Blackstone to take Apartment Income REIT private in $10B deal

Blackstone Inc. (BX) is on the path to acquiring Apartment Income REIT Corp. (AIRC) for $10 billion with plans to take the real estate investment firm private. Yahoo Finance Live monitors shares of Apartment Income REIT Corp. following this announcement.

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Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

- Air community stock official name, apartment income REIT corp. Surging on Monday as Blackstone Real Estate agrees to buy the apartment building's owner in an all cash transaction valued at around $10 billion. We have Blackstone here really making a big bet on luxury apartments. Air communities operates about 76 communities, the average income for folks who are buying one of these units $237,000. So moving into that space talk a lot on this show about what is the play within real estate?

Individual homeowners can't seem to buy a home. Commercial real estate, you don't want to touch that. So maybe you have your high end multifamily is where Blackstone at least sees this opportunity.

JULIE HYMAN: And it's interesting because they earlier this year also bought a portfolio of single family rental homes as well. So it's not as though they're just betting on luxury. They're also betting on the rental market, which is interesting given our discussion that we were just having with Jonathan Pingel about what's going to happen with rent inflation. When you have a Blackstone coming in and you're looking at this. I mean, it's luxury.

So it's not the average rent. But it affects the average rent. It affects the overall calculation. So it's just interesting that Blackstone is making these moves.

- Yeah. And it's also a reminder, this idea that we've circled we talked about it with Huntington Bancshares earlier in the program. That how would you go in? Why would you make a big leveraged bet on real estate at this point in the cycle? Rates are 4 and 1/2%, 10 years ticking up. Well, when you have some visibility. As a Blackstone, you think you have some visibility and you can say, OK, well we can finance it at this. We know we can refinance it lower or we think we know we can refinance lower in three years.

You make your peace with it, you give it a shot. And to your point, this is not the average home buyer.

JULIE HYMAN: Exactly. It's an urban areas too which I thought was also interesting given the conventional wisdom about.

- You can split your time.

JULIE HYMAN: I could.