Blackstone Will Buy Bluerock Residential in $3.6 Billion Deal

(Bloomberg) — Blackstone Inc. has agreed to acquire Bluerock Residential Growth REIT Inc. in a deal valued at $3.6 billion, extending its push into U.S. rental housing.

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Affiliates of Blackstone Real Estate will buy New York-based Bluerock for $24.25 a share, according to a statement Monday. That’s a premium of about 124% over the closing price on Sept. 15, the day before Bloomberg News reported the firm was exploring strategic options including a sale.

Bluerock shares surged as much as 76% to $27.20. The stock closed Friday at $15.44.

Read more: Blackstone Nears $930 Million Deal for Manhattan Luxury Rentals

Blackstone is buying 30 multifamily rental buildings with about 11,000 units and a loan book secured by 24 rental assets. Most of the properties are high-quality garden-style apartments, located in cities including Atlanta, Phoenix, Orlando, Denver and Austin, according to the statement.

“Bluerock’s portfolio consists of high-quality multifamily properties in markets across the U.S. experiencing some of the strongest fundamentals,” Asim Hamid, senior managing director at Blackstone Real Estate said. “We look forward to bringing our best-in-class management to these properties to ensure they continue to be operated at the highest standards for the benefit of tenants and the surrounding communities.”

Read more: Blackstone Bets $6 Billion on Shifting Path to Suburban Homes

The embrace of remote work in the pandemic has set off migration in the U.S. to Sunbelt cities that are less expensive than New York and San Francisco. Soaring home prices, meanwhile, have kept some potential buyers on the sidelines, pushing up rents across that U.S. That’s helped fuel demand for apartments deals as real estate investors shift money to housing from offices, hotels and malls.

Blackstone’s deal is expected to close in the second quarter. Prior to the acquisition, Bluerock plans to spin off its single-family rental business to a newly formed real estate investment trust, Bluerock Homes Trust Inc.

The new REIT will own interests in about 3,400 homes across the U.S., according to the statement.

(Adds shares.)

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