Blackstone Makes Their Biggest Bet on Multifamily Sector With $10 Billion Purchase of AIR Communities

In their largest ever acquisition in the multifamily real estate sector, Blackstone has agreed to purchase AIR Communities for approximately $10 billion. The all-cash deal represents Blackstone’s biggest showing of confidence yet in the rental housing industry. AIR Communities owns coastal multifamily properties across major US markets like Boston, Los Angeles, and Miami. That will now be control by industry heavyweight Blackstone.

The $39.12 per share price that Blackstone has agreed to pay AIR Communities shareholders represents a 25% premium over AIR’s stock price last Friday. Upon closing the transaction, which is expected next quarter, AIR will be taken private by Blackstone. The deal is being funded through Blackstone’s $30 billion global real estate fund and includes the assumption of AIR’s existing debt.

A $400 Million Investment and Belief in Continued Strength

Along with the acquisition, Blackstone has also committed to investing $400 million to improve AIR’s existing property portfolio. This shows Blackstone’s dedication to maximizing the value of AIR’s assets. The large investment displays Blackstone’s strong belief that the multifamily sector will continue performing well despite rising interest rates. Industry leaders like Blackstone recognize that rate hikes may be ending and access to capital is growing easier.

With this $10 billion AIR Communities deal, Blackstone is demonstrating their increased aggressiveness in the commercial real estate space. It represents their largest commitment yet to the booming multifamily market, a sector they are very confident will remain robust. Only time will tell if this mega-deal proves to be a wise long-term play by industry powerhouse Blackstone.