REIT Practice
Group
Cassels Brock has acted on some of the largest
REIT transactions in Canada. From IPOs to take-overs to
privatizations, we have a dedicated team of legal professionals
with the experience to handle every aspect of your next
transaction.
Contents
Real Estate Investment Trusts
1
Real Estate & Development
4
Tax7
Additional Representative Transactions 8
Our REIT Team
9
Real Estate
Investment Trusts
Unlocking
Liquidity in
Real Estate
Portfolios
Canadian investors continue to be attracted to holding securities in these
income-producing real estate vehicles. Experts attribute the most recent
surge in popularity to stable yields, substantial tax advantages and the
relatively low risk profile of real estate investment trusts (REITs), especially
when compared with other investments. This may also be why REITs are seen
as an attractive investment alternative in the Canadian capital markets.
Canadian REITs span a wide and growing range of real estate sectors and
markets. These include multi-residential, commercial, industrial, office,
medical complex, seniors housing, hospitality and self-storage. Several
cross-border and internationally-focused REITs have formed to acquire
and manage real estate assets in the US and Europe. A number of leading
Canadian companies have spun their real estate portfolios into publicly
traded REITs. Cassels Brock acted on behalf of Canadian Tire Corporation,
Limited (CTC) as the promoter of the initial public offering of trust units in
CT Real Estate Investment Trust (CT REIT) and in connection with the sale
by CTC to CT REIT of a significant portion of CTC’s real estate portfolio.
In addition, many US and foreign-based owners of property portfolios
are considering Canadian public markets as a viable liquidity option.
These transactions require complex tax and corporate structuring and
should be executed by Canadian and foreign advisors who are experienced
in this specialized area. Cassels Brock is currently engaged in a number
of mandates directed at forming foreign-based REITs and bringing them
to market in Canada. Cassels Brock is proud to have worked on the first
Canadian REIT focused solely on non-Canadian assets, through our
involvement in Dream Global REIT’s (formerly Dundee International REIT)
successful IPO.
June 2015
Real Estate Investment Trust Practice
Cassels Brock & Blackwell LLP
1
…Real Estate Investment Trusts
Leading
Advisors
in an Active
REIT Merger
Market
Our REIT group regularly assists clients with complex merger and
acquisition transactions on both the acquirer and target sides, under both
hostile and negotiated scenarios. We advise REITs and special committees
of trustees to negotiate, structure and complete acquisitions, dispositions,
business combinations and other REIT-related transactions.
Cassels Brock played a leading role in two of the largest recent REIT
merger and acquisition transactions in Canada. These were the
$2.3 billion privatization of TransGlobe REIT by a consortium led by
Starlight Investments Ltd. in June 2012 and the $4.6 billion take-over bid
for Primaris REIT. In the former, we acted on behalf of the buyer, Starlight,
and in the latter, we acted for the target, Primaris.
This experience has given us valuable insight into this complex market and
the ability to provide the in-depth, tactical advice clients need, no matter
what side of the transaction we’re on.
Innovation:
The
Emergence
of the
CPC REIT
Alternative
2
Our team is a recognized leader in forming REITs using the TSX Venture
Exchange’s (TSXV) unique Capital Pool Company (CPC) Program. We blazed
this trail in Canada with our work on True North Apartment REIT and the
True North Commercial REIT. These REITs were formed in 2012 and, after
a modest start, have raised over $250 million to date in public equity
financing. Both continue to grow and are now listed on the Toronto Stock
Exchange.
The use of the TSXV’s CPC Program is uniquely suited for certain real estate
portfolios. This platform allows the creation of a publicly-listed REIT without
the requirement of completing an IPO. Under the right circumstances and
market conditions, this represents a compelling alternative to a traditional
IPO. It is critical that portfolio owners engage advisors who understand
the challenges and advantages associated with this program to assist
in determining whether it is the optimal course of action. Cassels Brock
continues to be at the forefront of this growing subsector of the Canadian
REIT world, offering innovative advice as we work on CPC REITs in a number
of diverse sectors.
Cassels Brock & Blackwell LLP
Real Estate Investment Trust Practice
June 2015
…Real Estate Investment Trusts
Partnering
for Success
Cassels Brock sets itself apart by providing a team of lawyers focused on
REITs who are capable of delivering comprehensive structuring advice to
meet the needs of the organization. Our group draws seamlessly on other
highly regarded lawyers in real estate, securities and tax to provide clients
with strategic advice and creative business solutions essential for the
growth of any REIT.
