Centerspace to Merge With Independence Realty Trust in $8.1 Billion Deal
The all-stock combination of two middle-market apartment REITs is expected to be about 5% accretive to 2027 Core FFO per share on a leverage-neutral basis.
Centerspace (CSR) and Independence Realty Trust, Inc. (IRT) agreed to combine in an all-stock merger that creates a multifamily REIT with an enterprise value of about $8.1 billion and more than 44,000 apartment units.
Under the definitive agreement, Centerspace shareholders will receive 3.800 shares of IRT common stock for each share of Centerspace common stock owned, and holders of common units in Centerspace’s operating partnership will receive 3.800 common units in IRT’s operating partnership, subject to certain adjustments. The deal is expected to result in the aggregate issuance of about 67.6 million IRT shares and common partnership units. At closing, IRT will assume Centerspace’s outstanding preferred units. On a fully diluted basis, excluding preferred units, IRT stockholders will own about 78% of the combined company and Centerspace shareholders about 22%.
The combined company is expected to have a pro forma equity market capitalization of about $5.0 billion. IRT’s management team will lead the surviving company: Scott Schaeffer will remain chairman and chief executive officer, and James Sebra will serve as president and chief financial officer. The board will expand to 11 members, including nine directors from IRT and two from Centerspace. Headquarters will remain in Philadelphia, and the company will keep the Independence Realty Trust name and the IRT ticker on the New York Stock Exchange.
The merger is expected to create a leading middle-market apartment REIT with greater scale, broader geographic diversification, and an expanded value-add growth pipeline, positioned to deliver attractive risk-adjusted returns with no additional leverage. The combined portfolio will include 163 multifamily communities across 17 states, with 58% of pro forma net operating income from Sunbelt markets, 27% from Midwest markets, and 15% from Mountain West markets. About 80% of pro forma NOI is derived from markets with top-quartile projected population growth.
Anne Olson, president and chief executive officer of Centerspace, said, “This transaction delivers compelling value for Centerspace shareholders, who will benefit from participation in a larger, more efficient enterprise with enhanced access to capital markets, and a meaningful reduction in leverage.” She added that the complementary portfolio of Midwest and Mountain West communities is located in markets experiencing accelerating migration and strong employment growth, and that the combination is a natural fit with IRT’s scaled operating platform and proven value-creation strategies.
Scott Schaeffer, chairman and chief executive officer of IRT, said the pairing of IRT’s Sunbelt portfolio with Centerspace’s Midwest and recovering Mountain West communities is building a platform in markets that have historically delivered above-average NOI growth with lower volatility. He said the added scale is expected to compound that advantage through greater efficiency and an expanded value-add renovation program.
The transaction is expected to be about 5% accretive to IRT’s 2027 Core FFO per share on a leverage-neutral basis, supported by about $24 million of annualized synergies. Full integration of those synergies is expected over the 12-month period following closing. Pro forma G&A as a percentage of assets is 0.37%, a reduction of 24% versus stand-alone IRT and 57% versus stand-alone Centerspace. The combined company is expected to retain BBB/BBB credit ratings from S&P and Fitch.
The deal is expected to close as early as the end of the fourth quarter of 2026, subject to approval by stockholders of both companies, lender consents, and other customary conditions. It is expected to qualify as a tax-free reorganization for U.S. federal income tax purposes. IRT currently expects to continue paying its quarterly dividend of $0.18 a share after closing; in the quarter in which the deal closes, Centerspace will declare and pay a stub cash dividend of $0.09, prorated for days elapsed before closing.