Brixmor and Everview Partners to buy Slate Grocery REIT for US$2.3 billion

Explainer

Slate Grocery REIT has signed a deal to be acquired by Brixmor Property Group Inc. and Everview Partners in an agreement that values the trust at US$2.3 billion.

The buyers have agreed to pay US$13 per unit in cash to take the Toronto-listed trust private.

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Marc Rouleau, chair of Slate’s special committee, says the deal provides unitholders with immediate liquidity and certainty of value at an attractive all-cash price.

The purchase comes after Slate launched a review of strategic alternatives in May.

How is the deal structured?

Brixmor Property Group will pay US$636 million to acquire 23 grocery-anchored shopping centres outright from Slate.

It is also partnering with Everview Partners and a fund associated with the Abu Dhabi Investment Authority to acquire 92 similar assets for US$1.7 billion.

Brixmor will acquire a 20 percent equity interest in the larger property portfolio while acting as the property manager and leasing agent.

It also pledged a US$174 million equity investment in the joint venture.

The combined US$2.3 billion transaction will conclude the strategic review for Slate.

What does the price represent?

The US$13 per unit consideration represents a premium of approximately 13 percent to the closing price of the units on May 21, 2026, the last trading day prior to the public announcement of the strategic review process.

It is also a premium of approximately 20 percent to the closing price of the units on Sept. 23, 2026.

Slate’s shares plummeted 20 percent on the Toronto Stock Exchange last week after the REIT announced it was suspending distributions as it plotted the path forward.

What do the companies say about the deal?

“This outcome validates what we have long believed: grocery-anchored essential real estate is a high-quality, in-demand asset class, and active in-house management creates measurable value for investors,” Slate CEO Brian Welch said in a statement.

The deal gives Brixmor access to properties with in-place rents below its portfolio average and US$100 million in redevelopment and outparcel development opportunities, the grocery-anchored REIT said.

The portfolio is projected to generate net operating income of 4 percent in the long term.

“Across both the wholly owned and joint venture assets, we see meaningful embedded value through below-market rents and a robust pipeline of remerchandising, redevelopment, and outparcel opportunities,” Brixmor CEO Brian Finnegan said in a statement.

Where are the properties located?

The 23-property portfolio spans 3.2 million square feet.

Eleven of the properties are in Florida, seven in North Carolina, three in Georgia and one each in Michigan and Massachusetts.

One property in the portfolio is one that Brixmor will only have a 50 percent interest in.

Brixmor owns and operates a portfolio of open-air shopping centres in the U.S., while Everview Partners is a New York-based investor focused on private equity, credit and real estate.

What is the broader market context?

Grocery-anchored retail has become a popular investment target, in part because buyers are looking for resilient assets that are likely to perform regardless of macroeconomic conditions and because retail construction is historically low.

In July, Norges Bank Investment Management, Norway’s sovereign wealth fund, invested US$500 million with Asana Partners to buy high-quality retail assets and launched the venture with a grocery-anchored asset purchase.

A month earlier, Norges and a group of other investment giants agreed to acquire Echo Realty and its 230 retail centres in a deal with a US$2 billion portfolio valuation.

GCM Grosvenor also provided US$200 million in seed funding to sector veteran Jon Mendis’s Hyperion Grocery Retail Partners III fund that is aiming to grow into a US$1 billion portfolio.

What happens next?

The deal, which requires unitholder approval, is expected to close in the first quarter of 2027.

Shares in Brixmor were trading flat Monday morning and are up roughly 8 percent this year.

With files from The Canadian Press, The Globe and Mail and BNN Bloomberg