Dive Brief:

• King of Prussia, Pennsylvania-based apartment owner Morgan Properties will acquire Toronto-based Dream Residential REIT in an all-cash transaction for approximately $354 million, according to an Aug. 21 news release.
• With the purchase of Dream Residential, Morgan gains 3,300 units across 15 properties in Texas, Ohio, Kentucky and Oklahoma.
• Dream Residential unit holders and DRR Holdings LLC class B unit holders will each receive cash consideration of $10.80 USD per unit of the REIT and per class B unit of DRR Holdings LLC. The price represents a premium of 60% to the closing trust unit price on the Toronto Stock Exchange as of Feb. 19, 2025, the last trading day prior to the announcement of the REIT’s strategic review.

Dive Insight:

Dream Residential agreed to the transaction after its board of directors conducted a strategic review of the REIT and determined that a sale was the best way forward.

“We are pleased with today’s announcement, which will bring a successful conclusion to the REIT’s strategic review,” Vicky Schiff, chair of Dream Residential REIT’s board of trustees, said in the news release. “The board is unanimously recommending that unit holders vote in favour of the transaction.”

Dream Residential isn’t the only smaller multifamily REIT to launch a strategic review to determine the best way to unlock value for its shareholders.

In January, the board of directors for Aimco decided to explore alternatives to “unlock and maximize shareholder value” for the Denver-based REIT, which could include a sale or merger of the company. 

Earlier this month, Aimco sold a portfolio of five suburban Boston-area properties in Massachusetts, New Hampshire and Rhode Island, totaling 2,719 units, to an affiliate of Norfolk, Virginia-based apartment owner Harbor Group International for $740 million.

Aimco will continue to explore further ways to maximize and unlock shareholder value through additional strategic transactions. Those could include the sale of additional components of the portfolio, individual asset sales or a sale or merger of the company. 

In February, Elme Communities “initiated a formal evaluation of strategic alternatives to maximize shareholder value.” 

Earlier this month, the Bethesda, Maryland-based REIT sold a 19-asset portfolio to Atlanta-based investor, developer and manager Cortland Partners for $1.6 billion in cash. In addition, its board of trustees approved a plan of sale and liquidation under which the company would market its remaining nine multifamily assets, as well as Watergate 600 — an office asset.

As smaller multifamily REITs are considering exit strategies, Morgan, the No. 3 largest owner of apartments in the U.S., continues to get bigger. In April, it purchased a portfolio of 3,054 units across 11 assets in eight Midwest states from Trilogy Real Estate Group for $501 million, which pushed its holdings to over 100,000 units nationwide.

With the purchase of The Dream Residential REIT, Jonathan and Jason Morgan, co-presidents of Morgan Properties, say that the firm was able to leverage a strong balance sheet and deliver execution certainty. 

“Our team looks forward to welcoming these new communities, enhancing the physical assets and providing best-in-class customer service for the residents,” they said in the release.

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