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Pedestrians head for work among the highrise buildings at Spadina Avenue and Bremner Boulevard in Toronto. Investors can tap into the growth of commercial real estate – retail, office and rental properties – through REITs, real estate investment trusts.Fred Lum/The Globe and Mail

What's Daniel Drimmer up to?

That question's been thrown around a lot in real estate circles since Mr. Drimmer surprised the market in April by privatizing TransGlobe Apartment REIT, just two years after he took it public.

Even more questions arose when Mr. Drimmer converted Wand Capital Corp., a capital pool company, into True North Apartment REIT just a few months later. Odd, it seemed, that he would take an apartment-focused real estate investment trust private, and then launch a new one shortly after.

There was speculation that he might sell some of TransGlobe's properties into the new REIT. Doing so would mean he took the properties private only to sell them into a public REIT shortly after.

Sure enough, that's what transpired. In September True North acquired 26 different properties for $139-million, some of which came from TransGlobe, the others coming from Mr. Drimmer's private company, Starlight Investments. Now True North's buying more, with plans to acquire 17 additional properties for $153-million. Again, some come out of the TransGlobe portfolio, others come from Starlight.

Mr. Drimmer could not be reached to comment.

The circular for the latest acquisition suggests more deals of these sorts will materialize. "Starlight has advised the REIT that its current intention is to offer to sell to the REIT additional multi-suite residential rental properties that it manages and in which it has an ownership interest, in one or more transactions over the next few years, although no assurance can be given in that regard," the document stated.

Mr. Drimmer stands to personally benefit from more deals because True North signed an asset management agreement with Starlight, which means the private company manages the day-to-day operations of the REIT's properties. This agreement comes with an acquisition fee that requires True North to pay Mr. Drimmer a certain percentage of the purchase price of every property the REIT acquires.

The September acquisition paid Mr. Drimmer an acquisition fee of $833,000, while the latest deal earns him $1.4-million.

Should the latest acquisition be approved by shareholders, he will also hold a 17-per-cent stake in True North, in part because a portion of the payment for the properties comes in the form of REIT shares.