H&R Real Estate Investment Trust has confirmed it is in early discussions with Blackstone, a move that immediately sharpened investor focus on the Canadian landlord's U.S. holdings and cross-border strategy. The talks, still at a preliminary stage, underscore how a discounted public valuation and a growing U.S. footprint are drawing renewed interest from private equity capital.
Early Talks With Blackstone
Late Thursday, H&R said it is in "preliminary, non-exclusive discussions with Blackstone regarding a potential sale of certain assets," after securities regulators asked the trust to respond to media reports. The statement effectively validated earlier reporting that sent H&R's shares up more than 8 percent in the previous session. The trust stressed that no agreements have been signed and that there is no assurance any sale or other transaction will occur.
People familiar with the matter told Bloomberg that Blackstone is in early-stage talks about acquiring H&R, which owns apartment buildings and other properties in Canada and the United States. Those people, who asked not to be identified because the talks are private, also cautioned that the discussions may not lead to a deal.
Cross-Border Portfolio In Focus
For potential buyers, the attraction is not just H&R's scale in Canada but its evolving portfolio across North America. The REIT is one of Canada's largest and has spent several years shifting away from struggling office and retail assets toward apartments and industrial properties in both countries. As of March 31, H&R managed about C$8.1 billion in assets and had a market capitalization of roughly C$3.1 billion, or about $2.2 billion, at Thursday's close.
The trust's holdings span more than 20 million square feet, with a heavy concentration in residential assets. On the U.S. side, its Lantower Residential arm has helped build a platform in multifamily markets, while exposure to industrial and residual office adds further diversification.
That cross-border footprint is central to the current interest: a buyer like Blackstone would be able to fold H&R's U.S. assets into an existing American rental and logistics portfolio rather than assemble properties one by one.
U.S. Assets Draw Private Equity
H&R's recent activity highlights how it has been repositioning for growth in U.S. markets. In March 2024, the trust bought the site at 459 Smith Street in Brooklyn's Gowanus neighborhood from an entity backed by All Year Management's Yoel Goldman for $76.5 million.
The site sits in an area rezoned in 2021 to allow for higher-density, mixed-use development, giving H&R a foothold in a New York submarket that has become a magnet for institutional capital.
At the same time, the REIT has been trimming exposure to sectors facing more structural pressure. In November, H&R agreed to sell a portfolio of Canadian and U.S. office and retail properties to several buyers for about C$1.5 billion. For Blackstone or any other private equity buyer, that pivot makes H&R's U.S. holdings a clearer strategic fit.
Discounted Valuation And Deal Pressure
H&R's performance in the public markets has helped set the stage for the current talks. Over the last decade, the trust has delivered a total return of about 22 percent, lagging the broader Canadian real estate sector. Hedge fund K2 & Associates Investment Management has urged H&R to explore a sale, arguing that its units trade at a substantial discount to the value of its real estate.
That disconnect between public pricing and private asset values is a recurring theme across listed real estate and a key reason H&R is back in play. Last year, a consortium including Blackstone, TPG and Crestpoint Real Estate Investments held takeover talks with the REIT, but those discussions ultimately fell apart.
TPG is no longer involved in the current round, according to people familiar with the matter, and it is unclear whether TPG or Crestpoint would participate if Blackstone moves ahead with a transaction.
For now, H&R is emphasizing caution. The trust has confirmed that it is in discussions with Blackstone about a potential sale of certain assets, but it has also made it clear that there are no guarantees that any deal will be completed. That leaves commercial real estate executives watching closely, particularly those focused on U.S. multifamily and industrial markets, where the outcome could offer a fresh benchmark for valuing cross-border platforms with meaningful American exposure.
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