In a landmark deal, personal equity real estate financial investment company KingSett Capital and retail-focused Choice Residence REIT (TSX: CHP.UN) revealed recently that they had partnered and participated in an agreement to obtain First Capital REIT (TSX: FCR.UN) in a $9.4 billion deal inclusive of debt.Unitholders of First Capital will receive$ 19.24 in cash and 0.3186 units of Option Properties per First Capital unit, which totals to $24.40 per First Capital unit based upon the closing unit price of Choice Properties on April 15, according to a joint press release.The business stated that the deal price represents a premium
of 17 %on First Capital’s 20-day volume-weighted typical rate through April 15, a premium of 8%on First Capital’s Net Possession Value(NAV)of$22.57 per system, a 12% premium on First Capital’s closing unit cost on April 15, and a 21 %premium on First Capital’s 90-day volume-weighted typical cost through April 15. As of December 31, 2025, First Capital’s portfolio consisted of 21.8 million square
feet of gross leasable area in 136 neighbourhoods across the country.The transaction is the latest that sees a publicly-traded REIT being engulfed and taken personal. Previously this year, Minto Group and Crestpoint Real Estate Investments revealed that they were getting Minto Apartment REIT for$2.3 billion, while CLV Group and Singaporean sovereign wealth fund GIC announced in 2015 that they were getting InterRent REIT for $4 billion.But both of those deals are dwarfed by this offer, which sees Canada’s biggest REIT by market cap (Option)partnering with personal equity(KingSett )to purchase Canada’s
fifth-largest REIT by market cap( First Capital ). Choice Properties REIT Option Properties REIT– of which George Weston Limited is a bulk unitholder– is obtaining around$5.0 billion of premium retail properties from First Capital REIT. The portfolio of
both REITs were retail-focused and are hence a natural fit to be merged.Choice explained the portfolio being obtained as “strategically aligned and highly complementary,”said it would”boost Option Characteristic’ability to outperform throughout market cycles and provide higher capital and net possession value development over the long-lasting
,”and said the acquisition would enhance its capital markets profile.”This is an exciting and transformative transaction that will solidify Option Properties as Canada’s leading REIT,” stated Choice Characteristic President & CEO Rael Diamond.” Option Residence is acquiring best-in-class, necessity-based neighbourhood shopping center that will significantly reinforce our portfolio. Our company believe this is a special and compelling opportunity that will increase our presence in city markets and further diversify our tenant base. “Of the$ 5.0 billion in properties, $4.8 billion consists of income-producing assets and $0.2 billion consists of homes under development, and Option stated the portfolio being gotten is anticipated to create a full-year net operating income(NOI) of around$235 million in 2027, with an annual
development rate estimated at 3.5%. As part of their side of the deal, Option Properties will be presuming First Capital’s$2.3 billion of impressive unsecured debentures.KingSett Capital KingSett Capital is then obtaining around$4.4 billion of First Capital properties, including needs-based retail assets, high-street retail assets, advancement possessions, and other monetary possessions. “This Transaction comes at a time when we are seeing restored optimism and positive momentum in Canadian real estate,”stated KingSett Capital
CEO Rob Kumer.”We have partnered with Option Properties to line up the ideal assets with our particular methods to provide optimal value to First Capital’s unitholders. We look forward to working with First Capital’s tenants, partners and other stakeholders in the years ahead.”KingSett Capital states it has protected all funding needed to finish the deal from its KingSett Property Growth LP No. 8 fund, with fully underwritten financial obligation funding from TD Securities Inc. and Desjardins Group.In their own announcement, TD stated it also functioned as Administrative Representative, Lead Left Underwriter and Joint Bookrunner & Co-Lead Arranger to KingSett on its completely underwritten credit facilities consisting of an acquisition term loan, revolving credit center, and mortgage backstop center. The TD Securities team included Jason Murison, Atif Zia, Adam Gagnon, and Sviat Romaniuk.First Capital REIT After selling some its scheduled projects over the past year, including 34-70 Montgomery Opportunity and 895 Lawrence Opportunity East, First Capital is now offering the entire REIT.”The Deal supplies First Capital unitholders with the chance to participate in the continued development of much of First Capital’s assets, in addition to the broader Choice Characteristic portfolio, through ownership of Choice Residence systems, “the REIT stated.”The combined portfolio provides improved national scale, enabling higher assistance for tenant growth and attracting best-in-class talent, while also gaining from Option Characteristic ‘tested capability to create worth at the residential or commercial property level.””This is an excellent transaction for our financiers, which recognizes their longstanding assistance and dedication to First Capital, “included First Capital President & CEO Adam Paul.” I am deeply grateful to our workers– a number of whom will continue to support the possessions gotten by KingSett and Option– in addition to my partners on the executive leadership group, who have actually remained singularly concentrated on what remained in the very best interests of First Capital unitholders, and whose diligence and work ethic were important in bringing us to this point.”
First Capital stated it has received consentaneous assistance from its Board of Trustees and obtained fairness viewpoints from RBC Capital Markets and National Bank Capital Markets. The deal still needs court approval and unitholder approval, with a unitholder conference to vote on the deal presently arranged for June.