Greystar-Led Fund Taking Monogram Residential REIT Private in $3 Billion Deal

New Multifamily Investment Fund Consists of Investors from The Netherlands, China and Canada

CEO Bob Faith hof Greystar Real Estate Partners is adding another 49 multifamily properties to his growing portfolio.
CEO Bob Faith hof Greystar Realty Partners is adding another 49 multifamily homes to his growing portfolio. Monogram Residential Trust, Inc.(NYSE: MORE), an owner and operator of apartment neighborhoods mostly located in seaside markets, agreed to be obtained by a freshly formed perpetual life fund, Greystar Development and Income Fund, led by Greystar Realty Partners in a transaction valued at $3 billion, including financial obligation to be presumed or re-financed.

Investors in the brand-new fund consist of Dutch pension fund APG Property Management NV, Singapore-based international investment firm GIC, and Quebec-based CRE financier IvanhoƩ Cambridge.

Based in Plano, TX, Monogram owns a portfolio of investments in 49 multifamily neighborhoods in 10 states totaling 13,674 systems.

A ranking of the largest US apartment owners by the National Multifamily Real estate Council for 2017 lists Charleston, SC-based Greystar as the 19th biggest owner with 44,037 units. Greystar is also ranked as the biggest home manager with 415,634 units under management.

Under the arrangement, which was unanimously authorized by Monogram’s board, stockholders will receive $12 per share in cash, a premium of 22% to Monogram’s closing stock rate of $9.80 on July 3.

The $3 billion value consists of Monogram’s share of its 2 institutional co-investment joint endeavors with PGGM and NPS. The PGGM joint endeavor will be restructured, and the joint endeavor interests held by NPS will be purchased by Greystar under a separate assignable purchase and sale agreement for around $500 million.

“Through this deal, Monogram will transition from being a publicly traded REIT to an independently held company and a part of the Greystar company,” Mark T. Alfieri, CEO of Monogram wrote to workers yesterday announcing the news. “We believe this transaction offers our stockholders with instant and compelling value for their investment, and shows the effort and commitment of all the workers at Monogram.”

“We are thrilled to add Monogram’s high quality assets in some of the best markets in the country as the seed portfolio for Greystar Growth and Earnings Fund, LP, our flagship core-plus perpetual life lorry,” stated Bob Faith, the founder and chairman of Greystar.

The deal is not contingent on invoice of funding by Greystar. JPMorgan Chase Bank, N.A. has actually provided a commitment letter to Greystar Growth and Earnings Fund for $2 billion in financial obligation financing for the transaction.

The Greystar fund retained Walker & & Dunlop Inc. (NYSE: WD) to secure financing for its acquisition. This will be the biggest transaction in Walker & & Dunlop’s history.

Home REIT assessments stand near all-time highs, regardless of steady brand-new supply that stays a near term headwind, inning accordance with initial analysis of the deal by Morgan Stanley Research.

“We think the transaction continues to illustrate that private financiers are looking past near term supply headwinds and are more optimistic about the longer term outlook offered encouraging basics,” Morgan Stanley Research study reported.

Morgan Stanley is acting as exclusive monetary consultant. Morrison & & Foerster is representing Morgan Stanley in the financing. Goodwin Procter LLP is acting as legal advisor to Monogram. J.P. Morgan Securities LLC is working as unique monetary advisor and Jones Day is serving as legal consultant to Greystar.

The transaction, which is anticipated to close in the 2nd half of 2017, is subject to approval by Monogram’s stockholders and other customary closing conditions.

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