Blackstone Acquiring AIR Communities for $10B

Author Rick Bell Read bio
Date: April 10, 2024

This cash-only deal represents Blackstone’s most significant acquisition in the apartment sector to date.

Blackstone’s recent $10 billion investment in multifamily assets signals a significant move within the real estate sector, historically indicating market bottoms. As a prominent player known for strategic investments, Blackstone’s heavy commitment suggests a bottoming out. This trend suggests a promising outlook for the market’s upward trajectory. Private and family office owners stand to benefit by strategically positioning their multifamily assets in anticipation of the forecasted market uptick.

With $337 billion in U.S. investor capital, Blackstone actively acquired several apartment companies through its Blackstone Real Estate Income Trust before rising interest rates halted market transactions.

Notable acquisitions include the student housing company American Campus Communities in Austin, Texas, for $13 billion in August 2022, Atlanta’s Preferred Apartment Communities for $5.8 billion in June 2022, and Philadelphia’s Resource REIT for $3.7 billion in January 2022.

But AIR’s portfolio stands out.

“AIR Communities represents the highest-quality, large-scale apartment portfolio we have ever acquired and is located in markets with strong multifamily fundamentals,” Nadeem Meghji  (global co-head of Blackstone Real Estate) stated.

Since 2020, AIR has functioned independently after separating from Aimco, previously one of the country’s largest apartment owners. Post-separation, Aimco’s founder Terry Considine took the helm at AIR as CEO and director, stating the Blackstone deal would enhance AIR’s commitment to providing quality homes, being an excellent workplace, responsibly managing communities, and being a reliable investor partner.

Additional Deals Expected

The recent period has seen a slowdown in apartment market transactions, with minimal merger and acquisition activity reported in the last 16 months. MSCI Real Assets’ report to Multifamily Dive suggests a potential thaw, with the Blackstone-AIR transaction possibly indicating a recovery from the pandemic’s impacts and a warming market for future deals.

Rental housing economist Jay Parsons views the public market’s undervaluation of apartments as a strategic opportunity for Blackstone, suggesting this significant investment could encourage other institutions to engage in the market actively.