Equity Residential has agreed to purchase 11 apartment complexes from Blackstone for $964 million, marking the largest multifamily acquisition by a public REIT in the U.S. in the past seven years. The portfolio includes over 3,500 units located in high-growth markets such as Atlanta, Denver, and Dallas/Fort Worth. This acquisition is part of a broader trend in the multifamily sector, driven by expectations of a rebound in rents and property values, partially due to potential interest rate cuts by the Federal Reserve.
"We are pleased to add these high-quality, well-located properties to our growing portfolios in Atlanta, Dallas/Ft. Worth and Denver at pricing that is attractive compared to replacement costs," said Alec Brackenridge, Equity Residential's executive vice president and chief investment officer. "This transaction is a significant step in our goal of generating a higher percentage of our annual net operating income from these strong growth expansion markets."
Blackstone, which recently acquired Apartment Income REIT for about $10 billion, is selling these properties to return cash to investors while maintaining confidence in the rental housing market. The properties are held by three Blackstone funds: Blackstone Real Estate Income Trust, Blackstone Real Estate Partners, and Blackstone Property Partners.
Equity Residential, which owns approximately 80,000 units across nearly 300 properties, was attracted to this portfolio due to its strategic locations in rapidly growing markets and the relatively young age of the complexes, which average eight years old. The transaction is expected to close in the third quarter of 2024.
This deal is part of a series of large transactions in the multifamily sector this year, including KKR's purchase of over 5,200 units for $2.1 billion and Brookfield's acquisition of 7,000 units for $1.55 billion. Despite challenges such as high interest rates and an oversupply due to recent construction booms, investor sentiment remains optimistic, with expectations of reduced construction starts and deliveries in the coming years.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
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.
