Blackstone, the world’s largest alternative asset manager, has announced plans to take Tricon Residential private in a $3.5B deal.
The companies have entered into an agreement under which Blackstone Real Estate Partners X along with Blackstone Real Estate Income Trust, Inc (BREIT) will acquire all outstanding common shares of Tricon for $11.25 USD, or approximately $15.17 CAD.
Blackstone intends to complete Tricon's $2.5B development pipeline of new apartments in Canada and $1B of new single-family rental homes in the United States. Blackstone will also improve the quality of Tricon's existing US rental homes through an additional $1B of planned capital projects over the next several years.
"Tricon provides access to high-quality housing, and we are fully committed to delivering an exceptional resident experience together," said Nadeem Meghji, Global Co-Head of Blackstone Real Estate.
"We are excited that our capital will propel Tricon’s efforts to add much needed housing supply across the US and in Toronto, Canada."
Tricon owns and operates a portfolio of more than 38,000 single-family rental homes in the US, including in Atlanta, Charlotte, and Dallas, and multi-family apartments in Toronto, including The Selby and The Taylor.
It has roughly 5,500 market-rate and affordable multifamily rental apartments under development in Canada, and approximately 2,500 single-family rental homes in the US. Tricon's US-based land development projects can support the future development of nearly 21,000 single-family homes.
"I sold Tricon a zoned development land site for purpose built rental in 2022, Andrew Joyner and their whole team are wonderful to work with," Jeremiah Shamess, Senior Vice President at Colliers Private Capital Investment Group, told STOREYS.
"Tricon is one of the most professional and efficient operators in the business. I look forward to seeing their continued growth in Toronto with this new capital source."
The transaction is expected to be completed in the second quarter of 2024, and will be subject to customary closing conditions, including court approval, the approval of Tricon shareholders, and regulatory approval under both the Canadian Competition Act and Investment Canada Act. BREIT will maintain its approximately 11% ownership stake post-closing.
The $3.5 billion price-tag represents a premium of 30% to Tricon’s closing share price on the New York Stock Exchange (NYSE) on January 18, and a 42% premium to the volume weighted average share price on the NYSE over the last 90 days.
"We are proud of the significant and immediate value that this transaction will deliver to our shareholders, while allowing us to continue providing an exceptional rental experience for our residents," said Gary Berman, President & CEO of Tricon.
"Blackstone shares our values and our unwavering commitment to resident satisfaction, and we look forward to benefitting from their expertise and capital as we partner in building thriving communities."
