About the Offer

A Compelling Offer at an Attractive Premium for Milestone Unitholders

Attractive Value

  • Transaction capitalization rate of ~5.8% (excluding capital expenditure reserves), compares favourably to the REIT’s Q3 2016 IFRS capitalization rate of 6.3%(1)
  • Transaction average price per apartment unit of ~US$120,000 represents an ~US$10,000 or an ~10% premium to the REIT’s Q3 2016 IFRS book value per apartment unit of ~US$109,500(2), and a similar premium to the average price per apartment unit of recent comparable asset transactions 
  • Implies an ~8% premium to Milestone’s Q3-2016 IFRS book value per Unit of US$14.90 
  • The transaction is structured in a tax efficient manner to result in unitholders being taxed at capital gains rates and without incurring any U.S. or Canadian withholding tax 

Attractive Premium to Recent Comparable Asset Sales Transactions

  • Starwood’s offer price also represents an ~US$10,000 per apartment unit or an ~10% premium to the ~US$109,000(3) per apartment unit for sales of comparable garden-style apartments 
  • These sales (i) represent all single asset sales of garden-style apartments with confirmed pricing over the last 24 months, a minimum of 100 units, and average year built comparable to the REIT’s apartments, and (ii) are based upon the REIT’s portfolio units by metropolitan area.

Premium Consistent with Precedent Multifamily M&A Transactions

  • Significant value in US$16.15 all cash offer per outstanding Unit 
  • ~16% premium to 30-day VWAP(4) consistent with premiums for precedent North American multifamily M&A transactions 
  • Monthly distributions to be paid in the normal course through to closing 

Maximizing Value Amid Market Uncertainties

  • Multifamily rental rate growth has started to decelerate, which could negatively impact the REIT’s ability to continue to increase rental rates and NOI 
  • Capitalization rates are likely to expand amid a rising interest rate environment, which could negatively impact the REIT’s valuation, cost of capital and ability to grow accretively 
  • MST’s CAD unit price has benefited from an ~26%(5) appreciation of the USD relative to the CAD since the REIT’s IPO and this trend is expected to continue to reverse over the next three years(6) could negatively impact unitholders’ CAD denominated investment in the REIT 

  • (1) Before capital expenditure reserves and excludes acquisitions and dispositions completed post Q3 2016.
  • (2) Excludes acquisitions and dispositions completed post Q3 2016.
  • (3) Based on confirmed pricing data collected by Real Capital Analytics.
  • (4) As of 18-Jan-17; based on a 30 day volume weighted average price per Unit of US$13.93 at the average Bank of Canada noon exchange rate of 1.3282 over the 30-day period.
  • (5) As of 18-Jan-17.
  • (6) Based on the median forecast from a broad selection of global and Canadian broker-dealers compiled by Bloomberg.

Vote Now

There are two convenient ways for you to vote today:

2. Phone 1-866-851-3215 

The deadline of Mar. 24, 2017 at 10:00am (Toronto time) is fast approaching so vote today.

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