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Posted: December 01, 2013

Big deal for Archstone

Nora Caley

The biggest deal of the year was so big it needed two buyers.

Arlington, Va.-based AvalonBay Communities Inc. and Chicago-based Equity Residential announced in February they had completed the acquisition of Archstone Enterprise LP for $16 billion. Archstone is an Englewood-based apartment developer and operator acquired by Lehman Brothers Holdings Inc., in 2007. The defunct investment bank, which filed for bankruptcy in 2008, sold the apartment company to pay off creditors.

Archstone-Smith was once a publicly traded real estate investment trust (REIT). It was purchased by Lehman Brothers and Tishman Speyer Properties in 2007 for $23 billion and taken private. Since then the apartment company shortened its name to Archstone, and Lehman bought Tishman Speyer’s share of Archstone.

AvalonBay acquired approximately 40 percent of Archstone’s assets and liabilities for $6.5 billion, which included taking over $3.9 billion of debt, paying $669 million in cash, and delivering 14,889,706 shares of AvalonBay common stock to Lehman.

Equity Residential acquired approximately 60 percent of Archstone’s assets and liabilities for nearly $9 billion, including $2 billion in cash, the issuance of 34,468,085 common shares to Lehman and assumption of debt.

Nora Caley is a freelance writer specializing in business and food topics.

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