Steadfast’s REIT Merger Creates Firm with $3.3B in Assets

Steadfast Apartment REIT has acquired three affiliated REITs in separate stock-for-stock, tax-free transactions. The deal is expected to close in 2020.
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Steadfast Apartment REIT announced that it will acquire Steadfast Income REIT and Steadfast Apartment REIT III to form a single REIT focused on moderate-income apartments that together will own approximately $3.3 billion in real estate assets.

Expected to close in the first quarter of 2020, the deal is expected to increase cash flow to the new company by nearly $21 million, due to the fee structure realignment, according to the company. The newly formed entity also expects to be able to raise rents in the majority of its markets and for average annual returns on ground-up development projects to average 40 percent higher than acquisitions of stabilized, developed multifamily properties.

The company’s portfolio will consist of 71 properties across 14 states in the U.S., including major metros such as Dallas, Nashville and Austin. With the merger, the REIT plans to reposition its portfolio based on market and property conditions and actively pursue ground-up development opportunity projects.

Steadfast Apartment REIT’s major move comes on the heels of multifamily investment firm Cortland’s acquisition of LIV Group, a U.K.-based residential developer, and Canadian REIT Pure Multifamily, which Cortland acquired last month for $1.2 billion in an all-cash deal.