Private equity real estate giant, Starwood Capital Group has partnered with Milestone Apartments to acquire multifamily REIT Landmark Apartment Trust for $8.17 per share. The all-cash transaction values the Landmark Apartments at approximately $1.9 billion, including the assumption of existing debt.
Starwood, based in Greenwich, Connecticut, has made significant moves in the multifamily sector over the past year adding 44,500 multifamily units to its holdings. The acquisition of Landmark Apartments will see Starwood get 19,615 units across 63 properties in eight ‘Sunbelt’ states. Milestone Apartments, a Ontario-based open-ended real estate investment trust, will act as a property manager for the portfolio and receive 4,172 units in 15 assets.
“This acquisition highlights our confidence in multifamily housing as an asset class that represents an attractive risk/reward proposition for our investors,” said Christopher Graham, Starwood’s senior managing director and head of real estate acquisitions for the Americas, in a statement yesterday. “Across the United States, demographic, economic and financial factors are driving apartment vacancy rates lower and rental rates higher – and we believe that these trends will continue into the foreseeable future.”
For the Landmark transaction Starwood will use capital for from Starwood Global Opportunity Fund, a $5.6 billion fund that held its final close in March. Other recent investments from the fund include two Luxembourg office buildings, a mixed-use property in suburban Denver and the top four floors of Macy’s department store in downtown Seattle.
Starwood’s push into the multifamily business comes after the firm agreed last month to combine its single-family rental business, Starwood Waypoint Residential Trust, with Colony Capital’s Colony American Homes. The merged company is expected to own and manage more than 30,000 homes and have an aggregate asset value of $7.7 billion at the transaction’s closing, which is expected during the first quarter of 2016.
The Landmark Apartments transaction is expected to close in the first quarter of 2016.