Archstone’s US Apartment Portfolio Acquired for $16 Billion

Equity Residential has teamed up with AvalonBay Communities to acquire a portfolio of US apartment properties owned by Archstone. Equity Residential and AvalonBay are acquiring the portfolio from the Lehman Brothers estate for approximately $16 billion. Morrison & Foerster represented Equity Residential in the transaction.

PRESS RELEASE

In the largest real estate deal this year, Morrison & Foerster LLP is representing leading residential real estate investment trust Equity Residential (NYSE: EQR) in a joint agreement with AvalonBay Communities to acquire a vast portfolio of U.S. apartment properties owned by Archstone. Equity Residential and AvalonBay are acquiring the portfolio from the Lehman Brothers estate for approximately $16 billion. The deal marks the largest real estate transaction since Blackstone Group’s $26 billion acquisition of Hilton Worldwide Inc. in 2007.
Equity Residential’s stake, around 60% of the Archstone portfolio, includes 78 properties in major U.S. markets, including Washington, D.C. San Francisco, Los Angeles, New York, Boston, Seattle, South Florida and elsewhere. The total number of apartments going to Equity Residential is more than 23,000 units. The company will additionally acquire properties under development in Washington, D.C., San Francisco, Phoenix and South Florida.
The deal is expected to close in the first quarter of 2013.
Washington, D.C.-based corporate and securities partner David Slotkin led Morrison & Foerster’s deal team along with partners Thomas Fileti (Los Angeles); Peter Dopsch, Dominick Bozzetti, and Spencer Klein (New York), and associates Jacob Bernstein, Joshua Pierce, Rada Blumkin, Amanda Hines, Wells Miller and Henrique Canarim.
Here is a summary of the operating properties Equity Residential is slated to acquire.
Market
Properties
Units
Washington, D.C.
24
7,578
San Francisco
14
4,827
Southern California
12
3,374
New York
10
2,638
Boston
8
1,984
Seattle
7
1,841
South Florida
1
196
All other markets
2
672
Totals
78
23,110
In May, Morrison & Foerster represented Equity Residential in obtaining $150 million in fees when Lehman exercised its right of first offer blocking Equity Residential’s proposed purchase of Bank of America and Barclays Bank’s 26.5 percent ownership interest in Archstone.
“We are pleased to once again work with Equity Residential in this high-profile acquisition of trophy residential properties,” Mr. Slotkin said
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