Alignvest Student Housing REIT unitholders have overwhelmingly approved its proposed $1.69-billion acquisition by Forum Real Estate Income and Impact Fund.

During a special meeting of unitholders, 99.03% of all participants approved the resolutions related to the transaction, while 98.62% of minority shareholders also gave their consent. The agreement, initially announced by parent organizations Alignvest Student Housing and Forum Asset Management in October.

The transaction is expected to close by the end of 2024, pending customary conditions. The Competition Bureau of Canada has already cleared the deal, removing a key regulatory hurdle.

To streamline the process, ASH REIT will suspend monthly distributions for November and December 2024. Instead, unitholders will receive increased cash and units of REIIF in exchange for their ASH REIT units, as stipulated in the agreement.

Launched in 2018, ASH REIT has established itself as a leading provider of purpose-built student accommodations, with a portfolio of 17 properties housing over 7,000 students across key Canadian university markets. Forum Asset Management, known for its focus on real estate and sustainable investment, aims to enhance the combined entity’s impact in the student housing sector.

Alignvest Student Housing and Forum Asset Management said they have entered into definitive agreements whereby Forum REIIF will acquire ASH REIT’s entire portfolio. Forum will own suites containing about 10,500 beds altogether, pending regulatory approvals and customary closing conditions.

“This combination marks a pivotal step in Forum’s journey and is a testament to our team’s hard work and dedication in building a leading alternative asset manager,” said Richard Abboud, founder and CEO of Forum Asset Management, said in October.

ASH REIT was formed in 2018 to consolidate the fragmented student accommodation sector across Canada. The REIT has built a portfolio of 17 properties with 7,159 beds across key university markets.

“We are delighted to partner with Forum on this transaction, which provides a compelling return on investment for ASH REIT’s unitholders,” said Sanjil Shah, managing partner of Alignvest Student Housing and trustee of ASH REIT, when the agreement was announced.

“Importantly, we’ve structured the deal to allow unitholders to roll their units into Forum on a tax-deferred basis for Canadian income-tax purposes. This ensures continued participation in the robust Canadian student housing sector, which has consistently demonstrated strong demand and attractive returns.”

The REIT’s management group has agreed to roll $50 million of its units into Forum REIIF and, together with the parent company’s shareholders, contribute nearly $100 million into Forum units.

Forum invests in multi-family rental apartments, purpose-built student housing, and furnished rentals in supply-constrained Canadian markets. The fund emphasizes ESG-driven investments to enhance yields and total returns while striving to foster a resilient and diverse portfolio.

Both Alignvest and Forum are based in Toronto.

Rendering: Courtesy of Forum Asset Management