Alignvest Student Housing REIT and Forum REIIF Transaction Announcement
Alignvest Student Housing Inc. ("ASH") has entered into a significant agreement with Forum Asset Management for a substantial acquisition. This deal involves acquiring nearly all the assets and liabilities of Alignvest Student Housing Real Estate Investment Trust ("ASH REIT") for a total of $1.686 billion, which will be payable in cash and units of Forum Real Estate Income and Impact Fund ("Forum REIIF"). This acquisition represents a notable premium to the current net asset value of ASH REIT.
Key Insights from Leadership
Sanjil Shah, Managing Partner of ASH and Trustee of ASH REIT, expressed enthusiasm about the partnership with Forum. He noted, "This transaction provides an attractive return on investment for ASH REIT's unitholders. Furthermore, we have structured it to allow unitholders to roll their units into Forum REIIF on a tax-deferred basis. This opportunity enables continued participation in the Canadian student housing sector, which has consistently shown strong demand and investment returns."
Growth Opportunities with Forum
Reza Satchu, Managing Partner of Alignvest Management Corporation, the parent company of ASH, noted that this acquisition embodies the investment potential they envisioned when launching ASH. He highlighted that the combined entity will boast nearly 10,000 beds, creating the largest student housing platform in the country, facilitating considerable operational efficiencies. "Our unitholders will gain access to Forum’s extensive development pipeline that promises further growth," he added. Alignvest Management Corporation is committed to rolling 100% of its units in ASH REIT, totaling over $50 million into units of Forum REIIF.
Expected Closure and Next Steps
The transaction aims to close by the end of 2024, pending regulatory approvals and customary closing conditions. An Information Circular, which will incorporate a fairness opinion from BMO Capital Markets and other details, will be sent to ASH REIT's unitholders, followed by a voting process regarding the transaction.
About Alignvest Student Housing Real Estate Investment Trust
Established to create a consolidated approach to the purpose-built student accommodation market in Canada, ASH REIT was launched in 2018. Over seven years, it has amassed a high-quality portfolio with 17 properties, totaling 7,159 beds across various university-centric markets.
Investment Strategy and Market Position
ASH REIT is structured as an unincorporated open-ended real estate investment trust, focusing on income-producing student accommodations. It utilizes a private placement offering to accredited investors across Canada, facilitating continuous trust unit offerings. This effective structure aligns with the growing demand for student housing in urban regions.
About Forum Real Estate Income and Impact Fund
Forum REIIF primarily invests in quality multi-family homes, purpose-built student housing, and furnished rentals situated in markets with stringent supply constraints in Canada. The fund is also dedicated to establishing an impactful and ESG-driven portfolio to elevate yields and total returns while fostering a diverse and resilient income stream.
Frequently Asked Questions
What is the transaction between ASH and Forum REIIF about?
The transaction involves Forum acquiring most of ASH REIT's assets and liabilities for $1.686 billion, offering ASH unitholders a chance to exchange their units on a tax-deferred basis.
Why is this acquisition important?
This acquisition will create the largest student housing platform in Canada, allowing both ASH and Forum to leverage economies of scale and growth opportunities in student accommodations.
What benefits do unitholders gain from this transaction?
Unitholders will receive an attractive return on their investment and an opportunity to invest in the stable growth of the Canadian student housing market through Forum REIIF.
What is the expected timeline for this acquisition?
The acquisition is targeted for completion before the end of 2024, subject to customary closing conditions and regulatory approvals.
How has ASH REIT performed historically?
Since its establishment, ASH REIT has built a strong portfolio across major university markets in Canada, emphasizing quality and the growing demand for student accommodation.
