Hyatt to sell Playa's real estate portfolio for US$2 billion
Hyatt had entered into a deal to buy Playa, which operates 24 high-end, all-inclusive resorts across Mexico, Jamaica and the Dominican Republic, for $2.6 billion including debt in February.
Following the sale of the portfolio, which includes 15 resort assets, Hyatt's net purchase price for the remaining of Playa's business is about $555 million, the company said. The real estate deal, subject to regulatory approval in Mexico, is expected to close before the end of 2025.
'The rapid sale of the real estate from the transaction is likely to be taken positively by investors,' said Richard Clarke, analyst at Bernstein.
Hyatt, in a filing with the U.S. securities regulator, disclosed that its purchase of Playa was completed on June 17 and it entered into the deal with Tortuga on June 29.
Hyatt and Tortuga, concurrent with the portfolio sale, will enter into 50-year agreements for certain properties under which Hyatt will continue managing the resorts.
Thirteen of the 15 properties follow terms consistent with Hyatt's existing management fee structure, while the remaining two properties fall under separate deals.
Hyatt operates on an asset-light model, where the hotel chain prefers not to own physical properties but to manage or franchise them.
'The planned real estate sale to Tortuga transforms the acquisition of Playa into a fully asset-light transaction and increases Hyatt's fee-based earnings,' Hyatt CEO Mark Hoplamazian said in a statement.
Hyatt said it expects its asset-light earnings mix could reach at least 90 per cent by 2027.
It expects to use the proceeds from the latest deal to repay the loan used to fund a portion of the Playa acquisition.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Shailesh Kuber)
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The Market Online
an hour ago
- The Market Online
Tariffs Bite, Gold Shines, and Cannabis Rebounds on The Market This Month
TRANSCRIPT BELOW The Canadian Securities Exchange presents your go-to source for trends in junior and small cap markets. Each month, join host Anna Serin and financial expert Bruce Campbell, in partnership with Stockhouse. This article is being disseminated on behalf of the Canadian Securities Exchange, a third-party issuer, and is intended for informational purposes only. ANNA Hi, my name is Anna Serin. I am director of listings development with the Canadian Securities Exchange. You are joining us for another Market This Month in August of 2025. I am, of course, joined today by my wonderful co-host, Bruce Campbell, with StoneCastle Investment Management. In this month's episode, we are diving into how August has been shaped by trade tensions, a shift in commodities, and renewed momentum in the cannabis sector. Canadian employment numbers are down, and while tariffs keep piling up, economists say the economy is holding together better than we expected, though cracks are beginning to show. In response, the government has rolled out programs to support tariff-affected workers and is accelerating both defense and infrastructure spending. It is worth noting that 85% of Canada's trade with the US remains tariff-free, though. However, in July, President Trump raised tariffs to 35% on Canadian goods that are not compliant with the Canada-US-Mexico agreement. Meanwhile, cannabis stocks are sparking renewed interest after Trump said on August 11th that his administration is considering reclassifying marijuana to a less dangerous Schedule III drug. Currently, marijuana is a Schedule I substance, classified alongside heroin as highly dangerous, addictive, and without medical use, where it has been since the Controlled Substance Act was signed in 1970. Although 45 states have legalized marijuana for medical or recreational use, federal law still treats it as a top-tier controlled substance. If reclassified, marijuana would be regulated more like Tylenol with codeine or anabolic steroids, prescription-only, but available through licensed healthcare providers and pharmacies. This would mark the most significant shift in federal marijuana policy in over 50 years in the United States. Reclassification would not legalize recreational use nationwide, but it would reshape the regulation and taxation. For example, businesses currently barred from claiming federal tax deductions under Section 280E would gain access to significant tax savings, boosting profitability for licensed operators. It could also unlock easier access for clinical research, long stifled under Schedule I restrictions. However, banking and payment barriers would likely persist. Most banks avoid businesses due to federal penalties. According to a Congressional Research Service report, scheduling a loan is unlikely to change that. We will break down what all of this means for the markets, check in on gold, copper, and oil, and explore why cannabis could be on the verge of another major revelation. Let's dive in. BRUCE Yeah. Thanks for having me, Anna. We were talking in the green room there about how I can't believe summer is almost over. It is kind of sad how fast it has flown by. ANNA It has flown by. And, you know, Bruce, I think we will talk about this today, but the markets have been quite busy for the summertime. Normally, there is not as much to talk about, but it has been a busy summer in the markets, hasn't it? BRUCE It sure has. Between financings and activity, it has not given us much time to put our feet up and relax. ANNA Absolutely. We are going to get into some of those numbers this episode. It is pretty exciting stuff. So let's let's dive into it. You know, we are going to talk about tariffs again, because that is just a part of our reality these days. But, you know, I think one thing that you wanted to touch on is kind of, what is the ripple effect that is happening on tariffs? What are the economics of what is happening with the tariff life in Canada? BRUCE We have seen some real mixed numbers, right? If you look