Deal Works Out To $187,000 per Unit for Properties Located in Seven Major U.S. Markets
Equity Residential (NYSE:EQR) has begun selling some assets to raise money for its deal to buy Archstone for $16 billion in cash, stock and assumed debt with AvalonBay (NYSE: AVB).This week, Chicago-based EQR agreed to sell a 27-property portfolio to a joint venture of Goldman, Sachs & Co. and Greystar Real Estate Partners for $1.5 billion in cash, which works out to approximately $187,000 per apartment unit and a capitalization rate in the mid-to-high 5% range.
Equity Residential has granted the buyers the right to exclude certain assets up to 8% of the 8,010-unit portfolio's total value. As a result, Goldman Sachs and Greystar have the option of acquiring all of the properties for $1.5 billion or can drop some, but they must buy at least $1.38 billion of the properties. The buyers have deposited $150 million in escrow and have waived their due diligence contingency. The transaction is expected to be completed in two separate closings, both of which will occur in the first quarter of 2013.
"With this transaction we will have made significant progress selling assets in our exit markets and non-core assets in primary markets to fund our share of the acquisition of Archstone," said David J. Neithercut, Equity Residential?s President and CEO. Neithercutt added invetsor demand for multifamily assets remains very strong and the firm's original pricing expectations were met under this transaction.
EQR identified the following properties as those under contract to Goldman Sachs/Greystar:
Bella Vista, 7810 N. 14th Place, Phoenix, AZ
Bella Vista, 6925 Town Harbour Blvd., Boca Raton, FL
Cascade at Landmark, 300 Yoakum Parkway, Alexandria, VA
Crescent at Cherry Creek, 755 South Dexter St., Denver, CO
Ellipse at Gov Ctr., 11842 Federalist Way, Fairfax, VA
Gatewood, 3992 Stoneridge Dr., Pleasanton, CA
Grandeville, 2980 Grandeville Cir., Oviedo, FL
Iron Horse Park, 225 Coggins Dr., Pleasant Hill, CA
Montecito, 24640 Town Center Dr., Valencia, CA
Mountain Terrace, 25399 The Old Rd., Stevenson Ranch, CA
Park Central, 1555 Galindo St., Concord, CA
Prospect Towers (Phase I & II), 300 Prospect Ave., Hackensack, NJ
Savannah Lakes, 220 Savannah Lakes Dr., Boynton Beach, FL
Sedona Ridge, 5010 E Cheyenne Dr., Phoenix, AZ
Sonata at Cherry Creek, 4750 Cherry Creek Dr. South, Denver, CO
Sonoran, 13625 S 48th St, Phoenix, AZ
Stonybrook, 10206 Stonehenge Cir., Boynton Beach, FL
Sunforest, 2750 SW 73rd Way, Davie, FL
The Enclave, 3255 S. Dorsey Lane, Tempe, AZ
The Heritage, 1100 E. Osborn Rd., Phoenix, AZ
The Townes at Herndon Center, 508 Pride Ave., Herndon, VA
Village at Lakewood, 15815 S Lakewood Pkwy W, Phoenix, AZ
Warwick Station, 10305 Dover St., Westminster, CO
Waterside, 12032 Waterside View Drive 11, Reston, VA
Westerly at Worldgate, 13000 Wilkes Way, Herndon, VA
Whisper Creek, 3505 South Nelson Circle, Lakewood, CO
Windsor Fair Lakes, 4106 Brickell Dr.201, Fairfax, VA
On a unit/market basis, the properties break down as follows:
| MARKET(S) | # UNITS | PRICE ($Million) |
|
| Washington, D.C./Northern N.J. | 2,105 | $517.7
| |
| Florida | 1,896 | $276.7
| |
| Phoenix | 1,575 | $180.3
| |
| Denver | 1,003 | $156.0
| |
| Southern California | 720 | $180.8
| |
| San Francisco Bay Area | 711 | $188.5
| |
| TOTAL | 8,010 | $1,500.0
|
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