Starwood Capital Snaps Up Canadian Apartment REIT for $2.9B

The deal will expand Starwood’s footprint in 16 markets across the Southeast and Southwest.

moneyGreenwich, Conn.—Starwood Capital Group agreed to buy Canada’s Milestone Apartments Real Estate Investment Trust in a deal valued at about US $2.85 billion. Under the terms of the deal, all of Milestone’s subsidiaries and assets will be absorbed by Starwood, while Milestone unit holders will receive $16.15 per trust unit in cash.

Milestone, formed in 2013, is an unincorporated, open-ended REIT based in Toronto. Based on current exchange rates, the offer is a premium of 9.2 percent to the price per unit at the close of the markets on Wednesday.

Currently Milestone portfolio consists of 78 multifamily garden-style residential properties, comprising 24,061 units. Geographically, its holdings are in 16 major metro markets in the Southeast and Southwest United States. Milestone is also the largest REIT listed on the TSX focused solely on the U.S. multifamily sector.

Milestone CEO Robert P. Landin pointed out that since the REIT’s IPO, its enterprise value has more than doubled, and its equity market cap has more than tripled. Annual compound returns have been in excess of 28 percent, he said.

Milestone’s legal advisers on the deal are Goodmans LLP and Vinson & Elkins LLP, while Starwood’s are Stikeman Elliott LLP and Kirkland & Ellis LLP. BMO Capital Markets is Milestone’s financial adviser.

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