Canderel-led investor group to buy Cominar REIT for $ 2.2 billion – .

0
26
Canderel-led investor group to buy Cominar REIT for $ 2.2 billion – .


Canderel’s transaction to purchase Cominar REIT will expand its portfolio of office towers and retail space in Quebec City, Montreal and Ottawa. The value of the transaction, including the debt, is $ 5.7 billion.Christinne Muschi/The Globe and Mail

Quebec-based Canderel has partnered with activist real estate investors to privatize Cominar REIT for $ 2.2 billion, in a transaction that will expand its portfolio of office towers and retail space in Quebec City, Montreal and Ottawa.

Canderel Real Estate Property Inc. leads the buying group, which includes activist funds FrontFour Capital Group LLC and Sandpiper Group, as well as Artis REIT and Koch Real Estate Investments LLC.

The group, called Iris Acquisition II LP, offered to pay $ 11.75 for each outstanding Cominar unit. This represents a 13% premium over Cominar’s closing price on Friday, although it is well below Cominar’s strongest days when it was trading above $ 20 apiece ten years ago.

The value of the transaction, including the debt, is $ 5.7 billion.

Contra Guys: Why we’re betting on Cominar REIT

As part of the transaction, private equity firm Blackstone Group will purchase industrial properties from Cominar, and Montreal real estate company Groupe Mach will purchase a portion of the REIT’s commercial properties. Their purchase prices were not disclosed. Canderel CEO Brett Miller said the capital will be used to finance the privatization of Cominar.

Canderel, which has real estate operations in Toronto, Calgary, Montreal, Vancouver, Nova Scotia, Edmonton and Ottawa, began to seriously consider Cominar in 2020 after the real estate investment trust effectively went up for sale by publicly announcing a formal strategic review process. .

This is the first major transaction for Mr. Miller, who succeeded Canderel founder Jonathan Wener as CEO in 2019 with a mandate to grow Mr. Wener’s business.

The proposed acquisition will give Canderel and other investors in its group control of 80 of Cominar’s 310 properties, including Gare Centrale, Montreal’s main train station with commercial, industrial and office buildings.

Cominar’s privatization deal is one of the largest commercial real estate deals to date this year and shows investor interest in Montreal and Ottawa, two regions where house prices have jumped since the start of the pandemic.

Mr. Miller said the development potential of the Central Station was great and added that Canderel could build condos and apartments in this area.

Office buildings and downtown retail have suffered from the work-from-home demands of the pandemic. It is not known if the dynamism will return to the heart of the city.

Overall, investor interest in Canadian commercial real estate has increased this year after the uncertainty of the economic downturn in 2020. Investment hit a record $ 14 billion in the second quarter of this year, with the most valued transactions in industrial properties, land and apartments, according to commercial real estate services company CBRE.

Miller said Canderel approached several large investors, including Canadian pension funds, as part of his offer to buy Cominar. He said his company is not going into activist investing, although his investor group includes Sandpiper, who has successfully installed new board members from several REITs, including Artis, and FrontFour, which installed board members from other REITs.

“I wouldn’t call us a public market player,” Miller said. He would not disclose the names of other investors in his group. Canderel and Sandpiper already have Cominar units. FrontFour owns an 8.5 percent interest in the REIT.

The independent trustees of Cominar’s board of directors have recommended the deal, according to a press release from Canderel. For the transaction to be successful, the majority of Cominar unitholders must vote in favor of the transaction. An outside public relations firm, National, said voting for Cominar unitholders will take place on or around December 21.

Your time is precious. Receive the Top Business Headlines newsletter delivered to your inbox in the morning or evening. register today.

LEAVE A REPLY

Please enter your comment!
Please enter your name here