Dealmaker: UDR, MetLife Execute $1.7B JV Swap Transaction

UDR, Highlands Ranch, Colo., and MetLife Investment Management, New York, agreed to $1.76 billion in transaction swaps involving several joint ventures.

Under the deal announced yesterday, UDR will acquire the 50 percent interest not previously owned in 10 UDR/MetLife Investment Management joint venture operating apartment communities, one community under development and four development land sites. The firms valued this part of the deal at $1.1 billion.

UDR also agreed to sell its 50 percent ownership interest in five other UDR/MetLife Investment Management joint venture communities to MetLife Investment Management for $645 million.

After assuming $540 million of in-place debt, UDR expects its net cash outflow to complete the swap to be $105 million.

UDR Chairman and CEO Tom Toomey said the acquired communities are mainly in markets the firm has targeted for expansion. “[They] have operational upside and improve the diversification of our portfolio,” he said, noting he expects to continuing partnering with MetLife Investment Management on other properties in the joint venture relationship.

“The ownership interest swap increases our exposure to markets identified by our portfolio strategy work for further expansion and less near-term new supply risk while also maintaining our portfolio diversification as it relates to market mix, location within markets and asset quality,” said UDR President and COO Jerry Davis.

Both firms expect the transactions to close during the fourth quarter.