Tricon Residential, Toronto-based rental housing company, announced that a syndicate of investors led by Blackstone Real Estate Income Trust, Inc.(BREIT), a non-listed, perpetual-life real estate investment trust advised by an affiliate of Blackstone Real Estate, has agreed to make a $300 million (C$395 million) preferred equity investment in Tricon through the purchase of newly-created units which are issued by a Tricon subsidiary on a private placement basis and are exchangeable into a minority investment of Tricon. BREIT will acquire $240 million of the preferred equity.
“This investment in Tricon illustrates Blackstone Real Estate’s confidence in our business fundamentals and the value in our stock,” said Gary Berman, CEO of Tricon Residential. “Blackstone inherently understands our business and is exceptionally well-positioned to help us bring our tech-enabled operating platform to its full potential. We are excited to have the support of one of the world’s largest real estate investors, and we are confident that this investment will create significant value for both Tricon’s and BREIT’s shareholders.”
Frank Cohen, Chairman and CEO of BREIT, said, “We are pleased to make this preferred equity investment in Tricon. We continue to see strong underlying fundamentals in the rental housing sector and believe the company’s high quality, income-generating assets are poised to generate stable performance under the leadership of its best-in-class management team.”
”Tricon expects to use the full net proceeds of the Investment to repay its corporate credit facility, reducing its proportionate leverage by approximately 500 basis points to approximately 56% net debt/assets (excluding convertible debentures) and enhancing its balance sheet flexibility. Tricon remains committed to reducing its leverage to a near-term target of 50-55% net debt/assets and expects the planned syndication of an equity interest in its U.S. multi-family portfolio to contribute further to this goal,” said Tricon in a press release.