House REITs Fairness Residential and AvalonBay Communities, Inc. on Thursday introduced a definitive settlement to mix in an all-stock merger of equals. The brand new firm can have a professional forma fairness market capitalization of roughly $52 billion and a complete enterprise worth of roughly $69 billion, with greater than 180,000 rental flats and almost 11,000 items within the development pipeline.
Underneath the settlement, AvalonBay shareholders will personal roughly 51.2% of the mixed firm and Fairness Residential shareholders will personal 48.8% on a totally diluted foundation. AvalonBay president and CEO Benjamin Schall will lead the mixed firm, which can have twin headquarters in Chicago and Arlington, VA. Mark J. Parrell, who has served as CEO of Fairness Residential for eight years and on the firm for 27 years, will retire on the transaction shut.
“This mixture creates a brand new and basically stronger firm with differentiated capabilities that may drive structurally superior money stream era, earnings and dividend development, and worth for shareholders,” mentioned Schall. “As one of many nation’s main builders of recent flats throughout our areas, we are going to immediately enhance the provision of each market-rate and reasonably priced housing. Drawing on the foundational strengths and industry-leading groups throughout each of our organizations, our ambition is to redefine management in rental housing for the advantage of residents, associates, and shareholders.”
The board of trustees will initially encompass seven current trustees of Fairness Residential and 7 current administrators of AvalonBay. Steve Sterrett, present lead unbiased trustee of Fairness Residential, will function chairman. David Neithercut, present non-executive chair of Fairness Residential, and Tim Naughton, present non-executive chairman of AvalonBay, will every function Trustees of the mixed firm.
The merger is predicted to shut within the second half of 2026, pending approval by shareholders of each REITs. At the moment, the identify of the mixed firm might be introduced.
Goldman Sachs is serving as lead monetary advisor to AvalonBay and Goodwin Procter LLP is serving as authorized advisor to AvalonBay. J.P. Morgan and Wells Fargo are additionally serving as monetary advisors to AvalonBay.
Morgan Stanley and Centerview Companions LLC are serving as lead monetary advisors to Fairness Residential and Wachtell, Lipton, Rosen & Katz is serving as authorized advisor to Fairness Residential. BofA Securities can be serving as a monetary advisor to Fairness Residential.
Pictured: Fairness Residential’s Mantena property in Midtown Manhattan.
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