Less than a week after Brookfield Asset Management announced plans to buy Cleveland-based Associated Estates, REIT Newshound reported that another of the smaller apartment REITs may be on the block.

In an article yesterday, the newsletter reported that Rochester-based Home Properties, which is led by CEO Ed Pettinella, was in "advanced discussions" to be acquired by a private equity fund, Dallas-based Lone Star Funds. Home didn’t return a call from Multifamily Executive about the report.
Edward J. Pettinella
Edward J. Pettinella

Home has long been rumored to be a takeout candidate for no other reason than its size relative to its larger peers. Last year in an interview with Multifamily Executive, Stifel Nicolaus & Co. analyst Rod Petrik called Home an “obvious” candidate for a takeout. 

“I think you’ll see more merger and acquisition activity in the REIT space,” Petrik said a year ago. “The logical candidates remain Post Properties and Home Properties. They still have debt with above market interest rates.”

Petrik reiterated that in a note released on Monday. “While we have no knowledge of any M&A discussion or activity reported this morning that Home was one of our top takeout picks at the beginning of the year,” he wrote. 

In the note, Petrik went on to say that “Lone Star recently closed a $5.8 billion real estate fund that provides about $20 billion of purchasing power.”


In 2014, Lone Star bought 64 properties from Greensboro, N.C.-based Bell Partners and New York-based DRA for $1.8 billion. If a deal were to happen, Real Capital Analytics’ Jim Costello wouldn’t be surprised. “The portfolio and entity level activity has been on the rise,” he says.