We advise our REIT clients on the full range of issues that affect REIT
formation, operation, financing and growth, including:
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Public offerings of securities, follow-on financings and secondary sales
Commercial construction and development
Real estate acquisitions and financing
Trustee matters and special committees
Corporate governance matters
Securities compliance
Environmental compliance
Debt financing
Mergers and acquisitions
Privatizations
Income tax, land transfer tax and HST
A growing number of Canadian corporations are looking to spin real estate
assets into REITs and navigating this complex process requires strategic
counsel. With numerous successful REIT-related transactions already in our
portfolio, Cassels Brock has the experience needed to be the right partner
for your next deal.
June 2015
Real Estate Investment Trust Practice
Cassels Brock & Blackwell LLP
3
Real Estate &
Development
The Cassels Brock Real Estate & Development Group is one of the leading practices in Ontario. We have
demonstrated expertise in all areas of real estate, leasing, and development law, and our depth of experience
enables us to serve a wide range of clients including municipalities, Crown corporations, educational and
other public institutions, national retailers, financial institutions, real estate investment trusts, commercial
and real estate owners, managers, developers and builders.
Our Group’s broad and varied practice touches on virtually all areas of commercial real estate activity, including:
Commercial Acquisitions and Dispositions
Our lawyers have provided real estate expertise in respect of many prominent commercial transactions,
including the following representative examples:
»» Acting for a university on a complex groundlease proposal to redevelop lands for
residential, retail and hotel use
»» Acting in conjunction with an acquisition of a
parcel of land for construction of a film studio
targeting large-scale film production
»» Acting for a syndicate of lenders on a complex
project financing of a major regional shopping
centre
»» Acting for a major Canadian retailer in the
acquisition and development of its “big box”
locations in shopping centres throughout the
country
»» Acting for a REIT in respect of its property
acquisitions including office and industrial
properties throughout the country
»» Acting on behalf of professional sports teams
in the acquisition and development of arenas
Financing
Members of our Group regularly provide advice with respect to financing including all aspects of
development, construction and permanent financing, leasehold financing and syndicated loans.
We have experience acting for lenders on numerous financings including:
»» The lenders with respect to a $62 million IPO
»» The $50 million financing of a portfolio of
of a major Canadian-based resort owner
multi-family residential buildings
»» The $180 million financing for the acquisition of »» The lenders with respect to large financings
a portfolio of office buildings
to a REIT of leasehold interests in multi»» The $190 million financing for the construction
residential complexes throughout the GTA
of a hotel
»» Infrastructure Ontario (formerly Ontario Realty
»» The $79 million financing for the acquisition of
Corporation) with respect to its agreements for
a portfolio of industrial buildings
province-wide facilities management
4
Cassels Brock & Blackwell LLP
Real Estate Investment Trust Practice
June 2015
…Real Estate & Development
Commercial Leasing
In connection with commercial leasing, we advise landlords and tenants of institutional, office, retail,
shopping centre and industrial premises as well as healthcare facilities on a full range of leasing
services including:
»» Structuring and documentation for all types
of leases as well as restoration obligations at
lease conclusion
»» Negotiating ground leases
»» Structuring of joint ventures
»» Advising on financial matters including tax
allocation and cost recovery
»» Advising on insurance matters
»» Advising on risk management
Examples of our transactions in this area include:
»» Negotiating a ground lease with the City
of Toronto for and on behalf of a developer
involved in a build-to-suit project on
waterfront lands
»» Negotiating on behalf of a developer a longterm lease from York University for the
construction and development of its arena
facility known as the Ice Gardens
June 2015
»» Acting for St. Michael’s Hospital in its real
property and leasing matters
»» Representing various health care clients
including Whitby Mental Health Centre,
Trillium Gift of Life Network, Northeast Mental
Health Services and Rekai Health Centre on a
variety of real estate-related matters such as
divestitures, acquisitions and lease work
Real Estate Investment Trust Practice
Cassels Brock & Blackwell LLP
5
…Real Estate & Development
Land development & municipal planning
Our Land Development Group combines the knowledge and experience of our Real Estate, Planning,
Municipal and Construction lawyers to provide advice on all types of development projects from initial
acquisition and site selection, through all aspects of the planning approval process, to construction and/or
disposition.
Our lawyers are skilled and experienced in working for both public institutions and private enterprises in
all aspects of the development process. We have represented clients at all levels of the court system, as
well as a range of administrative tribunals with particular emphasis on the Ontario Municipal Board (OMB).
We are recognized as a leading law firm in this area by the Canadian Legal Lexpert Directory.
