Starlight Investments and KingSett Capital announced that they have entered into an agreement to acquire Northview Apartment REIT in a transaction valued at $4.8 billion.
Northview, one of Canada’s largest publicly traded multifamily REITs with approximately 27,000 residential units, was formed in 2015 through Northern Property REIT’s acquisition of True North Apartment REIT and a Starlight Investments apartment portfolio.
This announcement comes two months after Starlight acquired 44 GTA apartment properties owned by Contiuum REIT. The company now manages more than $10.6 billion (C$14 billion) of direct real estate and real estate investment securities, with a portfolio totalling roughly 43,000 multifamily units.
“This transaction provides Northview unitholders with a premium above Northview’s all time high unit closing price, with the option of continuing to invest alongside Starlight and KingSett in what we believe will be an attractive, publicly-listed, newly formed, high yield, multi-residential fund,” said Daniel Drimmer, Starlight’s President and Chief Executive Officer. “We look forward to building on Northview’s tenant focus by maintaining high-quality, well-operated and sustainable buildings.”
Moving forward, Starlight will assume operations of the Northview properties and says it intends to retain “substantially all of Northview’s site level employees and operational staff, as well as its offices in Calgary and Toronto.”
Under the proposed transaction, a joint venture between Starlight and KingSett Canadian Real Estate Income Fund LP will acquire certain “core” properties that account for about 17 per cent of the Northview portfolio. The remaining assets, except for those comprising the new High Yield Fund, will be acquired by a joint venture between Starlight and KingSett Real Estate Growth LP.
Northview unitholders will be entitled to receive all-cash consideration of $36.25 per unit, representing a 12 per cent premium above Northview’s near all-time high closing price on the Toronto Stock Exchange of $32.50 per Unit on February 19, 2020. They will also have the option of investing in the High Yield Fund, which is expected to have a distribution yield in excess of 10 per cent, and will hold a geographically diversified portfolio of more than 10,900 of Northview’s multi-residential suites, more than 340 of Northview’s current execusuites, and more than 1.1 million square feet of Northview’s current commercial portfolio.
More details about the transaction can be found at Starlight.com