at employment numbers, they were certainly weaker than what the consensus was expecting when they just recently came out here in the early part of August, which is clearly disappointing. That has had an impact. There are a lot of companies that still are in that holding pattern. They do not know what to do, because, you know, the tariffs are reduced, and then they are back up. And it really it really kind of jams up businesses, for sure. I know that in the US though, the interesting thing is that the small business sentiment has increased over the last month. And it has increased now above the kind of long-term average, which is good to see. Because, if that is out, a lot of hesitancy because of, and, and sort of negative sentiment, because of the fact that the tariffs were imposed. And most businesspeople did not know what that meant. And now, as we are starting to get a little bit more clarity in the US, that has started to help business sentiment. And then hopefully we can get some clarity in Canada. And then, once businesses have a framework for which they can work in, then it is just a function of, you know, that is the new operating manual that they have to run with. And most people are quite good at adapting from a business perspective. It is just the uncertainty of not knowing like, 'Are they on and how much? And, you know, where are they coming from?' And things like that. It will be nice to get that uncertainty dealt with. And hopefully that can happen over the next few months here. ANNA Look, I think on a global level, you know, we all sit and watch, and we are never really sure what Trump is going to do next. And that that creates a lot of uncertainty, right? BRUCE Yeah, 100%. And day-to-day… you kind of never know what is going to come and what direction that is going to come from. Not just tariffs, but there are so many other things. There has been lots of criticism of the Fed. There has been, obviously, political, geopolitical items that come out. There has been these different events as far as getting taxes on chip sales to China. It just never seems to end, and it is quite the flurry of activity. And you have to really be paying attention to know, you know, what today's news is versus what it was two days ago. ANNA That is right. There was one economist that works for one of the big banks that came out recently and said, 'Well, we are not dealing with the worst case scenario,' which I thought was very warming thoughts. We are not in Canada dealing with the worst case scenario of the fallout of these tariffs. And hopefully we continue to not see the worst case scenario. All right. Well, we will keep watching that. I think the markets generally are always, they are always going to do a little bit of a reawakening in September when everyone goes back to reality. We will see what happens in the fall. Okay, let's talk about commodities again. This is a monthly thing we talk about. Gold has been holding strong. It has been quite a fantastic year to watch gold. And I know copper and oil, they are not holding some of the levels that they were. So, let's dive into that. BRUCE Yeah, for sure. The overlying theme is that the US dollar continues to still be relatively weak, right? It hit a top for the year back in kind of the February timeframe and has since declined. And that certainly helps risk assets. It also helps gold because there has historically been an inverse correlation between the two. And, you know, the one thing that is a little bit kind of puzzling is the move in oil for sure. In that, you know, we saw oil kind of moving up, and then it has recently pulled back. And what most investors would like to see for sure is that, not oil spike up, but that it see a kind of steady incline. Because that is indicating that there is economic activity that is using up that oil that is out there. At the same time, we have seen OPEC increasing their supply. And I think that that is certainly a political pressure that they are getting, I would imagine, from the US to keep oil within range. Just because everyone is so focused still on inflation. And that is a fairly big impact on inflation as it directly impacts, but also trickles through. That is kind of been important. And we are watching it from a number of different perspectives, both from an investment perspective, but also from an economic perspective. And then copper is kind of the same, right? It had a fairly strong move up during the year. And then, you know, some of the news out from President Trump. And it had probably, I think, it might have been, if it was not the biggest drop in one day history or two days, it was certainly right up there. And it has settled back down. And it is going to be interesting to see, you know, kind of where it goes from a record high to being down over 20%. So it has been challenging for sure in the commodity markets. ANNA Again, you know, it will be interesting to see what happens in September. Sometimes we… It is an odd one this summer, because normally we see some of these depressed levels that happen naturally in the summertime. But it is also been such a busy summer, it is hard to tell how much this is going to stick. Do you think that we are going to see some more strength in the fall? BRUCE Well, certainly that would be the way things have been trending as of right now. And, you know, we saw the April lows in the markets and also several of the commodities. And then as the tariffs have walked back, things have continued to improve. And the latest, which we will touch on in a second is the interest rates, and kind of what the expectation is there. July and August can be a little bit wild cards. They tend to have lower volume. And so markets tend to sort of drift in the direction that they have been going. And they have gone up in both July and now to where we are in August. September and October tend to be weaker months. That is looking at it from a historical perspective. And that is going to be the really interesting