Continuum REIT, an affiliate of Q Management LP, and Starlight Investments have entered into an agreement whereby Starlight will acquire the REIT’s multi-residential portfolio for a gross purchase price of $1.732 billion.
The portfolio is comprised of 44 high-rise concrete buildings located primarily in the Greater Toronto Area, and contains 6,271 rental suites.
“We filed an amended and restated prospectus with the Ontario Securities Commission on October 21, 2019 with the intention of completing an initial public offering (“IPO”) of the Units of the REIT,” said Dan Argiros, President and CEO of Continuum. “Since filing, senior management has been marketing the IPO in Canada and the United States, which has resulted in an order book of over $1.0 billion.”
According to Arginos, during the marketing process Starlight approached Continuum to acquire its entire portfolio and made an offer that was superior to the IPO opportunity, which would have been priced between $15.50 to $16.50 per unit.
“As a result, we have elected to proceed with the Starlight offer to acquire the portfolio and we will be withdrawing the IPO,” he said. “We are very proud of the superior performance of the REIT since inception and we thank all of our investors for their support.”
“The opportunity to acquire a 44-building, concrete, multi-residential high-rise portfolio located in the Greater Toronto Area is an extremely compelling opportunity to continue Starlight’s strategic growth,” said Daniel Drimmer, Chief Executive Officer and President of Starlight. “We look forward to completing this significant transaction and integrating the portfolio into our multi-residential platform as we continue addressing Canada’s rental housing shortage.”
The transaction is expected to close in December, 2019. Desjardins Capital Markets and CIBC Capital Markets are acting as financial advisors to the REIT and Gardiner Roberts LLP is serving as legal counsel in connection with the transaction. Bloom Lanys Professional Corporation is acting as lead legal counsel to Starlight together with Wildeboer Dellelce LLP.
Continuum REIT is an affiliate of Q Management LP, a real estate asset and property management entity that is actively engaged in the multifamily residential sector in Ontario. In addition to the REIT, Q Management LP manages two private equity multi residential funds in Ontario consisting of 5,234 (owned and under contract) suites in 45 buildings.
With the addition of this portfolio, Starlight portfolio now consists of approximately 36,000 multi-residential units across Canada and the U.S. and over 6.2 million square feet of commercial properties.