BREIT to acquire Preferred Apartment Communities for $5.8bn

Blackstone Real Estate Income Trust Inc has agreed to acquire Preferred Apartment Communities for $25 per share or about $5.8 billion. Jones Lang LaSalle Limited, BofA Securities, Lazard Frères & Co. LLC and Wells Fargo Securities LLC are serving as financial advisors to BREIT while Goldman Sachs is serving as lead financial advisor to PAC with KeyBanc Capital Markets Inc also serving as financial advisor. PAC is a real estate investment focused on multifamily properties.

PRESS RELEASE

ATLANTA & NEW YORK–(BUSINESS WIRE)–Preferred Apartment Communities (NYSE: APTS) (“PAC” or the “Company”) today announced that it has entered into a definitive agreement with Blackstone Real Estate Income Trust, Inc. (“BREIT”), under which BREIT will acquire all outstanding shares of common stock of PAC for $25.00 per share in an all-cash transaction valued at approximately $5.8 billion.

Under the terms of the agreement, BREIT will acquire PAC, which includes 44 high-quality multifamily communities totaling approximately 12,000 units concentrated largely in Atlanta, Orlando, Tampa, Jacksonville, Charlotte and Nashville, and 54 grocery-anchored retail assets comprising approximately six million square feet located mostly in Atlanta, Orlando, Nashville and Raleigh. BREIT will also acquire the Company’s two Sun Belt office properties and 10 mezzanine / preferred equity investments collateralized by under construction and newly-built multifamily assets.

Joel T. Murphy, PAC’s Chairman and Chief Executive Officer, said, “This transaction is an excellent outcome for our stockholders and the culmination of the hard work our first-class team has done over the past few years to simplify and refocus our portfolio.”

Howard A. McLure, PAC’s Lead Independent Director, added, “Our focus from the outset has been on delivering the best possible outcome for all our stockholders. I would like to thank our entire Board, our team of outside advisors and the PAC management team for their collective efforts in bringing about this result.”

Jacob Werner, Co-Head of Americas Acquisitions for Blackstone Real Estate, said, “We are pleased to acquire Preferred Apartment Communities and its portfolio of high-quality multifamily assets in key Sun Belt markets, which represents a significant majority of the Company’s value. Investing using BREIT’s perpetual capital will enable us to be long-term owners of these vibrant communities. The Company’s grocery anchored retail portfolio performance has also been strong and resilient, and we believe these types of necessity-oriented assets located in areas with growing populations are well-positioned for continued growth.”

Werner continued, “The Company has a terrific property management and operations team that shares our commitment to being best-in-class owners. They have deep relationships and real estate expertise within the Sun Belt region, and we look forward to working closely with them to grow the business and continue to deliver a great experience for residents and tenants.”

The purchase price represents a premium of approximately 39% over the unaffected closing stock price on February 9, 2022, the date prior to a media article reporting that the Company was exploring strategic options including a sale, and a premium of approximately 60% to the 90-day volume-weighted average price through that date.

Transaction Terms, Timing and Approvals
The holders of each series of PAC’s preferred stock will receive the $1,000 per share liquidation preference for each share plus accrued but unpaid dividends. Subject to and upon completion of the transaction, PAC’s common stock will no longer be listed on the New York Stock Exchange, and PAC will be owned by BREIT.

The transaction has been unanimously approved by PAC’s Board of Directors and is expected to close in the second quarter of 2022, subject to approval by PAC’s stockholders and other customary closing conditions. The merger agreement also includes a 30-day “go-shop” period that will expire on March 18, 2022. There can be no assurance that this process will result in a superior proposal, and PAC does not intend to disclose developments with respect to the go-shop process unless and until it determines such disclosure is appropriate or is otherwise required.

Advisors
Jones Lang LaSalle Limited, BofA Securities, Lazard Frères & Co. LLC and Wells Fargo Securities LLC are serving as BREIT’s financial advisors, and Simpson Thacher & Bartlett LLP is acting as BREIT’s legal counsel.

Goldman Sachs & Co. LLC is serving as PAC’s lead financial advisor. KeyBanc Capital Markets, Inc., is also serving as financial advisor to PAC. King & Spalding LLP and Vinson & Elkins LLP are serving as the Company’s legal counsel.

About Preferred Apartment Communities, Inc.
Preferred Apartment Communities, Inc. (NYSE: APTS) is a real estate investment trust engaged primarily in the ownership and operation of Class A multifamily properties, with select investments in grocery anchored shopping centers. Preferred Apartment Communities’ investment objective is to generate attractive, stable returns for stockholders by investing in income-producing properties and acquiring or originating multifamily real estate loans. As of September 30, 2021, the Company owned or was invested in 107 properties in 13 states, predominantly in the Southeast region of the United States. Learn more at www.pacapts.com.