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Blackstone to Acquire Apartment Income REIT for $10 Billion in Cash

  • April 8, 2024

AIRC BX Merger

Asset manager Blackstone Inc. (BX) announced on April 8, 2024,  a merger agreement under which it would take private rental housing firm Apartment Income REIT (AIRC), known as AIR Communities, for $10 billion in cash, including debt.

Under the deal, Blackstone will pay $39.12 for each share of the real estate investment trust, representing a premium of about 24.78% to its last close.

AIR Communities owns 76 rental housing communities primarily based in coastal markets, including Miami, Los Angeles, and Boston, and Blackstone plans to invest more than $400 million to improve these properties, the companies said in a statement.

This deal from Blackstone comes soon after it announced its acquisition of Canadian single-family rental housing firm Tricon Residential (TCN) in January.

Blackstone is acquiring AIR Communities through its real estate fund and the deal is expected to close in the third quarter of 2024.

Apartment Income REIT Corp. pays an annual dividend of $1.8 per share, with a current yield of 4.6%. The stock is optionable.

AIRC was spun out of the Apartment Investment and Management Company (AIV), also known as AIMCO in late 2020 much to the opposition of activist investor Land & Buildings Investment Management. Considering the nearly 16% increase in price of AIRC since the spinoff and the 64% increase in price of the parent company AIMCO (not taking any dividends into account), the spinoff worked out great in the end for AIMCO investors.

AIRC generated funds from operations (FFO), a key metric used to track the performance of REITs, of $2.27 per share in 2023 and adjusted funds from operations (AFF) of $2.41, implying Blackstone paid 17 times FFO or 16 times AFFO for the company.

For this deal, Citigroup Global Markets was the financial advisor for AIR Communities, with Skadden, Arps, Slate, Meagher & Flom LLP serving as its legal advisors. On the other hand, BofA Securities, Barclays, Goldman Sachs & Co. LLC and Wells Fargo provided financial guidance to Blackstone, while Simpson Thacher & Bartlett acted as the legal counsel.

For complete details regarding the deal, please refer to the Deal Metrics page here:

Deal Metrics for the acquisition of Apartment Income REIT Corp. (AIRC) by Blackstone Inc. (BX)

Disclaimer: Please conduct your own due diligence before buying or selling any securities mentioned in this article. We do not guarantee the completeness or accuracy of the content or data provided in this article.