Apartment REIT Recapitalizes, Renames Itself
- Aug 15, 2012
Richmond, Va.—In a complex deal involving a number of investors, Apartment Trust of America Inc. has recapitalized itself, acquired a large new portfolio and changed its name. Going forward, the REIT will be called Landmark Apartment Trust of America.
As part of the recapitalization, the newly renamed Landmark (the former ATA) received 21 apartment properties valued at $485 million and including about 6,100 apartment units. The properties are being contributed by Elco Landmark Residential Holdings LLC (ELRH) and its affiliates and partners, DeBartolo Development LLC, the Florida Value Funds and other investors. In return, the investors are receiving $187 million of partnership interests in Landmark’s operation partnership and some cash, and Landmark is assuming $282 million worth of the property’s debt.
At the completion of the deal, Landmark will own a total of 36 properties that include about 10,000 units in 17 markets across the southern United States. The company will also continue to provide fee-management services for about 12,000 units that it doesn’t own. According to Landmark CEO Stanley J. Olander, the transactions are to facilitate the process of listing its shares on an exchange, which will provide liquidity for the company’s shareholders.
The company also established two classes of preferred stock, and sold for cash $50 million of the preferred stock to OPSEU Pension Trust and DeBartolo together with warrants to purchase an equivalent amount of common stock. In addition, the company sold for cash about $1.5 million of common stock to ELRH at a price of $8.15 per share. Proceeds are being used to repay debt, fund additional property acquisitions and pay transaction costs.
Joseph Lubeck, CEO of ELRH, will become the executive chairman of Landmark’s board of directors, while Olander will continue to serve on the board of directors and be CEO. Gus Remppies will continue to be president of the company.