Canmarc vets behind new PROREIT

To those who follow the Canadian REIT space, there are two familiar names at the top of Taggart Capital Corp., a real estate company that intends to convert into a new REIT called PRO Real Estate Investment Trust (PROREIT).
The Montreal-based company is headed by James Beckerleg and Gordon Lawlor, who were President/Chief Executive Officer and Chief Financial Officer, respectively, of Canmarc Real Estate Investment Trust.
The two executives found themselves without full-time employment after a hostile bid for Canmarc by Cominar REIT turned friendly and successful after the real estate rival upped its offer to more than $900 million.
Friendly or not, the takeover completed last March resulted in the departure of the duo in the summer of 2012. “Our relationship with them was completely cordial but eventually our roles matured,” said Beckerleg.
It did not take them long to find a way back into the real estate game. The long-term plan from the start was to convert Taggart Capital, which trades on the TSX Venture Exchange, to a REIT, said the company’s president and CEO.
“We think it is a model that the capital markets in Canada are comfortable with and it’s a business that we are familiar with and we are familiar with the institutional and retail investment community that follows REITs. We see it as our area of expertise and an area where there is still capital raising opportunities to support good portfolio acquisitions.”
The soon-to-be PROREIT President and CEO said the real estate company will kick off with one property holding, a commercial retail property it purchased in Moncton, New Brunswick as a qualifying transaction. Last December the company also raised $6.5 million in seed capital and “that money will be deployed in the Maritimes and in the Montreal area,” he said.
An Eastern focus
The new REIT intends to cast its acquisitive eye on property in eastern Ontario, Quebec and the Maritimes and does not intend to concentrate on any particular real estate class.
“We going to be a diversified commercial property REIT so we see ourselves in office, flex office in certain suburban and secondary markets, as well as retail space,” he said.
The two former Canmarc executives boast a great deal of experience in Eastern Canada, so it made sense to take that geographic tilt. “We see those as markets where we have got a depth of knowledge and familiarity,” he said. “In addition to that, we also see starting out a new REIT that there are some cost advantages in those markets compared to Western Canada.”
That does not mean the PROREIT executives are expecting easy times on the acquisition trail. “We are seeing competition in the markets that we are going to be investing in,” he said. “There is lots of buying activity and interest that we are encountering in those markets.”
Big plans in place
Beckerleg does not have a firm number in place for just how much he expects the new REIT to raise in new capital following the March 8 special meeting to convert Taggart to PROREIT, but he expects it to be a big number.
“We would certainly like to see within a year or two having assets of a couple hundred million dollars so we would need to raise the equity to support that.”
Once the company has its REIT structure in place, it can approach capital markets to raise funds through the sale of trust units from treasury. “We’re confident that we will be able to tap those markets soon after shareholder approval.”
As for the yield the new REIT will pay its unit holders, he said it would be “competitive” with other small REITs with mid-market aspirations. “I would think REITs in our space tend to be trading in the 7 to 8(%) area.”
PROREIT explains to shareholders that its objectives are threefold: provide holders of units with stable and growing cash distributions from investments focused on real estate properties in Canada, primarily in the Maritimes, Ontario and Québec, on a tax efficient basis; enhance the value of PROREIT's assets and maximize long-term unit value; and expand the asset base of PROREIT and increase PROREIT's AFFO per unit, through internal growth strategies and accretive acquisitions.
Besides Beckerleg and Lawlor, initial trustees slated to head the new REIT include Osler, Hoskin & Harcourt partner Vitale Santoro (Corporate Secretary and Trustee), EDEV Real Estate Advisors partner John Levitt (Independent Trustee and Chairman of the Board of PROREIT), retired executive and corporate director Gérard Limoges, ( Independent Trustee), and retired executive and corporate director Ronald Smith (Independent Trustee).



Paul is a writer, editor and media trainer based in Toronto with over 25 years of experience as a business reporter. He has written for Canada’s major news services on…

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Paul is a writer, editor and media trainer based in Toronto with over 25 years of experience as a business reporter. He has written for Canada’s major news services on…

Read more




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