NEW YORK CITY AND DENVER — Private equity behemoth Blackstone (NYSE: BX) has agreed to acquire AIR Communities (NYSE: AIRC) for $10 billion in an all-cash deal that would take the Denver-based multifamily REIT private. The deal is expected to close during the third quarter.
AIR Communities, which is formally named Apartment Income REIT Corp., owns 76 multifamily properties totaling roughly 27,000 units across 10 states and Washington D.C. The properties are primarily concentrated in coastal markets such as Los Angeles, Miami and Boston.
Under the terms of the deal, Blackstone will also assume all of AIR Communities’ outstanding debt. Blackstone also plans to invest more than $400 million to maintain and improve the existing communities in the portfolio.
The purchase price of $39.12 per share represents a premium of 25 percent to AIR Communities’ closing share price on April 5, 2024, the last full day of trading prior to the announcement. The price also represents a 25 percent premium to AIR Communities’ weighted average share price over the previous 30 days.
“AIR Communities represents the highest quality, large-scale apartment portfolio we have ever acquired and is located in markets where multifamily fundamentals are strong,” says Nadeem Meghji, global co-head of real estate for Blackstone.
The announcement coincides with court approval of Blackstone’s $3.5 billion acquisition of Canadian multifamily owner-operator Tricon Residential. The private equity giant is also taking Tricon private as part of that deal.
BofA Securities, Barclays, Goldman Sachs and Wells Fargo are acting as Blackstone’s financial advisors, and Simpson Thacher & Bartlett LLP is serving as Blackstone’s legal counsel. Citigroup Global Markets Inc. is acting as AIR Communities’ financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as its legal counsel.
The stock price of AIR Communities stood at $38.45 per share at the opening bell, up nearly 20 percent from its closing price of $31.35 per share on Friday, April 5 and up about 7 percent from $35.51 per share a year ago. Blackstone’s stock price opened at $127.49 per share on Monday, April 8, up from $81.57 per share a year ago.
— Taylor Williams