RBC’s asset management arm to vote against H&R REIT takeover

RBC Global Asset Management, one of H&R Real Estate Investment Trust’s HR-UN-T largest unitholders, will vote against the REIT’s proposed takeover by GO Residential Real Estate Investment Trust GO-U-T, adding a prominent voice to a growing campaign against the deal.

RBC, which currently owns 9.3 million H&R units, said Thursday it will vote against the deal. The bank declined to elaborate on its reasoning.

A day earlier, Boston-based Mill Pond Capital also came out against the takeover. Mill Pond beneficially owns 2.2 million H&R units.

In a letter to Stephen Gross, H&R’s lead independent board trustee, Mill Pond addressed a number of concerns with the deal, including confusion around a partial sale of assets to H&R founder Tom Hofstedter, as well as fears about preferential treatment for Mr. Hofstedter’s deal.

H&R’s sale is a complex transaction that proposes a takeover by GO Residential. GO is working with a consortium of other buyers that includes Blackstone Real Estate, Crestpoint Real Estate Investments Ltd. and a company controlled by members of Mr. Hofstedter’s family, known as CRAL.

GO is acquiring H&R’s residential properties across three U.S. Sunbelt states, among other assets; Blackstone will acquire some of H&R’s Canadian industrial properties; Crestpoint and PSP Investments will also acquire some of H&R’s Canadian industrial properties; and CRAL will acquire H&R’s remaining “non-core assets” for cash.

The REIT agreed to pay H&R unitholders $4.28 per unit in cash, plus 0.5688 GO REIT units.

Some shareholders have been frustrated about the lack of details around Mr. Hofstedter’s and CRAL’s purchase. “Without a disclosed price unitholders cannot assess what CRAL is paying, or compare it with the consideration offered to everyone else,” Mill Pond wrote in its letter.

There have also been some concerns about the cancellation of Mr. Hofstedter’s shares. Unlike other H&R unitholders, who will receive some GO Residential units, Mr. Hofstedter will have his units cancelled, which means he isn’t rolling his equity into GO.

“No other unitholder was offered consideration in that form,” Mill Pond wrote.

Bloomberg News first reported the news of RBC’s opposition to the takeover on Thursday.

GO Residential, which predominately owns luxury multifamily properties in New York, went public on the Toronto Stock Exchange in 2025 at US$15 per share – its IPO was priced in U.S. dollars – and its units currently trade for US$7.47 apiece.

H&R’s units are down roughly 13 per cent since the GO takeover was announced in mid-August.