Bank of America Corp. and Barclays Bank PLC are selling their stake in the apartment building owner Archstone to Lehman Brothers Holdings Inc.'s bankruptcy estate for $1.58 billion, AP reported.
The transaction disclosed Friday for the banks' 26.5 percent interest will give Lehman's estate full ownership of Archstone, an Englewood, Colorado-based company that owned all or part of 434 apartment communities in the U.S. and Europe as of the end of March.
The move also blocks plans by Chicago-based Equity Residential, an apartment owner whose chairman is real estate magnate Sam Zell, to buy the stake.
Equity Residential had offered in December to acquire an Archstone stake from BofA and Barclays for $1.33 billion. But Lehman exercised its right to match that offer. It used that same right on Friday to purchase the remaining stake of Archstone.
Equity would get $150 million from the two banks and Lehman for walking away from the deal. BofA and Barclays will pay an $80 million breakup fee, while Lehman will pay a $70 million termination fee. If the Lehman purchase falls through, Equity's deal with BofA and Barclays will remain in effect.
The deal comes as the U.S. apartment market has been gaining strength, buoyed by a pickup in job growth that is encouraging more people who have been sharing housing with relatives or roommates to rent on their own.