- RBC and Mill Pond, which together hold 11.5 million H&R REIT units, say they will vote against the $4.8B plan to sell the REIT off in pieces.
- Mill Pond’s letter alleges the structure favors CEO Tom Hofstedter over unitholders, RBC has not explained its opposition, and a special meeting is set for Nov. 13.
- The breakup would cap a repositioning that cut H&R from 365 properties to 107 in a year, so a failed vote could force the board to renegotiate its exit.
H&R REIT’s breakup plan is drawing fire from two sizable investors, according to Bisnow, which clouds the outcome of a Nov. 13 special meeting.
RBC Global Asset Management owns 9.3 million units, and Mill Pond Capital owns 2.2 million.
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Two Holders Break Ranks
RBC told Bloomberg it intends to vote no, but managing director Hanif Mamdani offered no reasoning. Mill Pond stated its position a day earlier.
Mill Pond went further with a five-point letter. The chief allegation: the structure lets CEO Tom Hofstedter benefit while unitholders absorb the cost.
How the Deal Is Built
Agreed in August, the transaction splits the portfolio among five buyers: GO Residential REIT, Blackstone Real Estate, Crestpoint Real Estate Investments, PSP Investments and a vehicle controlled by the Hofstedter family.
Blackstone, PSP and Crestpoint would absorb the Canadian industrial properties. GO Residential would take 27 assets that include rental housing, an office tower in New York and a Dallas mixed-use property, and the family-linked entity would buy what is left over.
A Portfolio Already Shrinking
The Toronto REIT counted 107 assets at the close of the second quarter, versus 365 twelve months earlier, under a repositioning it started in 2021. Industrial accounts for 68 of them and 8.5M SF. Residential has 26 properties, office has 12 and retail has just one.
Three January sales produced $1.1B of proceeds, among them a one-third stake in Echo Realty and a Canadian package of 23 properties. H&R values the remaining 20.5M SF at $6.5B, while its stock market valuation is around $1.8B.
Why It Matters
Unitholders who approve would collect a 14.5% premium to the June 10 close, the trading day before Blackstone’s early-stage sale talks became public. Two holders have now signaled that price is not enough, or that the process is flawed.
The related-party buyer sharpens the scrutiny. A Hofstedter-controlled entity sits across the table from the REIT it runs, which is the heart of Mill Pond’s complaint.
What’s Next
The Nov. 13 vote decides the outcome. Watch whether other large unitholders side with RBC and Mill Pond, and whether the board sweetens the premium or reworks the related-party pieces beforehand.
