The Bloomberg real estate investment trust index posted its biggest one-day gain since December on Monday. As expected, the biggest gainer was AIR Communities (also known as Apartment Income REIT).
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Apartment stocks surged after Blackstone Group Inc. made a $10 billion bet on multifamily housing, according to news reports.
The Bloomberg Real Estate Investment Trust Index posted its biggest one-day gain since December on Monday, according to Bloomberg Bloomberg. The index, which tracks 13 apartment owners, rose 4% on the day.
Although REIT shares remain below their 2022 highs, Monday’s gains erased all losses so far this year, the report said. The index ended last week down more than 3% year to date and was up 0.9% for the year as of Monday’s close.
Unsurprisingly, the biggest gainer was AIR Communities (also known as Apartment Income REIT), which owns high-end apartment buildings and was acquired by Blackstone for $10 billion. After the acquisition news was announced, the company’s stock price rose 22%, reaching a maximum of $38.38 per share.
As the world’s largest owner of commercial real estate, Blackstone’s activities in this area could have an impact on REITs other than AIR, BTIG analyst Michael Gorman said Bloomberg The acquisition “could spark more bullish sentiment in the group on top of the current supply wave that is impacting fundamentals.”
Blackstone’s acquisition of AIR is the company’s largest acquisition in the multifamily sector, with the majority of its real estate holdings being commercial real estate. Blackstone plans to take AIR private, with the deal expected to close next quarter. The acquisition will also include a $400 million investment to improve AIR’s existing assets.
Other recent moves by Blackstone include a $3.5 billion acquisition of single-family rental company Tricon Residential, a stake in Signature Bank’s $17 billion loan portfolio and a joint venture with Digital Realty to develop a $7 billion data center.
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