Multifamily real estate investment trust UDR has formed a $2 billion joint venture with alternative asset manager Apollo Global Management, Commercial Observer reported. The joint venture will own a portfolio of 19 multifamily communities containing 7,059 units.
Under the structure of the agreement, Apollo will invest $1.34 billion in equity capital to acquire a two-thirds interest in the joint venture. UDR will retain a one-third interest and will manage and operate the 19 properties. The deal was arranged by Citigroup Global Markets and Wells Fargo Securities and is scheduled to close on Oct. 29.
What happened
The recapitalized portfolio carries an average property age of 39 years and generates an average monthly revenue of $2,058 per home. While the companies announced the size and unit count, they did not disclose the specific locations of the 19 communities.
As part of the joint venture terms, UDR holds an option to repurchase the two-thirds interest from Apollo in five years. UDR leadership noted that proceeds from the $1.34 billion equity investment will fund higher-growth assets and general corporate needs, while offering flexibility to rotate properties into and out of the joint venture structure.
What it changes for a closing
For closing teams, large multi-asset joint ventures present distinct documentation demands. Citigroup Global Markets and Wells Fargo Securities arranged the recapitalization, which requires title teams, counsel, and settlement agents to coordinate ownership transfers and equity contributions across 19 separate property assets for a single Oct. 29 target date.
The structure also incorporates specific governing provisions that transaction lawyers must track. These include operating and management covenants for UDR, equity accounting mechanics for Apollo, and documentation surrounding UDR's option to repurchase the two-thirds stake in five years. Closing checklists must reconcile entity-level governing agreements with property-level transfer requirements across all 7,059 units.