Canadian real estate firm H&R REIT has agreed to pay $84.3 million to acquire its investment partner’s stakes in two Florida apartment developments, including Lantower Bayside in Largo. The deal would give H&R full ownership of the 601-unit portfolio before the properties reach stabilized occupancy, while offering the partner’s investors an earlier exit.
Key takeaways
H&R’s agreement covers its partner’s 70.9% interests in Lantower Bayside and Lantower Sunrise, consolidating ownership of both developments under H&R’s Lantower residential business.
- The two properties total 601 apartments, including 271 units in Largo.
- The estimated amount payable for the remaining interests is $77.9 million after management fees and carried interest.
- The transaction is expected to close in the fourth quarter, subject to required approvals.
What the agreement covers
H&R already owns 29.1% of each property through a joint venture with Lantower Residential Real Estate Development Trust. Under an agreement dated Oct. 5, H&R subsidiaries would acquire the trust’s remaining 70.9% stake. The announced $84.3 million deal involves both developments; the companies have not specified how much of the price is attributable to the Largo property alone.
The trust was established in 2024 to help finance construction. Its independent committee recommended the sale, citing the risk and wait involved in holding the investments until the properties reach stabilized occupancy. The proposed transaction offers investors a return based on a 20% annualized gross-return formula, before fees and carried interest.
Details on the Florida properties
Lantower Bayside is located on 8.4 acres at 16485 U.S. Highway 19 N. in Largo. The four-story development has 271 apartments and about 261,000 square feet of rentable space. The second property, Lantower Sunrise, is a 330-unit development in Kissimmee. Together, the projects had an original construction budget of about $210 million.
The companies have not provided separate construction, leasing or occupancy figures for either development. The buyout would therefore transfer full ownership to H&R while the properties are still short of stabilized occupancy.
Investor proceeds and closing conditions
Investors in the development trust are expected to receive about $15.15 per U.S.-dollar unit or C$15.65 per Canadian-dollar unit, compared with an original investment of $10 per unit. Those amounts are before certain additional deductions.
H&R expects the deal to close in the fourth quarter, pending approval from the trust’s investors and shareholders involved in a broader H&R transaction. The agreement follows H&R’s Aug. 11 announcement of a pending change of control involving GO Residential Real Estate Investment Trust.