Blackstone is making its belief in the multifamily market known, agreeing to its largest ever acquisition in the sector.
The firm agreed to acquire AIR Communities for approximately $10 billion, the Wall Street Journal reported. The deal is expected to close next quarter.
The all-cash transaction breaks down to $39.12 an AIR share, a 25 percent premium of the real estate investment trust’s closing price on Friday. The acquisition is being made through Blackstone’s $30 billion global real estate fund and includes the assumption of AIR’s debt.
Blackstone will take the company, otherwise known as Apartment Income REIT, private. AIR owns rental housing communities in coastal markets like Boston, Los Angeles and Miami.
The AIMCO spinoff last year paid $223.5 million for a pair of 14-story multifamily buildings in Miami Beach, as well as another $26.9 million for the same property’s garage and ground-floor retail.
The company pivoted away from New York City last year, selling its final two properties in the Big Apple for a combined $33.2 million.
Blackstone’s acquisition also comes with a promise of a $400 million investment to improve AIR’s existing properties. AIR, led by Terry Considine, split off from AMICO in 2020.
Blackstone is getting more aggressive in the commercial real estate market, recognizing that the Federal Reserve’s many recent interest rate hikes appear to be coming to a close and access to capital is growing easier.
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Among its recent moves, the company acquired a stake in Signature Bank’s $17 billion loan portfolio and teamed up with Digital Realty on a joint venture to develop $7 billion in data centers. This year, Blackstone agreed to acquire single-family rental operator Tricon Residential for $3.5 billion.
On the multifamily side, Blackstone landed a $550 million CMBS loan secured by 10 multifamily buildings in the Sun Belt, mostly Texas, in February. Combined, the buildings have 3,406 units, and all were built between 2020 and 2022.