Archstone-Smith Trust, Colorado’s second largest real estate investment trust, has accepted a $13.5 billion buyout offer from Tishman Speyer Properties and Lehman Brothers Holding, the company announced today.
Tishman Speyer and Lehman are offering $60.75 a share for Archstone shares, a 22.7 percent premium to the company’s May 24 closing price, but still below what the stock traded for in February.
The partnership being formed by Tishman Speyer and Lehman will also assume $8.7 billion in debt owed by Archstone-Smith, which is based in Arapahoe County.
“Archstone is an exceptional company that has built one of the finest collections of multifamily assets in the industry,” Rob Speyer, senior managing director of Tishman Speyer, said in a statement.
New York-based Tishman Speyer manages a $40 billion real estate portfolio, with the Rockefeller Center and Chrysler Center in New York among its signature holdings. The company also oversees about 14,000 residential units.
Archstone-Smith, an S&P 500 company with a market value of $12 billion before the deal announcement, is one of the nation’s largest REITs focused on apartments.
It owns more than 86,000 apartments in 344 complexes concentrated primarily in Washington D.C., southern California, New York City, San Francisco, Seattle and Boston.
Archstone-Smith sold the bulk of the apartment complexes it owned in the Denver metro market to focus on more profitable opportunities elsewhere in recent years.
Rising rents and falling vacancy rates, a fallout of the slowing housing market, have made apartment investments more attractive to investors.
Archstone shares were up $5.59 or 10.1 percent to $60.82 in mid-day trading. Shares of other multi-family REITs also traded higher.
The deal is expected to be completed in the third quarter.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
