Blackstone gains 8,300 units in California with $10B AIR deal

Portfolio spans markets from San Diego to San Jose at cost of $353K per unit

Blackstone Gains 8,300 Units in California With AIR Deal
Blackstone’s Nadeem Meghji, AIR Communities CEO Terry Considine and 1050 Frederick Street in Venice (Blackstone, AIR Communities, Lincoln Place Apartment Homes)

Blackstone is gaining 8,300 apartments across California with its $10 billion acquisition of AIR Communities.

On Monday, Blackstone announced it was buying AIR Communities, also known as Apartment Income REIT, for $10 billion or roughly $39.12 a share. The deal, which marks Blackstone’s largest multifamily acquisition to date, comes with more than 27,000 apartments across 10 states. 

The deal is the “highest-quality, large-scale apartment portfolio we have ever acquired, and is located in markets where multifamily fundamentals are strong,” Nadeem Meghji, Blackstone’s global real estate co-head, said in a statement.

And about 30 percent of those apartments are in California. 

AIR, which spun off from apartment owner AIMCO in 2020, owns 23 apartment complexes from San Diego up to San Jose, according to filings with the U.S. Securities and Exchange Commission. 

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On AIR’s books, the properties are valued at almost $3 billion, or roughly $353,000 per unit. 

In Los Angeles, AIR owns eight properties — four around Park La Brea and Fairfax and complexes in Century City, Venice, Calabasas and Simi Valley. 

The largest is the 795-unit Lincoln Place, located at 1050 Frederick Street in Venice, which AIR’s predecessor AIMCO bought for $77.7 million in 2002, records show.

Many of the properties were refinanced in the last 10 years, according to property records filed with Los Angeles County. 

AIR refinanced 6220 West 3rd Street, a 521-unit complex, with a $170 million loan originated by Northwestern Mutual Life Insurance. On 348 Hauser Boulevard, a 611-unit complex next door, AIR has a $200 million loan from Prudential Insurance, provided in 2018. 

In the Bay Area, AIR owns six properties — two in San Jose, two in Redwood City, one in San Bruno, another in San Mateo and another in Pacifica. 

Blackstone plans to spend $400 million to “maintain and improve” AIR’s properties and may spend more in the future. The deal for AIR is expected to close in the third quarter, Blackstone said in its announcement.