There’s a New Big Dog in Town

If you read the headline and saw the cover picture, you may think we’re talking about Rogers Place or Stantec Tower. However, in this case the big dog is Choice Properties Real Estate Investment Trust and the town is all of Canada.  Admittedly, we might be guilty of click-bait here, but if we haven’t lost you we’ll explain why this is a big development.  Choice Properties REIT, which is majority owned by the Loblaw Group and the Weston Family, just agreed to buy Canadian Real Estate Investment Trust (CREIT) for $3.93 billion.   With the acquisition, Choice Properties REIT will have an enterprise value of about $16 billion, comprised of 752 properties and 69 million square feet of leasable space.   From an enterprise standpoint, this will make it the largest REIT in Canada and also put it as a top 5 REIT by market capitalization.

canadareitsbymarketcap

 

What’s interesting is that they will move from being a retail-property focused REIT to one that owns properties in each of the three main commercial asset classes (industrial, office and retail).  In stock market parlance, they will be moving from a pure-play retail REIT to a diversified REIT.  On the pure-play side, there are a number of REITs that focus specifically on one asset class.  There are even a few REIT’s that further define their mandate by focusing on subsections of those asset classes such as health care, hotels or automotive.

This weeks announcement follows another large acquisition from last month when the Blackstone Group and Ivanhoe Cambridge agreed to purchase Pure Industrial REIT (Piret) for roughly $2 billion.  Riocan, who is currently the largest REIT by market capitalization, also announced last year that they would be selling up to $2 billion in properties as they diverted attention strictly to the major Canadian markets.

There’s a website that tracks the stock price of all Canadian REIT’s.  You’ll see that most are down year-to-date but a few have fared quite well.

It will be an interesting year in Canada’s commercial real estate market as we’ve already seen more than $5 billion in transactions and it’s not even March yet.

 

 


 

 

Sources:

Jon Germain / Richardson GMP, ycharts, Choice Properties

Disclaimer:

Information has been obtained from sources deemed reliable but is not warranted to be so.  Information contained herein is not to be deemed investment advice.   View full disclaimer and privacy policy.

Our Team

Chad Griffiths

Chad Griffiths

Partner, SIOR, CCIM

Chad is a partner with NAI Commercial Real Estate and focuses on the Greater Edmonton area. Chad entered the industry in 2004 and has completed over 400 commercial transactions with clients ranging from small, local companies to large institutional owners. Chad has been a top 15 producer with NAI Canada-wide since 2013.

Ryan Brown

Ryan Brown

Partner, BCom, SIOR

Ryan is a partner with NAI Commercial Real Estate in Edmonton and is currently ranked nationally as one of NAI's top advisors. Having executed in excess of $100 Million worth of sales transactions and over 2 Million square feet of lease transactions, Ryan has developed a firm understanding of asset evaluation and an aptitude for building design, functionality, and long-term practicality.

Darcie Bouteiller

Darcie Bouteiller

Associate

Darcie is a licensed Commercial Real Estate Agent in the Province of Alberta with a focus on the Edmonton market and its surrounding areas. Darcie accomplishes custom solutions for her clients through her personable nature and results driven attitude. Darcie can help if you are looking to invest in commercial real estate or are looking for representation for a sale or lease transactions.

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