On July 14, Blackstone Real Estate Income Trust (BREIT) announced that they reached a definitive agreement for BREIT to acquire AIG’s interests in a U.S. affordable housing portfolio for approximately $5.1 billion, in an all-cash transaction. This transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2021.
“Today’s announcement is an important milestone for AIG. Establishing a cornerstone partnership on several fronts with such a highly regarded organization as Blackstone validates the strength of our market-leading Life & Retirement business and provides it with additional growth opportunities, provides AIG with flexibility as we continue to work to separate Life & Retirement from AIG, and results in significant new capital for AIG to deploy to support our capital management priorities,” said Peter Zaffino, President and Chief Executive Officer of AIG.
Mr. Zaffino added, “AIG has stewarded the Affordable Housing portfolio for more than 30 years. While the highly specialized assets subject to this transaction are attractive investments, they are no longer core to AIG’s long-term investment strategy. We believe Blackstone has the right expertise and commitment to stakeholders to manage these assets going forward.”
“We look forward to a productive and value-enhancing partnership with Blackstone as we continue to build momentum on our journey to become a top performing company.”
Jon Gray said, “We are honored to become AIG’s strategic partner, supporting the growth and success of one the world’s top life insurers as a standalone business. We believe our leading private credit origination platform will play an important role to help meet long-term policyholder obligations while maintaining strong credit quality.”
Kathleen McCarthy, Global Co-Head of Blackstone Real Estate, commenting on the real estate transaction, added, “These communities provide critical affordable housing and we look forward to being long-term owners. We will make significant investments to improve the apartments while ensuring they remain affordable and in compliance with all rent regulations. We are committed to working with our partners in this sector to expand the supply of affordable housing.”
This announcement follows on the heals of BREIT’s June acquisition of Home Partners of America (HPA) and its portfolio of 17,000 SFR homes across America. That transaction is expected to close in the third quarter of 2021. BREIT has stated that it intends to retain HPA’s model of giving the residents of their rental properties the option to purchase them.
Blackstone Real Estate Income Trust is a long-term, perpetual capital vehicle affiliated with Blackstone, a U.S. based private equity, investment banking, and asset management firm.