Our experience representing developers and property owners extends to:
»» Acquisition and disposition of land
»» Tenders and contracts
»» Development charges, front-ending
agreements and development charge credit
agreements
»» Landowner group structuring and cost sharing
»» Official plan, rezoning and committee of
adjustment applications
»» Plans of subdivision and condominium,
secondary plan and block plan development
and approvals
»» Design and construction, including
construction lien claims
»» Representation before the OMB and the courts
Some examples of our experience include:
»» Acting for a group of land developers on an
employment land conversion project in the
Greater Golden Horseshoe
»» Representing a major developer on a largescale community development in southern
Ontario Acting on behalf of a consortium
of developers in the development and
construction of Canada’s largest film studio
complex, in co-operation with the City of
Toronto and Toronto Economic Development
Corporation
»» Acting for developers in obtaining approvals
for high rise condominium towers, residential
plans of subdivision and common elements
6
Cassels Brock & Blackwell LLP
condominiums across Ontario
»» Representing Infrastructure Ontario in the
development of the West Don Lands in the
Toronto waterfront, including preparations for
the Pan/Parapan American Games
»» Obtaining advanced approvals for the
construction of a condominium apartment
tower on top of a downtown Toronto hotel
»» Providing construction advice respecting
the Markham Stouffville Hospital, the Ricoh
Coliseum at Exhibition Place in Toronto and
Touchstone on Lake Muskoka
Real Estate Investment Trust Practice
June 2015
Tax
The tax lawyers at Cassels Brock have significant experience advising in connection with both
outbound and inbound real estate investment, REITs and real estate partnerships. In addition to
advising on the establishment of REITs, our advice extends to REIT acquisitions and mergers, advising
in respect to the SIFT rules, and structuring and obtaining advance income tax rulings pertaining to
the creation of private REITs. On page 8 you will find a detailed list highlighting our representative
REIT transactions; furthermore, recent mandates include acting for a consortium of Canadian pension
plans investing in European real estate and acting for a US fund partnering with a large Canadian
pension plan in Mexican real estate; in addition, a senior member of our tax group has advised CAP
REIT, H&R REIT, Royal Host REIT, Summit REIT, RES REIT, aVista REIT and CREIT.
The lawyers in our Tax Group bring knowledge, insight and innovation to both the technical and practical
aspects of taxation to provide effective advice on domestic and international tax planning, structuring
and compliance. Our experience includes acting as special counsel on discrete complex matters as
well as serving as part of a larger team on business transactions, and advising on tax policy and tax
legislation. Our tax lawyers assist a diverse range of local, national and international clients, including
large public entities, private corporations, financial institutions, private equity funds, professional
service firms, governments and their agencies, foreign investors in Canada and Canadian companies
expanding abroad. Our clients may seek advice on tax matters alone, or integrated with commercial
advice. We offer a broad range of tax advice with respect to securities matters, including the structure
of security offerings and preparation of tax opinions for prospectuses and offering memoranda.
Our lawyers are experienced in land transfer tax and sales and commodity tax, including the federal
HST, and they also work closely with members of our Business, Financial Services, Natural Resources
and Insolvency law groups to assist clients in planning for and structuring mergers, acquisitions,
divestitures, reorganizations, and inbound and outbound investment. Members of our group are
recognized as leading practitioners by the International Who’s Who of Corporate Tax Lawyers and
Chambers Global. A senior member of our tax group has also been sought out by the Department of
National Revenue and the Department of Finance for contributions to the development of tax policy
and tax legislation.
June 2015
Real Estate Investment Trust Practice
Cassels Brock & Blackwell LLP
7
Additional Representative
Transactions
Client
Title
Primaris REIT/
Primaris Retail REIT
Primaris REIT Completes $4.6 Billion Arrangement Transaction with H&R REIT and a
KingSett Led Capital Consortium
Primaris Retail REIT Completes $115 Million Public Offering
True North
Commercial REIT
True North Commercial REIT Completes $144.7 Million Formation, Public Financings and
Multi-Provincial Property Portfolio Acquisitions Totalling 610,884 Square Feet of Office Space
True North Apartment
REIT
True North Apartment REIT Completes $63 Million Subscription Receipt Offering
True North Apartment REIT Completes $57.5 Million Subscription Receipt Offering
True North Apartment REIT Completes $51 Million Public Offering
True North Apartment REIT Completes $616 Million Formation, Public Financing and Acquisition of Multi-Province Property
Portfolio of 5,828 Suites
True North Apartment REIT Acquires Residential Property Portfolio in Montreal, Québec for $121 Million
Starlight Investments
Ltd.
