By Jessica Fiur, News Editor
Chicago—Equity Residential, an S&P 500 company that focuses on acquisition, development and management of apartments, announced it has signed a contract to acquire 26.5 percent ownership interest in Archstone, a privately held owner, operator and developer of multifamily properties. The agreement was for $1.325 billion, in cash.
The ownership interests under contract are represented by one half of the collective interests currently owned by affiliates Bank of America and Barclays Bank. The closing of the contract is contingent on the remaining Archstone owner refusing its right of first offer to acquire the interest from the banks at the same price agreed to by Equity.
If interest in Archstone is acquired by Equity, Equity will then hold a minority interest, and it will not have the ability to make decisions regarding Archstone. However, it will have rights over major decisions such as annual budgets, and certain financings, refinancings, and acquisitions and dispositions.
Currently, the Archstone portfolio includes almost 50,000 stabilized apartment units, as well as 1,332 apartments under construction.
If all goes as planned, Equity will acquire the interest in Archstone in early 2012.
Representatives from Archstone declined to comment to MHN about the acquisition.