CHARLESTON, SC—A newly formed perpetual life fund led by Greystar Real Estate Partners is acquiring apartment REIT Monogram Residential Trust in a $3-billion deal. Announced over the Fourth of July holiday, the merger agreement between Monogram and Greystar Growth and Income Fund LP calls for the REIT's stockholders to receive $12 per share in cash, a premium of 22% on Monogram's closing stock price on Monday.
Along with Greystar, the perpetual life fund's founding partners include affiliates of APG Asset Management NV, GIC and Ivanhoé Cambridge. Their acquisition of Monogram includes the Plano, TX-based company's share of its two institutional co-investment joint ventures with PGGM and NPS. The PGGM JV will be restructured, and Greystar will buy out NPS' JV interests in a separate transaction valued at about $500 million.
Bob Faith, Greystar's founder, chairman and CEO, says Monogram's “high quality assets in some of the best markets in the country” will serve as the seed portfolio for Greystar Growth and Income Fund. “The collective strength and experience of our high-quality investment partners are second to none, and we look forward to completing this transaction and further expanding Greystar's US multifamily platform.”
At Monogram, CEO, president and COO Mark Alfieri says the acquisition is the outcome of his company's success in “executing and delivering on strong operations, innovative development programs and investment strategies in conjunction with skillful market timing. The interest we received from this sophisticated group of investors demonstrates that our targeted focus on building our portfolio with high quality Class A assets in select core markets has been recognized and our stockholders and joint venture partners are rewarded with this successful outcome.”
JPMorgan Chase Bank has provided a commitment letter to Greystar Growth and Income Fund for $2 billion in debt financing. The transaction is not contingent on receipt of financing by Greystar.
Morgan Stanley is serving as exclusive financial advisor and Goodwin Procter LLP is serving as legal advisor to Monogram. J.P. Morgan Securities LLC is serving as Greystar's exclusive financial advisor, while Jones Day is serving as its legal advisor. The acquisition is expected to close in the second half of 2017, pending approval by Monogram's shareholders.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
