The Real Deal New York

MAA to buy Post Properties for nearly $4B

Combined entity will be largest multifamily REIT with 105K units

August 15, 2016 01:33PM

Dave Stockert and MAAs corporate offices

Post Properties’ Dave Stockert and MAA’s corporate offices in Memphis, Tenn. 

Memphis-based real estate investment trust Mid America Apartments agreed to buy Post Properties for nearly $4 billion to create the largest multifamily REIT nationwide, the companies announced Monday.

Fueled by a strong rental market, the all-stock deal creates a multifamily colossus with 105,000 units between them, mostly concentrated in Sunbelt cities such as Atlanta, Dallas, Austin, and Charlotte, N.C.

Once the deal closes, MAA investors will own 68 percent of the merged REIT, and Post investors will own 32 percent, the companies said. The deal is expected to close in the fourth quarter.

Pre-merger, MAA had nearly 81,000 units in its portfolio while Atlanta-based Post had 24,000 units plus another 2,600 in development. MAA has an average monthly rent per unit of $1,031 while Post has average monthly rent per unit of $1,483, according to the Wall Street Journal, which first reported on the impending merger Sunday.

Both MAA and Post have seen stock prices skyrocket in recent years amid a rental-market boom, but with signs that the market could be slowing a merger could bring the combined company about $20 million in savings. MAA is currently valued at $8 billion, while Post is valued at $3.3 billion. The firms released a joint statement claiming the new entity’s total market capitalization was pegged around $17 billion.

So far this year, there have been more than $215 billion worth of mergers and acquisitions in the real estate industry, the second-busiest sector globally, the Journal said, citing data from Dealogic. Among REITs, there have been $52 billion in deals.

Neither company has holdings in New York. In 2014, Post sold two residential towers — the 199-unit Post Toscana at 389 East 89th Street and 123-unit Post Luminaria at 385 First Avenue — to developer Ben Shaoul for $270 million.

MAA CEO Eric Bolton Jr. will lead the combined company, which will retain its name. — E.B. Solomont

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