Topic: Real estate

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Understanding landlord consents in share and asset purchase transactions

Transactions, whether share or asset purchase, may involve the transfer of real property interests. Some important considerations when drafting agreements for these transactions are:

  • Are there any leases that are a part of the transferred assets?
  • If so, is landlord consent required for assignment or change of control under these leases?
  • Are the leases material, such that failure to maintain or transfer the lease on closing will materially adversely impact the deal?

Landlord consents are a crucial aspect of such deals and proper drafting of the agreement and interpretation of landlord consent provisions in leases can save time and undue … Continue Reading

eSports: a new MVP for real estate?

As we have previously discussed, the eSports industry has garnered immense popularity and is projected to grow considerably. While this projected growth may present new targets for acquisitions, partnerships, sponsorships and the like, it may also create new real estate opportunities – specifically, in the form of eSports stadiums and arenas. Although likened to traditional sports stadiums and arenas, the infrastructure, facilities and amenities of their eSports counterparts will be quite different. Most notably, these venues will be constructed with an emphasis on the “fan experience” and technology. The eSports stadiums and arenas already in operation throughout the … Continue Reading

Technology and creativity: keys to unlocking real estate?

With increasing globalization, shifting demographics and advancing technologies, just to name a few, society is changing rapidly. These changes, as reflected by evolving tastes, preferences and needs, influence both how and where people live and work. As part of their joint publication, Emerging Trends in Real Estate 2019 (the Report), PwC and the Urban Land Institute forecast that in response to mounting pressure on the Canadian real estate industry (the Industry) to confront these changes, we may begin to see Industry players increasingly embrace both technology and creativity.

Smart technologies may help the Industry adapt to a changing

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Private equity and Canadian partnerships: tax considerations

Canada continues to be an attractive market for private equity (“PE“) investors with recent transactions highlighting significant investments into Canadian real estate and energy infrastructure assets.

Partnerships (particularly, limited partnerships) continue to be a popular PE vehicle, providing a means of pooling and aggregating investment funds and allowing for income or losses to be “flowed-through” to its members for Canadian tax purposes, subject to certain exceptions.

However, the use of partnerships with non-resident investors in PE investments raises two particular issues.

Withholding Tax

Part XIII of the Income Tax Act (Canada) (the “Tax Act“), requires that … Continue Reading

Keeping real estate on trend with RealTech

The impact of technology can be felt across virtually all sectors of the economy and real estate is no exception. In fact, technology affects all aspects of real estate from its procurement and development to its management and use. Real estate-specific technology is often aptly referred to as “RealTech”.

Explaining RealTech

The KPMG White Paper, “The Future of RealTech – Real Estate Technology: Threat or Opportunity?” defines RealTech as “technologies that impact the built environment and the real estate sector, either through business model innovation or product innovation, affecting the way we live, work and play”. The UK company, PoperteeContinue Reading

Real estate M&A: what’s retail got to do with it?

So far this year, global merger and acquisition (M&A) activity in the real estate sector has reached new heights. In fact, Dealogic reports that as of the third quarter of 2017, the volume of real estate M&A, globally, was the second highest on record. While a variety of factors can account for this trend, one in particular is the changing retail sector.

Real estate companies with operations in the retail sector are trading at notable discounts, thereby enhancing their appeal as targets for M&A activity.

Across the United States and to a more limited extent, Canada,  there … Continue Reading

Emerging trends in Canadian real estate: mobility, mobility, mobility

We have all heard the expression: “Location, location, location” when it comes to buying real estate. Though that may be true for the immovable property itself, the 2018 Emerging Trends in Real Estate report (the Report) published by PwC Canada and the Urban Land Institute (ULI) suggests that the new and emerging trend in real estate is a demand for mobility.

