Calgary-based Northview Apartment REIT has entered into an agreement to be sold to Starlight Investments and KingSett Capital for $36.25 per unit in cash in a transaction valued at $4.8 billion.

“This transaction provides Northview unitholders with a premium above Northview’s all-time high Unit closing price, with the option of continuing to invest alongside Starlight and KingSett in what we believe will be an attractive, publicly-listed, newly formed, high yield, multi-residential fund,” said Daniel Drimmer, Starlight’s President and Chief Executive Officer, in a news release on Thursday.

“We look forward to building on Northview’s tenant focus by maintaining high-quality, well-operated and sustainable buildings. Starlight, which will operate the Northview properties, has high regard for Northview’s management and intends to retain substantially all of Northview’s site level employees and operational staff, as well as its offices in Calgary and Toronto.”

The High Yield Fund is expected to have a distribution yield in excess of 10 per cent and will hold a geographically diversified portfolio of more than 10,900 of Northview’s multi-residential suites, more than 340 of Northview’s current execusuites, and more than 1.1 million square feet of Northview’s current commercial portfolio. 

“This Transaction is a testament to the business Northview has built, both through its original incarnation as Northern Property REIT, and more recently since the 2015 transaction, as Northview,” said Todd Cook, President and Chief Executive Officer of Northview, in a news release.  “We have successfully executed on our strategic priorities to build the portfolio in strong and growing markets, and to create value for unitholders through organic growth and Northview’s development platform.”

Starlight Investments is a privately held Toronto-based, full service, multi-family and commercial real estate investment and asset management company. It currently manages over $14 billion of direct real estate as well as real estate investment securities. Investment vehicles include institutional joint ventures, True North Commercial REIT, Starlight U.S. Multi-Family Funds and Starlight Capital Funds. Starlight Investment’s portfolio consists of approximately 43,000 multi-residential units across Canada and the U.S. and over seven million square feet of commercial properties. 

KingSett Capital is Canada’s leading private equity real estate investment firm.  Since 2002, KingSett has raised over $11 billion of equity and completed $40 billion of investment transactions on behalf of its Growth, Income, Urban and Mortgage funds. Currently, KingSett’s various funds have ownership interests in a $15 billion portfolio of assets across Canada.

“This Transaction provides significant value, certainty and liquidity to unitholders, while also allowing Northview to solicit superior proposals through a go-shop period of up to 60 days,” said Scott Thon, Chair of the Board, at Northview. 

Mario Toneguzzi is a business reporter in Calgary.

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