Founded in 1980, Grove currently has more than 6,000 apartmentunits in Connecticut, Maine, Massachusetts and Rhode Island. Underthe $461-million agreement, Grove shareholders would receive about$17 per share in cash. The acquisition price includes $251 millionin debt, of which Equity will assume some $244 million. Equity alsohas 19 multifamily properties in New England, but Navarro says hebelieves his company will continue to concentrate on the six-stateregion once the deal is completed. Structured as an UPREIT, Grovehas traditionally targeted infill suburban locations, with a focuson acquiring and upgrading older properties.

New England "is our specialty," Navarro says. "It's part of thereason they bought our company, and I think they believe we cancreate value over the long term." To date, Grove Property Trust hasbeen among the better-performing operations of its kind, with SNLReal Estate Securities Monthly estimating its total return duringthe past three years at 110%. It was also the 10th best performingREIT on a total return basis in 1999 and has a current marketcapitalization of $320 million.

Consolidation of the REIT industry has been on the upswinglately, partly due to the sector's recent struggles. Navarrobelieves the trend "makes a lot of sense," given that it can createeconomies of scale and provide greater operating efficiencies.