Steadfast to Merge Three REITs, Creating $3.3B REIT Focused on Moderate Income Apartments

IRVINE, CALIF. — Steadfast Apartment REIT (STAR), Steadfast Income REIT (SIR) and Steadfast Apartment REIT III (STAR III) have entered into definitive merger agreements in which STAR will acquire SIR and STAR III in separate stock-for-stock, tax-free transactions. The merger will create a combined company with approximately $3.3 billion in gross real estate assets.

The transactions are expected to close in the first quarter of 2020, subject to certain closing conditions, including the approval of the respective mergers by SIR and STAR III stockholders. The merger transactions are expected to close concurrently, but are not conditioned on the consummation of each other.

The merger agreements were negotiated on behalf of STAR, SIR and STAR III by their respective special committees, each of which is composed exclusively of independent directors, along with each special committee’s independent financial and legal advisors.

“We believe the strategic merger of these three highly complementary portfolios with similar investment strategies will create an enhanced and diversified portfolio, concentrated in high-growth markets,” said Rodney Emery, chairman of STAR, SIR and STAR III. “The enhanced size, scale and prominence of the combined portfolio will greatly improve the company’s access to attractive capital sources, which can be used to drive future growth opportunities and potentially deliver enhanced liquidity options to stockholders.”

If the mergers occurred now, the combined company’s portfolio would consist of 71 properties in 14 states with an average effective rent of $1,158. Based on occupancy as of June 30, the combined company’s portfolio is expected to have an occupancy rate of 94 percent, an average age of 20 years and gross real estate assets of $3.3 billion.

Robert A. Stanger & Co., Venable LLP, Morrison & Foerster LLP, BMO Capital Markets, Proskauer Rose LLP, Houlihan Lokey Inc. and DLA Piper LLP (US) served as financial and legal advisors for the merger negotiations.

Content Partners
‣ Bohler
‣ Lee & Associates
‣ Lument
‣ NAI Global
‣ Walker & Dunlop

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