Starwood to Buy Milestone Apartments for About $1.3 Billion

Updated on
  • Landlord has 78 properties in U.S. Southeast and Southwest
  • Offer for $16.15 a share an 8.6% premium to Wednesday’s close

Starwood Capital Group, the investment firm controlled by Barry Sternlicht, agreed to buy U.S. landlord Milestone Apartments Real Estate Investment Trust for about $1.3 billion in cash.

Starwood will pay $16.15 a share for Dallas-based Milestone, which trades on the Toronto Stock Exchange but mostly owns properties in the U.S. Southeast and Southwest. The offer is about 8.6 percent more than Wednesday’s closing share price of C$19.66 ($14.87). The deal has an enterprise value of $2.85 billion, including debt, according to a statement Thursday.

Milestone rose 9.5 percent to C$21.52 at 9:58 a.m. in Toronto. The company went public in 2013. 

The deal will add 78 garden-style rental properties to Starwood’s multifamily holdings, which will total 109,600 units after the transaction is completed. The U.S. apartment market has led the recovery in commercial real estate values since the financial crisis.

“We’ve had strong growth over the past several years and the fundamentals of the U.S. real estate market continue to be strong, particularly in the mid-market multifamily space,” Robert Landin, Milestone’s chief executive officer, said by phone. He will continue to run Milestone’s private equity investments.

The deal isn’t the first for Starwood and Milestone. In 2015, the companies teamed up to buy Landmark Apartment Trust Inc., also an owner of multifamily properties in the southern U.S., for $1.9 billion.

Since it started trading, Milestone’s stock has almost doubled from about C$10. The transaction is expected to close by the second quarter and Milestone’s board has already approved the deal.

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