The Landmark at Grand Terraces apartment complex that the company purchased a couple of years ago in Charlotte. (Courtesy of Landmark Apartment Trust)
Despite a recent push toward an IPO, a local apartments-focused REIT has agreed to be sold in a deal valued at $1.9 billion.
West End-based Landmark Apartment Trust announced last week it will be acquired by Monument Partners LLC, an entity owned by affiliates of Greenwich, Connecticut-based Starwood Capital Group and Dallas-based Milestone Apartments REIT.
The all-cash transaction includes assumption of Landmark’s existing debt and its tens of thousands of apartment units around the country.
Headquartered in an office off Dickens and Staples Mill roads, the 10-year-old company had been on track to go public, beefing up its portfolio of apartment properties in 2013 and filing paperwork for an IPO with the SEC this summer.
But the drop in the stock market that came in mid-August, coupled with interest from potential buyers, prompted a change in course, said Landmark CEO Jay Olander.
Jay Olander
“It takes a bit of time to get through the Securities and Exchange Commission, so we were just following a natural timeline with them and had actually gotten everything cleared when the market hit the fan,” Olander said.
“While the financial markets have come back, the markets for new equity to bring new companies public is not quite as robust as the comeback of the Dow, and we were looking for options of liquidity,” he said. “Also, as we filed our public offering, we had suitors that came out of the woodwork to look at the company as an acquisition. Those were the stars that aligned to bring this transaction together.”
Pending approval by stockholders, the transaction is expected to close in the first quarter of 2016. The company is currently considered a non-traded REIT, meaning shares of its stock are sold through brokers, but not on any public stock markets. It will be privately held following the Monument deal.
Landmark owns and operates about 24,000 apartment units and manages about 1,700 affiliate-owned units in southern states including Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee, Texas and Virginia. While headquartered in Henrico, the company’s closest holding to Richmond is in Portsmouth.
According to its latest annual report, the company’s assets totaled $1.82 billion in 2014. Liabilities totaled $1.53 billion. Total revenues reached $262 million, while expenses totaled $232 million. The company reported a net loss of $66 million, $25 million of which was attributable to common stockholders.
Starwood Capital, a global private investment firm with more than $45 billion in assets, will acquire Landmark’s ownership interest in 19,615 units in 63 apartment communities, bringing its multifamily housing portfolio to nearly 65,000 units. Milestone, which manages 61 multifamily residential properties consisting of 19,908 units in 14 metropolitan markets, will acquire 15 Landmark properties totaling 4,172 units.
Olander said the transaction would result in Landmark’s local office being shut down. He said its eight local employees may be granted interviews with the new company, though he said he was not certain.
Olander, who founded the company in 2008, said he was unsure what his own future holds.
“For me, I’m 61 years old, and I may be ready to retire,” he said, noting Landmark was one of several companies he started over the years.
Olander has been involved in Richmond REITs for decades. He was president of the former Cornerstone Realty Income Trust, a publicly traded REIT that was based in Richmond and was founded by Glade Knight, now head of the Apple REIT Companies.
Knight’s Apple Hospitality REIT was listed on the New York Stock Exchange earlier this year.
The Landmark at Grand Terraces apartment complex that the company purchased a couple of years ago in Charlotte. (Courtesy of Landmark Apartment Trust)
Despite a recent push toward an IPO, a local apartments-focused REIT has agreed to be sold in a deal valued at $1.9 billion.
West End-based Landmark Apartment Trust announced last week it will be acquired by Monument Partners LLC, an entity owned by affiliates of Greenwich, Connecticut-based Starwood Capital Group and Dallas-based Milestone Apartments REIT.
The all-cash transaction includes assumption of Landmark’s existing debt and its tens of thousands of apartment units around the country.
Headquartered in an office off Dickens and Staples Mill roads, the 10-year-old company had been on track to go public, beefing up its portfolio of apartment properties in 2013 and filing paperwork for an IPO with the SEC this summer.
But the drop in the stock market that came in mid-August, coupled with interest from potential buyers, prompted a change in course, said Landmark CEO Jay Olander.
Jay Olander
“It takes a bit of time to get through the Securities and Exchange Commission, so we were just following a natural timeline with them and had actually gotten everything cleared when the market hit the fan,” Olander said.
“While the financial markets have come back, the markets for new equity to bring new companies public is not quite as robust as the comeback of the Dow, and we were looking for options of liquidity,” he said. “Also, as we filed our public offering, we had suitors that came out of the woodwork to look at the company as an acquisition. Those were the stars that aligned to bring this transaction together.”
Pending approval by stockholders, the transaction is expected to close in the first quarter of 2016. The company is currently considered a non-traded REIT, meaning shares of its stock are sold through brokers, but not on any public stock markets. It will be privately held following the Monument deal.
Landmark owns and operates about 24,000 apartment units and manages about 1,700 affiliate-owned units in southern states including Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee, Texas and Virginia. While headquartered in Henrico, the company’s closest holding to Richmond is in Portsmouth.
According to its latest annual report, the company’s assets totaled $1.82 billion in 2014. Liabilities totaled $1.53 billion. Total revenues reached $262 million, while expenses totaled $232 million. The company reported a net loss of $66 million, $25 million of which was attributable to common stockholders.
Starwood Capital, a global private investment firm with more than $45 billion in assets, will acquire Landmark’s ownership interest in 19,615 units in 63 apartment communities, bringing its multifamily housing portfolio to nearly 65,000 units. Milestone, which manages 61 multifamily residential properties consisting of 19,908 units in 14 metropolitan markets, will acquire 15 Landmark properties totaling 4,172 units.
Olander said the transaction would result in Landmark’s local office being shut down. He said its eight local employees may be granted interviews with the new company, though he said he was not certain.
Olander, who founded the company in 2008, said he was unsure what his own future holds.
“For me, I’m 61 years old, and I may be ready to retire,” he said, noting Landmark was one of several companies he started over the years.
Olander has been involved in Richmond REITs for decades. He was president of the former Cornerstone Realty Income Trust, a publicly traded REIT that was based in Richmond and was founded by Glade Knight, now head of the Apple REIT Companies.
Knight’s Apple Hospitality REIT was listed on the New York Stock Exchange earlier this year.