Blackstone buying multifamily REIT in $5.8B deal

Preferred Apartment Communities has 107 properties, more than 40 rentals

New York /
Feb.February 16, 2022 11:30 AM

From left: Jacob Werner, senior managing director, Blackstone; Joel Murphy, chief executive officer, Preferred Apartment Communities (Preferred Apartment Communities, Blackstone, iStock/Illustration by Steven Dilakian for The Real Deal)

The Blackstone Group again advanced its push into the multifamily market with a sizable acquisition spanning in-demand Sun Belt sectors.

Multifamily REIT Preferred Apartment Communities announced Wednesday it has agreed to be acquired by Blackstone Real Estate Income Trust. The all-cash deal at $25 per share values the acquisition at $5.8 billion.

Under the deal, Blackstone would receive several dozen multifamily properties, as well as a plethora of retail properties. Preferred Apartment owns 44 multifamily communities totaling nearly 12,000 units concentrated in Sun Belt cities like Atlanta, Orlando, Tampa, Jacksonville, Charlotte and Nashville, as well as 54 grocery-anchored retail assets.

Preferred Apartment also has two office properties in the Sun Belt and 10 mezzanine/preferred equity investments collateralized by multifamily properties. In total, the REIT portfolio spans 107 properties across 13 states.

The purchase price is about a 39 percent premium on the closing stock price on Feb. 9, one day before Bloomberg reported the potential of a deal between the two sides. The deal is expected to close in the second quarter, though Preferred Apartment will have 30 days to solicit other bids.

“We are pleased to acquire Preferred Apartment Communities and its portfolio of high-quality multifamily assets in key Sun Belt markets, which represents a significant majority of the Company’s value,” added Blackstone senior managing director Jacob Werner. “Investing using BREIT’s perpetual capital will enable us to be long-term owners of these vibrant communities.”

The pending acquisition is the latest in a flurry of moves by Blackstone to improve its standing in the multifamily market, where rising rents has led to increased investor interest in the sector.

BREIT last month agreed to acquire Philadelphia-based Resource REIT in a deal valued at $3.7 billion. The deal included 42 multifamily, garden-style apartment communities encompassing more than 12,600 units across 13 states, including Georgia, Florida and Texas.

One month earlier, the investment giant agreed to acquire Bluerock Residential Growth REIT in a deal valued at $3.6 billion. The acquisition encompasses 30 rental properties comprising about 11,000 units, along with a loan book secured by 24 multifamily assets.

An entity managed by Blackstone’s top executives also acquired a garden-style multifamily project in North Lauderdale for $14 million last month. The Cornerstone Group sold the 322-unit complex.





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