Starlight Investments Ltd. Completes $2.3 Billion Privatization of TransGlobe Apartment REIT and Sale of 14 Multi-unit
Residential Properties in Ontario, Québec and Nova Scotia to Canadian Apartment Properties REIT; 26 Multi-unit Residential
Properties in Ontario, Québec and Alberta to Timbercreek Asset Management Inc.; 63 Properties in Four Canadian provinces
to Starlight Investments Ltd. and its Affiliates; and the 72 Remaining REIT Properties to a Joint Venture Comprised of
Starlight Investments Ltd. and the Public Sector Pension Investment Board
Lone Star Real Estate
Fund
Dream Global REIT (formerly Dundee International REIT) Completes $46 Million Bought Deal Public Offering
Dream Global REIT (formerly Dundee International REIT) Completes $36 Million Secondary Bought Deal Offering
Lone Star Real Estate Fund (U.S.) L.P., Sells its Commercial Real Estate Portfolio to Dream Global REIT (formerly Dundee
International REIT) as Part of Dream Global’s Successful $472 Million Initial Public Offering, as well as Subsequent “Bought
Deal” Public Offerings Resulting in the Sale to the Public of Lone Star’s $92 Million Equity Holding (value: €736 Million)
National Bank
Financial Inc.
BTB REIT Completes $23 Million Public Offering and Exercise of Over Allotment Option
BTB REIT Completes $21.1 Million Bought Deal Offering and Over-Allotment Option
BTB REIT Completes $17.5 Million Issue of Units
BTB REIT Completes $20 Million Public Offering of Convertible Debentures
BTB REIT Completes $12 Million Public Offering of Units
Underwriters led by
Canaccord Genuity
Corp
PRO Real Estate Investment Trust Completes $11 Million Public Offering
Canadian Tire
Corporation, Limited
CT Real Estate Investment Trust Completes $303 Million Initial Public Offering (Including Over Allotment Option)
Lenders
Various Financings for Skyline REIT totalling in Excess of $100 Million
8
Cassels Brock & Blackwell LLP
Real Estate Investment Trust Practice
June 2015
Our REIT
Team
Partner
Associate
IMRAN AHMAD
Joan Beck
LINDSAY CLEMENTS
Competition
416 860 6578
iahmad@casselsbrock.com
Securities
416 860 6754
jbeck@casselsbrock.com
Securities
416 869 5491
lclements@casselsbrock.com
FRANK DELUCA
JONATHAN FREEMAN
AFZAL HASAN
Securities
416 642 7475
fdeluca@casselsbrock.com
Real Estate
416 860 2927
jfreeman@casselsbrock.com
Securities
416 815 4248
ahasan@casselsbrock.com
CHRIS HERSH
GREG HOGAN
NATASHA JIMENO
Competition
416 869 5387
chersh@casselsbrock.com
Securities
416 860 6554
ghogan@casselsbrock.com
Real Estate
416 869 5322
njimeno@casselsbrock.com
JAY KING
TOM KOUTOULAKIS
ADRIA LEUNG Lim
Securities
416 869 5480
jking@casselsbrock.com
Securities
416 869 5311
tkoutoulakis@casselsbrock.com
Securities
416 860 6470
aleung@casselsbrock.com
PHILIP LONG
Pollyanna Lord
ROBERT LYSY
Securities
416 642 7458
plong@casselsbrock.com
Securities
416 869 5427
plord@casselsbrock.com
Real Estate
416 869 5789
rlysy@casselsbrock.com
PAUL MUCHNIK
ANDREW REBACK
DAVID REDMOND
Real Estate
416 869 5975
pmuchnik@casselsbrock.com
Tax
416 860 2980
areback@casselsbrock.com
Real Estate
416 869 5382
dredmond@casselsbrock.com
KEN SNIDER
Anne-Marie Widner
LAWRENCE WILDER
Tax
416 860 2947
ksnider@casselsbrock.com
Real Estate
416 869 5968
awidner@casselsbrock.com
Securities
416 869 5750
lwilder@casselsbrock.com
June 2015
Real Estate Investment Trust Practice
Cassels Brock & Blackwell LLP
9
Cassels Brock & Blackwell LLP
Suite 2100, Scotia Plaza
40 King Street West
Toronto, ON Canada M5H 3C2
Suite 2200, HSBC Building
885 West Georgia Street
Vancouver, BC Canada V6C 3E8
Tel: 416 869 5300
Fax: 416 360 8877
Tel: 604 691 6100
Fax: 604 691 6120
© 2011–2014 Cassels Brock & Blackwell LLP. All rights reserved.
This document and the information in it is for illustration only and does not constitute
legal advice. The information is subject to changes in the law and the interpretation
thereof. This document is not a substitute for legal or other professional advice. Users
should consult legal counsel for advice regarding the matters discussed herein.