AvalonBay and Equity Residential are merging to create Vivmark Residential. Massive merger to create a $53B Market cap and $70B+ Enterprise Value. They cited $175M in operational Synergies and combining data for AI-driven insights (not sure exactly what that means).
Any thoughts?
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“Vivmark” is a terrible company name. Corposlop right up there with Truist.
It sounds like a South Asian name
Hilarious reunification of the Archstone portfolio. They should have just named the company Archstone.
Have met a lot of smart people from both companies. I imagine the “synergies” mean a lot of people getting fired.
I'm only vaguely aware of the deal, but if I were a shareholder of either, I'd support it. And yes the only 'value' is the 'synergies' .... of firing the people performing overlapping duties. Nature of the beast. Companies belong to shareholders, not the employees (for whom I do feel genuinely bad). What's alternative? Continue independent, shares continue to dive, become take-over target, get taken over and employees get axed anyway? Might as well preserve your shareholder value and achieve the same outcome. Tough market. And I don't wish job loss on my worse enemy.
I’ve been watching Jay Parsons’ coverage of the merger . He made a few interesting points that I’ll try to accurately express: despite public claims this will create a monopoly, the combined firm owns less than 1% of units in the US. In their respective markets they own less than 4%, which is not going to move an entire market. Another thing I thought was interesting is the affordability issues in multi are not with Class A properties. Class A renters are not rent burdened (which firms know because of the income information they collect from prospective renters). Most of the firm’s units are in Class A properties, which still have runway before rents become unaffordable to most class A renters. But the OpEx side should see lots of efficiency for obvious reasons, and it seems that was more the play, not so much “monopoly”. I’d say I generally agree with Parsons. Also agree with others here that the name sucks lol.
Also interesting that the new combined firm's portfolio is actually still notably smaller (by number of units) than Equity's multifamily portfolio alone at it's peak in the 2000's.
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