Greystar Sells $2B National Multifamily Portfolio to Blackstone

Bob Faith

Charleston, S.C.—Investment, development and management company Greystar Real Estate Partners LLC has announced that Greystar Equity Partners VII LP (GEP VII) has sold a 32-property multifamily portfolio to Blackstone Real Estate Partners VIII. The purchase price was $2 billion, or approximately $192,000 per unit.

A blend of mid-rise, high-rise and garden-style apartment buildings from across the country make up the 10,399-unit multifamily portfolio. The properties comprising the portfolio are found in the New York, Los Angles, San Francisco, South Florida and Boston metropolitan areas, as well as other high-barrier-to-entry markets

The transaction was competitively bid, with HFF acting on behalf of Greystar. The terms of the transaction agreement stipulate that Greystar will continue to serve as property manager. The sale means Greystar has successfully monetized its investments in GEP VII.

“When evaluating our options, we felt now was an opportune time to monetize our investments in this portfolio of assets given we had accomplished our goal of executing our value-add strategy,” Greystar chairman and CEO Bob Faith told MHN. “Not surprisingly, demand for a portfolio of this size and quality was significant so we saw an opportunity to realize attractive pricing for our investors by pursuing a sale. We are very pleased with the outcome of the transaction.”

Spawned as part of Greystar’s flagship value-add acquisition fund series, GEP VII has as its focus the purchase of well-situated, institutional-quality properties in major markets across the country. Each one of the apartment communities purchased offers substantial upside potential flowing from operational improvements and capital renovations. GEP VII is a $600 million commingled fund that held its final close in 2011 with commitments from a diverse group of global institutional investors.

Greystar announced the final close of the $800 million Greystar Equity Partners VIII, a successor fund that is now fully invested, in June 2014.

“We continue to believe in the long-term fundamentals of the multifamily industry, given strong secular demand trends and barriers against widespread overdevelopment,” Faith said. “We will continue to leverage our proprietary insight, local market expertise and deep industry relationships to identify additional attractive value-add investments.”