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Real Estate Gets its Own Boutique
Boyd Erman – Streetwise
Published Wednesday, Aug. 20 2014
Canada has long had energy boutique investment banks, and plenty of small firms specialize in mining. But real estate was another story.
Trimaven Capital Advisors Inc. has stepped into that gap, and in less than two years of operations, is moving up in the rankings of investment banks doing deals in real estate. The Toronto-based firm worked for Huntingdon Capital Corp. on its $210-million sale to Slate Properties Inc., announced earlier this month, as well as advising Royal Host Inc. on its sale to Holloway Lodging Corp. in May. It has also advised New York-based activist Orange Capital LLC on two real estate files.
The founders of Trimaven counted on business from a number of sources. They saw more real estate investment trusts being formed, more activists on the prowl and boards looking increasingly for independent advice – all signs that, they believed, a boutique could make a go of it. Their gamble has paid off. The workload is busy for the three principals – RBC Capital Markets veteran Jeff Dean; Craig Shannon, the former head of real estate investment banking at National Bank Financial, and Wiz Khayat, a lawyer who came from Bennett Jones, and before that, Norton Rose – and the firm is looking to add people.
“For whatever reason, real estate in Canada was missing [a boutique],” Mr. Dean said. “We looked at the success of some of the oil-and-gas-focused boutiques out in Western Canada and thought we could replicate aspects of that model here.”
Real estate is an especially lending-heavy business, which means it will always be a slog to compete with banks that can offer up debt financing as well as advice on transactions. The banks are also just plain good in their own right. RBC, in particular, has a very big presence in the real estate advisory market, while the other big banks are also significant players. Without the ability to lend, a boutique has to offer innovative advice and push hard on the independence angle – the idea that its advice comes without any strings attached, whereas a bank’s advice might be coloured by its desire to offer up loans.
From left to right: Craig Shannon, Jeffrey Dean, Wiz Khayat
At the moment, the company has what Mr. Dean calls a “high-class” problem of being too busy on deals to be “focused inward, on the business,” so their plan now is to grow. The firm would like to add a property brokerage team, for example.Deal activity in REITs and real estate operating companies (REOCs) has picked up a bit in recent months, especially among smaller companies. That will contine as smaller companies that are having trouble financing keep teaming up.
Mr. Dean is expecting that M&A in bigger real estate companies may soon be more active.
“It’s been a slow 12 months for a number of the larger REITs and REOCs, so I wouldn’t be surprised at all to see one of the larger names [especially where succession is an issue] to either privatize or merge with another REIT or REOC within the next six months,” he said. Deals won’t all be friendly, either, he expects. Willingness to go hostile is as high as it has ever been. “Management teams won’t shy away from the right opportunity, even if overtures are met with resistance,” Mr. Dean said. Less »
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Trimaven’s Work with Huntingdon Capital Shows Role
for Independent Real Estate Investment Banking Firm
Barry Critchley
Published September 8, 2014
Shareholders of Huntingdon Capital Corp. should receive the circular for the company’s proposed arrangement with Slate Capital Corp. shortly. That $210-million arrangement is straightforward – Slate will acquire Hungtindon’s shares and warrants for cash – but complicated because of the seller’s large stake in publicly listed FAM REIT.
The deal, okayed by all the interested parties except the shareholders whose support is required at next month’s meeting, is noteworthy for another reason: it marks the largest transaction that Trimaven Capital Advisors, a Toronto-based investment banking firm with a specific focus on real estate, has been involved with in its two-plus year history.
“We were the lead advisor, we were hired with a U.S. firm and we also provided a fairness opinion to the special committee,” said Craig Shannon, one of the three partners at the firm that will have spent about nine months on the assignment when shareholders meet Oct. 15 in Vancouver to approve the transaction.
And arguably it’s a transaction that the bank-owned dealers would liked to have won when Trimaven (whose other partners are Jeff Dean and Wiz Khayat) and Evercore Partners were awarded a mandate by Huntingdon last January to assist the company review its “strategic alternatives.”
