Blackstone to Buy Bluerock Residential Growth REIT in $3.6 Billion Deal
Bluerock Residential Growth REIT Inc. (NYSE: BRG), a publicly traded real estate investment trust and sponsor of a non-traded Series T preferred stock offering, has agreed to sell its outstanding shares to affiliates of Blackstone Real Estate.
Bluerock Residential Growth REIT Inc. (NYSE: BRG), a publicly traded real estate investment trust and sponsor of a non-traded Series T preferred stock offering, has agreed to sell its outstanding shares to affiliates of Blackstone Real Estate for $24.25 per share in an all-cash transaction valued at $3.6 billion.
Under the terms of the agreement, Blackstone will purchase 30 multifamily properties with approximately 11,000 units, as well as a loan book secured by 24 multifamily assets. The properties are mostly located in Atlanta, Phoenix, Orlando, Denver and Austin and consist of “garden-style” assets built, on average, in 2000, the company said.
Prior to the acquisition, Bluerock Residential Growth REIT intends to spin off its single-family rental business into a newly formed REIT named Bluerock Homes Trust Inc. that will be externally managed by an affiliate of Bluerock Real Estate.
Bluerock Homes Trust will own interests in approximately 3,400 homes, including 2,000 through preferred/mezzanine investments. Shareholders will receive shares of Bluerock Homes Trust, with a current implied net asset value estimated at $5.60 for each share of Bluerock Residential Growth REIT common stock they own.
The transaction represents a premium of approximately 124 percent over the unaffected closing stock price on September 15, 2021, the day before a Bloomberg article reported the potential sale.
On Monday December 20th, shares of Bluerock Residential Growth REIT surged nearly 80 percent to $27.20. The stock closed Friday at $15.44.
“We believe the substantial premium to our historic trading price is a testament to our success in building a best-in-class institutional-quality multifamily apartment portfolio in our attractive knowledge-economy target markets, along with the robust process run by the board of directors and management to secure maximum value for our shareholders,” said Ramin Kamfar, chairman and chief executive officer.
The acquisition is expected to occur in the second quarter of 2022 and is contingent on the consummation of the spin-off, as well as the approval by Bluerock Residential Growth REIT shareholders.
Rather than receiving cash consideration, most members of Bluerock Residential Growth REIT’s senior management have agreed to retain their interests in the company’s operating partnership, which will hold the assets related to the single-family rental business on completion of the spin-off.
Bluerock is an alternative asset manager with approximately $11 billion of acquired and managed assets. The company is headquartered in Manhattan with regional offices across the U.S.
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