UDR, a multifamily REIT, and Apollo have formed a $2 billion joint venture involving a diversified portfolio of 19 apartment communities totaling 7,059 homes.
Under the terms of the transaction, UDR will continue to operate and manage the portfolio, earning an asset management fee. Apollo-managed funds and affiliates will invest $1.34 billion in equity capital into the newly established joint venture, acquiring an approximately two-thirds interest. UDR will retain a one-third interest and consolidate the joint venture.
The transaction is expected to imply a capitalization rate of approximately 6 percent for a portfolio with average revenue per home of $2,058 and an average age of 39 years. UDR also will retain an option to repurchase Apollo’s interest in the joint venture at an expected fixed return of 7 percent to 7.5 percent for a limited period beginning on the fifth anniversary of closing.
“We are delighted for the opportunity to partner with Apollo, one
