CONSHOHOCKEN, PA. AND TORONTO — An affiliate of Morgan Properties LP, a multifamily investment firm based in metro Philadelphia, has entered into an agreement to acquire Toronto-based Dream Residential Real Estate Investment Trust (Dream Residential REIT). The all-cash transaction is valued at $354 million and is expected to close by the end of the year.
Dream Residential REIT owns 15 garden-style multifamily communities totaling more than 3,300 units. The portfolio is concentrated in three markets: Cincinnati (six), Oklahoma City (five) and Dallas-Fort Worth (four). Morgan Properties will acquire all of Dream Residential REIT’s assets and assume the company’s liabilities as part of the acquisition agreement.
Jonathan Morgan and Jason Morgan, co-presidents of Morgan Properties, said in a prepared statement that the company “looks forward to welcoming these new communities, enhancing the physical assets and providing best-in-class customer service for the residents.”
The agreement requires Morgan Properties to pay all unit holders of Dream Residential REIT, which trades on the Toronto Stock Exchange, as well as unit holders of the REIT’s subsidiary DRR Holdings LLC, $10.80 per unit.
The price represents a 60 percent premium to the REIT’s closing price on Feb. 19, 2025, which is the day the company announced it was conducting a strategic review process. The price also reflects an 18 percent premium to Dream Residential REIT’s unit price as of Aug. 20, the day before the acquisition agreement was announced.
Dream Residential REIT’s board of trustees has unanimously approved the transaction and recommends that unitholders vote in favor of the deal.
Terms of the transaction include a separation payment from Dream Residential REIT to DRR Asset Management LP and Pauls Realty Services LLC that will cover the costs for the companies to wind down their asset management services of the REIT. The company will also pay any outstanding fees to DRR and Pauls. The separation payment and fee settlement totals $7 million, a price that was unanimously approved by the independent trustees of Dream Residential REIT.
The unit holders of Dream Residential REIT will hold a special meeting at an unspecified date to vote to approve the transaction. The deal is also subject to other customary closing conditions and court approval.
The deal also includes provisions of a termination fee to Morgan Properties of $8.6 million and a reverse termination fee of $25 million to Dream Residential REIT if the transaction is terminated in certain specified circumstances.
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, and Goodmans LLP is serving as legal counsel to the REIT’s special committee.
RBC Capital Markets is acting as exclusive financial advisor to Morgan Properties. Stikeman Elliott LLP and Blank Rome LLP are serving as legal counsel to the company.
— John Nelson