Apollo, UDR Form $2B Multifamily Ownership JV
The asset manager-REIT agreement includes the ownership of more than 7,000 units.
Apollo and UDR Inc. have announced a joint venture to own and operate a 19-property, 7,059-unit portfolio of multifamily properties valued at $2 billion. The transaction is expected to close on the 29th of this month, subject to customary closing conditions and document execution.
Under the new agreement, Apollo will invest $1.34 billion of capital in exchange for a two-thirds equity stake in the joint venture. UDR will continue to operate and manage the properties, which are expected to command an average rent of $2,058 per month and a cap rate of approximately 6 percent.
Following a five-year holding period, the REIT will also have the option to buy out Apollo’s interest in the venture at a roughly 7 to 7.5 percent fixed return rate.
Wells Fargo Securities, LLC and Citigroup Global Markets Inc. structured the agreement and served as financial advisors on behalf of UDR. Apollo was advised by Scotiabank.
One of the nation’s largest multifamily owners, UDR’s portfolio spans more than 60,000 units of market-rate and affordable housing across 21 distinct markets. As of September, the REIT has approximately $10.3 billion in assets under management.
In July of this year, UDR acquired Heirloom, a 286-unit market-rate community located in Portland, Ore. from NBP Capital. It paid $74.1 million for the property.
Earlier that month, the company sold Legacy Hill, a 206-unit property in Nashville in a $41.5 million deal. It parted with the asset after more than 30 years of ownership.