The two advisors split the work, with Trimaven focusing on Canada and Evercore on the U.S. By mid-March, 37 parties had executed “confidentiality agreements.” In all five Canadian buyers submitted “expressions of interest,” while four made the cut to proceed to the next stage. By early June, Slate Capital remained and by mid-August that firm — started by brothers Blair and Brady Welch and youthful veterans of the world of North American real estate, was declared the winner.
Advising firms such as Huntingdon may be a key objective behind the formation of Trimaven, a firm with two investment bankers, one real-estate focused lawyer on board, all backed by a team of analysts. (Shannon has worked for real estate companies and in investment banking; Dean in investment banking and Khayat in real estate law.
In short, the firm was set up because of the belief that there was a strong need for a best-in-class independent real estate focused advisory firm to provide boards and management teams independent advice with no conflict. And the no-conflict arises because Trimaven provides neither equity research, nor banking facilities nor capital raising capabilities.
“The bank-owned dealers are selling different services. We are not worried about giving the right advice,” said Shannon whose portfolio of Trimaven deals, so far, has ranged from providing fairness opinions, to advising on proxy fights to giving issuers advice on growth plans and an optimal capital structure. “We bring a strong hands-on practical approach because we have done it as bankers and with bricks and mortar.”
Adds Dean: “Boards appreciate an independent advisor and like the fact that there is a pure play real estate investment bank, staffed by real estate people who understand the nuances, providing traditional investment banking advice.” To get that business, Trimaven will rely on relationships established over the years.
Trimaven is pursuing two other areas: a realty brokerage business and a private equity business where it will raise private capital from institutions and high net worth individuals. Less »
Trimaven in the Press
News Releases
PROREIT to Acquire Boulevard Industrial REIT in a Supported Transaction
July 31, 2015
MONTREAL, QUEBEC and TORONTO, ONTARIO--(Marketwired - July 31, 2015) - PRO Real Estate Investment Trust ("PROREIT") (TSX VENTURE:PRV.UN) and Boulevard Industrial Real Estate Investment Trust ("Boulevard") (TSX VENTURE:BVD.UN) announced jointly today that they have entered into an arrangement agreement pursuant to which PROREIT will acquire all of the outstanding trust units of Boulevard in a friendly transaction approved unanimously by the boards of trustees of both PROREIT and Boulevard (the "Agreement").
The acquisition will be effected by way of a plan of arrangement pursuant to which unitholders of Boulevard will receive 0.04651 of a trust unit of PROREIT for each trust unit of Boulevard they hold (the "Plan of Arrangement").
Based on the $2.00 closing price of PROREIT's units on the TSX Venture Exchange ("TSX-V") on July 30, 2015, the day prior to entering into the Agreement, the offer implies a purchase price of $0.093 per Boulevard unit, representing a premium of approximately 43% to the $0.065 closing price of Boulevard's units on July 30, 2015 and a premium of approximately 45% based on the volume weighted average prices of each respective REIT on the TSX-V for the 20-day period ended July 30, 2015. More »
Centennial Group Announces Campaign for Immediate Change at Temple Hotels Inc., Nominates Five Highly Qualified, Independent Directors to the Board of Temple
May 26, 2015
TORONTO, May 26, 2015 /CNW/ - Centennial Group Limited ("Centennial"), an indirect owner of approximately 5% of the outstanding shares of Temple Hotels Inc. ("Temple" or the "Company") (TPH:TSX), announced today that it is calling on all Temple shareholders to join a campaign for immediate change at Temple to address mounting financial, operational and governance challenges. Centennial is seeking the support of shareholders to elect five highly qualified and independent nominees to Temple's board of directors at the upcoming meeting of shareholders to be held on June 25, 2015. More »
Slate Retail REIT and Slate U.S. Opportunity (No. 3) Realty Trust Announce Board Approval of Proposed Transaction and Special Meetings of Unitholders
