Greystar Real Estate Partners and Goldman Sachs & Co. have entered into a joint venture agreement to purchase a $1.5 billion portfolio of multifamily assets from Equity Residential. The portfolio consists of 27 high-quality apartment communities, or 8,010 units, located in major markets across the United States.
The portfolio of stable, income-producing properties is well positioned in markets with strong job growth and limited new supply. The transaction values the properties at approximately $187,000 per unit and a capitalization rate in the mid-to-high 5 percent range. Pursuant to the agreement, the joint venture retains the right to exclude up to 8 percent of the value of the portfolio upon its discretion. The transaction is expected to be completed in two separate closings, both of which will occur in the first quarter of 2013.
The transaction is another in a history of joint investments made by Goldman Sachs and Greystar and continues to build upon a longstanding relationship between the companies.
“This transaction fits perfectly in our investment strategy to acquire assets with strong existing cash flows at values below replacement cost located in markets with high employment and population growth,” Bob Faith, Greystar’s chairman and CEO, said in a statement. “We are pleased that the composition of this portfolio of high-quality apartment communities aligns with locations where we have deep operational expertise. We believe these assets are positioned to benefit both from continued strength in the multifamily industry as well as from Greystar’s operational expertise.”
The assets under contract for sale are located in the following markets: Washington, D.C. and Northern New Jersey (2,105 units at $517.7 million); South Florida (1,896 units at $276.7 million); San Francisco Bay Area (711 units at $188.5 million); Southern California (720 units at $180.8 million); Phoenix, Ariz. ( 1,575 units at $180.3 million) and Denver, Colo. (1,003 units at $156 million).