Blackstone to acquire Preferred Apartment Communities for $5.8bn

Blackstone to acquire Preferred Apartment Communities for $5.8bn

Blackstone Real Estate Income Trust (BREIT) has agreed to acquire Preferred Apartment Communities for $5.8 billion.

Under the terms of the agreement, BREIT will acquire PAC, which includes 44 high-quality multifamily communities totaling approximately 12,000 units concentrated largely in Atlanta, Orlando, Tampa, Jacksonville, Charlotte and Nashville, and 54 grocery-anchored retail assets comprising approximately six million square feet located mostly in Atlanta, Orlando, Nashville and Raleigh.

BREIT will also acquire the company’s two Sun Belt office properties and 10 mezzanine / preferred equity investments collateralized by under construction and newly-built multifamily assets.

Joel T. Murphy, PAC’s Chairman and Chief Executive Officer, said, “This transaction is an excellent outcome for our stockholders and the culmination of the hard work our first-class team has done over the past few years to simplify and refocus our portfolio.”

Howard A. McLure, PAC’s Lead Independent Director, added, “Our focus from the outset has been on delivering the best possible outcome for all our stockholders. I would like to thank our entire Board, our team of outside advisors and the PAC management team for their collective efforts in bringing about this result.”

Jacob Werner, Co-Head of Americas Acquisitions for Blackstone Real Estate, said, “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. Investing using BREIT’s perpetual capital will enable us to be long-term owners of these vibrant communities. The Company’s grocery anchored retail portfolio performance has also been strong and resilient, and we believe these types of necessity-oriented assets located in areas with growing populations are well- positioned for continued growth.”

Werner continued, “The Company has a terrific property management and operations team that shares our commitment to being best-in-class owners. They have deep relationships and real estate expertise within the Sun Belt region, and we look forward to working closely with them to grow the business and continue to deliver a great experience for residents and tenants.”

The purchase price represents a premium of approximately 39% over the unaffected closing stock price on February 9, 2022, the date prior to a media article reporting that the Company was exploring strategic options including a sale, and a premium of approximately 60% to the 90-day volume-weighted average price through that date.