After months of pressure from activist investor Anson Funds, InterRent REIT agreed to a $4.5 billion deal led by Singapore’s sovereign wealth fund, GIC, and InterRent executive chair Mike McGahan. The transaction marked a defining moment for Canada’s multifamily REIT sector, long neglected by investors but now drawing heavyweight global capital back into the market.

Toronto and Dallas based Anson Funds, which held a stake in InterRent, launched an activist campaign earlier this year arguing that the REIT’s persistent undervaluation had become untenable. Despite solid operating results, InterRent’s units traded at a 30% discount to NAV, underscoring what Anson viewed as a disconnect between market perception and intrinsic value. The eventual offer of $13.55 per unit, about 10% below consensus NAV estimates, has reignited debate over valuation but also underscored renewed institutional interest in Canadian rental housing.

“This is about unlocking value in a misunderstood sector,” said Michael Missaghie, President of ARCH Corporation and Portfolio Manager at Anson Funds. “We had constructive engagement with InterRent over the past several months. From both a private and public market perspective, it became clear this was a valuable operating platform held back by poor governance and underappreciated assets.”

InterRent, which owns 12,000 apartments nationwide, faced a wave of selling in late 2024 after the federal government slashed immigration and student visa numbers, policies expected to dampen rental demand. Apartment REITs, once viewed as defensive, sold off harder than their office and industrial peers. But the anticipated downturn never materialized. By March, InterRent reported 96.8% occupancy and a 6.2% year-over-year rent increase.

Still, public valuations failed to recover.  For Anson, the market’s inaction signaled opportunity.  “We’ve gone through a 36-month stretch the sector hasn’t seen in 15 years.” Missaghie said. Higher rates, inflation, but you can’t sit on your hands forever. Public markets locked them out of capital. Going private opens options.”

The bid, anchored by McGahan and backed by GIC, which manages over US$800 billion in assets, also reflects rare insider alignment. “There’s always concern when a related party is involved,” Missaghie acknowledged. “What matters now is whether the board runs a real go-shop process and maximizes value.”

He noted that the offer was materially below some NAV estimates, including a $16 target from Raymond James, it must be judged on more than headline price.  “We recognized the pricing was below that. But this deal can’t be judged on price alone. It’s about certainty, execution, and setting a precedent.”

Moez Kassam, co-founder of Anson Funds, emphasized the strategic foundation behind the move. “We’re building expertise within our firm. This is why we launched the Anson Tactical REIT Fund (ARCH). There’s huge dislocation in REITs right now, and we’re bringing real estate investment professionals onboard to take advantage.”

Kassam pointed to ARCH’s team, composed of alumni from top real estate firms and REIT mutual funds, as key to their edge. “We’re one of the few funds doing this with real conviction. Others are waiting for the macro to turn. We’re doing the work now.”

Analysts have begun rethinking the sector’s prospects in light of the deal. “This transaction should cause a knock-on valuation effect through the remainder of the multifamily REITs,” analysts Dean Wilkinson and Sumayya Syed wrote.

GIC’s entry mirrors last year’s $3.5-billion Tricon Residential buyout by Blackstone, another foreign investor betting big on Canada’s rental market. Kassam sees that as validation. “People said international capital wouldn’t come to Canada. That’s clearly wrong.”

With more REITs trading far below NAV, Anson sees additional opportunities. “This is not a one-off,” said Missaghie. “This is a broader reset for a sector that’s been ignored too long.”

Whether InterRent’s board entertains rival bids during the go-shop period remains to be seen. But Anson’s play is altering the landscape, one undervalued REIT at a time.