Apollo to Sell Rest of Realogy Shares as Housing Rebounds
Apollo Global Management LLC (APO) is selling its remaining shares in Realogy Holdings Corp (RLGY), exiting its investment in the residential brokerage company as homebuying demand spurs the biggest jump in values since 2006.
Apollo and its affiliated funds agreed to sell about 25 million shares of Realogy common stock in a secondary public offering, Parsippany, New Jersey-based Realogy said in a statement yesterday.
Apollo, the New York-based private-equity firm run by Leon Black, acquired Realogy for $6.8 billion in 2007, close to the real estate market’s peak. The company, owner of the Century 21 and Coldwell Banker brands, climbed 83 percent since its October initial public offering, closing yesterday at $49.29.
The housing market is recovering as buyers seeking to take advantage of historically low mortgage rates compete for a tight supply of listings, driving up values. U.S. home prices rose 12.2 percent in May from a year earlier, the largest increase since February 2006, according to Irvine, California-based CoreLogic Inc.
In a separate statement, Realogy said net revenue increased as much as 18 percent in the second quarter from a year earlier to as much as $1.54 billion, according to preliminary results. Home-sale transactions rose 21 percent, compared with the company’s May projection that they’d climb 14 percent to 17 percent.
“The increased volume is attributed to demand outstripping supply, moderately improved inventory levels and continued historically high affordability levels despite a rising mortgage-rate environment,” Richard A. Smith, Realogy’s chief executive officer, said in the statement.
The average rate for a 30-year fixed mortgage rose last week to a two-year high of 4.51 percent, according to McLean, Virginia-based Freddie Mac. The rate, which climbed from a near-record low of 3.35 percent in early May, is still below the average of about 5.3 percent for the past 10 years, according to data compiled by Bloomberg.
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