RICHMOND, VA. — Apartment Trust of America (ATA) has arranged a $536.5 million recapitalization that includes the acquisition of 21 apartment communities, valued at $485 million, as well as the issuance of $50 million of preferred stock and $1.5 million of common stock.
Elco Landmark Residential Holdings (ELRH) and its affiliates and partners, including DeBartolo Development and the Florida Value Funds, are contributing the multifamily properties in exchange for $187 million of partnership interests in ATA’s operation partnership, $16 million in cash and the assumption of $282 million in debt on the properties.
“Over the past six years, we have worked to create a high-quality portfolio that produces strong returns for stockholders and a fiscally prudent balance sheet,” says Stanley Olander, CEO of ATA, a publicly registered, non-traded real estate investment trust.
In conjunction with the transaction, the company has been renamed Landmark Apartment Trust of America (LATA). Joseph Lubeck, CEO of ELRH, will become the executive chairman of LATA’s board of directors. Upon completion of the 6,100-unit portfolio, LATA will own a total of 36 properties totaling 10,000 units in the southern U.S.
“We are pleased that our investors will now also benefit from the larger, more diverse group of properties and increased operating efficiencies, both of which will support the existing dividend and provide a path for future liquidity,” Olander says.
Bank of America Merrill Lynch acted as the exclusive advisor to ATA for the transaction and Robert A. Stanger & Co. acted as the financial advisor to the independent special committee of the ATA board of directors. Evercore Partners acted as the exclusive advisor to ELRH.
“This transaction is a clear strategic fit and creates value for all involved,” Lubeck says. “The new LATA is well positioned to capitalize on the growth prospects and limited new construction supply in the high-growth southeastern U.S. This transaction is an important step in the goal of becoming one of the premier owners and operators of multifamily real estate in the region.”
— Savannah Duncan
