True North Apartment REIT granted its chief executive officer and board of trustees almost one million stock options the day after closing its very first public offering.
Run by Daniel Drimmer, upstart True North Apartment REIT recently raised $45-million to fund the acquisition of a portfolio of Montreal properties. That deal closed Tuesday. Quietly on Wednesday, the firm announced that it issued 951,768 options to “certain directors, officers and employees of the REIT.” No names were disclosed.
The issuance is above board legally; the options were priced at the market, and the company had already publicly disclosed its option policy. But the timing is highly suspect. Why not grant the options before the bought deal was announced?
Before the new issuance of options, True North's board of trustees -- comprised mostly of people from the real estate world -- held 687,500 options, according to the company’s management information circulated May 4. With the new issuance, that number jumps to 1.6-million. The company is just a few months old.
A request for comment was not immediately returned.
True North was founded in 2012 after Mr. Drimmer turned his capital pool company, Wand Capital Corp., into the REIT. For now, True North is expected to keep buying up small batches of multi-residential properties, but there is industry speculation that Mr. Drimmer will somehow take the TransGlobe assets he recently bought public again through True North.
True North’s latest acquisition had a purchase price of $121-million, and which got the REIT 1,528 residential suites.