(Reuters) -Preferred Apartment Communities Inc said on Wednesday a Blackstone (NYSE:BX) Inc unit would buy it in a $5.8 billion deal, as the world's biggest alternate asset manager ramps up investments in the red-hot U.S. housing sector.
Blackstone Real Estate Income Trust's (BREIT) all-cash offer of $25 per share is nearly 40% higher than Preferred Apartment's stock close on Feb. 9, a day before media reports on the company exploring strategic options including a sale.
The real estate investment trust's shares shot up 7% to $25.04 before the bell following the news.
Blackstone's offer comes at a time when a strong economic recovery, ultra-low interest rates and continued demand for bigger homes have driven up home prices in the United States. The private equity giant also bought Home Partners of America in a $6 billion deal last year.
Preferred Apartment Communities (NYSE:APTS) is a rental apartment owner that primarily owns and operates multifamily properties, with investments in grocery-anchored shopping centers as well.
BREIT invests in stabilized, income-generating U.S. commercial real estate across key property types including residential, industrial, hotel, retail and office.
The terms of the deal include a 30-day "go-shop" period expiring on March 18, during which Preferred Apartment is allowed to seek alternate bids.
The deal is expected to close towards the second quarter of this year.