In what's being called one of Canada's largest-ever real estate transactions, KingSett Capital and Choice Properties REIT announced Wednesday that they will acquire First Capital REIT in a deal valued at approximately $9.4 billion, including the assumption of debt. The deal will see First Capital unitholders receive $19.24 in cash and 0.3186 units of Choice Properties per First Capital unit — total consideration of $24.40 per unit, representing a 17% premium to First Capital's 20-day volume-weighted average price and an 8% premium to its net asset value of $22.57.
More interesting than the price tag is what's inside the portfolio: 136 properties across British Columbia, Alberta, Ontario, and Quebec, the vast majority anchored by grocery stores, pharmacies, or other needs-based tenants. This is not a bet on discretionary retail. It's a bet on the stuff people have to buy every week.
How the Assets Get Divided
Choice Properties, which was spun out of Loblaw in 2013 and currently manages over 68 million square feet valued at roughly $17.8 billion, will acquire approximately $5 billion of First Capital's portfolio — focused on neighbourhood shopping centres. That haul includes 50 grocery store tenants that compete with Loblaw, plus 65 existing Loblaw and Shoppers Drug Mart locations, according to BNN Bloomberg.
KingSett Capital, a private real estate investor, will take approximately $4.4 billion of First Capital's assets, including its high-street retail properties in locations like Toronto's Yorkville Village and Vancouver's False Creek Village. Choice Properties CEO Rael Diamond said the deal "increases urban market presence" and diversifies the tenant base. KingSett's Rob Kumer pointed to "signs of renewed optimism in Canadian real estate." First Capital CEO Adam Paul called the transaction "excellent" for investors. Everyone's happy, which in dealmaking usually means the price was right for the seller and the assets were right for the buyer.
What This Signals for Physical Retail
The timing is instructive. This deal is closing in a year when U.S. retail store openings are down 47% year-over-year, consumer sentiment is at historic lows, and tariff uncertainty has frozen discretionary expansion plans. Against that backdrop, two sophisticated real estate players are writing a $9.4 billion check for grocery-anchored retail.
The logic is defensible. Grocery-anchored properties have the lowest vacancy rates in retail real estate, the most predictable foot traffic, and the strongest resistance to e-commerce displacement. People still overwhelmingly buy their groceries in stores — online grocery penetration remains well under 15% in North America, even after the pandemic surge.
For Choice Properties specifically, the deal is a consolidation play. Acquiring 50 competing grocery tenants alongside its existing Loblaw-anchored locations gives it leverage on lease renewals and tenant mix optimization that it simply couldn't achieve at its current scale.
The Broader Read
The First Capital acquisition is the clearest signal yet that institutional capital views needs-based physical retail as a durable asset class — not a declining one. In a market where Saks Global is liquidating stores and even off-price players are slowing expansion, the grocery-anchored category is heading in the opposite direction.
First Capital expects to hold a unitholder vote in June, with the transaction closing in the second half of 2026. When it does, it will be the largest retail-focused real estate deal in Canadian history — and a data point that every U.S. grocery REIT board will be studying closely.