tell, is like when the majority of investors get back to their desks after being away for summer. Do they look at things, and are they assessing whether or not there is going to be some type of economic slowdown or other type of event that is going to cause earnings to be depressed and the market to go down? And so that is going to be really interesting to see. Certainly we are not seeing that tell right now, but it is something you always have got to be keeping your eye on. ANNA Yeah, absolutely. Okay. Well, let's hop into… Why do not we actually talk about rates next, just to dive into that, because you mentioned it. What are the expectations for rates? Are they going up? Are they going down? When are we going to see that happen? BRUCE Yeah. The expectation in the US for sure is that rates are going to drop. And it is now a fairly high probability. There are multiple different surveys that are done to try to determine what investors' perceptions are on rate increases or decreases and what the probability of that is. And just recently, that has gone to almost a 90… I think it is 96% probability as of today that interest rates are going to be lowered in the September Fed meeting. And there are a couple of factors that sort of go into that. But one of them has been inflation. In that, the inflation numbers that were released earlier this week for July were actually up. But they were a little bit tamer than what the market expected, which allows the Fed some room to lower rates. At the same time, there has been a tremendous amount of political pressure on Jerome Powell to lower rates. President Trump has been all over him. And even this morning, I saw an interview with Scott Besson, who is the Treasury Secretary. And he was talking about how they should be 150 to 175 basis points or 1.5 to 1.75% lower than where they are right now. ANNA Wow. BRUCE He is getting a lot of pressure to put rates down. And there is a lot of name-calling that is going on. He is being referred to as Jerome 'Too Late' Powell and things like that. And so he is getting a lot of political pressure. At the same time, you know, he has to monitor and he has got his own mandate as far as inflation and employment goes. And so he has got to balance those two because he knows if he starts lowering rates too fast, it could mean that we get inflation back. And nobody wants to see that, especially after what we went through, you know, kind of going back three years ago. ANNA I was just actually going to bring that up. On that note is, there was a time in market recap where we talked about inflation, you know, weekly, you and I. It is not something we have talked about a lot. Obviously, both in the US and Canada, there has been some correction in inflation. Is that right? BRUCE When we were talking about it all the time, it went to 9% and then has slowly worked its way back down. And now it is sub 3%. It is like, you know, kind of in the 2.5, 2.7% annualized rate. ANNA That is like the sweet spot, right? BRUCE Yes, that is like the historical rate of inflation from one year to the next. It is not like it is, it has dropped down or anything like that. What we are basically paying is up around 2.7% from where it was. What we are going to see though probably in the next few months is that that starts to inch its way back up to around 3%. 3% is not too bad, of course. It is kind of that historical rate. It is kind of like that 2 to 3% range. But of course, we all have probably a little bit of scar tissue from the hyper, high inflation that we saw at 9%. And in some goods, they were doubled in price. And nobody wants to go back to that because it just erodes purchasing power for everyone and is difficult for everybody to keep up with. And so there is a balance between full employment, which requires lower rates and keeping rates at a certain level so that we do not get too much inflation. ANNA Okay. Well, it feels like it is a bit of a yo-yo. It felt like rates really were, they were at a certain level without much movement for quite some time. And it is definitely been an interesting few years with the rates going up and down. So, it will be interesting to see if they do get cut. And then, of course, if they come down in the US, typically what we see after that is that the Canadian rates go down as well. Is that right? BRUCE Not always. Our Bank of Canada acts completely independently of the Federal Reserve in the US. And of course, they have to look at what is happening here domestically. They are looking, and again, trying to balance inflation with employment and economic growth. And there is a strong chance that they could be lowering rates in the future as well because we are not seeing the strong economy and inflation is actually probably been a little bit lower here in Canada than it has been in the US. It probably gives them a little bit of room to lower rates. The one thing about most central bankers is they tend to be conservative in what they do. They do not… Unless it is almost a crisis where, you know… So when we had the high inflation, they raised rates really quickly. Or if we were to see some type of, you know, massive economic decline where they lower rates, in a rapid fashion to try to spur on things. Generally, they move in a very slow and methodical way. ANNA Yeah. Okay, okay. Well, we will see what happens there, in September. Okay, let's talk about cannabis. We do not talk about cannabis a lot anymore. There was a period of time where, again, like inflation, it was something that we talked about weekly. Trump came out on August 11th and said that he is looking at, who knows what that means, potentially changing the schedule of cannabis at a federal level in the United States. Tell us your thoughts there. BRUCE Yeah. This has been off-again, on-again sector for a number of years. And the challenge with the sector is that we know the market itself is massive and we know that the product is… The demand for the product is certainly there both from a