Equity Residential has agreed to acquire 11 multifamily properties from Blackstone as it deepens its investment in Sun Belt residential.

The $964M deal will take place over a series of transactions with various Blackstone real estate investment vehicles, including Blackstone Real Estate Income Trust, Blackstone Real Estate Partners and Blackstone Property Partners. It is expected to close before the end of September, according to an announcement by the two companies.

The portfolio consists of 3,572 units across Atlanta, Dallas-Fort Worth and Denver — all expansion markets for Equity Residential. The REIT is already among the country’s largest apartment landlords, with nearly 80,000 units across 300 properties.

“This transaction is a significant step in our goal of generating a higher percentage of our annual net operating income from these strong growth expansion markets,” Equity Residential Chief Investment Officer Alec Brackenridge said in a statement.

The properties are on average 8 years old and are expected to cater to higher-end renters, according to the statement. For Equity Residential, the portfolio’s price tag is attractive compared to the cost of new construction.

Four of the properties, totaling almost 1,400 units, are in Atlanta. Another four, with approximately 1,200 apartments, are in Dallas-Fort Worth. The last three, spanning fewer than 1,000 units, are in Denver.

Despite offloading the properties, Blackstone has looked to increase its exposure to the multifamily sector in recent months. In June, the investment giant spent $10B to take Apartment Income REIT private.

“Rental housing remains one of our highest-conviction themes, and we continue to see strong fundamentals in attractive markets,” Blackstone Real Estate Senior Managing Director Asim Hamid said in the statement.

In its latest quarterly earnings release, Equity Residential reported stronger-than-expected results, including ​​$177M in profits. However, despite its focus on expansion in the Sun Belt, its executives have acknowledged oversupply and “weak” rent levels, with recovery not expected until at least 2027.

“It's a challenging operating environment for both new leases and retention given the amount of new supply,” Equity Residential Chief Operating Officer Michael Manelis said during a call with analysts last week.