This translation has been automatically generated and has not been verified for accuracy.The sale of Dream Global Real Estate Investment Trust provides a healthy payday for Michael Cooper’s holding company as the real estate titan pivots toward private capital in a new era for the industry.
“We think that, right now, private money is beating public money in terms of its competitiveness,” he said. “Pension funds, private equity investors, high-net-worth investors, a lot of them have a much better opportunity to buy properties than public companies can.” BMO Nesbitt Burns analyst Jenny Ma calculated that Blackstone’s $3.3-billion purchase price, at $16.79 a share, equates to a 18.5-per-cent premium to Dream Global’s closing price on Friday, but it amounted to a 6.6-per-cent discount to the REIT’s net asset value.
Asset managers often earn a number of fees for their work. Typically, they make a base annual fee, calculated as a percentage of a REIT’s historical cost of assets. For Dream Global, this fee was 0.35 per cent annually. Asset managers also earn acquisition fees – often 0.5 per cent to 1 per cent of a property’s purchase price – as well as capital expenditure fees for hard construction costs.
Asked about the structure of these contracts, Mr. Cooper said Dream Global is getting rid of its own through the sale – however, he acknowledged that Dream Industrial REIT still has a contract with Dream Asset Management.
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