Blackstone deal for apartment REIT signals opportunities
The market for commercial real estate mergers and acquisitions showed signs of life Monday when Blackstone announced that it was acquiring a listed real estate investment trust, Apartment Income REIT Corp., for $10 billion in cash.
“The market needs to see institutions do these kinds of transactions,” said Kevin Gannon, chairman and CEO of Robert A. Stanger & Co. Inc. “For the most part, they’ve been sitting on the sidelines.”
“Will others follow suit?” Gannon asked. “This deal is a sign, probably a good sign, that the market will stabilize and potentially take off. Investors need to see this. The commercial real estate market hasn’t been fluid for almost two years.”
The market for commercial real estate investing has faced serious headwinds in an environment of sharply rising interest rates, amid headlines about half-empty office buildings, and investors pulling their money from nontraded REITs, and most notably from the industry’s biggest player, the $61 billion Blackstone Real Estate Income Trust, also known as BREIT.
Blackstone is buying Apartment Income REIT (AIRC) through its global real estate fund, Blackstone Real Estate Partners, and not through BREIT. Blackstone is acquiring the outstanding common shares of AIRC for $39.12 per share, which is a premium of 25 percent to the REIT’s closing price on Friday.
With more than $2 trillion in commercial real estate debt coming due before 2028, there’s clearly an opportunity for buyers like Blackstone, other executives said. Much of that $2 trillion will have to be refinanced at higher rates, putting more pressure on real estate investors to sell.
“It looks like Blackstone is value-investing and hunting,” said another senior industry executive, who asked to speak
Read more on investmentnews.com
