First Capital REIT’s board of trustees has unanimously endorsed a $9.4-billion deal that would see Choice Properties REIT and KingSett Capital divvy up the portfolio of open-air, grocery-anchored retail centres. First Capital’s unit-holders will have to give their approval for the proposed transaction, which offers them the equivalent of $24.40 per unit via a combo of cash and Choice REIT units.
“This is an excellent transaction for our investors,” says Adam Paul, First Capital’s president and chief executive officer.
Choice Properties will have an approximate $5 billion stake to be financed through a combination of debt and equity. The REIT will acquire roughly 8 million square feet of income-producing assets and $200 million worth of properties under development, while taking on $2.7 billion in First Capital’s debt, including $400 million in mortgages and $2.3 billion in outstanding unsecure debentures.
“Choice Properties is acquiring best-in-class, necessity-based neighbourhood shopping centres that will significantly strengthen our portfolio,” maintains Rael Diamond, the REIT’s president and chief executive officer. “We believe this is a unique and compelling opportunity that will increase our presence in urban markets and further diversify our tenant base.”
KingSett brings $4.4 billion to the deal to acquire all of First Capital’s issued and outstanding units and various urban street front, plaza and development properties.
“We have partnered with Choice Properties to align the right assets with our respective strategies to deliver maximum value to First Capital’s unitholders,” notes Rob Kumer, chief executive officer of KingSett Capital. “We look forward to working with First Capital’s tenants, partners and other stakeholders in the years ahead.”
The special meeting of First Capital unit-holders, required to affirm the deal, is expected to be scheduled for June 2026. Voters will consider an offer that equates to a 17 per cent premium on the 20-day average unit price prior to April 15, 2026 and an 8 per cent premium on the REIT’s per-unit net asset value of $22.57. If approved, unit-holders will receive $19.24 and 0.3186 units of Choice Properties for each First Capital unit.
“The First Capital board believes this transaction is in the best interests of First Capital unit-holders,” says Paul Douglas, chair of First Capital’s board of trustees.
The transaction will also be subject to regulatory approval prior to closing.
