Tishman, Lehman Close on $22B Archstone-Smith Deal

NEW YORK CITY-Archstone-Smith Trust has closed the previously announced acquisition by a partnership by New York City-based duo Tishman Speyer Real Estate Venture VII L.P. and Lehman Brothers Holdings Inc. The transaction, valued at approximately $22.2 billion , includes Archstone-Smith’s outstanding debt as GlobeSt.com reported when the deal was announced in May. The transaction represents the largest public to private merger and acquisition transaction in the multifamily REIT sector.

The transaction is being financed by equity provided by Tishman Speyer, and debt and equity capital provided and arranged by Lehman Brothers Holdings Inc., Banc of America Strategic Ventures Inc., Barclays Capital and their respective affiliates. As GlobeSt.com previously reported, pursuant to the merger, holders of Archstone-Smith’s common shares will receive cash consideration of $60.75 per share, without interest and less applicable withholding taxes, for each share issued and outstanding immediately prior to the effective time of the merger. In addition, according to a release, in connection with the merger of Archstone-Smith Operating Trust with an affiliate of the partnership sponsored by affiliates of Tishman Speyer and Lehman Brothers, “holders of Archstone-Smith Operating Trust’s class A-1 common units will receive one newly issued Series O preferred unit of Archstone-Smith Operating Trust or, if they so elected, a cash payment equal to $60.75, without interest and less applicable withholding taxes, for each class A-1 common unit that they own, or a combination of Series O preferred units and the cash consideration.”

As a result of the completion of the merger, Archstone-Smith has applied to delist its common shares from the New York Stock Exchange. “This transaction with Tishman Speyer and Lehman Brothers is a powerful combination of real estate assets, management, and expertise that will greatly benefit all parties,” notes R. Scot Sellers, who will remain CEO of the Denver based Archstone, in a prepared statement. “As the rental market continues to strengthen, the Archstone-Smith apartment portfolio is well-positioned to create tremendous long-term value.”