BSR Real Estate Investment Trust completed its initial public offering of 13,500,000 trust units at a price of US$10.00 per unit for gross proceeds of US$135 million.
In connection with the offering, the REIT indirectly acquired a 48-property portfolio of multifamily garden-style residential properties (one of which is to be acquired following closing of the offering) located across five bordering states in the Sunbelt region of the United States, held indirectly by BSR Trust, LLC (BSR). The net proceeds of the offering were used by the REIT to repay approximately US$122.3 million of indebtedness owing by BSR and to fund transaction costs associated with the offering.
The offering was underwritten by a syndicate of underwriters led by BMO Capital Markets, and included CIBC Capital Markets, RBC Capital Markets, Scotiabank, TD Securities Inc., National Bank Financial Inc., Raymond James Ltd., Canaccord Genuity Corp., Desjardins Securities Inc., Industrial Alliance Securities Inc. and Echelon Wealth Partners Inc. The REIT granted the underwriters an over-allotment option, exercisable in whole or in part at any time up to 30 days after the closing of the offering, to purchase up to an additional 2,025,000 units at a price of US$10.00 per unit which, if exercised in full, would increase the total gross proceeds to US$155,250,000.
The net proceeds of the over-allotment option, to the extent exercised, will be used by the REIT for capital expenditures on the initial properties, to repay indebtedness or for future acquisitions.
On closing of the Offering, existing members of BSR retained an aggregate approximate 66-per-cent ownership interest in the REIT and will retain an aggregate approximate 63-per-cent ownership interest in the REIT if the over-allotment option is exercised. Certain of these holders are members or affiliates of the Bailey family or are members or affiliates of the Hughes family (collectively, the Bailey/Hughes Holders), who together founded BSR. The Bailey/Hughes Holders together own 17,210,733 class B units of BSR, which are economically equivalent to and redeemable for units of the REIT on a one-for-one basis, and 3,037,159 units of the REIT, together representing an aggregate approximate 51-per-cent ownership interest in the REIT, and an aggregate approximate 49-per-cent ownership interest in the REIT if the over-allotment option is exercised.
BSR Real Estate Investment Trust is an internally managed, unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario.
Goodmans LLP represented the REIT in Canada with a team led by Stephen Pincus and Brad Ross (corporate/securities) that included Emily Weizel and Tara Hunt (corporate/securities), Jon Northup and Ken Saddington (tax) and Francy Kussner (insurance); and by Mitchell, Williams, Selig, Gates & Woodyard, PLLC in the United States with a team that included Harry Hamlin and Melissa Bandy (real estate), Nicole Lovell (corporate/securities), Jennifer Pierce (tax) and Nate Read (employment).
Blake, Cassels & Graydon LLP represented the Underwriters in Canada with a team that included William Fung, Eric Moncik, Neelu Toor and Raees Nakhuda (corporate/securities), and Andrew Spiro and Sabrina Wong (tax). The Underwriters were represented by Greenberg Traurig LLP in the United States with a team that included Andy White and Barbara Jones (corporate/securities), Neil Oberfeld, Nicholas Dyer and Christina George (real estate), and Bob Simon and Jennifer Weiss (tax).