Equity Residential Buys 11 Apartments from Blackstone for $964M

It is the largest multifamily acquisition by a REIT in the last seven years.

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.