Blackstone plans to buy Preferred Apartment in $5.8 bn deal

Preferred Apartment Communities Inc told the media that a Blackstone Inc unit would buy its $5.8 billion deal as the world's biggest alternate asset manager increases its investments in the USA housing sector.

Blackstone Real Estate Income Trust's (BREIT) all-cash offer of $25 per share is about 40% higher than Preferred Apartment's stock which closed on 9 February. BREIT's shares increased by 7% to $25.04.

This offer comes during a strong economic recovery, ultra-low interest rates and continuous demand for bigger homes have increased home prices in the USA. Last year, the private equity firm bought Home Partners of America in a $6 billion contract.

Preferred Apartment Communities are rental apartment owners that own and operate multifamily properties, investing in grocery-anchored shopping centres.

BREIT invests in stabilised, income-generating US commercial real estate sectors across major property types, including residential, industrial, hotel, retail and office spaces.

According to the terms of the deal, it includes a 30-day go-shop period expiring on 18 March 2022, during which Preferred Apartment is allowed to seek alternate bids. The deal is expected to close by the end of the second quarter (Q2) of this fiscal year.

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