Thacher & Bartlett LLP is acting as BREIT’s legal counsel.
Goldman Sachs & Co. LLC is serving as PAC’s lead financial advisor. KeyBanc Capital Markets, Inc., is also serving as financial advisor to PAC. King & Spalding LLP and Vinson & Elkins LLP are serving as the company’s legal counsel.