Centerbridge in talks to buy stake in $3bn real estate firm
Potential investment in Merritt Properties comes amid a busy stretch for acquisitions in commercial property
A real estate investment offshoot of asset manager Neuberger Berman is in talks to sell a minority stake in a commercial real estate firm in control of 21mn sq ft of properties to private equity group Centerbridge Partners, valuing the business at roughly $3bn.
Centerbridge has drawn ahead of several rival bidders in the race to buy a stake, totalling roughly a third of the business, in Merritt Properties from Almanac Realty Investors, the real estate investment arm of Neuberger Berman, according to people familiar with the matter.
With $47bn in assets under management, Centerbridge focuses on the infrastructure and real estate sectors.
Talks are ongoing but a deal is likely to come together in the coming weeks, the people said. The deal, which values Merritt at roughly $3bn including debt, could still fall apart or another bidder could prevail, they added.
The Merritt family, which founded the real estate firm in the late 1960s, will maintain a majority stake in the business, the people added.
The potential deal comes amid a busy stretch for real estate dealmaking. Some $99bn worth of real estate deals were struck worldwide between the start of this year and late May, 44 per cent higher than during the same period last year, according to LSEG.
Earlier this week, top US apartment landlords AvalonBay Communities and Equity Residential agreed to combine in an all-stock deal to create a giant apartment real estate investment trust with a combined enterprise value of $69bn.
Merritt specialises in industrial and commercial real estate and manages more than 21mn sq ft of properties including warehouses, distribution centres and office buildings across Maryland, Virginia, North Carolina and Florida.
Industrial real estate has outperformed the wider sector due to supply-chain investments and reshoring of manufacturing, but stubbornly high interest rates continue to be a drag on valuations.
Neuberger’s Almanac has $6bn of assets under management and invests across the real estate sector, including in businesses like Storage Post.
Neuberger declined to comment. Merritt and Centerbridge did not immediately respond to requests for comment.