GO Residential REIT Announces Acquisition Agreements for 7 Dey Street and 409 Eastern Parkway for US$439.6 Million and Concurrent Trust Unit Offering and Private Placement
Executive Summary
- GO Residential REIT entered into agreements to acquire 100% of 7 Dey Street (NYC) and an ~81% managing interest in 409 Eastern Parkway (Brooklyn) for a total consideration of ≈ US$439.6 million.
- The purchase will be funded with cash, assumed debt, new mortgage/debt financing, and the issuance of REIT Units valued at US$23.70 each; equity financing is being raised through a bought‑deal offering (≈ US$37.5 M) and a concurrent private placement of OpCo units (≈ US$37.6 M).
- The acquisitions, together with previously announced Hudson Yards and Ivy Tower deals, are expected to be mid‑single‑digit accretive to annualized AFFO Adjusted per Unit and increase the REIT’s fully diluted unit count by ~12%, enhancing public float and liquidity.
Key Details
- Acquisition Targets
- 7 Dey Street, Tribeca, Manhattan – 209‑suite luxury high‑rise; 99% occupied (Feb 2026); avg. rent US$7.45/ft².
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409 Eastern Parkway, Prospect Heights, Brooklyn – 185‑unit building; 95% occupied (Feb 2026); avg. rent US$4.90/ft².
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Total Consideration: ≈ US$439.6 million, comprised of:
- Assumption of ~US$66.6 M fixed‑rate mortgage on 409 Eastern Parkway.
- New fixed‑rate debt financing of ~US$150.0 M for 7 Dey Street.
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Issuance of 9,410,880 REIT Units (“Consideration Units”) at NAV per Unit US$23.70 (≈ US$223.0 M).
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Equity Financing Structure
- Bought‑Deal Offering: Underwriters to purchase 3,768,845 REIT Units @ US$9.95/unit → gross proceeds ≈ US$37.5 M.
- Concurrent Private Placement: ~3,780,910 OpCo Units @ US$9.95/unit → gross proceeds ≈ US$37.6 M.
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Over‑allotment option for underwriters up to 565,326 additional REIT Units; total potential gross proceeds ≈ US$80.7 M.
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Use of Proceeds – Net proceeds from the Offering and Private Placement plus a US$19 M draw on the REIT’s credit facility will fund the cash component of the acquisitions (i.e., the equity portion of the purchase price).
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Closing Timeline – Acquisitions expected to close in Q2 2026, subject to customary conditions including TSX approval and lender consent for mortgage assumption. Offering and Private Placement closings anticipated around March 23 2026.
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Strategic Impact
- Adds ~1,000 suites, doubling building count to eight LHR assets (total ≈ 3,015 suites).
- Expected mid‑single‑digit accretion to AFFO Adjusted per Unit.
- Increases fully diluted unit count by ~12%, improving liquidity and public float.
Notable Quotes
- “7 Dey Street and 409 Eastern Parkway represent the latest steps in a concerted effort to deliver meaningful value to our unitholders,” – Joshua Gotlib, CEO, GO Residential REIT.
- “Today’s acquisitions…should serve as a clear signal to the market: GO Residential REIT is well‑positioned to execute on accretive acquisition opportunities.” – Meyer Orbach, Chairman, GO Residential REIT.