Equity Residential to buy apartment portfolio from Blackstone for nearly $1 billion
12:51 pm Wednesday, August 07th, 2024
(Reuters) -Equity Residential has agreed to acquire 11 apartment properties located in its expansion markets such as Atlanta and Denver from Blackstone for about $964 million, the companies said on Wednesday.
The company will purchase the portfolio comprising of 3,572 apartment units in separate deals with Blackstone Real Estate strategies. The properties cater to a demographic of higher-end renters.
The deal comes at a time when real estate investment trusts have been sharpening their focus on rental housing acquisition, as the supply of apartments in the U.S. is expected to decline due to a slowdown in construction.
This is likely to lead to rental growth, which has over the past few months remained flat or declined modestly due to fresh supply that came into many U.S. markets after low interest rates ushered in an era of rising construction.
Equity Residential has largely been insulated from supply pressures, having built a diversified portfolio.
The company has said that about 95% of its net income has been coming from its established markets, where supply levels are more stable, with its customers on average spending about 20% of their income on rent, lesser than the national average.
“This transaction is a significant step in our goal of generating a higher percentage of our annual net operating income from these strong growth expansion markets,” said the company’s Chief Investment Officer, Alec Brackenridge.
The companies expect the deal to close in the third quarter of 2024.
(Reporting by Ananta Agarwal in Bengaluru; Editing by Shailesh Kuber)
