RICHMOND— At its special meeting of stockholders held on Friday, Jan. 22, locally-based Landmark Apartment Trust's shareholders gave their approval to the company's previously-announced merger with Monument REIT Sub L.P., an entity owned by affiliates of Starwood Capital Group and Milestone Apartments REIT. It is a $1.9-billion all cash deal, excluding the assumption of existing debt. The deal is currently expected to on Jan. 27, at which time Landmark will be taken private – yet another REIT to follow down this path.
Executives at the apartment REIT started contemplating this move in 2015, following a strategic review that included the possibility of an initial public offering, according to earlier comments by CEO Jay Olander. They opted for a sale given the signs of market volatility that were already apparent at that point. A merger, Olander said, would provide for "a more certain liquidity event," Olander says.
The deal was announced in mid-October of 2015.
Landmark's portfolio will be divvied up between an affiliate of Starwood Global Opportunity Fund and Milestone, which is headquartered in Dallas, Texas, but listed on the Toronto Stock Exchange. Specifically, Starwood will acquire Landmark's ownership interest in 63 apartment communities totaling 19,615 units while Milestone will take control of 4,172 units across 15 properties, and will serve as property manager for Starwood's portion of the portfolio.
Landmark's portfolio stretches across eight Sunbelt states, which held great appeal for the investors. "More than half of the portfolio's NOI is located within the country's top 14 largest metropolitan areas for expected household growth over the next five years," according to earlier comments made by Starwood Capital VP Ethan Bing. "All five of the country's top multifamily markets for absorption rate over the past four quarters are represented in this portfolio, and we expect the multifamily fundamentals for these markets to remain positive going forward," he said.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
