Elme Seeks Shareholder Approval for Cortland Portfolio Transaction and Liquidation.

Elme Communities plans to seek shareholder approval for a transaction involving its Cortland portfolio. Assuming the transaction is completed, shareholders can expect upfront distributions of $14.68 to $15.00 per share. The company estimates additional liquidating distributions of $2.90 to $3.50 per share in total. The transaction aims to maximize shareholder value, following an extensive evaluation of strategic alternatives.

Elme Communities (NYSE: ELME), a value-oriented multifamily owner and operator, has announced that its Board of Trustees has completed a strategic alternatives review to maximize shareholder value. The company has entered into a Purchase and Sale Agreement (PSA) with Cortland Partners, LLC, a vertically integrated real estate investment, development, and management company, to sell a 19-asset portfolio for $1.6 billion in cash [1].

The transaction, expected to close in the fourth quarter of 2025, is subject to shareholder approval and customary closing conditions. Elme intends to use the proceeds from the sale to make total upfront distributions to shareholders of approximately $14.68 to $15.00 per share, assuming the transaction is completed. The company's current estimate of additional liquidating distributions to shareholders is approximately $2.90 to $3.50 per share in the aggregate [1].

The sale of the 19-asset portfolio is the first step in Elme's plan of sale and liquidation, which contemplates the voluntary liquidation and dissolution of the company by the sale or disposition of all its remaining assets. The company intends to market and sell its remaining nine multifamily assets, as well as Watergate 600, within the next 12 months [1].

Elme's CEO, Paul McDermott, stated, "Following a thorough Board-led process, and despite our successful transformation into a focused multifamily platform, market conditions have not allowed us to lower our cost of capital in a way that supports accretive growth. We are pleased to have reached an agreement with Cortland that recognizes the greater value of these 19 Elme communities and their long-term potential when coupled with Cortland’s economies of scale" [1].

Cortland's CEO, Steven DeFrancis, expressed excitement about the transaction, stating, "This transaction is a major milestone in Cortland’s history, as we significantly grow our presence in the greater Washington, D.C. area and our home state of Georgia. We’re excited to welcome these communities into the Cortland family and deliver the exceptional living experience residents have come to expect from our brand" [1].

The transaction is subject to shareholder approval and closing of the Portfolio Sale Transaction. Elme has received a debt commitment of $520 million from Goldman Sachs Bank USA to provide debt financing secured by Elme’s assets not included in the closing under the Portfolio Sale Transaction upon completion of the Portfolio Sale Transaction [1].

References:
[1] Elme Communities Concludes Strategic Alternatives Review. (2025, August 4). Elme Communities. Retrieved from https://ir.elmecommunities.com/news-events/press-releases/detail/372/elme-communities-concludes-strategic-alternatives-review