Blackstone Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust managed by private equity giant The Blackstone Group (NYSE: BX), plans to purchase publicly traded REIT, Preferred Apartment Communities (NYSE: APTS), in an all-cash transaction valued at approximately $5.8 billion.
Blackstone REIT agreed to buy all of the outstanding shares of Preferred Apartment Communities for $25.00 each, and once the transaction closes, the REIT’s common stock will no longer be listed on the New York Stock Exchange.
In addition, holders of Preferred Apartment Communities’ preferred stock will receive the $1,000 per share liquidation preference for each share plus accrued but unpaid dividends.
Preferred Apartment Communities owns 44 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 6 million square feet located mostly in Atlanta, Orlando, Nashville and Raleigh.
Blackstone REIT will also purchase the company’s two Sun Belt office properties and 10 mezzanine / preferred equity investments collateralized by under construction and newly-built multifamily assets.
The $25.00 purchase price represents a premium of approximately 39 percent over the unaffected closing stock price on February 9, 2022, the date prior to a media article reporting that the Preferred Apartment Communities was exploring strategic options including a sale, and a premium of approximately 60 percent to the 90-day volume-weighted average price through that date.
Shares closed at $25.80 on Wednesday, an increase of $2.52 or 10.82 percent from the previous day.
The transaction is expected to close in the second quarter of 2022, with the approval of Preferred Apartment Communities stockholders.
The merger agreement also includes a 30-day “go-shop” period that will expire on March 18, 2022.
In related news, Blackstone REIT recently announced plans to purchase Resource REIT, a non-traded REIT with 42 multifamily communities, in an all-cash transaction valued at $3.7 billion.
Blackstone REIT oversees a portfolio comprised of $84.7 billion in real estate investments and $9.1 billion in real estate debt as of January 2022. Its initial offering launched in August 2016 and raised $46 billion in three public offerings as of December 2021. The REIT has raised $18.7 billion in the current offering, and its $60 billion follow-on offering was declared effective by the Securities and Exchange Commission last week.