Atlanta-based apartment giant Post Properties has agreed to be bought by a larger rival.
Memphis-based MAA, a real estate investment trust, said Monday it will buy Post in a deal valued at about $4 billion. The potential merger, which is expected to close by the end of the year, was first reported online Sunday by the Wall Street Journal.
Post is one of the best-known Sun Belt apartment developers and operators. Its flower logo is a familiar symbol on properties across the metro area.
Post recently broke ground on a community in downtown Atlanta near Centennial Olympic Park.
“The combination of MAA and Post will establish the leading apartment real estate platform focused on the high-growth Sunbelt region of the country with significant competitive advantages to drive superior value for our shareholders, residents and employees,” H. Eric Bolton, Jr., MAA Chairman and CEO, said in a news release.
The combined company will be based in Memphis, but will continue to have a large presence in Atlanta, the release said. The merged company is expected to see $20 million in annual “synergies,” or largely cost savings that generally come from cutting some jobs and overlapping services.
Details of potential job cuts are not immediately known.
Apartments have been one of the strongest performing real estate asset classes coming out of the Great Recession. A higher percentage of households are now renters, rather than homeowners, and many would-be first time buyers have been priced out of the market, don’t have the savings for a down payment or perhaps would prefer to rent rather than make a commitment to buy.
The metro Atlanta area has seen mid-to high-rise apartment development surge amid a boom in white collar job growth. Rents also have risen considerably amid Atlanta’s apartment booming, putting stress on the region’s stock of affordable housing.
“This merger redefines the combined company in terms of product, capability and capacity for consistent growth,” David Stockert, president and CEO, said in the release. “Its unique position in the apartment REIT space and strength of its financial position should drive an advantageous cost of capital and value for shareholders of both companies. Post shareholders are receiving an attractive value for our assets and business and a 24 percent increase in the dividend, while preserving the continuing opportunity to participate in the combined company’s ongoing success.”
The combined company will operate 105,000 apartment units in more than 300 properties and have a significant Sun Belt presence.
Post was founded in the 1970s by noted Atlanta developer John Williams, who served as CEO of the company into the early 2000s.
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