NEW YORK, Dec. 20, 2021 /PRNewswire/ -- Bluerock
Residential Growth REIT, Inc. (NYSE American: BRG) (the "Company")
today announced that it has entered into a definitive agreement
with affiliates of Blackstone Real Estate ("Blackstone") under
which Blackstone will acquire all outstanding shares of common
stock of BRG for $24.25 per share in
an all-cash transaction valued at $3.6
billion (the "Acquisition").
Under the terms of the agreement, Blackstone will acquire 30
multifamily properties comprising approximately 11,000 units as
well as a loan book secured by 24 multifamily assets. The
properties consist of high-quality garden-style assets with
significant green space and resort-style amenities, built, on
average, in 2000. The majority of the properties are located in
Atlanta, Phoenix, Orlando, Denver and Austin.
Prior to the Acquisition, the Company separately intends to spin
off its single-family rental business to its shareholders (the
"Spin-Off" and together with the Acquisition, the "Transaction")
through the taxable distribution to shareholders of all of the
outstanding shares of common stock of a newly formed real estate
investment trust named Bluerock Homes Trust, Inc. ("BHOM"), which
will be externally managed by an affiliate of Bluerock Real Estate.
BHOM will own interests in approximately 3,400 homes, including
2,000 through preferred/mezzanine investments, located in fast
growing, high quality of life and knowledge economy markets across
the United States. The Company's
shareholders will receive shares of BHOM, with a current implied
Net Asset Value estimated at $5.60
(based on the midpoint of the valuation range provided by Duff
& Phelps, independent financial advisor to the Company's board
of directors), for each share of Company common stock. There can be
no assurance that the trading price upon a listing of BHOM will be
equal to or greater than this estimated NAV.
The Transaction has been unanimously approved by the Company's
board of directors and the Acquisition, excluding the value of
BHOM, represents a premium of approximately 124% over the
unaffected closing stock price on September
15, 2021, the date prior to a media article reporting that
the Company was exploring strategic options including a sale.
"We are very proud to enter into a transaction that delivers
tremendous value to our shareholders. We believe the
substantial premium to our historic trading price is a testament to
our success in building a best-in-class institutional-quality
multifamily apartment portfolio in our attractive knowledge-economy
target markets, along with the robust process run by the board of
directors and management to secure maximum value for our
shareholders," said Ramin Kamfar,
Company Chairman and CEO.
Asim Hamid, Senior Managing
Director at Blackstone Real Estate, said, "Bluerock's portfolio
consists of high-quality multifamily properties in markets across
the U.S. experiencing some of the strongest fundamentals. We look
forward to bringing our best-in-class management to these
properties to ensure they continue to be operated at the highest
standards for the benefit of tenants and the surrounding
communities."
Completion of the Acquisition, which is currently expected to
occur in the second quarter of 2022, is contingent upon
consummation of the Spin-Off, as well as customary closing
conditions, including the approval of the Company's shareholders,
who will vote on the transaction at a special meeting on a date to
be announced. The Acquisition is not contingent on receipt of
financing by Blackstone.
Most members of the Company's senior management, along with
certain entities related to them, have agreed to retain their
interests in the Company's operating partnership, which will hold
the assets related to the single-family rental business upon
completion of the Spin-Off, rather than receiving cash
consideration.
Morgan Stanley & Co. LLC and Eastdil Secured LLC are the
Company's lead financial advisors with BofA Securities also serving
as an advisor. Wachtell, Lipton, Rosen & Katz, Kaplan Voekler Cunningham & Frank, PLC, and
Vinson & Elkins, LLP are serving as the Company's legal
counsel. Barclays and Wells Fargo Securities LLC are Blackstone's
financial advisors and Simpson Thacher & Bartlett LLP is
Blackstone's legal advisor.
About Bluerock Residential Growth REIT, Inc.
Bluerock
Residential Growth REIT, Inc. (NYSE American: BRG) is a real estate
investment trust that focuses on developing and acquiring a
diversified portfolio of institutional-quality highly amenitized
live/work/play apartment communities in demographically attractive
knowledge economy growth markets to appeal to the renter by choice.
The Company's objective is to generate value through
off-market/relationship-based transactions and, at the asset level,
through value-add improvements to properties and to operations. BRG
has elected to be taxed as a real estate investment trust (REIT)
for U.S. federal income tax purposes.
About Blackstone Real Estate
Blackstone is a global
leader in real estate investing. Blackstone's real estate business
was founded in 1991 and has $230
billion of investor capital under management. Blackstone is
the largest owner of commercial real estate globally, owning and
operating assets across every major geography and sector, including
logistics, multifamily and single-family housing, office,
hospitality and retail. Our opportunistic funds seek to acquire
undermanaged, well-located assets across the world. Blackstone's
Core+ strategy comprises open-ended funds that invest in
substantially stabilized real estate assets globally and Blackstone
Real Estate Income Trust, Inc. (BREIT), a non-listed REIT that
invests in U.S. income-generating assets. Blackstone Real Estate
also operates one of the leading global real estate debt
businesses, providing comprehensive financing solutions across the
capital structure and risk spectrum, including management of
Blackstone Mortgage Trust (NYSE: BXMT).
