Equity Residential has announced an agreement to acquire 11 multifamily properties from Blackstone, furthering its investment in Sun Belt residential markets, reports Sasha Jones of Bisnow. The $964 million deal involves various Blackstone real estate investment vehicles, including Blackstone Real Estate Income Trust, Blackstone Real Estate Partners, and Blackstone Property Partners. The transactions are expected to close before the end of September.
The portfolio includes 3,572 units spread across Atlanta, Dallas-Fort Worth, and Denver—key expansion areas for Equity Residential. Already one of the largest apartment landlords in the country with nearly 80,000 units across 300 properties, Equity Residential views this acquisition as a strategic move to increase its annual net operating income from high-growth markets. The properties, averaging eight years in age, are targeted at higher-end renters, providing a cost-effective alternative to new construction.
“This transaction is a significant step in our goal of generating a higher percentage of our annual net operating income from these strong growth expansion markets,” said Alec Brackenridge, Equity Residential's Chief Investment Officer.
The deal includes four properties in Atlanta totaling almost 1,400 units, four properties in Dallas-Fort Worth with approximately 1,200 units, and three properties in Denver with fewer than 1,000 units.
Despite selling these assets, Blackstone remains committed to the multifamily sector. In June, the investment firm spent $10 billion to take Apartment Income REIT private. “Rental housing remains one of our highest-conviction themes, and we continue to see strong fundamentals in attractive markets,” said Asim Hamid, Blackstone Real Estate's Senior Managing Director.
Equity Residential reported stronger-than-expected results in its latest quarterly earnings release, including $177 million in profits. However, the company has acknowledged challenges in the Sun Belt markets, citing oversupply and weak rent levels, with recovery not expected until at least 2027. “It's a challenging operating environment for both new leases and retention given the amount of new supply,” said Michael Manelis, Equity Residential's Chief Operating Officer.
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