Why Apartment Income REIT Shares Are Rocketing Today

Zinger Key Points
  • Apartment Income REIT agrees to go private in $10 billion deal with Blackstone Inc. (BX).
  • Blackstone plans to invest over $400 million to maintain and improve AIRC's portfolio of 76 rental housing communities.

Apartment Income REIT Corp. AIRC shares are trading higher after it inked a deal with Blackstone Inc. BX to be taken private.

In particular, Blackstone Real Estate Partners X entered into a definitive agreement to acquire AIR Communities in an all-cash transaction valued at about $10 billion, including the assumption of debt.

The purchase price of $39.12 per share represents a premium of 25% to Apartment Income Communities’ closing share price on the NYSE on April 5, 2024, the last trading day before the announcement.

The purchase price represents 25% premium to the volume weighted average share price on the NYSE over the previous 30 days.

Apartment Income Communities’ portfolio comprised 76 rental housing communities concentrated mainly in coastal markets, including Miami, Los Angeles, Boston, and Washington D.C. 

Blackstone plans to invest over $400 million to maintain and improve the existing communities in the portfolio.

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The transaction, unanimously approved by the AIR Communities Board of Directors, is expected to close in the third quarter of 2024, subject to customary closing conditions. 

As a part of the deal term, Apartment Income suspended payment of its quarterly dividend, effective immediately.

Following completion of the transaction, AIR Communities’ shares will not be listed on the New York Stock Exchange.

As of December 31, 2023, Blackstone had $8.4 billion in total cash, cash equivalents, corporate treasury, and other investments and $16.9 billion of cash and net investments.

Investors can gain exposure to the stock via Tidal ETF Trust Residential REIT ETF HAUS and Invesco S&P Spin-Off ETF CSD.

Price Action: AIRC shares are up 22.5% at $38.40 on the last check Monday.

Photo via Shutterstock

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