Equity Residential is expanding in high-growth markets with an agreement to acquire 11 multifamily communities in separate transactions from Blackstone Real Estate and its subsidiaries—Blackstone Real Estate Income Trust, Blackstone Real Estate Partners, and Blackstone Property Partners—for approximately $964 million. The transactions are expected to close in the third quarter.
The properties comprise 3,572 apartments and are on average eight years old. They include 1,357 units in four properties in Atlanta, 1,237 units in four properties in Dallas-Fort Worth, and 978 units in three properties in Denver. According to Equity Residential, these multifamily communities are attractive to its higher-end renter demographic.
“We are pleased to add these high-quality, well-located properties to our growing portfolios in Atlanta, Dallas-Fort Worth, and Denver at pricing that is attractive compared to replacement costs,” said Alec Brackenridge, executive vice president and chief investment officer at Equity Residential, a leading public real estate investment trust (REIT). “This transaction is a significant step in our goal of generating a higher percentage of our annual net operating income (NOI) from these strong growth expansion markets. We appreciate partnering with Blackstone on this mutually beneficial transaction and look forward to continuing to grow the relationship.”
Equity Residential, which owns or has investments in nearly 300 properties with 79,738 units and is the sixth-largest multifamily owner on the National Multifamily Housing Council’s 2024 Top 50 list, had a strong second quarter. In its earnings call at the end of July, it shared that the report results exceeded expectations.
"We are pleased … to be seeing positive forward momentum in our business, which led us to significantly improve our guidance," said president and CEO Mark J. Parrell. "Our portfolio continues to benefit from steady demand from our well-employed, higher-earning renter demographic, elevated single-family housing costs, and manageable new apartment supply across most of our markets.”
Same-store revenue increased 2.9% for the second quarter compared with the prior-year period, driven by strong demand and modest supply across most of the REIT’s markets. Same-store expense increased 2.7% with low growth in its primary expense categories, while same-store NOI increased 3%.
“This transaction represents an excellent outcome for our investors and demonstrates the strong institutional demand for high-quality assets,” said Asim Hamid, senior managing director at Blackstone Real Estate. “Rental housing remains one of our highest-conviction themes, and we continue to see strong fundamentals in attractive markets. We’re pleased to have worked with EQR, who will be an excellent steward of these properties going forward.”Blackstone’s financial advisers included Eastdil Secured, RBC Capital Markets, Santander, and Sumitomo Mitsui Banking Corp., while Simpson Thacher & Bartlett Served as legal counsel for the firm. Equity Residential’s legal counsel included Neal Gerber & Eisenberg, Hogan Lovells, and Bryan Cave Leighton Paisner.
