Apple REIT Six OKs merger

Latest nontraded property trust to announce liquidity event

May 12, 2013 @ 12:01 am

By Bruce Kelly

Apple REIT Six Inc. said last Thursday that its shareholders had approved a definitive merger agreement with BRE Select Hotels Corp., an affiliate of Blackstone Real Estate Partners VII, which is expected to close tomorrow.

Apple REIT Six, which has $741 million in assets, originally was sold to investors between 2004 and 2006, with most shares priced at $11. Each holder of Apple REIT Six will receive $11.10 in value, consisting of $9.20 in cash and $1.90 a share in preferred stock of the Blackstone affiliate, BRE Select Hotels Corp.

Investors, however, won't have full liquidity immediately. They will have an option to redeem the new shares after seven and a half years; the shares have a dividend rate of 7%.

The total transaction value of the Blackstone deal is $1.1 billion.

As reported, six nontraded real estate investment trusts are close to or mulling a listing or a merger, with the first, Chambers Street Properties, planning to list this month on the New York Stock Exchange.

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