A hundred billion merger! Blackstone shifts from defense to offense, betting big on the bottoming out of the U.S. real estate market

On Monday local time, Blackstone announced the acquisition of Apartment Income REIT (AIR Communities), one of the largest apartment owners in the United States, for around $10 billion.

Amid a softening U.S. housing market, this move is seen by the public as Blackstone, known as the "world's largest landlord," believing it is a good opportunity to further invest in the U.S. real estate market.

According to the announcement, Blackstone has agreed to acquire AIR Communities at a price of $39.12 per share, a 25% premium over the company's stock price of $31.35 at the close of the U.S. stock market on April 5. Blackstone Real Estate Partners X, a fund of over $30 billion, will purchase these shares.

Earlier this year, Blackstone also acquired single-family real estate company Tricon for $3.5 billion.

Jon Gray, President of Blackstone Group, told investors that Blackstone believes the "U.S. real estate market is nearing the bottom."

In recent months, the U.S. apartment market has faced pressure due to rising interest rates and declining property valuations. According to real estate analytics firm Green Street, prices of apartment properties have dropped by 8% in the past year as of March.

Nadeem Meghji, Global Co-Head of Blackstone Real Estate, said, "In terms of quality and scale, AIR Communities is the highest-end apartment portfolio we have acquired to date, located in markets with strong multifamily fundamentals."

Based in Denver, AIR Communities manages 76 upscale apartment communities targeting high-income tenants, primarily in major cities like Miami and Washington. According to the company's introduction, by 2023, the average household income of the company's tenants will reach $237,000, with average monthly rents exceeding $2,700 per apartment