H&R Real Estate Investment Trust has agreed to buy Lantower Residential Real Estate Development Trust (No. 1)’s 70.9% interest in two Florida projects, in a transaction structured as an all-cash exit for Lantower unitholders. The deal values the joint-venture stake at approximately US$84.3 million and would give H&R greater ownership of developments in Largo and Kissimmee.
Key takeaways
- H&R REIT plans to acquire Lantower’s roughly 70.9% interest in two Florida residential projects.
- The interest is valued at about US$84.3 million, with an estimated net purchase price of US$77.9 million.
- The projects are expected to include 601 suites and approximately 606,000 net rentable square feet.
- Lantower projects mid- to high-teens annualized pre-tax returns for unitholders from distributions tied to the sale.
Deal details
H&R REIT, through subsidiaries, has agreed to purchase Lantower’s stake in developments located in Largo and Kissimmee, Florida. The properties are expected to comprise 601 suites across about 606,000 net rentable square feet. The stated value of the joint-venture interest is approximately US$84.3 million, while the estimated net purchase price is US$77.9 million.
The transaction is intended to provide cash liquidity to Lantower unitholders while allowing H&R to consolidate its ownership of the projects. The announcement did not specify a closing date.
Expected proceeds and trust wind-up
After the sale closes, Lantower expects to distribute net proceeds to unitholders, while keeping a reserve for taxes and other costs. It then plans to cancel its outstanding units, winding up the trust’s interest in the projects. Record and payment dates for the distributions have not yet been announced.
Lantower estimates that the distributions will produce compounded annualized pre-tax returns in the mid- to high-teens. These figures are projections, not guaranteed outcomes. An independent special committee unanimously supported the transaction, citing value certainty and immediate cash liquidity for unitholders.
Significance for H&R REIT
The acquisition would expand H&R’s ownership of the two Florida developments and further consolidate its U.S. multifamily portfolio. The deal was announced while H&R has a pending change of control; the available announcement did not provide further details about how that process relates to the transaction.