Washington, D.C. —AvalonBay Communities Inc. and Equity Residential have entered into an agreement with Lehman Brothers Holdings Inc. to acquire a respective 40 percent and 60 percent stake of Archstone Enterprise LP, a transaction that involves 66 communities across the country. The approximate purchase price is $16 billion and the deal is expected to close in the first quarter of 2013 with a weighted average cap rate in the high four percent range.
The purchase is being funded by $2.7 billion in cash, a fixed number of shares of AvalonBay and Equity Residential common stock valued at $3.8 billion, and the assumption of approximately $9.5 billion of consolidated and unconsolidated debt at Archstone’s share.
The 66 apartment communities contain 22,222 units. Six of the properties are still under construction and are expected to contain 1,666 units upon completion. A breakdown of the property locations is detailed below.