Blackstone-backed Go Residential to buy Canadian REIT in $3.4 billion deal

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Or sign-in if you have an account.H&R has spent several years moving its portfolio away from struggling office and retail holdings and increasing its exposure to apartment and industrial assets in the US and Canada. Photo by James MacDonald /BloombergGO Residential Real Estate Investment Trust, backed by a group of investors including Blackstone Inc., agreed to buy H&R REIT in a cash-and-units deal valuing the Canadian property owner at around $3.4 billion.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe deal will see the breakup of H&R, which has endured years of difficult restructuring as it shifted its portfolio away from office and retail properties to focus on apartment and industrial assets in North America.In addition to Blackstone, the transaction is backed by a group comprising Crestpoint Real Estate Investments Ltd., Canada’s Public Sector Pension Investment Board and a company controlled by family members of Tom Hofstedter, the executive chairman and chief executive of H&R.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againGO will get 23 residential properties in the U.S. sunbelt, along with H&R’s 50 per cent stake in the Jackson Park luxury high-rise apartment complex in New York and other assets. Blackstone, PSP and Crestpoint will acquire H&R’s Canadian industrial properties, while the Hofstedter family will receive the company’s remaining non-core assets, according to a statement on Tuesday.Under the terms, H&R investors will receive $4.28 in cash plus 0.5688 GO REIT units for every unit they hold. That represents a total price of $12.01 per unit, a premium of 14.5 per cent to H&R’s undisturbed closing unit price on June 10, the statement said. Bloomberg News reported at that time that Blackstone was in early-stage talks with H&R.If the deal goes through, H&R unitholders would collectively wind up with a 67 per cent stake in GO Residential, a New York-based company that listed on the Toronto Stock Exchange last year.Stephen Gross, H&R’s independent lead trustee, said the company went through an “exhaustive” review of its options last year. H&R has badly underperformed other Canadian real estate companies over the past 10 years. “The independent trustees are confident this transaction represents the best path forward for our unitholders,” Gross said.Including debt, the deal values H&R at around $6.7 billion. It’s expected to close in the fourth quarter.—With assistance from Melissa Shin. H&R has spent several years moving its portfolio away from struggling office and retail holdings and increasing its exposure to apartment and industrial assets in the U.S. and Canada. 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