Commercial and Multifamily Briefs April 22, 2022

Blackstone Agrees to Acquire American Campus Communities for $12.8 Billion

Blackstone, New York, agreed to acquire student housing real estate investment trust American Campus Communities, Austin, Texas, for $12.8 billion, including assuming ACC debt.

Blackstone Core+ perpetual capital vehicles, primarily comprised of Blackstone Real Estate Income Trust and Blackstone Property Partners, will acquire all outstanding American Campus Communities shares for $65.47 per fully diluted share in an all-cash transaction.

The purchase price represented a 22 percent premium to the 90-calendar day volume-weighted average share price ending April 18, 2022 and a 14 percent premium to Monday’s closing price.

The ACC portfolio includes 166 owned properties in 71 university markets including Arizona State University, The University of Texas at Austin, Florida State University and the University of California – Berkeley, among others. Most ACC properties are high-quality, purpose-built student housing assets located within walking distance of their respective university campuses; nearly one-quarter of ACC’s communities are located on campus.

BofA Securities served as ACC’s lead financial advisor. KeyBanc Capital Markets Inc. acted as a financial advisor. Dentons US LLP served as the company’s legal counsel.

Wells Fargo Securities LLC, J.P. Morgan Securities LLC and TSB Capital Advisors served as Blackstone’s financial advisors and Simpson Thacher & Bartlett LLP acted as Blackstone’s legal counsel.

Madison Marquette, Highland Square Holdings Form Madison Highland Live/Work Lofts
Madison Marquette and Highland Square Holdings formed Madison Highland Live/Work Lofts, an investment and development platform to develop live/work loft communities in urban markets across the U.S.

“The change to hybrid work environments, buoyed by technological advances, has altered retail and then office products,” said Madison Marquette Chairman Amer Hammour. “To retain and grow value in office buildings, we believe that physical space must provide consumers with the same flexibility, utility and value as cyberspace.”

In addition to the Washington, D.C. area, Madison Highland Live/Work Lofts is targeting other U.S. markets that have seen high knowledge and information-based job growth drive increases in housing costs. The platform will initially focus on select markets in California, the southeastern U.S. and New York, Boston, Seattle, Austin, Dallas, Denver and Salt Lake City.

“Having flexible space that can serve more people in more ways is smart business. By expanding loft uses, we increase the number of people we can serve,” said Madison Marquette CEO Vincent Costantini. “The net result is a resilient resource that maximizes market demand and stabilizes revenue across changing markets at all times.”

Fannie Mae Prices $736M Multifamily DUS REMIC Under Its GeMS Program

Fannie Mae, Washington, D.C., priced a $736 million Multifamily Delegated Underwriting and Servicing REMIC under its Fannie Mae Guaranteed Multifamily Structures program on April 11. FNA 2022-M8 represented the fourth Fannie Mae GeMS issuance of 2022.

“With the M8, we were able to include a small group of our ARM 7-6 collateral, which is a seven-year, SOFR-based floater with a 6% cap on the pass-through rate,” said Dan Dresser, Senior Vice President of Multifamily Capital Markets and Pricing with Fannie Mae. “This product enables smaller borrowers who may not want to manage their own interest rate cap to participate in the popular floating-rate market.”

Fannie Mae will guarantee all classes of FNA 2022-M8 with respect to the full and timely payment of interest and principal.