Mobility in capital

According to the Report, real estate business prospects in 2018 are higher than in 2017, signaling an increased optimism from owners, developers, and investors in the Canadian real estate sector. The survey also … Continue Reading

Mergermarket report highlights global real estate M&A trends and forecasts

In its June 2017 edition of Venue Market Spotlight (the Report), Mergermarket explored current and projected developments in the real estate M&A sector by surveying 25 global dealmakers.

Overall market activity

Of the respondents surveyed about market activity in the next 12 months, 44% predict that real estate M&A activity is on the decline, 24% believe that activity will increase “somewhat,” and 24% predict that activity will remain the same. The Report posits that opinions were geographically influenced. Of the respondents with optimistic outlooks, the majority were based in either the Asia-Pacific (APAC) region or in Europe.… Continue Reading

Global M&A in the first half of 2015

Similarly to American M&A in the first half of 2015, the first half of 2015 was remarkably active on the global mergers and acquisitions front. According to a recent Mergermarket report, total deal value topped US$1.7 trillion. This represents an increase of 15.2% over the first six months of 2014, and only 15.4% behind the record-setting first half of 2007, when US$2.1 trillion worth of deals were completed. With 7,136 transactions, it is interesting to note that total deal volume actually decreased by 15.7% compared to the same time period last year, but higher valuations explained the market’s … Continue Reading

Tax considerations in M&A for purchasers dealing with non-resident vendors

If a non-resident vendor sells property, one consideration that a purchaser must be cognizant of is whether that property constitutes “taxable Canadian property” under the Income Tax Act (Canada). If the property is taxable Canadian property and the vendor does not obtain a certificate of compliance (discussed below), generally the purchaser must withhold 25% of the purchase price and remit it to the Receiver General of Canada.

It should be noted that even a non-resident purchaser is required to make this withholding and remittance. The purpose of these rules is to allow the Government of Canada to secure its tax … Continue Reading

Mid-market deals dominate in Canadian M&A in Q1 2015

Crosbie & Company’s quarterly Canadian M&A Report has indicated an overall decline in activity for the first quarter of 2015, with total deal volume down 7% and total value down 46% from the previous quarter.

Deal size

Accounting for the decrease in deal value is the fact that the majority of transactions this quarter took place in the mid-market segment. While mid-market deals (under $250 million) represented 90% of all transactions this quarter, they accounted for only $9 billion, or 20% of total deal value.  Mega-deals (over $1 billion), on the other hand, accounted for $26 billion in value, with … Continue Reading

A mixed bag for global M&A activity in April 2015

Mergermarket published its M&A Monthly Insider for May of 2015 earlier this week, summarizing M&A activity around the world, and particularly in the regions of North America, Central and South America, Europe, Middle East and Africa, Asia-Pacific, and Japan.

To date in North America, there have been 1,516 deals worth US $407.2 billion. April 2015 saw 319 deals signed that were worth US $55.7 billion, which represented a 56.3% decrease in value compared to April 2014.  Domestic M&A dominated North America for April 2015 with US $45.8 billion in deals. Cross-border M&A deals decreased in value compared to April 2014, … Continue Reading

Lease considerations in the M&A context – Part 2

In a previous post we began exploring lease considerations that landlords and parties to asset purchase and sale transactions should be aware of in the M&A context, including that many commercial leases will require landlords’ prior written consent to an assignment and that the original tenant/assignor typically will not be released from its covenant absent landlords’ agreement (notwithstanding any assignment). We went on to discuss some strategies to mitigate this issue from a seller/assignor perspective, such as requiring releases and/or a replacement covenant from the purchaser/assignee as a condition precedent to closing.

From a purchaser/assignee perspective, in addition to wanting … Continue Reading

The return of the REIT

M&A activity involving real estate investment trusts (REITs) is heating up in Canada and south of the border, according to a recent PWC report, “Emerging Trends in Real Estate: Global Outlook for 2015”. Following a succession of REIT conversions in 2014 by companies with significant real estate holdings, coupled with ripe market conditions for REITs, the industry is well-positioned for further consolidation.

To merge or to acquire?

