AvalonBay Communities and Equity Residential officially completed their merger of equals Aug. 17, forming Vivmark Residential, which begins trading on the New York Stock Exchange under ticker VMRK at market open Aug. 18, the company said in an Aug. 17 announcement on Business Wire. RealtyWire previously reported that shareholders of both companies approved the deal at special meetings Aug. 12.
The combined REIT owns more than 184,000 rental apartments across U.S. markets, with 11,100-plus additional apartments under construction across 33 communities representing $4.4 billion in active development, plus a $4.2 billion development-rights pipeline representing roughly 9,900 future homes. Vivmark’s equity market capitalization is approximately $51 billion, with an enterprise value near $70 billion. Under the merger terms, former AvalonBay shareholders own about 51% of the combined company and former Equity Residential shareholders own about 49% on a fully diluted basis.
Benjamin Schall, the former AvalonBay chief executive, leads Vivmark as CEO. The company named Michael Manelis as chief operating officer and Kevin O’Shea as chief financial officer, with Stephen Sterrett chairing a 14-member board split evenly between seven trustees from each legacy company. “Our vision is to be the most trusted and best-performing rental housing company in America,” Schall said in the announcement, citing a focus on homes residents value and consistent shareholder returns.
The completed leadership roster and board structure mark new details beyond what was disclosed when the merger was first named Vivmark Residential in late July; at that stage only Schall’s role as incoming CEO and Equity Residential CEO Mark Parrell’s planned retirement had been confirmed. Parrell is not listed among Vivmark’s newly named executive officers.
What it means: With its close, Vivmark becomes one of the largest publicly traded apartment REITs in the country, combining AvalonBay’s coastal and Sun Belt development pipeline with Equity Residential’s urban and suburban portfolio under a single executive team. The deal is one of several large multifamily REIT consolidations this year, following a pattern of scale-seeking mergers across the sector as owners look to spread costs and development capacity across larger combined portfolios. A 14-member board split evenly between legacy AvalonBay and Equity Residential trustees, and an ownership split close to the pre-merger 51%-49% ratio, suggests the companies structured the combination to avoid either legacy shareholder base appearing to have been acquired outright — consistent with how the deal was originally billed as a merger of equals rather than an acquisition.
What to watch: Vivmark’s first trading day Aug. 18 will be the first market test of the combined company’s valuation; investors will also watch for the company’s first standalone earnings report and updated full-year guidance, which AvalonBay had suspended ahead of the merger’s close.
