On June 27, 2001, a new Canadian REIT, O&Y Real Estate Investment Trust, was launched by O&Y Properties Inc. (as promoter) and a syndicate of underwriters led by CIBC World Markets Inc. The REIT initially acquired a portfolio of office properties for a purchase price of approximately $506 million, funded through cash, the issuance of REIT units, the issuance of REIT convertible debentures and the assumption of existing indebtedness. The initial public offering, including the over-allotment option exercised on July 24, 2001, raised gross proceeds of $153.5 million. The structure of the REIT is unique in Canada as it is a structured to create differential voting rights and rights to distributions within a single class of units so that, in effect, the founding unitholders will control the majority of the votes even though they may not at some time own a majority of the units. After negotiation with the Toronto Stock Exchange and Canadian securities regulators, the units were designated as limited voting units.
Fasken Martineau DuMoulin LLP acted for O&Y Properties Inc. and the new REIT with a team that included Jonathan Levin, Joel Binder, Jodi Katz, Nigel Johnston, Stephen Risk, Belinda James, Dan Law and Allison Allaster. Randy Northey, Senior Vice-President, General Counsel and Secretary of O&Y Properties, also represented the O&Y corporate group in the transaction. Torys acted as counsel for the underwriters, with a team that included Patricia Koval, Bill Estey, Jane Helmstadter, Lucia ten Kortenaar, Philip Mohtadi, Robert Mansell, Jay Holsten, Christopher Fowles, Gregg Horne, Tim Rorabeck, Katherine Alexander-Carew and Conrad Sheppard.