Retail investors on both sides of the border began doing the arithmetic within hours of the First Capital deal landing on a Tuesday morning in Toronto. KingSett Capital and Choice Properties REIT divided a portfolio of 136 shopping centers dispersed throughout Canada’s most sought-after urban neighborhoods as part of a $9.4 billion privatization, including debt.
On paper, the offer of $24.40 a unit—a 17% premium to the 20-day volume-weighted average—seemed appealing, but then you recalled that the units had traded close to $22 before to the pandemic. A small premium sealed five years of stagnation. The majority of owners are currently sitting with that version of the narrative.
| Retail Investors & Canadian REIT Shift — Key Information | Details |
|---|---|
| Catalyst Deal | First Capital REIT going private |
| Deal Size | $9.4 billion (including debt) |
| Acquirers | KingSett Capital and Choice Properties REIT |
| First Capital Portfolio | About 136 urban shopping centres |
| Headquarters | Toronto, Ontario |
| Offer Per Unit | $24.40 |
| Premium to 20-Day VWAP | 17% |
| Premium to Net Asset Value | 8% |
| Pre-Pandemic Trading Level | Around $22 per unit |
| Benchmark Comparison | iShares S&P/TSX Capped REIT Index ETF (5-yr return ~2%) |
| TSX Composite (Same Span) | Up more than 75% |
| Notable Investor | Jeffrey Olin, Vision Capital Corp. |
| Average Takeover Premium | Close to 30% across 25 holdings |
| Other Recent Privatizations | InterRent and Minto Apartment REIT |
The deal may appear more appealing than it actually is. Since 2020, public markets have been wary of brick-and-mortar retail, and rising interest rates have put pressure on the entire industry. As a result, shopping center REITs have been trading at quiet discounts to net asset value for the better part of three years.
Grocery-anchored urban infill plazas in Toronto, Montreal, and Vancouver—places where foot traffic actually held—were the kind of properties controlled by First Capital that ought to have survived the post-pandemic transition. However, such quality was never fully compensated for by the public market. KingSett and Choice Properties, owned by the Weston family, entered the private market, which seems to have recognized something that the TSX had not valued.
The true motivation for retail investors north of the border is that arbitrage. American small investors have begun to view Canadian REITs as a specialty that the larger market hasn’t completely embraced, weary of stretched valuations on the S&P 500 and a tech sector that continues to falter under regulatory pressure.
Retail brokerages indicated a consistent increase in U.S. accounts purchasing Canadian-listed real estate trusts during the previous 18 months. This isn’t coincidental, according to survey data from late 2025 and early 2026. Investors want to be holding units when the next deal comes through because they tend to think the wave of privatization will continue.
By historical standards, that wager has a respectable track record. After 18 years of investing in REITs, Jeffrey Olin, the CEO of Vision Capital Corp. and a major shareholder in First Capital, has seen 25 of his assets go private. He claims that the average premium for all of those transactions has been around thirty percent.
Even when public assessments seem like dead weight, that kind of figure maintains people in the business. Olin’s framing, which states that he would prefer to sell to Brookfield or Blackstone rather than attempt to compete with them, comes out as both practical and a little worn out. Conversations with Canadian REIT investors give the impression that the public market has turned into a holding cell for assets that are awaiting acquisition.
The list of recent privatizations continues to expand. The apartment REIT InterRent has already vanished from public markets. It is being followed by the Ottawa-based Minto Apartment REIT. Private capital supported both transactions, believing that residential real estate is still undervalued on the TSX despite all the regulatory noise surrounding Canadian housing.
Mario Saric, a sector analyst for the Bank of Nova Scotia, described the First Capital withdrawal as a farewell to another high-quality REIT while also citing the transaction as justification for sticking with overweight retail trusts. Primaris and RioCan are still on the board. For the time being.
The discourse has changed significantly in the last year when you walk into a financial advisor’s office in Calgary or Vancouver. Less often than not, clients inquire about American technology. They inquire about NAV gaps, payouts, and whether their RRSP may include the next privatization contender. It’s difficult to ignore the shift in the geographic distribution of retail investor interest.
Money would often leave a sector completely after five years of underperformance relative to the larger TSX. Rather, it’s attracting new interest from across the border, not because of yield but rather because of the subdued hope that someone bigger will someday make an offer worth accepting.
