AvalonBay Communities Inc. revealed contribution of its fee ownership of Avalon Morningside Park, Avalon Bowery Place I, and Avalon Bowery Place II, as well as of its leasehold interest in Avalon West Chelsea and AVA High Line, to a newly formed joint venture with an institutional client of global real estate investment manager, Invesco Real Estate. AvalonBay retained a 20% interest in the venture and is acting as the managing member of the venture and property manager for the assets.
According to a prepared statement, the transaction was based on an aggregate asset valuation for the contributed assets of approximately $760 million. In connection with the preparation and formation of the joint venture and the contribution of assets to it, the following occurred:
AvalonBay repaid approximately $194 million of variable rate mortgage notes secured by Avalon Bowery Place I and Avalon Morningside Park, which had a weighted average interest rate of 3.8% as of September 30, 2018.
The newly formed joint venture originated approximately $396 million of secured financing at a weighted average interest rate of 3.9%.
AvalonBay received net proceeds of approximately $470 million from the transaction.
The five communities included in this transaction will not be consolidated by AvalonBay for financial reporting purposes for the period ending December 31, 2018.
Cushman & Wakefield acted as exclusive advisor to AvalonBay in this transaction.
As of September 30, 2018, the company owned or held a direct or indirect ownership interest in 290 apartment communities containing 84,490 apartment homes in 12 states and the District of Columbia, of which 19 communities were under development and 15 communities were under redevelopment. The company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas primarily in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and the Northern and Southern California regions of the US.