Morgan Properties to Acquire Dream Residential REIT
The transaction is valued at more than $350 million.
Morgan Properties is set to acquire Dream Residential REIT, the Toronto-based owner of garden-style properties in the Sun Belt and Midwest, the companies announced on Thursday morning.
The all-cash transaction, valued at $354 million, is expected to close by the end of the year, following the approval of Dream’s unitholders and the REIT’s last monthly distribution in November.
The announcement follows a strategic review by Dream’s board of trustees, which recommended the merger unanimously. The transaction price reflects a 60 percent premium to the REIT’s closing unit price on the Toronto Stock Exchange as of Feb. 19.
According to Dream Residential’s second-quarter financial results, occupancy across its portfolio increased to 95.2 percent, up nearly 2 percentage points from the previous quarter. Additionally, the company finished renovations on six properties in the Cincinnati area.
TD Securities acted as Dream’s financial advisor for the transaction, while Osler, Hoskin & Harcourt LLP and Clifford Chance US LLP served as its legal counsel. Goodmans LLP advised the trustees. RBC Capital Markets is Morgan Properties’ financial advisor in the transaction, and Stikeman Elliott LLP and Blank Rome LLP is providing legal consultation.
Morgan’s Midwest expansion
According to Morgan Properties, the transaction is an opportunity to expand into fast-growing markets in Dream’s active regions. Dream’s portfolio spans 15 middle-income properties totaling 3,300 units across four states: Texas, Ohio, Kentucky and Oklahoma.
READ ALSO: Top 10 US Markets for Multifamily Construction
It’s not the first time this year that Morgan has grown its footprint in the Midwest. In April, the firm snapped up an 11-property, 3,054-unit portfolio in eight states that was previously owned by Trilogy Real Estate Group.
According to Multi-Housing News’ most recent ranking of multifamily property owners, Morgan is the fourth largest in the nation, owning approximately 96,000 units across more than 300 communities.
