CAPREIT has agreed to sell its manufactured rental home portfolio to global asset management giant TPG for $740 million.

The unencumbered portfolio comprises 12,138 residential lots in 75 communities across Canada.

“We look forward to a smooth and successful transition with TPG Real Estate,” said Mark Kenney, CAPREIT’s president and CEO in a news release. “TPG Real Estate has advised CAPREIT that, as a longstanding investor in the Canadian real estate sector, it intends to partner with the existing team to manage and grow the [manufactured home] portfolio going forward.”

San Francisco-based TPG plans to finance its acquisition with an interest-only vendor take-back loan of $140 million and $600 million in cash.

Toronto-based CAPREIT will use the sale proceeds to repay the balance of its Canadian revolving credit facility, approximately $187 million; fund future acquisitions of Canadian rental properties and cover other business expenditures.

“This pivotal transaction is not only providing CAPREIT with a significant amount of capital, but it also increases management’s focus as a pure-play apartment REIT,” said Julian Schonfeldt, CAPREIT’s chief investment officer.

.”We’re excited to be simplifying our story and dedicating our resources to our core business, where our competitive advantages are strongest.”

The transaction is slated to close in the fourth quarter of 2024.

Photo: CAPREIT