Independence Realty Trust to Create Mega Multifamily REIT with Acquisition of Trade Street Residential

Independence Realty Trust to Create Mega Multifamily REIT with Acquisition of Trade Street Residential

PHILADELPHIA, PA - Independence Realty Trust and Trade Street Residential jointly announced that IRT and TSRE have signed a definitive merger agreement pursuant to which IRT has agreed to acquire all of the outstanding common stock of Trade Street for a mix of cash and stock, creating a leading, regional market focused, multifamily REIT.

Under the terms of the definitive merger agreement, IRT will pay each Trade Street stockholder $3.80 in cash and 0.4108 of newly issued IRT common stock, subject to adjustment as described below. Based on the agreed upon “Reference Price” of $9.25 for IRT shares, this offer represents the equivalent of $7.60 in value to Trade Street stockholders. The transaction is expected to close in the third quarter of 2015, subject to customary closing conditions including the approval of both IRT and Trade Street stockholders.

Upon consummation of the merger, IRT will significantly increase its scale and improve the quality of its portfolio while accelerating its market penetration in key regional markets and realizing immediate financial benefits.

Increased scale – IRT’s number of properties will increase from 31 to 50* resulting in a 55% increase in units to 14,044. The combined scale will provide an enhanced platform to continue to pursue accretive acquisitions and transformational opportunities.

Improved portfolio quality – the addition of Trade’s Street’s high-quality Class A apartment communities will reduce IRT’s average property age from 25 years to 20 years while improving average base rents, occupancy levels and operating margins on the expanded platform.

Accelerates market penetration – the addition of Trade Street’s highly-complementary portfolio will expand IRT’s geographic diversity into targeted regions in eight new markets, and also enhance IRT’s presence in three existing markets, to create a leading non-gateway multifamily platform in select regional markets in the United States.

Immediate financial benefits – the transaction is expected to be accretive to 2016 Core FFO and AFFO per share, with meaningful identified run-rate cost savings and NOI upside from value-add capex. Additionally, with a stronger balance sheet and lower cost of capital, IRT will be better positioned to drive future growth and increase its current quarterly dividend.

Upon completion of the transaction, Scott Schaeffer will continue to serve as Chairman and CEO of IRT. Mack Pridgen, Chairman of Trade Street, and Richard Ross, CEO of Trade Street, will join IRT’s board of directors, which will be expanded from five members to seven members.

Scott Schaeffer, Chairman and CEO of IRT, stated, “We are pleased to announce the acquisition of Trade Street, which will accelerate our expansion strategy and significantly strengthen our position as a leading regional multifamily operator across select target markets in the United States. This high quality portfolio of luxury, class A apartment communities will immediately increase our average occupancy levels and average base rents, and we have additional value-creating opportunities in progress to drive further improvement in our operating results. We also expect to generate increased operating efficiencies and achieve synergies on our larger platform which should result in stronger margins and cash flows. Upon completion of the deal, our expanded business will be even better situated to continue to pursue accretive acquisitions and transformational opportunities to create additional shareholder value.”

Richard Ross, CEO of Trade Street, commented, "Building on our successful accomplishments since our IPO in May 2013, we are also pleased to have reached this agreement with IRT. We believe our combined business will be better positioned to further expand our modern portfolio of well-located apartment communities and capitalize on the improving fundamentals in our attractive markets across the Southeast and Texas.”

Source: Independence Realty Trust / #Apartments #Multifamily

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