Lazard May Earn Up to $25M Advisory Fee in Blackstone-Resource REIT Deal

March 7, 2022 | James Sprow | Blue Vault

Lazard Freres & Co. LLC may earn up to $25 million for advising Resource REIT Inc. in its pending $3.7 billion all-cash sale to Blackstone Real Estate Income Trust Inc.

The Lazard Ltd. subsidiary served as a financial adviser and provided fairness opinion to Resource REIT in connection with the deal. Resource REIT agreed to pay Lazard Freres a sale transaction fee of $15 million, plus an estimated incentive fee equal to about $10 million, to be paid upon the completion of the transaction, according to a March 2 SEC filing.

Resource REIT will also pay quarterly advisory fees of $250,000, payable every 90 days after the date of the engagement letter, and an opinion fee of $2.5 million, payable upon rendering by the adviser of its written opinion. The engagement letter was executed October 7, 2021.

Resource REIT will also reimburse Lazard Freres for certain expenses and will indemnify the adviser and certain related persons under certain circumstances against various liabilities that may arise from or be related to the engagement.

For the fourth quarter of 2021, Lazard booked a financial advisory operating revenue of about $608 million, up 20% year over year.

Source: S&P Market Intelligence, Rica Dela Cruz, 3-4-22