Milestone Apartments Real Estate Investment Trust (TSX:
MST.UN) announced yesterday that it has entered into an acquisition agreement with an affiliate of Starwood Capital Group under which Starwood will acquire all of Milestone's subsidiaries and assets. The deal, which will yield $16.15 per trust unit in cash for all Milestone unit holders, is expected to be completed early in the second quarter of 2017.
"I am extremely proud of what this organization has achieved since the REIT's 2013 [IPO], including more than doubling [our] enterprise value, more than tripling our equity market capitalization, and generating total annual compound returns for our investors in excess of 28%," said Robert P. Landin, CEO of Milestone, in a statement. "This compelling, all-cash transaction reflects an attractive value for our unit holders and will position Milestone and its employees for continued growth with an experienced, reputable, and very capable strategic owner."
Landin and co-managing partner Jeffrey L. Goldberg will not have continuing roles with the REIT's business or Starwood after the transaction is completed.
"Today's announcement can be largely attributed to [Milestone's] high-quality portfolio of multifamily properties and associated state-of-the-art operating platform," said Michael Young, chairman of Milestone's board of trustees. "The transaction delivers significant and certain value to unit holders while at the same time providing an excellent opportunity for Milestone's employees to continue their success."
The acquisition of Milestone's portfolio of multifamily developments, which consist of 78 garden-style properties comprising 24,061 units in 16 major metros throughout the Southeast and Southwest, and of the REIT's operating platform of more than 1,200 employees is strategic to Starwood's growth initiatives in the multifamily sector and, specifically, in the Sun Belt, where Starwood already owns over 67,000 apartment units.
The total value of the deal is approximately $2.85 billion, with an average price per apartment unit of about $120,000.