Former TransGlobe CEO looks to convert Edgefront into REIT

Kelly Hanczyk, until recently Chief Executive Officer of TransGlobe Apartment REIT, is back in the commercial real estate game.
After nearly five years running TransGlobe, he is CEO of Toronto-based Edgefront Realty Corp., which recently agreed to buy three properties in Nova Scotia as it gains scale and moves toward its goal of converting to a REIT.
Edgefront paid approximately $31.3 million for the trio of properties: a 71,800 square foot retail/office property in Bedford, a 24,200 sq. ft. retail/office property in Bedford, and a 23,100 sq. ft. single-tenant office property in Halifax.
The purchase “represents part of the foundation which we believe is needed in order to successfully implement our strategy to convert Edgefront into a diversified real estate investment trust,” said Hanczyk.
Fast track to REIT
Edgefront got its start last fall, completed its qualifying transaction in February and is now intent on reorganizing into a REIT, said Edgefront’s CEO. “This press release is part and parcel of a series that we will issue shortly.”
It’s safe to assume that at least one of those disclosures will concern an acquisition.
Hanczyk said the initial Nova Scotia focus does not reflect Edgefront’s strategy, which is to purchase properties across the country.
“It is going to be cross Canada. These just happened to be East Coast. From there I think you will see a little bit in Quebec, some Ontario, secondary markets as our focus, the East Coast and we will try to get into Alberta if we can find properties that make sense and the cap rates are good for us.”
Properties on Edgefront’s shopping list include industrial, retail strip plazas, smaller-sized office buildings. “The $4 million to $25-million range will be our niche.”
Look for acquisitions sooner, rather than later. “We have a number of things in the works and we are just putting some Purchase & Sales together and finalizing and that will be part and parcel of a larger announcement.”
Edgefront wants to have more properties in its portfolio before it pulls the trigger on its REIT conversion. “We are looking at putting together a large portfolio and then from there we will look at converting.”
Small, but connected
Hanczyk admits that competition for properties is and will continue to be fierce, but that Edgefront’s principals have an impressive rolodex of connections that should serve them well.
 “I have been a real estate guy for about 16 years so I have developed pretty strong relationships, East Coast, Quebec, Ontario,” he said.
“Everybody is chasing the same sort of assets. But we do have a pretty good network for a pipeline of properties and we are experienced real estate guys who do have capital markets experience.”
The group includes Edgefront’s Chief Financial Officer, Rob Chaisson, who worked for a number of companies, including InStorage REIT, where he was corporate controller. It also includes the company’s Chairman, Mario Forgione. “He is a very, very experienced real estate guy. Has experience in the States in Vegas and Florida and in Canada in the Oakville and Cambridge Ontario areas.”
East, Central, maybe West
“We have some good strong relationships with local developers on the East Coast, and then we have my own network of people who I have dealt with over the years and a number of guys here in Ontario that have a fairly significant pipeline.”
Hanczyk said Edgefront’s strategy is a mix of renovate and operate. “It’s a mixture of both. We are buying things that have long-term government-based tenants or long-term lead credit tenants,”
“We are also buying things that we see some overvalued rents or have development opportunities on them.”
While he is best known as the CEO of TransGlobe, his prior experience was commercial – industrial, retail, and office – before getting into multi-residential.
TransGlobe Apartment REIT was transformed into a private entity in a complicated transaction last June which saw Canadian Apartment Properties Real Estate Investment Trust, (CAPREIT), acquire 14 properties, Timbercreek Asset Management Inc. buy 26 properties, TransGlobe founder Daniel Drimmer’s Starlight Investments Ltd. take over 63 properties while another 72 properties went to a joint venture of Starlight and a subsidiary of the Public Sector Pension Investment Board.


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…

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