- Blackstone agreed to acquire Apartment Income REIT Corp, the private equity firm announced Monday.
- Shares of AIRC jumped over 22% as Blackstone plans to take it private in a $10 billion transaction.
- Blackstone is eyeing a recovery in commercial real estate, which was bruised by the pandemic.
Shares of Apartment Income Reit Corporation surged over 22% on Monday after Blackstone announced that it would take the real estate investment trust private.
In a press release, the private equity giant said that it would acquire all outstanding shares of the real estate investment trust, known as Air Communities, for $39.12 each, representing an all-cash transaction worth around $10 billion.
Air Communities' share price gained 22.55% on the news, reaching $38.38 as of 1:40 ET. Blackstone shares increased 1.42%.
According to The Wall Street Journal, the deal marks the biggest multifamily transaction for Blackstone, and will be followed by another $400 million investment geared toward improving the properties. Blackstone will add 76 housing communities in coastal markets that include Miami, Los Angeles and Boston, the release said.
The transaction backs up the firm's bet that the commercial real estate market is in recovery mode, despite rates remaining elevated and lingering uncertainty around the path of the US economy.
"We think this moment in time is when you want to lean in and deploy capital after a downturn, before that proverbial all clear sign," Blackstone president Jonathan Gray said in a February video update from the firm.
He added: "While you're in this period bouncing along the bottom, this is when we want to deploy capital, where you can see that light at the end of the tunnel, but it's not yet priced into the market."
It's a strategy that the firm has been touting since last year, when CEO Steve Schwarzman noted Blackstone would deploy $200 billion in raised capital into the European market, where rates were pressuring property owners to sell.
So far in 2024, Blackstone has also acquired Tricon Residential for $3.5 billion, a company operating 38,000 single-family rentals, the Journal said. The company has also eyed deals concerning student housing and data centers.
Meanwhile, commercial real estate observers still hold grim forecasts for the office segment, which has been battered by the resilience of remote work. Over half of office REITs ended 2023 with weaker earnings, S&P Global said.