legal perspective and from a black market perspective. The challenge has been for many of these companies is access to capital so that they can grow their businesses. But also the taxation that they pay. There is a tax in the US called 280E which refers to illegal substances. There was a court case where there was a drug trafficker who filed his taxes as if he was just a regular business but he was writing off all his expenses. And when they eventually caught up to what he was doing, they said, 'Whoa, whoa, whoa, you can't write off your business expenses, this is an illegal product'. And so they imposed this 280E, which means that the normal cost of business activities that most businesses have that are able to write off, they can't do that with 280E. So it just means that their costs are really depressed, though they have to pay for those costs. And their taxes are a lot higher than what another business that was outside of cannabis would be. And so this would, if they reclassified it, would actually allow those two things. One is that they would no longer have to pay the 280E, at least for sure on the medical side. There is still some uncertainty as to whether or not there would be the recreational side. And then the second thing is, it would most likely open up access to capital because now you are going to have banks that would look at it from a different perspective. It is not an illegal controlled substance, it is now a legal controlled substance. And so they would be able to lend money perhaps to some of these cannabis companies. And then they would be able to grow and increase their market share, so it would be profitable and at the same time, they would be able to raise money. ANNA And to just touch on that too, you know, the CSC has obviously seen over the years, a wonderful cannabis space evolve on our marketplace. One of the reasons that it has evolved so much and so big is because also US cannabis companies that touch the plant are not allowed to list on a US stock exchange, which is why we have seen so many of them come to the CSC. That would change that as well potentially, would not it? BRUCE It could, yeah, for sure. There is some talk that if it was reclassified then at that point in time, they could get banking. And with the banking, that would allow them to list on a US stock exchange. It is a bit of a gray area. It is not 100% defined that if this happens, that happens. But certainly that is the interpretation that a lot of market watchers have when they look at this and they sort of look at the politics of it all. ANNA If that happens, I, you know, I think people maybe do not completely understand the exact scope and size of the US capital pools. But I believe the numbers are somewhere around, on a global level, the US equity capital is somewhere just over 60% and Canada is somewhere between three and four. It really would open up massive pools of capital for the cannabis space, do not you think? BRUCE It would for sure, yeah. You would get bigger institutional ownership then in the sector because what has happened is a lot of custodians do not allow investors to hold cannabis stocks in their accounts at those custodians because it is deemed to be federally illegal. And also a schedule one substance. And so as a result, they do not want to go near it. They can't bank it, and it is just really challenging. That could also be a change that happens. ANNA Yep. The other thing is, when we started this conversation years ago, you and I, Bruce, I was actually surprised to see, I believe it is now 45 states, it is either recreational or medicinal, it is legal. Which is pretty much the United States of America. So at some point, it seems like it may just have to go there. It does also seem like from a political perspective, this is something that gets thrown into the ring and pulled out of the ring on a regular basis at the whim of political parties, to be used for whatever reason. So my hopes are up, but who knows what that means? BRUCE Yeah, it has certainly been challenging for investors. The amount of political swing that the industry can have is immense. Just as the view that it is going to be regulated or change the regulations in some way, the optimism builds, and then what has happened is the rug gets pulled and then the sector crashes. Many people now have just completely said like, 'It is a non-investible sector,' and are completely staying away. That is where eventually the opportunity will lie is that, you know, when it does actually change and it will at some point in time, we just do not know if that is a year from now or 10 years from now or more. But when it does eventually change, there will, it will really revolutionize the industry and allow for big changes. ANNA Yeah, I was going to say, the smart money has been the ones jumping in there every time this this gets thrown into the ring, because when it does go through, it will be a massive shift within that sector. People are maybe getting a little tired of the, you know, the step in, step out situation but there is a reason for it and it will definitely change the sector. It is so wonderful that CSC gets to be such a big participant of it. We have such wonderful companies that have grown, raised capital for years now, and done some really fantastic work as far as the sector goes. So, excited for them when that does happen. Okay, so let's talk about the small cap space. It has been a great summer for the small caps. Tell us, tell us more. BRUCE Yeah, one of the things that we have talked about in the past is that, you know, when we came through the pandemic and then this inflation happened to the degree that it did, a couple of things that happened were that we saw the interest rates increase at one of the fastest rates in history, certainly in most people who have invested or being investors' history. And then the second thing is that we saw the money supply go negative as far as a rate of change goes. It was not meaning that the money supply