02/16/2022 | by
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Preferred Apartment Communities, Inc. (NYSE: APTS) said Feb. 16 that Blackstone Real Estate Income Trust, Inc. (BREIT) will acquire the REIT in an all-cash transaction valued at approximately $5.8 billion.

The purchase price represents a premium of approximately 39% over the closing stock price on Feb. 9, the date prior to a report that PAC was exploring strategic options, including a sale.

Joel Murphy, PAC’s chairman and CEO, said the transaction reflects the company’s hard work over the past few years to simplify and refocus its portfolio.

BREIT will acquire PAC’s 44 multifamily communities totaling approximately 12,000 units concentrated largely in: Atlanta; Orlando; Tampa; Jacksonville, Florida; Charlotte, North Carolina; and, Nashville. The deal also includes PAC’s 54 grocery-anchored retail assets comprising approximately six million square feet located mostly in: Atlanta; Orlando; Nashville; and, Raleigh, North Carolina.

BREIT will also acquire PAC’s two Sun Belt office properties and 10 mezzanine/preferred equity investments collateralized by under construction and newly-built multifamily assets.

In a research note, Colliers Securities said that given the recent Bluerock Residential Growth REIT, Inc. sale to affiliates of Blackstone Real Estate, and now the PAC deal, “there does seem to be a healthy appetite for Class A apartment buildings in the Southeast.”

With many apartment REITs trading at discounts to net asset value (NAV), or higher implied cap rates, “it is reasonable to think that there could be a few more take-outs in the sector. Simply put, prices for apartment buildings are cheaper on Wall Street than on Main Street,” Colliers said.