A notable trend among REITs in 2014 was the acquisition of small and mid-sized players by larger companies, ostensibly fueled by increasing shareholder activism.  At the same time, small and … Continue Reading

Lease considerations in the M&A context

In the wake of a series of announcements regarding the closure of the operations of several Canadian retailers as well as the withdrawal of US retailers from the Canadian market, questions are being asked regarding the potential impact on the landlords of the numerous store locations affected. This is not surprising given that a retailer’s entry into or expansion strategy within Canada routinely involves the assumption of various existing leases. The consequences of the recent closure announcements will, no doubt, be felt across the Canadian commercial real estate market and retail scene for years to come, as landlords scramble to … Continue Reading

Real estate and M&A: forecasts, drivers and roadblocks

RR Donnelly has released the October edition of its Venue Market Spotlight, entitled Real Estate and M&A. The report, a summary of a survey of experts, speaks to what we can expect in terms of real estate-related M&A in the next 12 months. Experts predict an increase in activity, and this legal update will highlight some of the discussions outlined in the report, including forecasts, drivers, and potential roadblocks.

Forecasts

An overwhelming majority of the experts surveyed predict an increase in global real estate M&A levels in the coming year. While some experts see this increase coming through the … Continue Reading

Seminar: Norton Rose Fulbright’s 7th Annual Mergers & Acquisitions School

On Wednesday, September 10, 2014 to Wednesday, October 22, 2014 from 6:30 pm – 8:30 pm (US/Central), Norton Rose Fulbright  will be presenting its 7th Annual Mergers & Acquisitions School for corporate, in-house legal, investment banking and private equity professionals in Houston, Texas.

This comprehensive program is designed for participants that desire to develop a thorough understanding of the M&A process and agreements from a legal perspective. Invited organizations will have the exclusive opportunity to enroll up to two professionals.

Class Syllabus

Wednesday, September 10, 2014

  • Confidentiality, Non-Solicitation and Non-Circumvention Agreements • Legal Structures of Transactions – Asset Acquisitions, Stock/Equity
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M&A activity bolstered by financial sponsors and real estate sector

Crosbie & Company recently released its Canadian M&A Activity – Fourth Quarter 2013 Report. The report explains that while M&A activity in Q4 didn’t deviate much from the year’s previous quarters, suggesting a relatively stable year from a numbers perspective, a closer look at 2013 deal activity as a whole tells a slightly different story.

As reported in the Financial Post:

“The mix of deals in the Canadian M&A market has really shifted in recent years,” said Colin Walker, [Crosbie’s] managing director, noting that some of the sectors that historically were key contributors (such as mining) have become

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M&A 2013 trend report: into Q1 2014 like a lamb

2013 started off slowly with a downturn in Q1, and Q4 brought the year to a close with mixed results. M&A activity in Canada resulted in 567 deals valued at US $71.8 billion. The year was the slowest by deal value since 2004 (US $42.3 billion); by contrast, deal count was the highest it has been on Mergermarket record since 2001.

What brought about these mixed results?

Transactions valued over US $250 million were scarce. 42 large-cap transactions, worth US $54.4 billion, were completed in 2013. However, this number represented the lowest (in deals and in value) since 2004, when … Continue Reading

Q1 2013 M&A Trends

Canadian M&A continued its decline in Q1 2013, reaching lows not seen since Q1 2009.   According to Crosbie & Company Inc.’s Q1 2013 M&A Report, which compared M&A activity results from Q4 2012 to Q1 2013, the market has declined significantly both in transaction value (51%) and volume (35%).  Specifically, while Q4 2012 saw 301 transactions valued at $52.8 billion, Q1 2013 saw 196 transactions valued at $25.9 billion.

PricewaterhouseCoopers (PwC) noted similar trends in their recently released report, Capital Markets Flash: Q1 2013 Canadian M&A Deals Quarterly, including that:

  • the decline in Canadian M&A activity was largely
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