IRT, Centerspace to Create $8.1B Apartment REIT
Independence Realty Trust and Centerspace have agreed to an all-stock merger that will create a multifamily real estate investment trust with approximately $8.1 billion in enterprise value and a $5 billion equity market capitalization.
Centerspace shareholders will receive 3.8 IRT common shares for each Centerspace share. Upon closing, IRT stockholders will own approximately 78% of the combined company, while Centerspace shareholders will own about 22% on a fully diluted basis, excluding preferred units.
The combined portfolio will include 163 apartment communities totaling 44,354 units across 17 states. Approximately 58% of pro forma net operating income will come from Sunbelt markets, with 27% generated in the Midwest and 15% in the Mountain West.
The geographic mix combines IRT’s larger Sunbelt presence with Centerspace’s apartment portfolio in markets including Minnesota, North Dakota, Colorado and Montana. The companies said the broader footprint should reduce regional concentration and expand opportunities for renovations and ancillary-income programs.
IRT expects the merger to generate approximately $24 million in annualized synergies and increase 2027 core funds from operations per share by about 5% on a leverage-neutral basis.
IRT’s management will lead the combined company. Scott Schaeffer will remain chairman and CEO, while James Sebra will serve as president and chief financial officer. The Philadelphia headquarters and Independence Realty Trust name and ticker will be retained.
The board will expand to 11 directors, comprising nine IRT representatives and two from Centerspace.
The transaction is expected to close as early as the fourth quarter.
RBC Capital Markets and Rothschild & Co. are acting as financial advisors and Troutman Pepper Locke LLP is acting as legal advisor to IRT. BMO Capital Markets Corp. is acting as financial advisor, and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Centerspace.
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