was negative, but just the rate of change was negative. There was less money being created and in the system, from a rate of change perspective. And that is something that no one who is investing on the planet right now has ever experienced. Certainly if you were well into your 100s, you would have experienced it in life but not… You would not have been an investor back then. And so what that means is that… Most small caps were in a really challenging environment for their business, and then at the same time, for their access to capital. And that is now really started to change. We have seen rates starting to trickle their way down. We have seen a few rate decreases, and then we have seen the rate of change of money supply going positive. And so what that means is that now investors are starting to look for earnings, and the earnings that we saw in the smaller sectors, small cap sectors and sort of medium and small cap companies, was we really saw a recession in that, in that area over the last few years, and that is now started to change. And we have seen earnings starting to ramp up and starting to increase as they have, you know, increased in their businesses, increased access to capital, and investors take note of that. And of course, they are following and watching earnings, and they go to where those earnings are accelerating, and that is been the small cap area as well. In Canada, our small caps tend to be led by commodities with the fact that gold has done so well. You are starting to see some trickle down now into other commodities. Lithium has started to certainly come off the canvas and is now starting to move back up. And so those are a lot of constituents in the small cap indices in Canada. And so you are starting to see that, that start to really move. The TSX Venture Exchange is considerably off its highs. So is the CSE Composite. It is considerably off its highs. But they have both made fairly significant moves off the bottom for sure. ANNA Yeah, which is fantastic. And quite often you need that initial jump off the bottom to really kind of get the market moving. Just to touch on what we saw this summer at the CSE, in June, there was 101 financings, that totaled 132 million in capital that was raised for CSE listed issuers. In July, we saw 91 financings that totaled 595 million in financings. It was a busy summer for CSE issuers. You put those two numbers together, that is about 200 issuers, out of the 745 that we have listed. That is a busy summer for CSE issuers. That is pretty amazing. BRUCE Yeah, and a fair bit of money that was raised as well. ANNA Absolutely. I think, I was actually doing a presentation this week, and I believe that over the past 12 months, I think the number is somewhere around 940 financings have been closed in 12 months. We have 745 companies. Our companies are very active right now, which is really great to see. I know it has been a very difficult market. Probably a lot of these financings are smaller financings, you know, for the company to deal with their corporate governance needs and to kind of keep afloat. Some are going to be for some smaller work programs, but it is still activity. You know, it is not Zombie Land that we are dealing with. I have good faith that there will be some great activity in the fall. What do you think? BRUCE Certainly that is a trend, and when you see the summer this strong, it tends to lead into, activity in the fall that is going to be stronger because a lot of financings are often held in the summer just because they are concerned about the lack of access to investors because they are not at their desks. And so, I would not be surprised if you saw that trend continue through the fall. ANNA We also do not typically see a lot of these financings occur in June and July in the resource sector because they are actively up at the property doing work programs. So, you do not see it as often. You normally see it in the spring where they get their money for the work program. They are busy in the summer, and then in the fall, we get the results from those programs, and then they are out there raising capital again. So, I think it is all good news, and hopefully we continue to see that trend as we go into the fall season. Just to touch on some CSE issuer news, we had a few new issuers that joined us over the past month, so welcome Trimera Metals Corp, Rush Gold Corp, and Goldcanna Resources. As you can tell from those names, these are all resource sector companies. I mean, Bruce, we have talked about it so much. The resource sector continues to be the front-runner in what is happening in the markets. One thing I did want to ask you though is that we have had a flurry of activity in the crypto space. What are your thoughts there? What are you seeing? BRUCE We continue to see more adoption of crypto into a number of different vehicles. There are a lot of ETFs that have been created that are now holders of crypto, but now, you have also seen a lot of companies where they are holding crypto on their balance sheet or that is what they have turned their business plan into, which is also kind of interesting. It is interesting and I also find it a little bit on the cautious side. I am just watching to see how this trend continues. Certainly, there was a number of front-runners that were doing this, and now, a lot of people are jumping in, and you kind of have to wonder like, is it a longer term strategy or not? Certainly, if crypto continues to appreciate, then having crypto assets on your balance sheet is going to help you. But if that is your sole business, you do have to really be careful that everyone is doing it the right way and that you are paying the proper valuation for them holding it on their balance sheet. ANNA It seems to make sense to me that we are seeing kind of in a, in what is percolating as a decent resource sector is to see kind of crypto percolating as well. Because I think what we have seen in the crypto space is traditionally people are