Minto Group has agreed to take its apartment REIT private in a proposed joint-venture deal with Crestpoint Real Estate Investments worth $2.3 billion.

Announced Monday, the proposed transaction calls for a Crestpoint affiliate to acquire all of the REIT’s units, except those owned by Minto Group and its senior officers, for $18 apiece. That price represents a 32% premium to the REIT’s January 2 closing price and a 35% premium on its 20-day volume-weighted average price.

“This partnership is a decisive, forward-looking move that prepares us to lead in the next phase of market evolution,” said Minto Group CEO Michael Waters. “We are proactively structuring our portfolio to capitalize on emerging opportunities, and Crestpoint’s proven expertise in strategic real estate partnerships makes them the ideal partner with which to execute this strategy.”

Upon the deal’s expected closure in the second half of 2026, the REIT will be delisted from the Toronto Stock Exchange.

Minto will continue to manage the portfolio. The company decided to divest the REIT after becoming dissatisfied with the unit’s performance.

“We have great confidence in the high-quality, well-located portfolio we have built; however capital markets constraints have hindered our ability to achieve our long-term growth objectives,” said Jonathan Li, the REIT’s president and CEO. “This transaction provides trust unitholders with near-term liquidity at a significant premium to the current trading price at a time when the operating environment is challenging and the capital markets remain sub-optimal for the Canadian multi-family sector. This is a strong result for all stakeholders.” 

The proposed transaction is structured as a plan of arrangement in accordance with Ontario law. The REIT’s unitholders are slated to vote on the agreement during a special meeting in March.

The REIT’s board special committee has recommended that unitholders vote in favour of the transaction. If the board changes its view or the REIT does not complete the deal for another reason, Crestpoint will receive a $42.1-million kill fee. In turn, Crestpoint must pay the REIT $47.7 million if the company fails to fund the proposed all-cash transaction.

Minto currently holds about a 42.7% direct and indirect interest in the REIT. The company has agreed to vote all of its shares in favour of the proposed deal, as has each executive officer. Together, the company and its officers hold a 44.3% interest in the REIT.

“This partnership represents an exceptional opportunity to work alongside a well-respected real estate developer and operator with over 70 years of experience, and we look forward to building a successful, long-term relationship” said Kevin Leon, president and CEO of Crestpoint.

Following a review commissioned by the REIT board’s special committee, Desjardins has valued the REIT at $17 to $19 per unit.

BMO Capital Markets, also commissioned by the special committee has deemed the proposed transaction to be fair.

Law firm Blake, Cassels & Graydon is acting as legal counsel for the special committee, while Goodmans is doing likewise for the REIT.

Torys is serving as legal counsel for Minto and Crestpoint, while TD Securities is acting as the financial advisor for both firms. McCarthy Tétrault LLP is also legal counsel to Crestpoint.

The REIT owns and manages multi-residential rental properties across major Canadian urban centres, including Toronto, Montreal, Ottawa, Calgary and Vancouver.

Ottawa-based Minto Group is a fully integrated real estate investment, development and management firm.

Crestpoint is a Toronto-headquartered commercial real estate and debt-investment firm that manages approximately $11 billion worth of assets on behalf of institutional and high-net-worth clients. The company is a subsidiary of Toronto-based Connor, Clark and Lunn, an asset-management firm whose affiliates manage $167 billion in assets for individuals, advisors and institutional investors.

Pictured: Minto Apartment REIT’s Lonsdale Square apartment building in North Vancouver, B.C.

Photo: CNW Group/.Minto Apartment REIT