April 2, 2015
TORONTO, April 2, 2015 /CNW/ - Slate Retail REIT ("Slate Retail" or the "REIT") (TSX:SRT.U/SRT.UN) and Slate U.S. Opportunity (No. 3) Realty Trust ("SUSO 3") are pleased to announce that their boards of trustees have unanimously approved the previously announced transaction pursuant to which the REIT will acquire SUSO 3's assets in a US$195 million transaction (the "Acquisition"). As consideration for the Acquisition, the REIT will issue class U trust units (the "Units") of the REIT, and units of a subsidiary of the REIT that will be economically equivalent to Units, at a deemed price of US$10.47 per unit. In connection with closing the Acquisition, SUSO 3 will also make a special distribution of its remaining cash balance, estimated to be approximately US$6 million to current investors, for total proceeds to current SUSO 3 investors of US$201 million less debt. More »
Melcor REIT Announces $138.25 Million of Acquisitions From Melcor and $30 Million Bought Deal of Extendible Convertible Debentures
November 12, 2014
EDMONTON, ALBERTA--(Marketwired - Nov. 12, 2014) - Melcor Real Estate Investment Trust (TSX:MR.UN) (the "REIT") announced today that it has agreed to acquire (the "Melcor Acquisition") a portfolio of six commercial properties (the "Melcor Acquisition Properties") for an aggregate purchase price of $138.25 million (excluding transaction costs) from Melcor Developments Ltd. ("Melcor"), the REIT's external asset manager and property manager. Expanding on the REIT's recent announcement, it has entered into an agreement to acquire (the "Third Party Edmonton Acquisition") (together with the Melcor Acquisition, the "Acquisitions") an office and retail complex in Edmonton, Alberta (the "Third Party Edmonton Complex") from a third party vendor for a purchase price of approximately $31.38 million (excluding transaction costs). Closing of the Third Party Edmonton Acquisition is expected to be in Q4 2014. More »
Slate Asset Management completes acquisition of Huntingdon Capital Corp. and assumes management of FAM REIT
November 4, 2014
TORONTO, Nov. 4, 2014 /CNW/ - Slate Asset Management LP ("Slate") and Huntingdon Capital Corp. ("Huntingdon") (TSX: HNT) (TSX: HNT.DB) (TSX: HNT.WT) today completed the previously announced plan of arrangement (the "Arrangement") between Huntingdon and Slate Capital Corporation ("Slate Capital"), a wholly-owned subsidiary of Slate, whereby Slate Capital acquired all of the issued and outstanding shares of Huntingdon in a cash transaction valued at approximately $210 million. More »
Slate Properties to acquire Huntingdon Capital Corporation for an effective price of CDN $13.40 per share
August 12, 2014
RICHMOND, BC, Aug, 12, 2014 /CNW/ - Huntingdon Capital Corp. (the "Corporation" or "Huntingdon") (TSX: HNT) (TSX: HNT.DB) (TSX: HNT.WT) announced today that the Corporation has entered into an arrangement agreement (the "Arrangement Agreement") with Slate Capital Corporation, an affiliate of Slate Properties Inc. ("Slate"), at an effective price of CDN$13.40 per share in cash. More »
Holloway Lodging Corporation completes acquisition of Royal Host and proposes assumption of Royal Host's convertible debentures
July 2, 2014
HALIFAX, NS, July 2, 2014 /CNW/ - Holloway Lodging Corporation (TSX: HLC) ("Holloway") and Royal Host Inc. (TSX: RYL) ("Royal Host") are pleased to announce that Holloway has completed its previously announced acquisition of Royal Host (the "Acquisition") with an effective date of July 1, 2014. As consideration for Royal Host's outstanding shares, Holloway paid a total of $16.4 million in cash and issued 1,637,967 Holloway common shares. Holloway funded $16.0 million of the cash purchase price from its existing credit facility and the remainder from its cash on hand. More »
Orange Capital Announces Premium Tender to Purchase Units of Partners Real Estate Investment Trust
May 28, 2014
TORONTO, May 28, 2014 /CNW/ - Orange Capital, LLC ("Orange Capital") is pleased to announce a premium tender offer (the "Premium Tender") to purchase up to 2,604,956 units of Partners Real Estate Investment Trust (TSX: PAR.UN) ("Partners REIT" or the "REIT") at a price of $5.00 per unit (the "Purchase Price"), payable in cash More »
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