Steadfast Income REIT Inc., a publicly registered non-traded real estate investment trust, has entered into a joint venture arrangement with Blackstone Real Estate Income Trust with respect to 20 of the 63 apartment communities owned by the Steadfast REIT. The companies also entered in an investment agreement whereby Steadfast would seek additional multifamily investments on behalf of both REITs.
In the transaction, Blackstone’s non-traded REIT will acquire a 90 percent ownership interest in the 20-apartment community portfolio for approximately $460.8 million in cash and debt assumption. Steadfast Income REIT will continue to own 10 percent of the portfolio.
Affiliates of Steadfast Income REIT will continue to provide property management services for the properties in the joint venture. The transaction is expected to close in two tranches during the next 60 days.
“This transaction validates our investment thesis, wherein we seek to add value through the acquisition of stable, income-producing and value-add apartment communities in targeted regions of the United States,” said Ella Neyland, president of Steadfast Income REIT.
The 20 assets total 4,584 apartment homes located in Austin, Dallas, and San Antonio, Texas; Nashville, Tennessee; and Louisville, Kentucky. Steadfast Income REIT acquired the assets for a total cost of $436 million between August 2011 and May 2014. Based upon the market value agreed to with Blackstone, the properties are now worth $512 million.
Jones Lang LaSalle Securities LLC served as financial advisor to Steadfast Income REIT, and Morris, Manning & Martin LLP served as legal counsel.
Blackstone Real Estate Income Trust is sponsored by private equity giant The Blackstone Group (NYSE: BX) and oversees a $2.2 billion portfolio of 17 properties, and as of October 20th, the company had raised approximately $1.4 billion in investor equity.
Steadfast Income REIT invests primarily on the multifamily sector, including stable, income-producing and value-added properties. The company launched its initial public offering in July 2010 and concluded its sales of shares of common stock in December 2013 after raising $767 million in investor equity. The company owns a multifamily property portfolio of 63 properties with a total purchase price, including development and construction costs, of $1.6 billion.