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AMLI Residential Properties Trust, a Chicago-based investor, developer and manager of high-end apartment communities, became the latest of a number of REITs to announce plans to be taken private, last month agreeing to be bought for $2.1 billion in cash by Morgan Stanley Real Estate's Prime Property Fund. It is the fifth REIT to announce plans to go private this year in deals totaling $10.9 billion. Last year, three REITs went private in transactions worth $2.6 billion, according to SNL Financial, a market data firm.
The company focuses on the upscale apartment market, catering to the "renter by choice," as they are known in the industry. It has nine core markets: Atlanta, Southeast Florida, Chicago, Kansas City, Indianapolis, Dallas, Austin, Houston and Denver. AMLI went public in 1994 after being formed in 1980 by Gregory Mutz and John Allen, its current chairman and vice chairman, respectively, along with Life Investors, an Iowa-based insurer.
Robert Chapman has been AMLI's CFO since 1997. He started his career in the early 1970s at what is now KPMG. He spent 18 years at JMB Realty in Chicago, and with the sale of a JMB division in early 1990, he joined Heitman Capital Management where he spent the next three years.
IDD: Why did AMLI decide to go private?
Chapman: We were approached by Morgan Stanley with an offer that was of interest to the board and, after exploring alternatives, we decided that the price we received was very good for shareholders. It provides an opportunity for a very strong return, depending upon how long you've been in the stock, but it is also a significant premium over the current market and over our highest trading value.
IDD: Did some of the other recent privatizations of REITs influence your decision?
Chapman: There's strong interest in the private market for high- quality real estate, and we had a platform...