US residential real estate investment trust Independence Realty Trust (IRT) is merging with listed peer Centerspace in an all-stock deal to create an $8.1bn (€7bn) enterprise value company with more than 44,000 apartment units.
The transaction, expected to close by the end of the year, will leave Centerspace shareholders with a 22% stake in the expanded business, while existing IRT shareholders will hold the remaining 78%.
The combined group will own and operate 163 residential communities across 17 states, preserving IRT’s focus on high-growth Sunbelt markets while expanding its footprint into lower-volatility Midwest and Mountain West regions, the companies said.
IRT’s management team will continue to lead the enlarged business, with Scott Schaeffer serving as chairman and CEO, and James Sebra as president and CFO.
The combined entity will retain the Independence Realty Trust name and its NYSE listing with a $5bn market capitalisation.
Schaeffer said: “By pairing our high-growth Sunbelt portfolio – which remains our largest exposure and primary growth engine – with Centerspace’s stable Midwest and recovering Mountain West communities, we are building a platform in markets that have historically delivered above-average NOI growth with lower volatility.
“We expect the added scale to compound that advantage: greater efficiency across a larger operating base, and an expanded value-add renovation programme and other income initiatives across a larger platform.”
Anne Olson, president and CEO of Centerspace, said: “This transaction delivers compelling value for Centerspace shareholders, who will benefit from participation in a larger, more efficient enterprise with enhanced access to capital markets and a meaningful reduction in leverage.
“Our complementary portfolio of high-quality Midwest and Mountain West apartment communities is located in markets experiencing accelerating migration and strong employment growth – this is a natural fit with Independence Realty Trust’s scaled operating platform and proven value creation strategies. We are excited for our shareholders to participate in the long-term upside of the combined company.”
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