Deutsche Wohnen AG (DWNI) agreed to buy 6,900 apartments from Blackstone Group LP (BX) in a deal that will give the Blackstone’s affiliated funds a 5 percent stake in Germany’s second-largest residential landlord by market value.
Deutsche Wohnen will pay 260 million euros ($338 million) in cash and 8.15 million new shares for the homes, the Frankfurt-based company said in a statement today. The transaction is valued at 369 million euros, based on yesterday’s closing share price. About 54 percent of the properties are in Berlin and the surrounding area.
The deal will increase Deutsche Wohnen’s presence in a market with strong rental-growth expectations as Blackstone profits from demand for German homes as prices climb. Apartments in the capital have been among the biggest gainers, with values rising 8 percent in 2012, according to data compiled by Berlin- based online broker ImmobilienScout.
Deutsche Wohnen will also said it will buy 900 Berlin apartments from an unnamed seller for about 51 million euros in cash.
Blackstone, the largest manager of real estate private equity funds, bought the apartments included in today’s transaction last year, two people with knowledge of the matter said in February. The New York-based company acquired the homes after owner Level One defaulted on its debt.
Level One was placed in insolvency administration in August 2008, owing creditors about 1.3 billion euros. At the time, Blackstone helped reorganize the German property investor’s debt.
Deutsche Wohnen was down 0.9 percent to 13.29 euros at the 5:30 p.m. close in Frankfurt. The shares have declined 3 percent in the past six months, cutting the company’s market value to 2.13 billion euros.
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