Apple REIT Six OKs merger with Blackstone fund

The nontraded-REIT party is getting ready to kick off as Apple REIT Six Inc. said yesterday that its shareholders had approved a definitive merger agreement with BRE Select Hotels Corp., an affiliate of Blackstone Real Estate Partners VII. The merger is expected to close May 14. 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 per share in preferred stock of the Blackstone affiliate, BRE Select Hotels Corp. Investors, however, will not have full liquidity immediately. Investors 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, including debt, is $1.2 billion. InvestmentNews reported last week that six nontraded real estate investment trusts with a total of $11.2 billion in equity were either close to or contemplating a listing or a merger, with the first, Chambers Street Properties, planning to list this month on the New York Stock Exchange.