IRVINE, CA—Steadfast Income REIT said Monday it had entered into a joint venture with Blackstone Real Estate Income Trust on 20 apartment properties in SIR's portfolio. BREIT will pay approximately $460.8 million in cash and debt assumption for a 90% ownership interest in the JV properties, which collectively have been dubbed the LANDS Portfolio, presumably for the five metro areas represented in the transaction: Louisville, Austin, Nashville, Dallas and San Antonio.
To that end, SIR LANDS Holdings LLC, a newly formed wholly-owned subsidiary of SIR, will hold SIR's 10% interest in the JV, according to an SEC filing Monday. The total value of the LANDS Portfolio is approximately $512 million, subject to adjustment.
The 20 properties represent just under one-third of SIR's 63-property portfolio. They total 4,584 apartment units—including 30 condominiums—and were acquired for an aggregate cost of $436 million between August 2011 and May 2014. Affiliates of SIR will continue to provide property management services for the properties in the JV.
“This transaction validates our investment thesis, wherein we seek to add value through the acquisition of stable, income-producing and value-add apartment communities in targeted regions of the United States,” says Ella Neyland, president of SIR. Along with the three Texas markets and two Southern cities represented in the LANDS Portfolio, other regions in which SIR owns multiple properties include Chicago, Houston and Kansas City, MO.
Jones Lang LaSalle Securities LLC served as financial advisor to SIR, while Morris, Manning & Martin LLP served as its legal counsel. The transaction is expected to close in two tranches over the next 60 days.
BREIT has been an active investor in the multifamily sector throughout 2017. This past April, the company acquired a six-property, 2,514-unit apartment portfolio from TA Realty LLC for $430 million, and in September, it paid about $185 million to buy three properties totaling 1,132 units in the Phoenix suburb of Gilbert, AZ from American Capital.
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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.
