Canadian REIT Breakup Shows Continued Appetite for Industrial and Sunbelt Multifamily
GO Residential Real Estate Investment Trust and a consortium including Blackstone Inc., Crestpoint Real Estate Investments Ltd., Canada’s Public Sector Pension Investment Board, and a company controlled by the family of H&R REIT’s CEO agreed to acquire H&R’s assets in a deal valuing the Canadian property owner’s equity at C$3.4 billion. H&R unitholders will receive C$4.28 in cash plus 0.5688 GO REIT units per unit held, representing a total price of C$12.01 per unit and a 14.5% premium to the June 10 undisturbed closing price. The transaction, which includes debt, values H&R at around C$6.7 billion and is expected to close in the fourth quarter.
GO Residential will acquire 23 residential properties in the U.S. sunbelt, H&R’s 50% stake in the Jackson Park luxury high-rise apartment complex in New York, and other assets. Blackstone, PSP, and Crestpoint will take H&R’s Canadian industrial properties, while the Hofstedter family will receive the company’s remaining non-core assets. If completed, H&R unitholders would collectively hold a 67% stake in GO Residential, which listed on the Toronto Stock Exchange last year. Stephen Gross, H&R’s independent lead trustee, said the company conducted an exhaustive review of its options last year and that independent trustees are confident the transaction represents the best path forward for unitholders.
H&R has badly underperformed other Canadian real estate companies over the past 10 years as it went through a difficult restructuring, shifting its portfolio away from office and retail properties to focus on apartment and industrial assets in North America. The deal reflects continued investor demand for industrial properties and sunbelt multifamily housing, with Blackstone and institutional capital willing to pay premiums for stabilized assets in those sectors. The breakup allows investors to separate exposure to U.S. residential growth markets from Canadian industrial holdings, each controlled by buyers with specific sector expertise.
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