A pair of major shareholders have this month come out against the planned $4.8B deal to break up H&R REIT. 

Management at RBC Global Asset Management, which holds 9.3 million units in H&R, told Bloomberg earlier this month that the firm plans to vote against the deal. The disclosure came a day after leadership at Mill Pond Capital, which has 2.2 million units, also said it would vote to reject the transaction. 

RBC Managing Director Hanif Mamdani declined to provide an explanation to Bloomberg for why the firm opposed the deal. But Mill Pond published a five-point letter outlining its issues with the deal, chief among them an allegation that the proposed structure benefited CEO Tom Hofstedter at the expense of shareholders. 

Toronto-based H&R REIT cut a deal in August that would see its portfolio sold off in chunks to co-purchasers GO Residential REIT, Blackstone Real Estate, Crestpoint Real Estate Investments, PSP Investments and a company controlled by Hofstedter's family. Blackstone had been pursuing the deal since June, when sale talks were first disclosed.

H&R REIT had 107 assets at the end of the second quarter, down from 365 a year prior as the diversified REIT continues to execute a repositioning strategy it launched in 2021. Its portfolio includes 68 industrial assets totaling 8.5M SF, 26 residential properties, 12 office buildings and one retail asset. 

The REIT announced three transactions totaling $1.1B in proceeds in January, including the sale of its 33% interest in Echo Realty and the sales of a 23-property portfolio of Canadian assets and another retail asset. 

The remaining 20.5M SF portfolio has a fair-market value of $6.5B, H&R estimates, while the company's public market capitalization is around $1.8B. 

Under the terms of the deal, Blackstone, PSP and Crestpoint will acquire H&R’s Canadian industrial properties, while Toronto-based GO Residential REIT, which launched in 2025, would get a 27-property portfolio that includes apartments, a New York office tower and a mixed-use asset in Dallas. 

An entity connected to the Hofstedter family is set to acquire H&R’s remaining noncore assets. 

Shareholders are set to receive a 14.5% premium over H&R’s closing price on June 10, when Blackstone’s early-stage talks were first reported, if they approve the deal.

The REIT is holding a special meeting on Nov. 13 to vote on the breakup.