Grubb & Ellis Apartment REIT Agrees to Acquire Nine Properties and Property Management Business for $182 Million

SANTA ANA, Calif., Aug. 30 /PRNewswire/ -- Grubb & Ellis Apartment REIT, Inc. today announced that it has entered into definitive agreements totaling $182 million to acquire nine multifamily properties from affiliates of MR Holdings, LLC and substantially all of the assets of Mission Residential Management, LLC, the Mission Residential property management business.  The acquisitions are subject to customary closing conditions and the satisfaction of other requirements as detailed in the agreements.

"The proposed acquisitions announced today will be a tremendous step in the growth and evolution of Grubb & Ellis Apartment REIT that will strengthen the company and add significant value for our stockholders," said Stanley "Jay" Olander Jr., chairman and chief executive officer.  "We will enjoy greater economies of scale, equity will increase by approximately 18 percent, and the transactions will be immediately accretive to our bottom line earnings, increasing funds from operations and coverage of our investor dividend."

The nine multifamily properties include 2,676 apartment units located in North Carolina, Tennessee and Texas.  One of the properties is owned by a limited partnership for which an affiliate of MR Holdings serves as general partner.  The other eight properties under contract are owned by Delaware statutory trusts for which affiliates of MR Holdings serve as trustee.  Total consideration for the acquisition of the nine properties totals $176.9 million comprised of cash, debt and limited partnership interests in Grubb & Ellis Apartment REIT's operating partnership.

Mission Residential Management is the property manager of 41 multifamily communities, including the nine under contract for purchase, totaling approximately 12,000 apartment units in Georgia, Texas, North Carolina, Tennessee, Utah and Florida.  Under terms of the asset purchase agreement, Grubb & Ellis Apartment REIT will acquire substantially all of the assets of Mission Residential, including workforce in place and the assignment and assumption of the property management agreements for all of the Mission Residential properties, for $5.5 million in cash plus the assumption of certain liabilities.

According to Olander, "The acquisition of the Mission Residential property management business will provide immediate fee income to Grubb & Ellis Apartment REIT, provides a platform for the self-management of our entire portfolio, and adds nearly 300 experienced professionals to our talented employee base."

Additionally, Grubb & Ellis Apartment REIT will seek the consent of the respective tenant-in-common owners of six multifamily communities totaling 1,510 apartment units in North Carolina and Texas to acquire these properties.  Total consideration for these proposed acquisitions would be $99.5 million, including limited partnership interests in the REIT's operating partnership and assumed debt.

The Grubb & Ellis Apartment REIT portfolio is currently comprised of 14 multifamily properties totaling 3,747 apartment units valued at approximately $358 million, based on purchase price.  Should the REIT successfully complete all 15 proposed property acquisitions, its portfolio will total 29 multifamily properties totaling 7,933 apartment units valued at approximately $661.4 million, based on purchase price.

FBR Capital Markets & Co. served as financial advisor to MR Holdings in connection with the transactions, while Wells Fargo Securities / Eastdil Secured served as financial advisor to Grubb & Ellis Apartment REIT.

About Grubb & Ellis Apartment REIT

Grubb & Ellis Apartment REIT, Inc. is a publicly registered, non-traded real estate investment trust that seeks to preserve, protect and return investors' capital contributions, pay regular cash distributions, and realize growth in the value of its investments upon the ultimate sale of such investments.  Grubb & Ellis Apartment REIT is seeking to raise up to approximately $1 billion in equity and to acquire a diversified portfolio of apartment communities with stable cash flows and growth potential in select U.S. metropolitan markets.  Grubb & Ellis Apartment REIT has acquired a geographically diverse portfolio of 14 apartment properties valued at approximately $358 million, based on purchase price.

Grubb & Ellis Apartment REIT is sponsored by Grubb & Ellis Company (NYSE: GBE).  Grubb & Ellis is one of the largest commercial real estate services and investment companies in the world. Our 6,500 professionals in more than 100 company-owned and affiliate offices draw from a unique platform of real estate services, practice groups and investment products to deliver comprehensive, integrated solutions to real estate owners, tenants and investors. The firm's transaction, management, consulting and investment services are supported by highly regarded proprietary market research and extensive local expertise. Through its investment subsidiaries, the company is a leading sponsor of real estate investment programs that provide individuals and institutions the opportunity to invest in a broad range of real estate investment vehicles, including publicly registered non-traded real estate investment trusts (REITs), separate accounts, mutual funds and other real estate investment funds. For more information, visit www.grubb-ellis.com.

The statements contained in this current report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may differ materially from those included in the forward-looking statements. The company intends those forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and the company is including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, intentions and expectations, are generally identifiable by use of the words "expect," "project," "may," "will," "should," "could," "would," "intend," "plan," "propose," "anticipate," "estimate," "believe," "continue," "predict," "potential" or the negative of such terms and other comparable terminology. The company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain.

Factors which could cause actual events in the future to differ from the forward-looking statements contained in this report relating to the proposed transactions described in the report include, but are not limited to: material adverse changes in the business or assets of MR Holdings, Mission Residential Management or their properties; material adverse changes in the business, assets or financial condition of the company that prevent the company from being able to close the proposed transactions; inability of the parties to obtain all consents and approvals that are required to complete the proposed transactions, including lender consents and regulatory approvals; legal or regulatory proceedings that prevent the parties from being able to complete the proposed transactions; or the company's inability to raise sufficient funds to close the transactions.

THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF OFFERS TO BUY ANY SECURITIES DESCRIBED HEREIN. OFFERINGS ARE MADE ONLY BY MEANS OF A PROSPECTUS OR OTHER APPROPRIATE OFFERING MATERIALS.

SOURCE Grubb & Ellis Apartment REIT, Inc.