Cortland Partners Acquires 19 Property Portfolio from Elme Communities for $1.6 Billion

Cortland Partners, LLC has agreed to acquire a 19-property portfolio from Elme Communities for $1.6 billion. The transaction is expected to close in Q4 2025, subject to shareholder approval. Elme Communities will return net proceeds from the sale to shareholders and plans to delist its common shares from the NYSE. Goldman Sachs Bank USA will provide $520 million in debt financing.

Elme Communities, Inc. (NYSE: ELME) has announced a significant strategic move with the agreement to sell a 19-asset portfolio to Cortland Partners, LLC for $1.6 billion. The transaction, expected to close in the fourth quarter of 2025, is subject to shareholder approval. This sale is part of Elme's broader plan to maximize shareholder value, as outlined in its strategic alternatives review [1].

The agreement includes a Purchase and Sale Agreement (PSA) with Cortland, a vertically integrated multifamily real estate investment, development, and management company. Cortland will acquire the 19-asset portfolio for $1.6 billion in cash, subject to adjustments. The transaction is not contingent on Cortland securing financing. Elme intends to use the net proceeds from this sale to return value to shareholders, with an estimated initial special distribution of between $14.50 and $14.82 per share [1].

Elme's plan also includes the voluntary liquidation and dissolution of the company, with the sale of the remaining nine multifamily assets and Watergate 600 to be marketed and sold within the next 12 months. The company has received a debt commitment of $520 million from Goldman Sachs Bank USA to finance the remaining assets not included in the sale [1].

The transaction marks a significant milestone for Cortland, which is expanding its presence in the greater Washington, D.C. area and its home state of Georgia. Cortland has previously grown its portfolio through large-scale transactions, including the $1.2 billion privatization of Pure Multifamily REIT in 2019 [1].

Elme's decision to sell the portfolio and delist its common shares from the NYSE reflects a strategic shift aimed at maximizing shareholder value. The company's current estimate of additional liquidating distributions to shareholders from the sale of the remaining assets is between $2.90 and $3.50 per share [1].

Cortland's acquisition of the Elme portfolio is expected to enhance the resident experience through significant capital investments. The transaction is a testament to Elme's commitment to shareholder value and Cortland's strategic expansion plans.

References:
[1] https://ir.elmecommunities.com/news-events/press-releases/detail/372/elme-communities-concludes-strategic-alternatives-review