Starwood Capital Group, Milestone Apartments REIT Agree To Acquire Landmark Apartment Trust
GREENWICH, Conn., Oct. 22, 2015 /PRNewswire/ -- Starwood Capital Group, a leading global private investment firm, and Milestone Apartments Real Estate Investment Trust (TSX: MST.UN) announced today that they have entered into an agreement to acquire Landmark Apartment Trust, a multifamily real estate investment trust, for an enterprise value of approximately $1.9 billion. The acquisition—which is subject to customary closing conditions, including approval by Landmark's shareholders—is expected to close in the first quarter of 2016.
Under the terms of the transaction, Starwood Global Opportunity Fund (SOF X), through a controlled affiliate, will acquire Landmark's ownership interest in 19,615 units in 63 apartment communities. The portfolio is located in eight Sunbelt states, with major concentrations in Dallas, Atlanta, Orlando, Tampa, Charlotte and Nashville. Milestone—which will acquire 4,172 units in 15 assets as part of the transaction—will serve as property manager for Starwood's portion of the portfolio.
"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, Senior Managing Director and Head of Real Estate Acquisitions for the Americas at Starwood Capital Group. "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."
"We look forward to working with Milestone and are thrilled to capitalize on a rare opportunity to acquire a large portfolio of apartment communities at a discount to replacement cost that provides both immediate cash yield and growth potential," said Ethan Bing, Vice President at Starwood Capital Group. "These assets are located in markets that benefit from a wide variety of demand drivers for population, job and household formation growth. The population in the markets within the portfolio has expanded by 1.5% annually over the last two years—double the U.S. average—and that growth rate is projected to be sustained over the next five years. Employment growth in these markets has averaged 2.8% annually over the last two years. More than half of the portfolio's net operating income is located within the country's top 14 largest metropolitan areas for expected household growth over the next five years. Finally, all five of the country's top multifamily markets for absorption rate over the past four quarters are represented in this portfolio, and we expect the multifamily fundamentals for these markets to remain positive going forward."
Starwood Capital Group has extensive experience investing in the multifamily housing sector. Including the Landmark transaction, Starwood Capital Group and its controlled affiliates have acquired or are under contract to acquire approximately 44,500 multifamily units over the last 12 months. Following the merger with Landmark, Starwood will own almost 65,000 units.
About Starwood Capital Group
Starwood Capital Group is a private investment firm with a core focus on global real estate. Headquartered in Greenwich, CT, the Firm maintains 10 offices in four countries around the world, and currently has more than 1,400 employees. Starwood Capital Group has raised approximately $32 billion of equity capital since its inception in 1991, and currently manages over $45 billion in assets. The Firm has invested in virtually every category of real estate on a global basis, opportunistically shifting asset classes, geographies and positions in the capital stack as it perceives risk-reward dynamics to be evolving. For more than two decades, Starwood Capital Group and its affiliates have successfully executed an investment strategy that involves building enterprises around real estate portfolios in both the private and public markets. Additional information can be found at starwoodcapital.com.
About Milestone Apartments REIT
Milestone Apartments REIT ("Milestone") is an unincorporated, open-ended real estate investment trust that is governed by the laws of Ontario. Milestone's portfolio consists of 61 multifamily garden-style residential properties, comprising 19,908 units that are located in 14 major metropolitan markets throughout the Southeast and Southwest United States. Milestone is the largest real estate investment trust listed on the TSX focused solely on the United States multifamily sector. Milestone operates its portfolio through its internal property management company, Milestone Management, LLC, which has more than 900 employees across the United States. Based in Dallas, TX, TMG Partners, L.P., an affiliate of The Milestone Group, LLC, is the external asset manager of Milestone. For more information, please visit www.milestonereit.com.
SOURCE Starwood Capital Group
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