Equity to Sell $1.5B Portfolio
- Jan 16, 2013
Chicago—Equity Residential has unveiled a major deal to sell $1.5 billion worth of multifamily properties to a joint venture of Goldman, Sachs & Co. and Greystar Real Estate Partners. The transaction will involve 27 properties in various parts of the country.
Under the terms of the sale, the buyers have the right to acquire all of the assets for $1.5 billion but are obligated to purchase not less than $1.38 billion of them. The buyers have deposited $150 million in escrow and waived their due diligence contingency. Thus the deal, which will occur in two separate closings, will be finalized sooner rather than later, sometime during the first quarter of 2013.
According to Equity Residential, the funds generated by the sale of the assets—which is calls “non-core in primary markets”—will be put toward its acquisition of Archstone. Late last year, Equity Residential partnered with Avalon Bay Communities to buy Archstone for $16 billion in a deal in which the Chicago-based REIT will own 60 percent of Archstone.
The assets that the Goldman-Greystar JV are acquiring include more than 2,100 units in Washington, D.C., and northern New Jersey, and nearly 1,900 in Florida and 1,600 in Phoenix. The portfolio also includes about 1,000 units in Denver, and 700 or so each in southern California and the San Francisco Bay area. The total number of units is 8,010.
In terms of units, the sale is actually represents a relatively small fraction of Equity Residential’s holdings. Currently it owns 412 properties totaling more than 117,300 units nationwide.