Elme Communities Concludes Strategic Alternatives Review Process; Executes Agreement to Sell 19 Properties to Cortland, Remaining Assets to be Marketed for Sale
Elme to Seek Shareholder Approval for Cortland Portfolio Transaction and Plan of Sale and Liquidation
Intends to Make Total Upfront Distributions to Shareholders of Approximately $14.68 to $15.00 per Share assuming the Consummation of the Cortland Portfolio Transaction
Company's Current Estimate of Additional Liquidating Distributions to Shareholders is Approximately $2.90 to $3.50 per Share in the Aggregate
BETHESDA, Md., Aug. 04, 2025 (GLOBE NEWSWIRE) -- Elme Communities ("Elme" or the "Company") (NYSE:ELME), a value-oriented multifamily owner and operator, today announced that its Board of Trustees has completed its previously announced formal evaluation of strategic alternatives to maximize shareholder value. After an extensive evaluation of strategic alternatives available, the Company has entered into a Purchase and Sale Agreement (the "PSA") with an affiliate of Cortland Partners, LLC ("Cortland"), a vertically integrated, multifamily real estate investment, development, and management company, under which Cortland will acquire a 19-asset portfolio from Elme for $1.6 billion in cash, subject to certain adjustments (the "Portfolio Sale Transaction"). The transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions including the receipt of approval from the Company's shareholders. The Portfolio Sale Transaction is not contingent on the receipt of financing by Cortland.
In connection with the PSA, the Elme Board of Trustees approved a plan of sale and liquidation (the "Plan of Sale and Liquidation"). The Plan of Sale and Liquidation contemplates the voluntary liquidation and dissolution of the Company by the sale or disposition of all the Company's remaining assets. The sale of the 19-asset portfolio in the Portfolio Sale Transaction would be the first step in the Plan of Sale and Liquidation. Elme intends to market for sale its remaining nine multifamily assets, as well as Watergate 600. The Plan of Sale and Liquidation is subject to approval from the Company's shareholders. The Company intends to commence the marketing and sale of its remaining assets in the near future with a view toward completing these asset sales within the next 12 months.
"Our agreement with Cortland and concurrent decision to move forward with a voluntary liquidation is the culmination of a thoughtful and deliberate review process, overseen by the Board's Transaction Committee," stated Benjamin Butcher, Lead Independent Trustee. "The Board, taking into account the work the Company has already undertaken to scale its portfolio and reduce its cost of capital and the Company's future business prospects, evaluated a range of potential alternatives in an effort to determine the course of action that provides the best opportunity for maximizing shareholder value. Following the public announcement of the Board's formal strategic review process, our financial advisors engaged with more than 80 potential counterparties, including pension funds, insurance companies, institutional advisors, financial sponsors, multifamily managers, sovereign wealth funds, family offices and other public REITs. Our evaluation process was robust, underpinning the Board's unanimous determination that the combination of the sale of assets to Cortland and subsequent sale of the remaining assets is most likely to result in the greatest value for shareholders as compared to the Company's other strategic alternatives, including continuing to operate the business as an independent going concern."
"Elme has made deliberate strategic decisions to advance and refine our portfolio with the goal of maximizing shareholder value," said Paul McDermott, President and Chief Executive Officer of Elme. "Following a thorough Board-led process, and despite our successful transformation into a focused multifamily platform with strong operating capabilities, 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. We believe Cortland will be an excellent steward of the properties and that this sale will facilitate a seamless transition of ownership, enabling continuity of operations for our residents and community teams, and continuing our legacy of customer service excellence."
"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," said Steven DeFrancis, CEO, Cortland. "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."
This transaction marks Cortland's second large-scale transaction with a publicly traded REIT. In 2019, Cortland became the largest apartment owner in the Dallas area after its $1.2bn privatization of Pure Multifamily REIT, a TSX-listed company. As a deeply experienced, vertically-integrated platform, Cortland intends to invest significant capital into the portfolio to enhance and elevate the resident experience.
Estimated Distributions
The Company intends to return net proceeds from the Portfolio Sale Transaction and other asset sales to Elme shareholders when appropriate and in the Board's discretion, subject to payment of, and the creation of necessary reserves for, the Company's liabilities and obligations and the payment of expenses.
Subject to shareholder approval and closing of the Portfolio Sale Transaction, and shareholder approval of the Plan of Sale and Liquidation, the Company expects to provide shareholders with the following distributions, based on the other assumptions and estimates referenced below:
Source(s)
Estimated Amount
Initial Special Distribution
Net proceeds from Portfolio Sale Transaction and a portion of the proceeds from the new debt on Elme's remaining assets (1)
Between $14.50 and $14.82 per share to be paid following closing of the Portfolio Sale Transaction (2)
Next Regular Quarterly Distribution
