H&R REIT to Sell 63-Property Retail Portfolio for $633M
TORONTO — H&R Real Estate Investment Trust has entered into an agreement to sell nearly all of its U.S. retail holdings for US$633 million. The sale includes 63 assets and is expected to close in June.
The Toronto-based REIT’s portfolio houses retailers including Walgreens, CVS/pharmacy, Publix, Kroger, Kohl’s, Rite Aid, Sam’s Club, Lowe’s Home Improvement and The Home Depot.
H&R REIT (TSX: HR.UN) still owns 16 gas and convenience stores in the United States. The buyer was not disclosed.
The company plans to use a large portion of the sale proceeds to grow Lantower Residential, the REIT’s multifamily investment arm that comprises nearly 15 percent of the company’s real estate portfolio.
The REIT will also use the proceeds to repay US$205.9 million of mortgage debt on the portfolio and buy back stock.
“This transaction follows through on our strategy of narrowing and streamlining our focus, while enhancing the quality and growth profile of our portfolio,” says Thomas Hofstedter, president and CEO of H&R REIT.
Following the sale, H&R REIT expects for office investments and developments to make up approximately 47 percent of its real estate portfolio, with the company’s Primaris retail division making up more than 20 percent.
H&R REIT has ownership interests in a North American portfolio of office, retail, industrial and residential properties totaling more than 45 million square feet. The REIT also has a 33.6 percent interest in ECHO Realty LP, which owns 228 properties spanning 9.4 million square feet.
As of March 31, H&R REIT’s total assets were valued at CA$14.5 billion.
The company’s stock price closed on Monday, May 14 at CA$20.45 (US$15.84) per share, down from CA$22.55 (US$17.46) a year ago.
— John Nelson