PHILADELPHIA, PA — Independence Realty Trust, Inc. (NYSE: IRT) agreed to acquire Centerspace (NYSE: CSR) in an all-stock merger that would create an $8.1 billion apartment REIT with more than 44,000 units across 17 states, expanding IRT beyond its Sunbelt base into Midwest and Mountain West markets.
Centerspace shareholders will receive 3.800 IRT common shares for each Centerspace share they own, while holders of common units in Centerspace’s operating partnership will receive 3.800 units in IRT’s operating partnership, subject to adjustments.
IRT expects to issue about 67.6 million common shares and partnership units in the transaction and assume Centerspace’s outstanding preferred units at closing.
Existing IRT shareholders would own about 78% of the combined company on a fully diluted basis, excluding preferred units, with Centerspace shareholders holding about 22%.
The transaction would create a company with an estimated $5 billion equity market capitalization and $8.1 billion enterprise value. Its portfolio would comprise 163 multifamily communities and 44,354 apartments.
About 58% of pro forma net operating income would come from Sunbelt markets, 27% from Midwest markets and 15% from the Mountain West. IRT stated that about 80% of combined NOI would come from markets projected to rank in the top quartile for population growth.
The companies expect roughly $24 million in annualized synergies and estimate the merger would increase IRT’s 2027 Core FFO per share by about 5% on a leverage-neutral basis.
Full integration is expected within 12 months after closing.
IRT plans to extend several of its operating programs across Centerspace properties, including apartment renovations and Wi-Fi services. IRT stated that its existing value-add renovation program has historically generated returns on investment of about 16%.
The transaction would increase IRT’s market capitalization by an estimated 28% to $5 billion and its free float by about 27% to $4.8 billion. The companies expect the increased scale to raise the combined company’s weighting in benchmarks including the MSCI US REIT Index, FTSE NAREIT All Equity REITs Index and S&P MidCap 400 Index.
The combined company is expected to retain investment-grade ratings of BBB from both S&P and Fitch. IRT also expects the larger balance sheet and trading float to improve access to capital markets and potentially reduce its cost of capital over time.
Pro forma general and administrative expenses would equal about 0.37% of assets, representing reductions of 24% compared with standalone IRT and 57% compared with standalone Centerspace.
“By pairing our high-growth Sunbelt portfolio — which remains our largest exposure and primary growth engine — with Centerspace’s stable Midwest and recovering Mountain West communities, we are building a platform in markets that have historically delivered above-average NOI growth with lower volatility,” IRT Chairman and Chief Executive Officer Scott Schaeffer stated.
Centerspace President and Chief Executive Officer Anne Olson stated that the transaction would give its shareholders exposure to a larger company with greater capital-markets access while reducing leverage.
IRT’s management will lead the combined company. Schaeffer will remain chairman and chief executive officer, while James Sebra will serve as president and chief financial officer.
IRT’s board will expand to 11 directors after closing, including nine from IRT and two from Centerspace.
The company will retain the Independence Realty Trust name, its IRT ticker on the New York Stock Exchange and its headquarters in Philadelphia.
IRT expects to continue paying its quarterly dividend of 18 cents a common share after the merger. Both companies intend to maintain their regular quarterly dividends before closing, with Centerspace planning a prorated stub dividend of 9 cents a share for the quarter in which the transaction closes.
The merger has been unanimously approved by both companies’ boards and could close as early as the end of the fourth quarter of 2026, subject to shareholder approvals, lender consents and customary closing conditions. The companies expect the transaction to qualify as a tax-free reorganization for U.S. federal income tax purposes.
RBC Capital Markets and Rothschild & Co. are financial advisers to IRT, with Troutman Pepper Locke LLP serving as legal adviser. BMO Capital Markets Corp. is financial adviser to Centerspace, and Wachtell, Lipton, Rosen & Katz is its legal adviser.
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