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Apartment stocks are surging following Blackstone’s $10 billion bet on multifamily, according to news reports.
The Bloomberg REIT Index recorded its largest single-day gain since December on Monday, according to Bloomberg. The index, tracking 13 apartment landlords, jumped 4 percent throughout the day.
While REIT shares remain below their 2022 highs, Monday’s jump wiped out all of the year’s losses so far, according to the report. The index ended last week down more than 3 percent year to date and was up 0.9 percent for the year by market’s close on Monday.
The largest gains, unsurprisingly, were recorded by AIR Communities, also known as Apartment Income REIT, the owner of upscale apartment buildings acquired by Blackstone for $10 billion. The company’s stock rose 22 percent following the announcement of the acquisition, topping out at $38.38 per share.
As the world’s largest owner of commercial real estate, Blackstone’s activity in the sector is likely to impact REITs far beyond AIR, with BTIG analyst Michael Gorman telling Bloomberg the acquisition “is likely to spur additional bullish sentiment for the group beyond the current supply wave impacting fundamentals.”
Blackstone’s acquisition of AIR is the company’s largest acquisition in the multifamily sector, with most of its real estate holdings in commercial real estate. Blackstone plans to take AIR private, with the transaction expected to close next quarter. The acquisition will also include a $400 million investment to improve upon AIR’s existing properties.
Other recent moves by Blackstone include a $3.5 billion acquisition of the single-family rental firm Tricon Residential, a stake in Signature Bank’s $17 billion loan portfolio, and a joint venture with Digital Realty to develop $7 billion in data centers.
