From a small northwestern observatory…

Finance and economics generally focused on real estate

Posts Tagged ‘Lehman

And a bit more about Archstone

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Private Equity Real Estate reports this morning that the Estate of Lehman is challenging Equity Residential’s proposed acquisition of BofA’s 26.5% stake with protests to the Securities Exchange Commissions.

PERE reports that Lehman, which owns 47% of Archstone and serves as manager (the remainder is owned by Barclays) had filed a plan to emerge from Chapter 11 by paying $65 Billion to pay creditors, who hold about $450 Billion in claims.  Selling Archstone (they actually proposed an IPO) would have helped raise this sum (Lehman currently only has about $23 Billion), but Sam Zell’s move has left this idea hanging out to dry.

It’s going to be fun to watch.  We’ll keep you posted.

Written by johnkilpatrick

December 7, 2011 at 8:27 am

Lehman back in the news

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This is really an update to my recent post about BofA and Sam Zell’s acquisition of Archstone (  As it turns out, the remnants of Lehman had HOPED to do an IPO on Archstone, something that BofA and Barclays had opposed.  Now, with Zell’s acquisition of BofA’s share, he has both put a stake in the heart of that hope, but also set a value for the assets at about $16 Billion.  Given the convoluted ownership structure of Archstone, Zell has a veto over any of Lehman’s restructuring plans.

Elliott Brown and Robbie Whelan have a great piece on this in tomorrow’s Wall Street Journal.  (  Zell wants all of Archstone, and with Equity Residential would be America’s largest apartment landlord, with stakes in more than 190,000 units.  Technically, Lehman could block Zell’s offer by coming up with the cash, and they’ve been talking with both Blackstone and Brookfield.   However, part of Lehman’s accounting was a valuation of Archstone’s management and “brand” at around $1 Billion.  With Zell already owning Equity Residential, that brand value is negligible to him.  In short, Zell is in a fairly strong bargaining position to get what he wants.

Written by johnkilpatrick

December 4, 2011 at 7:20 pm

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