hedging with having both of those on their balance sheets. So, welcome to the new companies that joined in the resource sector. And I think we will continue to see both continue to develop. One financing thing I wanted to mention. We actually talked about this company in the spring. But I thought it was quite a wonderful financing. DragonFly Inc., we talked about them in May, closed a $25 million US registered direct offering on their NASDAQ listing. They raised 3.6 in May. They are a pioneer in drone solutions, AI-driven software, and robotics delivering innovative technology for public safety, agriculture, industrial inspections, security mapping, and surveying for over 25 years. You know, I thought this was… First of all, congratulations to them. It is great financing, especially after they just did, you know, a decent size one in the spring. But it is also nice to see our issuers that are successfully raising these kind of numbers in the US. Because I think with all of this tariff talk and with the cross-border stuff where we had such an open relationship between our two markets specifically, you know, there is obviously been some concern of Canadian issuers being able to raise capital down in the US. What are your thoughts on that? BRUCE It never hurts when you see that type of activity, especially when Canadian companies can access US capital and vice versa. It is, you know, the flow of capital is what you want to see. The bigger and the broader markets are, then generally the best opportunities are found by investors. ANNA Yeah, absolutely. Okay, Bruce, on that note, as we, as we go into our last weeks of summer, what are you going to leave us with? What should we think about before you and I can connect next month? BRUCE Yeah, the big thing is going to be, you know, watching what happens from an economic and tariff standpoint and then interest rates, what, what we see there and how that impacts the markets and the perception in the economy. ANNA Absolutely. Well, Bruce, it is always so great to see you. I am hoping next month that I can get you to Vancouver here in person and we can do this face-to-face. In the meantime, enjoy the rest of those sunny days out in Kelowna. BRUCE Yeah. Thanks so much. ANNA Thank you. We will see you next month.
National Post
an hour ago
- National Post
Dream Residential REIT Announces Agreement to Be Acquired by Morgan Properties
Article content This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release. All dollar amounts are in U.S. dollars. Article content Transaction Highlights Article content Article content Morgan Properties to acquire Dream Residential REIT in an all-cash transaction Unitholders to receive cash consideration of US$10.80 per Unit, representing a premium of 60% to the REIT's closing Trust Unit price on the TSX as of February 19, 2025, the day prior to Dream Residential REIT's announcement of a strategic review process Dream Residential REIT's board of trustees have unanimously approved the transaction and recommend that Unitholders vote in favour of the Transaction This Transaction represents the conclusion of the REIT's previously announced strategic review process Article content TORONTO — DREAM RESIDENTIAL REAL ESTATE INVESTMENT TRUST (TSX: DRR.U, TSX: ('Dream Residential REIT' or the 'REIT') announced today that its board of trustees (the 'Board') has completed its strategic review process (the 'Strategic Review') and has entered into an arrangement agreement (the 'Arrangement Agreement') with an affiliate of Morgan Properties, LP ('Morgan Properties') which is headquartered near Philadelphia PA, pursuant to which Morgan Properties will acquire the REIT in an all-cash transaction valued at approximately US$354 million (the 'Transaction'). Article content Under the terms of the Arrangement Agreement, Dream Residential REIT unitholders and DRR Holdings LLC Class B unitholders (collectively, the 'Unitholders') will each receive cash consideration of US$10.80 per unit of the REIT ('Trust Unit') and per Class B unit of DRR Holdings LLC ('Class B Unit' and together with the Trust Units, the 'Units'). The Transaction price represents a premium of 60% to the closing Trust Unit price on the TSX as of February 19, 2025, the last trading day prior to the announcement of the Strategic Review. Furthermore, the Transaction price represents an 18% premium to the closing Trust Unit price on the TSX as of August 20, 2025, the last trading day prior to the announcement of the Transaction. Article content 'Following a comprehensive review, the Board has determined that the Transaction is in the best interest of the REIT,' said Vicky Schiff, Chair of Dream Residential REIT's board of trustees. 'We are pleased with today's announcement which will bring a successful conclusion to the REIT's Strategic Review. The Board is unanimously recommending that Unitholders vote in favour of the Transaction.' Article content 'We are pleased to conclude our Strategic Review with a Transaction that delivers immediate value to our Unitholders and supports the underlying value of the REIT's real estate,' said Brian Pauls, Chief Executive Officer of Dream Residential REIT. 'The Transaction provides our Unitholders with liquidity and value certainty.' Article content 'The Dream Residential REIT portfolio exemplifies the type of investment opportunity Morgan Properties excels in – leveraging our strong balance sheet, proven ability to deliver execution certainty, and deep expertise in acquiring large portfolio across numerous markets,' said Jonathan and Jason Morgan, Co-Presidents of Morgan Properties. 