REITs a Bright Spot for a Rocky Legal Market

Christopher Murray

May 10, 2012

By Tim Wilbur, Lexpert Blog

This week’s rocky stock market is a familiar but disheartening scenario. A global event (this time a Greek election) creates uncertainty, the stock market plummets, it rebounds a bit but everyone feels nervous and unsure about their long term investment opportunities.

But one area that has been going strong and has no sign of slowing down is real estate investment trusts (REITs). Granted, REIT work doesn’t make up the lion’s share of the work for business law firms in Canada, but it is growing in a way that indicates it has a lot of future potential.

For Christopher Murray, a corporate lawyer at Osler, Hoskin & Harcourt LLP, REITs have offset the slowdown in resource work: “There hasn’t been a lot of large scale mining IPOs recently. There haven’t been a lot of [large scale mining acquisitions] recently. So REITs have very nicely filled that space.”

And REITs have been evolving in much the same way that the mining sector did for Canada a few years back. Funders, many of whom are international, are using Canada’s stock markets to finance projects that often involve offshore properties.

Dundee International REIT’s IPO last year is an example of this, where it filed a prospectus for an offering to help fund the purchase of commercial properties in Germany for around $1 billion. Osler represented Dundee International REIT in that transaction.