PLANO, TEXAS — Monogram Residential Trust Inc. (NYSE: MORE), an owner and developer of high-end apartment communities, has entered into a definitive merger agreement to be purchased by a newly formed perpetual life fund led by Greystar Real Estate Partners. The purchase price is $3 billion, including debt. Other principals of the fund, known as Greystar Growth and Income Fund LP, include affiliates of APG Asset Management, GIC and Ivanhoe Cambridge.
Monogram’s stockholders will receive $12 per share in cash, which represents a premium of approximately 22 percent to Monogram’s unaffected closing stock price on July 3, the last trading day prior to the public announcement of the transaction.
The ownership group has retained Walker & Dunlop to secure acquisition financing for the transaction, which includes Monogram’s share of its two joint ventures with PGGM and NPS. The PGGM joint venture will be restructured, and Greystar will purchase the joint venture interests held by NPS pursuant to a separate assignable purchase and sale agreement for approximately $500 million.
JPMorgan Chase Bank N.A. has provided a commitment letter to Greystar Growth and Income Fund for $2 billion in debt financing for the transaction. The deal is expected to close in the second half of 2017 and is subject to approval by Monogram’s stockholders and other customary closing conditions.
Morgan Stanley & Co. LLC is serving as exclusive financial advisor and Goodwin Procter LLP is serving as legal advisor to Monogram. J.P. Morgan Securities LLC is serving as exclusive financial advisor and Jones Day is serving as legal advisor to Greystar.
Monogram, a Plano-based REIT, had 49 multifamily communities totaling 13,674 units in its portfolio as of March 31. Spanning 10 states, the portfolio includes flagship properties such as Cyan on Peachtree in Atlanta; Seven in Austin, Texas; Zinc in Cambridge, Mass.; Argenta in San Francisco; EV in San Diego; Desmond at Wilshire in Los Angeles; Arpeggio Victory Park in Dallas; 55 Hundred in Arlington, Va.; and Soma at Brickell in Miami.
The company’s stock price closed on Monday, July 3 at $9.80 per share, down from $10.34 one year ago.
— John Nelson