Essex Property Trust, a residential real estate investment trust with a strong California presence, has agreed to acquire another West Coast residential REIT, BRE Properties, for $4.34 billion.
The merger would create the “only publicly traded West Coast pure play multifamily REIT,†with properties in the lucrative - thanks to the technology industry - rental markets of San Francisco and Seattle, among others.
Essex, based in Palo Alto, Calif., has ownership interests in 163 multifamily properties as well as in an additional 11 properties in various stages of development. BRE, based in San Francisco, owns 75 multifamily communities (totaling 21,396 homes) and has a joint venture interest in an additional apartment community (totaling 252 homes).
“By combining the strengths of the two platforms, which have a significant geographic overlap, we expect to realize operating efficiencies and further enhance our growth profile,†Michael Schall, Essex’s chief executive, said in a statement.
Under the terms of the deal, each common share of BRE will be converted into 0.2971 of a newly issued share of Essex common stock plus $12.33 in cash, or about $56.21 a share. The terms are the same as when the two companies disclosed on Dec. 9 that they were in merger talks. Essex says it has obtained committed financing of $1 billion for the deal.
UBS advised Essex and provided half of the bridge financing. Goodwin Procter acted as legal adviser. Citigroup acted as financial adviser and as administrative agent of the bridge facility.
Wells Fargo and the law firm Latham & Watkins advised BRE.
