In another move that underscores the current consolidation in the multifamily real estate market, Morgan Properties announced an agreement on August 21, 2025, to purchase Dream Residential REIT in an all-cash deal worth about US$354 million.
For Morgan Properties, the transaction will bring 3,300 residential units to its portfolio and will be a continuation of a year of growth. In the first half of this year, Morgan purchased a 3,054-unit portfolio in 11 properties from Trilogy Real Estate Group for US$501 million.
Transaction Overview
The purchase price of $10.80 was a 60% premium to the closing unit price of the REIT on the Toronto Stock Exchange (TSX) on February 19, 2025, the last trading day before the announcement of the strategic review.
The offer was also 18% above the closing price on August 20, 2025, the day before the deal announcement. The all-cash offer provides investors with immediate liquidity and Brian Pauls, CEO of Dream Residential REIT, believes that it supports the underlying value of the real estate of the REIT.
The deal was priced above industry revenue multiples on a trailing basis but looks more attractive on forward expectations, reflecting anticipated growth.
The deal was valued at an implied Enterprise Value to Last 12 Months Revenue (EV / LTM Rev) multiple of 13.86x, which was above the industry average of 11.79x. However, the deal’s valuation improves significantly when considering future revenue growth, as the Implied Enterprise Value to Next Twelve Months Revenue (EV / NTM Rev) multiple is 6.89x and is also considerably lower than the industry average of 12.15x.
Valuation and Strategic Rationale
The sale of the portfolio by Dream Residential REIT was a direct result of a strategic review that was initiated in February 2025. The review was brought on by the consistent gap between the trading price and the net asset value (NAV) per unit of Dream, which the board of trustees found to be in the best interest of the unitholders of the REIT.
Vicky Schiff, the chair of the board of Dream Residential REIT, said that after a thorough examination, the board had unanimously approved the transaction and was advising unitholders to vote in its favor.
For Morgan Properties, the acquisition is in line with its portfolio diversification strategy of acquiring high-quality assets in emerging markets. The company is ranked as the third-largest apartment owner in the U.S. and it has surpassed 100,000 units earlier this year.
Dream has 15 properties in the Sun Belt and Midwest regions, including the Dallas-Fort Worth, Oklahoma City, and Cincinnati metro areas.
According to the co-presidents of Morgan Properties, Jonathan and Jason Morgan, the portfolio is a good example of the type of investment opportunity that Morgan Properties targets, citing its strong balance sheet that provides execution certainty.
FIGURE 1: Deal Metrics
Industry Consolidation Trends
This transaction is a recent example of a broader trend of consolidation within the multifamily REIT sector in 2025. The current economic environment, which is marked by high interest rates and stricter lending policies, has reduced the volume of transactions in the industry. This has posed a difficult situation for most of the public REITs, whose public valuations have sometimes not been able to reflect the actual value of the underlying real estate assets. In reaction, several smaller REITs have undertaken strategic reviews to create shareholder value.
In other similar moves in the market, Aimco, a Denver-based company, has gone on a course of targeted asset sales, including a US$740 million sale of five properties in the Boston region. The review initiated by Aimco in January 2025 may still result in a sale or merger of the company.
In February, Elme Communities, located in Bethesda, Maryland, started a formal review of strategic options, which resulted in a sale and liquidation plan. This plan started with the sale of a 19-asset portfolio to Cortland Partners at a cash price of US$1.6 billion, and the remaining assets of the company are to be marketed and sold.
These are just a couple of examples that highlight companies believing their portfolios are trading at a discount to the market and private companies are willing buyers.
Final Thoughts
The Dream transaction is projected to be completed in late 2025, with customary approvals, with voting and support agreements already secured by trustees and affiliates representing approximately 22.5% of outstanding units. At the time of closure, Dream will halt its monthly distributions following the payment in October.
The transaction highlights privately held capital’s influence on the market. It also supports the appeal of multifamily properties, especially those in markets with positive population and employment trends.
For the broader industry, this deal also highlights the consolidation trend as well-financed companies seek to capitalize on market opportunities to acquire portfolios that support their long-term growth strategies.
FIGURE 2: Canadian REIT Comp Table
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