Global alternative asset manager Apollo agreed to buy commercial property owner and lender Bridge Investment Group for $1.5 billion as more commercial property companies prepare for a greater need for financing with prices and deals gaining steam.
Apollo expects Salt Lake City-based Bridge, a manager of about $50 billion in real estate assets, to boost its capacity for property investing and increase its ability to write loans.
The move by Apollo follows the roadmap of other private equity firms expanding their real estate credit capabilities. Blackstone reported in its year-end earnings that it raised $7.1 billion for its property credit fund last quarter. That amount of fundraising shows that a real estate recovery shows no signs of backsliding, Blackstone said.
Bridge is in the process of issuing $800 million in commercial mortgage-backed securities tied almost entirely to recently originated multifamily loans, according to bond rating firm Moody’s Ratings. The issuance is Bridge’s 14th such loan offering, making it one of the five largest private lenders securitizing loans in the past five years, according to CoStar data.
Apollo's deal will boost Bridge's lending capabilities, Piper Sandler equity analyst John Barnidge said in an analyst report.
The deal means Apollo will provide a bigger platform for Bridge's existing teams "while adding improved distribution and scale within a meaningfully larger public company," Barnidge said.
Loan originations
The transaction with Bridge "is highly aligned with Apollo’s strategic focus on expanding our origination base in areas of our business that are growing but not yet at scale," David Sambur, Apollo partner and co-head of equity, said in a statement.
Bridge owns about 425 properties, according to CoStar data, including 185 multifamily and 80 industrial assets, as well as 77 office buildings.
Since the start of last year, Bridge has acquired more than $1.4 billion of properties of which $1 billion has been multifamily and $350 million has been industrial, CoStar data shows. The firm has sold $650 million in properties, including $128 million of office holdings.
Real estate merger and acquisition activity was almost nonexistent last year after 2023 saw 11 such deals completed.
The lack of deals came after more than two years of high interest rates, according to management consulting firm PwC in its global real estate outlook for 2025 released last month. The outlook improved as real estate transaction deal volume began to increase with mergers and acquisitions.
“In 2025, we expect to see a rise in real estate M&A activity driven by favorable economic conditions, lower interest rates and available capital,” said Tim Bodner, global real estate deals leader for PwC.
Trade uncertainty
He added that “this growth may be tempered by global trade and other uncertainties. At the same time, we note the rise of a number of alternative asset classes which yield higher returns."
As a result, he said, "successful dealmakers will navigate this evolving landscape adeptly and employ advanced strategies to structure and finance deals with the right partners.”
That activity has already begun to take shape this year. Billionaire investor Bill Ackman's Pershing Square made a bid in January to merge with Howard Hughes Holdings, owner of large master-planned developments around the country.
Apollo’s planned acquisition of Bridge is subject to the approval of Bridge’s public shareholders.
Upon closing the transaction, Bridge will operate as a standalone company within Apollo’s asset management business, retaining its existing brand and management team.
Bridge Executive Chairman Bob Morse will become an Apollo partner and lead Apollo’s real estate equity franchise.