Goldman Sachs and Greystar to Acquire $1.5 Billion of Assets from Equity Residential

Greystar Real Estate Partners announced they are partnering with Real Estate Principal Investment Area of Goldman, Sachs & Co. to purchase a $1.5 billion portfolio of multifamily assets from Equity Residential.

Charleston, S.C.—Greystar Real Estate Partners announced they are partnering with Real Estate Principal Investment Area of Goldman, Sachs & Co. to purchase a $1.5 billion portfolio of multifamily assets from Equity Residential.

“This transaction fits in our investment strategy to acquire assets with strong existing cash flows at values below replacement cost located in markets with high employment and population growth,” Wes Fuller, executive director of investments, Greystar, tells MHN.

The portfolio includes 27 multifamily communities across the United States, incorporating 8,010 units. The transaction values the properties at approximately $187,000 per unit and a capitalization rate in the mid to high 5 percent range. According to Fuller, assets were selected from Equity Residential to include the most attractive investments.

According to the agreement, the joint venture retains the right to exclude up to 8 percent of the value of the portfolio upon its discretion.

Goldman Sachs and Greystar have a history of forming joint ventures for property transactions.

“Greystar has a significant operating presence and investment experience in each market, so we believe these assets are positioned to benefit both from continued strength in the multifamily industry as well as from Greystar’s operational expertise,” Fuller says.

The transaction is expected to be completed in two separate closings, both of which will occur in the first quarter of 2013.

The assets under contract for sale are located in the following markets:

 

Market  Units Purchase Price (millions)
Washington DC & Northern NJ 2,105 $517.7
South Florida 1,896 $276.7
San Francisco Bay Area 711 $188.5
Southern California 720 $180.8
Phoenix 1,575 $180.3
Denver 1,003 $156.0
Total 8,010 $1,500