'Our team looks forward to welcoming these new communities, enhancing the physical assets, and providing best-in-class customer service for the residents.' Article content Management and Advisory Services Separation Article content DRR Asset Management LP, a subsidiary of Dream Unlimited Corp. ('Dream'), and Pauls Realty Services, LLC, a subsidiary of Pauls Corp. ('Pauls'), have served, under an asset management agreement (the 'Asset Management Agreement'), as the external asset managers of the REIT since inception. Dream and Pauls and their respective affiliates also provide certain administrative services to the REIT pursuant to respective services agreements (collectively, with the Asset Management Agreement, the 'Services Agreements'). The Transaction requires the termination of the Services Agreements and certain other agreements which govern aspects of the relationship between Dream, Pauls and the REIT (the 'Separation'). Dream and Pauls have agreed to the Separation in exchange for the payment of certain outstanding fees pursuant to the Services Agreements as well as a payment to account for wind-down costs that will be incurred by Dream and Pauls in connection with the Separation, which in total aggregate US$7.0 million (the 'Separation Payment'). The Separation Payment has been approved by the independent trustees of the REIT. Article content Voting and Support Agreements Article content Each of the trustees and executive officers of the REIT, Dream, Pauls and certain affiliates of Dream and Pauls, has agreed to vote their Units, as applicable, in favour of the Transaction pursuant to voting and support agreements, subject to customary exceptions (the 'Voting and Support Agreements'). The Units represented by the Voting and Support Agreements represent approximately 22.5% of the votes of all of the Units. Article content Transaction Details Article content The consummation of the Transaction will be subject to certain approvals at a special meeting of Unitholders, including by (i) at least 66 2/3% of the votes cast by Unitholders, voting together as a single class, and (ii) a simple majority of votes cast by Unitholders (excluding Dream, Pauls and their respective affiliates), voting together as a single class. In addition to approval by Unitholders, the Transaction is also subject to the receipt of court approval and other customary closing conditions for transactions of this nature. Article content The Transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (Ontario), pursuant to which, among other things, Morgan Properties will acquire all of the assets and assume all of the liabilities of the REIT, the REIT will pay a special distribution and redeem all of its Trust Units for US$10.80 per Trust Unit in cash, and Morgan Properties will acquire all of the Class B Units for US$10.80 per Class B Unit in cash. Article content Dream Residential REIT will suspend its normal monthly distributions following the payment on November 15, 2025 of its October distribution. If the Transaction has not closed by November 18, 2025, and the conditions to closing of the Transaction have otherwise been satisfied or waived, the REIT may pay one additional monthly distribution. Article content The Arrangement Agreement provides for, among other things, customary representations, warranties and covenants, including customary non-solicitation covenants from Dream Residential REIT. The Arrangement Agreement also provides for the payment of a termination fee to Morgan Properties of US$8.6 million and a reverse termination fee of US$25.0 million to the REIT, if the Transaction is terminated in certain specified circumstances. Article content The Transaction is expected to close in late 2025 following satisfaction of all conditions to closing, provided that the Transaction will not close earlier than the date on which Morgan Properties obtains certain agency financing or December 18, 2025, whichever date is first. The Transaction is not subject to a financing condition. Article content The foregoing summary is qualified in its entirety by the provisions of the Arrangement Agreement, a copy of which will be filed on SEDAR+ at Further information regarding the Transaction will be included in the REIT's management information circular expected to be mailed to Unitholders in September 2025. Copies of the Arrangement Agreement, the Voting and Support Agreements and the management information circular will be available on and under the REIT's profile on Article content Board Recommendation and Fairness Opinion Article content The Dream Residential REIT Board, after receiving the unanimous recommendation of a committee of independent trustees of the REIT (the 'Special Committee') and in consultation with its financial and legal advisors, has determined that the Transaction is in the best interests of Dream Residential REIT and fair to Unitholders (other than Dream, Pauls and their respective affiliates), and is recommending that Unitholders vote in favour of the Transaction. Article content TD Securities orally delivered a fairness opinion to the Board, stating that, as of August 20, 2025, and subject to the assumptions, limitations and qualifications that will be set forth in TD Securities' written fairness opinion, the consideration to be received by the Unitholders (other than Dream, Pauls and their respective affiliates) pursuant to the Transaction is fair, from a financial point of view, to the Unitholders (other than Dream, Pauls and their respective affiliates). Article content Advisors Article content TD Securities is acting as exclusive financial advisor to Dream Residential REIT in connection with the Transaction. Osler, Hoskin & Harcourt LLP and Clifford Chance US LLP are acting as legal counsel to the REIT in connection with the Transaction. Goodmans LLP is acting as legal counsel to the Special Committee in connection with the Transaction. Article content RBC Capital Markets is acting as exclusive financial advisor to Morgan Properties. Stikeman Elliott LLP and Blank Rome LLP are acting as legal counsel to Morgan Properties. Article content About Dream Residential REIT Article content Dream Residential REIT is an unincorporated, open-ended real estate investment trust established and governed by the laws of the Province of Ontario. The REIT owns a portfolio of garden-style multi-residential properties, primarily located