Blackstone Pays $5.8B To Acquire Preferred Apartment Communities: What You Need To Know

Blackstone Inc. BX is acquiring Preferred Apartment Communities Inc. APTS for $5.8 billion in an all-cash transaction.

What Happened: The acquisition values Preferred Apartment at $25 per share. The purchase price represents a premium of approximately 39% over the unaffected closing stock price on Feb. 9, the date before a media report that uncovered the companies were exploring a deal.

Blackstone is coordinating the acquisition through its Blackstone Real Estate Income Trust, and the deal encompasses Preferred Apartment’s portfolio of 44 multifamily communities totaling approximately 12,000 units and 54 grocery-anchored retail properties across the Southeast. Also included are Preferred Apartment’s two office properties and 10 mezzanine/preferred equity investments that have been collateralized by multifamily assets that are either under construction or newly built.

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Why It Happened: Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate, said he views the transaction as an affirmation of the financial strength within the Southeast commercial real estate markets.

“Investing using BREIT’s perpetual capital will enable us to be long-term owners of these vibrant communities,” he said. “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.”

Joel T. Murphy, Preferred Apartment’s chairman and CEO, hailed the deal as 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.”

Photo: The Anson in Nashville, one of the properties within the Preferred Apartment Communities portfolio.