Dive Brief:

• AvalonBay Communities and Equity Residential announced Wednesday that shareholders overwhelmingly approved all proposals necessary to close the pending “merger of equals” between the two REITs. The companies plan to close the massive deal on Aug. 17, subject to the satisfaction or waiver of customary closing conditions, according to a press release. 
• At the AvalonBay special meeting, more than 99% of the votes cast were to approve the merger, per the release. The shares represented by those votes accounted for approximately 90% of the REIT’s common stock, as of the record date.
• Yesterday’s shareholder vote was one of the last major hurdles in the much-hyped “merger of equals” between AVB and EQR. If the union is completed, each share of AvalonBay common stock outstanding immediately before the merger will convert into the right to receive 2.793 Equity Residential common shares, according to the release.
   

Dive Insight:

More than 99% of the votes cast at the Equity Residential special meeting approved the issuance of Equity Residential common shares to AvalonBay stockholders as consideration in the merger, per the release. The shares represented by those votes accounted for approximately 90% of the REIT’s outstanding common shares, as of the record date.

Following the merger, the combined company will be renamed Vivmark Residential, which they announced July 30. At the beginning of trading on Aug. 18, its common shares will trade as “VMRK.”

Vivmark Residential will have a pro forma equity market capitalization of about $53 billion and an enterprise value of roughly $71 billion, per the July 30 release — slightly higher than previously reported. The combined firm will own more than 180,000 rental apartments with another 10,000-plus units under construction.

With more than 180,000 rental apartments, Vivmark Residential would have ranked No. 1 on the most recent National Multifamily Housing Council list of Top 50 owners and knocked Greystar to No. 2. Vivmark will have dual headquarters in Arlington, Virginia, and Chicago.

Benjamin Schall, president and CEO of AvalonBay, will serve as president and CEO and trustee of the combined company. Mark Parrell will step down as CEO of Equity Residential after 30 years at the company.

In addition to claiming five of the seven management spots at the combined company, AVB’s leaders will also have a strong say over capital allocation. The two EQR executives moving into top roles will head up property operations and legal.

The combined company’s board of trustees will initially consist of seven existing directors of AvalonBay and seven existing trustees of Equity Residential. Steve Sterrett, current lead independent trustee of EQR, will serve as chairman of the combined company.

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