in three markets across the Sunbelt and Midwest regions of the United States. For more information, please visit Article content About Morgan Properties Article content Established in 1985 by Mitchell Morgan, Morgan Properties is a national real estate investment and management company headquartered in Conshohocken, Pennsylvania, with a corporate office in Rochester, New York. Jonathan and Jason Morgan represent the next-generation leaders growing the platform and overseeing the business operations. Morgan Properties and its affiliates pursue a diversified investment strategy focusing on multifamily common equity, commercial mortgage-backed B-Piece securities, preferred equity, and whole loans. Morgan Properties and its affiliates own and manage a multifamily portfolio comprising over 100,000 units across more than 360 communities in 22 states. The company is the nation's largest private multifamily owner and one of the top apartment owners in the country. Additionally, the company has made investments in commercial mortgage-backed B-Piece securities backed by over $40 billion in multifamily loans. With over 2,500 employees, Morgan Properties prides itself on its quick decision-making capabilities, strong capital relationships, and proven operational expertise. For more information, please visit Article content Forward-looking information Article content This press release contains forward-looking information within the meaning of applicable securities legislation. Such forward-looking information includes, but is not limited to, information and statements concerning the Transaction and the terms thereof; the anticipated closing of the Transaction including the timing thereof; the expected monthly distributions by the REIT and the suspension thereof; and the payment of the Separation Payment. There can be no assurance that the proposed Transaction will be completed or that it will be completed on the terms and conditions contemplated in this news release. Article content The proposed Transaction could be modified, restructured or terminated in accordance with its terms. Forward-looking information generally can be identified by the use of forward-looking terminology such as 'will', 'expect', 'believe', 'plan' or 'continue', or similar expressions suggesting future outcomes or events. Forward-looking statements are based on information available at the time they are made, underlying estimates and assumptions made by management and management Article content ' Article content s good faith belief with respect to future events, performance and results. Such assumptions include, without limitation, expectations and assumptions concerning the market price of the Trust Units, the anticipated benefits of the Transaction to Unitholders, the receipt in a timely manner of court, unitholder and other approvals for the Transaction, and the availability of cash flow from operations to meet monthly distributions. Although Dream Residential REIT believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Dream Residential REIT cannot give assurance that they will prove to be correct. By its nature, such forward-looking information is subject to a number of risks and uncertainties, many of which are beyond Dream Residential REIT's control and could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, risks inherent in the real estate industry; financing risks; inflation, interest and currency rate fluctuations; global and local economic and business conditions; risks associated with unexpected or ongoing geopolitical events; imposition of duties, tariffs and other trade restrictions; changes in law; tax risks; competition; environmental and climate change risks; insurance risks; cybersecurity; and public health crises and epidemics. All forward-looking information in this press release speaks as of the date of this press release. Dream Residential REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions, risks and uncertainties is contained in Dream Residential REIT's filings with securities regulators, including its latest Annual Information Form and Management's Discussion and Analysis. These filings are also available on the REIT's website at Article content Article content Article content Article content Article content Contacts Article content For further information, please contact: Article content Dream Residential REIT Article content Brian Pauls Article content Article content Article content Article content (416) 365-2365 Article content Article content bpauls@ Article content Derrick Lau Article content Article content Chief Financial Officer Article content Article content (416) 365-2364 Article content Article content dlau@ Article content Scott Schoeman Article content Article content Article content Article content
National Post
18 hours ago
- National Post
Dream Residential REIT Announces August 2025 Monthly Distribution
Article content TORONTO — DREAM RESIDENTIAL REAL ESTATE INVESTMENT TRUST (TSX: DRR.U and TSX: ('Dream Residential REIT' or the 'REIT') today announced its August 2025 monthly distribution in the amount of US$0.035 per unit (US$0.42 annualized). The August distribution will be payable on September 15, 2025 to unitholders of record as at August 29, 2025. Article content About Dream Residential REIT Article content Article content Dream Residential REIT is an unincorporated, open-ended real estate investment trust established and governed by the laws of the Province of Ontario. The REIT owns a portfolio of garden-style multi-residential properties, primarily located in three markets across the Sunbelt and Midwest regions of the United States. For more information, please visit Article content Article content Article content Article content Article content Contacts Article content For further information, please contact: Article content Dream Residential REIT Brian Pauls Chief Executive Officer (416) 365-2365 bpauls@ Article content Derrick Lau Chief Financial Officer (416) 365-2364 dlau@ Article content