Additional Information and Where to Find It
In
connection with the Acquisition, the Company will file relevant
materials with the U.S. Securities and Exchange Commission (the
"SEC"), including the Company's proxy statement on Schedule 14A
(the "Proxy Statement"). In addition, in connection with the
Spin-Off, BHOM will file a registration statement on Form 10.
This press release is not a substitute for the Proxy Statement or
any other document that the Company may file with the SEC or send
to its shareholders in connection with the proposed
transactions. BEFORE MAKING ANY VOTING DECISION, SHAREHOLDERS
OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH
THE SEC, INCLUDING THE PROXY STATEMENT, WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTIONS. Investors and security holders will be able to
obtain the documents (when available) free of charge at the SEC's
website, http://www.sec.gov, and the Company's website,
www.bluerockresidential.com. In addition, the documents (when
available) may be obtained free of charge by accessing the Investor
Relations section of the Company's website at
ir.bluerockresidential.com or by contacting the Company's Investor
Relations by email at investor.relations@bluerockre.com.
Participants in the Solicitation
The Company and its
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the holders of Company common
stock in respect of the proposed transaction. Information
about the directors and executive officers of the Company is set
forth in the proxy statement for the Company's 2021 annual meeting
of stockholders, which was filed with the SEC on June 25, 2021, in the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 2020, which was filed with the SEC on February 23, 2021 and in other documents filed by
the Company with the SEC. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the Proxy Statement and other relevant
materials to be filed with the SEC in respect of the proposed
transaction when they become available. Investors should read the
Proxy Statement carefully when it becomes available before making
any voting or investment decisions.
Forward-Looking Statements
This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and other federal
securities laws. All statements other than statements of historical
fact are "forward-looking statements" for purposes of federal and
state securities laws and may be identified by words such as
"will," "expect," "believe," "plan," "anticipate," "intend,"
"goal," "future," "outlook," "guidance," "target," "estimate" and
similar words or expressions, including the negative version of
such words and expressions. These forward-looking statements
are based upon the Company's present expectations, estimates and
projections about the industry and markets in which the Company
operates and beliefs of and assumptions made by Company management,
involve uncertainty that could cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements and are not
guaranteed to occur. Furthermore, the Company disclaims any
obligation to publicly update or revise any forward-looking
statement to reflect changes in underlying assumptions or factors,
of new information, data or methods, future events or other
changes. Investors should not place undue reliance upon these
forward-looking statements. Although the Company believes that the
expectations reflected in these forward-looking statements are
based on reasonable assumptions, the Company's actual results and
performance could differ materially from those set forth in these
forward-looking statements due to numerous factors. Factors
that could have a material adverse effect on our operations, future
prospects, the Acquisition and the Spin-Off include, but are not
limited to: the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement between the Company and Blackstone's affiliates; the
failure to obtain the approval of the Company's shareholders of the
Acquisition or the failure to satisfy any of the other conditions
to the completion of the Acquisition or the Spin-Off; the risks
that the market does not value BHOM shares at NAV; the failure to
recognize the potential benefits of the Spin-Off due to, among
other reasons, BHOM's lack of liquidity, small market size or
inability to grow and expand revenues and earnings following the
Spin-Off; shareholder litigation in connection with the Acquisition
or the Spin-Off, which may affect the timing or occurrence of the
Acquisition or the Spin-Off or result in significant costs of
defense, indemnification and liability; the effect of the
announcement of the Acquisition and the Spin-Off on the ability of
the Company to retain and hire key personnel and maintain
relationships with its tenants, vendors and others with whom it
does business, or on its operating results and businesses
generally; risks associated with the disruption of management's
attention from ongoing business operations due to the Acquisition
and the Spin-Off; the ability to meet expectations regarding the
timing and completion of the Acquisition and the Spin-Off; the
possibility that any opinions, consents or approvals required in
connection with Spin-Off will not be received or obtained in the
expected time frame, on the expected terms or at all; and
significant transaction costs, fees, expenses and charges.
There can be no assurance that the Acquisition, the Spin-Off or any
other transaction described above will in fact be consummated in
the expected time frame, on the expected terms or at all.
There can be no assurance as to the impact of COVID-19 and other
potential future outbreaks of infectious diseases on the Company's
or BHOM's financial condition, results of operations, cash flows
and performance and those of their respective tenants as well as on
the economy and real estate and financial markets, which may impact
the timing or occurrence of the Acquisition or the Spin-Off.
For further discussion of the factors that could affect
outcomes, please refer to the risk factors set forth in Item 1A of
the Company's Annual Report on Form 10-K filed by the Company with
the SEC on February 23, 2021, and
subsequent filings by the Company with the SEC. Any forward-looking
statement speaks only as of the date on which it is made, and the
Company assumes no obligation to update or revise such statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law. The Company claims the
safe harbor protection for forward looking statements contained in
the Private Securities Litigation Reform Act of 1995.
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SOURCE Bluerock Residential Growth REIT, Inc.