As U.S. housing prices remain at all-time highs, Apollo Global Management, Inc. announced it will acquire Bridge Investment Group Holdings Inc, for approximately $1.5 billion. The all-stock transaction is structured as a reverse triangular merger that anticipates Bridge will operate as a standalone platform within Apollo’s asset management business, retaining its existing brand and management team.
“Founded in 2009, Bridge is an established leader in residential and industrial real estate as well as other specialized real estate asset classes,” according to the deal’s press release. “Led by an experienced senior leadership team and over 300 dedicated investment professionals with significant real estate investment and operating expertise, Bridges forward-integrated model, nationwide operating platform and data-driven approach have fostered organic growth and consistently produced desirable outcomes across asset classes.”
Source: Resiclub (citing Zillow)
The deal is announced as residential housing prices remain at record highs. After declining in the wake of the “Great Recession” – itself a result of a housing bubble – housing prices experienced moderate increases until 2020. During the pandemic, prices skyrocketed, experiencing over 15% increases across the U.S. during 2021-2022. That rate growth dropped significantly during the Federal Reserve’s aggressive interest rate hike increases from March 2022 through July 2023 as the increase in buyers’ mortgage payments ate into housing prices.
Source: Financial Samurai (citing Goldman Sachs Research)
It is crucial to note that those years of extraordinary price increases remain baked into the market and have not reversed. While housing prices declined during 2008-2012, today, housing prices across the nation remain at record highs – even if the rate of increase has moderated. These factors have led to record lows in U.S. housing affordability, which has ramifications across the economy, as young homebuyers are increasingly unable to purchase homes: first-time home buyers shrank to a historic low of 24% in 2024, as median buy age hit record highs.
According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly-announced transactions, Apollo is advised by law firms Paul, Weiss, Rifkind, Wharton & Garrison LLP and Sidley Austin LLP. Bridge is advised by Latham & Watkins LLP and Cravath, Swaine & Moore LLP.
