BETHESDA, MD. AND ATLANTA — Elme Communities (NYSE: ELME), a Maryland-based multifamily owner-operator that previously operated as WashREIT, has entered into a purchase and sale agreement with an affiliate of Cortland Partners, an Atlanta-based multifamily investment and management firm. Under the terms of the transaction, Elme would sell 19 apartment communities to Cortland for $1.6 billion in an all-cash deal.
“We are pleased to have reached an agreement with Cortland that recognizes the greater value of these 19 Elme communities and their long-term potential when coupled with Cortland’s economies of scale,” says Paul McDermott, president and CEO of Elme. “We believe Cortland will be an excellent steward of the properties and that this sale will facilitate a seamless transition of ownership, enabling continuity of operations for our residents and community teams.”
Steven DeFrancis, CEO of Cortland, said that the portfolio will grow the company’s presence in the Washington, D.C., region and in its home state of Georgia.
“We’re excited to welcome these communities into the Cortland family and deliver the exceptional living experience residents have come to expect from our brand,” says DeFrancis.
The properties include:
- Cascade at Landmark in Alexandria, Va.
- Clayborne in Alexandria, Va.
- Elme Alexandria in Alexandria, Va.
- Bennett Park in Arlington, Va.
- Park Adams in Arlington, Va.
- The Maxwell in Arlington, Va.
- The Paramount in Arlington, Va.
- The Wellington in Arlington, Va.
- Trove in Arlington, Va.
- Roosevelt Towers in Falls Church, Va.
- Elme Dulles in Herndon, Va.
- Elme Herndon in Herndon, Va.
- Elme Leesburg in Leesburg, Va.
- Elme Manassas in Manassas, Va.
- The Ashby at McLean in McLean, Va.
- Yale West in Washington, D.C.
- Elme Druid Hills in Atlanta
- Elme Cumberland in Smyrna, Ga.
- Elme Eagles Landing in Stockbridge, Ga.
Goldman Sachs & Co. LLC and Jones Lang LaSalle Securities LLC are acting as financial advisors to Elme in the transaction. Hogan Lovells US LLP is acting as the company’s legal counsel, and Joele Frank is serving as strategic communications advisor to Elme.
Evercore is serving as lead financial advisor and exclusive debt placement agent to Cortland, along with Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC. King & Spalding LLP is acting as Cortland’s legal counsel.
The transaction is expected to close in the fourth quarter, subject to customary closing conditions, including the receipt of approval from the company’s shareholders. (The portfolio sale transaction is not contingent on the receipt of financing by Cortland.)
The Elme portfolio sale marks Cortland’s second large-scale transaction with a publicly traded REIT. In 2019, Cortland became the largest apartment owner in the Dallas area after its $1.2 billion privatization of Pure Multifamily REIT.
Liquidation Plan
The portfolio sale to Cortland represents the first step in Elme’s planned voluntary sale and liquidation process. Elme’s board of trustees recently completed a strategic alternatives review process and concluded that the Cortland sale, along with marketing the firm’s remaining assets and dissolving the company, represented the best courses of action.
“The board evaluated a range of potential alternatives in an effort to determine the course of action that provides the best opportunity for maximizing shareholder value,” says Benjamin Butcher, Elme’s lead independent trustee. “Our financial advisors engaged with more than 80 potential counterparties. Our evaluation process was robust, underpinning the board’s unanimous determination that the combination of the sale of assets to Cortland and subsequent sale of the remaining assets is most likely to result in the greatest value for shareholders as compared to the company’s other strategic alternatives.”
The 10 remaining properties to be marketed include:
- Kenmore Apartments in Washington, D.C.
- 3801 Connecticut Avenue in Washington, D.C.
- Elme Marietta in Marietta, Ga.
- Elme Bethesda in Bethesda, Md.
- Elme Sandy Springs in Sandy Springs, Ga.
- Elme Germantown in Germantown, Md.
- Elme Watkins Mill in Gaithersburg, Md.
- Elme Conyers in Conyers, Ga.
- Riverside Apartments in Alexandria, Va.
- Watergate 600 in Washington, D.C. (office)
The liquidation is pending approval by Elme’s shareholders. The company intends to convene a special meeting of its shareholders to approve the Cortland portfolio sale and company liquidation plan at an unspecified date.
Goldman Sachs Bank USA has a $520 million debt commitment to finance Elme’s remaining assets once the Cortland transaction closes.
The New York Stock Exchange (NYSE) has discretionary authority to delist Elme’s common shares following shareholder approval of the plan of sale and liquidation. At a point in the future to be determined by Elme’s board of trustees, the company expects to voluntarily delist its common shares from the NYSE in order to reduce operating expenses and maximize liquidating distributions.
The company’s stock price closed on Friday, Aug. 1 at $15.11 per share, down more than 9 percent from a year ago ($16.66 per share). Connected with the portfolio sale and company liquidation, Elme’s board declared a quarterly distribution of $0.18 per share on Oct. 3, 2025 to be paid to shareholders of record on Sept. 17, 2025, as well as an initial special distribution estimated to total between $14.50 and $14.82 per share.
— John Nelson