Grubb & Ellis Apartment Reit has entered into definitive agreements totalling USD182m to acquire nine multifamily properties from affiliates of MR Holdings and substantially all of the assets of Mission Residential Management, the Mission Residential property management business.

The acquisitions are subject to customary closing conditions and the satisfaction of other requirements as detailed in the agreements.

"The proposed acquisitions announced today will be a tremendous step in the growth and evolution of Grubb & Ellis Apartment Reit that will strengthen the company and add significant value for our stockholders," says Stanley "Jay" Olander Jr., chairman and chief executive officer. "We will enjoy greater economies of scale, equity will increase by approximately 18 per cent, and the transactions will be immediately accretive to our bottom line earnings, increasing funds from operations and coverage of our investor dividend."

The nine multifamily properties include 2,676 apartment units located in North Carolina, Tennessee and Texas. One of the properties is owned by a limited partnership for which an affiliate of MR Holdings serves as general partner. The other eight properties under contract are owned by Delaware statutory trusts for which affiliates of MR Holdings serve as trustee. Total consideration for the acquisition of the nine properties totals USD176.9m comprised of cash, debt and limited partnership interests in Grubb & Ellis Apartment Reit's operating partnership.

Mission Residential Management is the property manager of 41 multifamily communities, including the nine under contract for purchase, totalling approximately 12,000 apartment units in Georgia, Texas, North Carolina, Tennessee, Utah and Florida. Under terms of the asset purchase agreement, Grubb & Ellis Apartment Reit will acquire substantially all of the assets of Mission Residential, including workforce in place and the assignment and assumption of the property management agreements for all of the Mission Residential properties, for USD5.5m in cash plus the assumption of certain liabilities.

Olander says: "The acquisition of the Mission Residential property management business will provide immediate fee income to Grubb & Ellis Apartment Reit, provides a platform for the self-management of our entire portfolio, and adds nearly 300 experienced professionals to our talented employee base."

Additionally, Grubb & Ellis Apartment Reit will seek the consent of the respective tenant-in-common owners of six multifamily communities totalling 1,510 apartment units in North Carolina and Texas to acquire these properties. Total consideration for these proposed acquisitions would be USD99.5m, including limited partnership interests in the Reit's operating partnership and assumed debt.