APPTON, Texas (Reuters) – Apple Inc’s $1.8 billion purchase of real estate company Appleton in a deal valued at $1 billion has put the spotlight on Texas real estate developers who are being squeezed by rising rents and a shortage of developers.
Apple will pay Appleton $150 million in cash and stock in the deal announced on Thursday, a deal that was announced last month and was approved by the Texas Railroad Commission in March.
The company will pay about $20 million in taxes and fees to the Railroad Commission, a state agency that manages the state’s transportation system, and Appleton will pay a $200,000 fee to the state.
Appleton is part of a global trend of real-estate deals that are making real estate a more attractive investment opportunity for many companies.
The $1bn acquisition of Appleton, a Dallas-based real estate investment trust, has created a boom in the number of developers that are seeking to acquire large, modern homes.
The deal will bring the total number of Apple Watch buyers in Texas to more than 200.
Apple has said that it expects the real estate transaction to generate about $150 billion in value in the next three years.
Appleton’s board of directors approved the deal in March and Appletons chief executive, Bill Meyers, said in a conference call with analysts on Wednesday that Appleton had a “very, very high” rate of returns.
Appletions chief executive officer, Brian Johnson, said on Thursday that Appletion was looking at more than 1,000 new homes a year in Texas.
He added that the company’s annual sales in Texas rose 20 percent last year.
Apple said in the news release that it had $4.1 billion in cash, with $3.1bn of that coming from the deal.
It said the cash is not yet invested in any real estate.
The Texas Railroad commission is not obligated to approve the deal, but commissioners have expressed interest in it in recent years.
In recent years, they have been pressured by the number and volume of developers seeking to buy homes in Texas, said Mike Siegel, an associate professor at Texas A&M University’s College of Business and Management.
In 2016, the commission approved an agreement with Apple worth $2.5 billion to buy out Appleton.
Apple’s investment is the largest in Texas real-life real estate since it purchased an additional $4 billion in a separate real-property deal in 2009.