Tricon Properties Sells Majority Stake In $1.3B U.S. Apartment Portfolio
Tricon Residential has inked a deal with two institutional investors to sell an 80% stake in its 23 U.S. multifamily properties, which total more than 7,000 units. The transaction values the portfolio at about $1.33B, with the two investors paying Tricon about $425M after debt is taken into account.
Toronto-based Tricon will retain a 20% interest in the newly formed joint venture that owns the properties and will continue to manage the apartments. The company will use the proceeds of the sale largely to pay down debt. Tricon declined to name the institutional investors.
Under the terms of the JV, Tricon and the investors will each earn a proportionate share of net cash flow from the properties. Tricon will also receive fees for managing the properties.
"When we acquired our U.S. multifamily portfolio in 2019, we saw an opportunity to create a platform for growth within the largest investible property type in residential real estate ... Our intent has always been to pursue this strategy in partnership with third-party investors," Tricon CEO Gary Berman said in a statement.
Besides its apartment holdings in the U.S., Tricon owns more than 21,500 single-family rental houses, mostly in the Southeast, Southwest and Texas. Altogether, the company has about $8.2B in assets under management.
The sale is the second major U.S. multifamily deal in as many days. A JV of Morgan Properties and Olayan America has closed on the acquisition of a 48-property portfolio across 11 states. The buyers paid $1.75B for the properties to STAR Real Estate Ventures, a joint venture between El-Ad National Properties and Yellowstone Portfolio Group.