Primaris (PMZ-U) passed $1B in deals this year with the $400M acquisition of Hamilton’s Lime Ridge Mall from Cadillac Fairview ($235M in cash, $181M in units), doubling down on its core strategy despite underperformance this year.

It’s a big one, with the new asset being PMZ’s fourth largest in terms of sales volume - but it’s also an efficient one, lifting the portfolio average same store sales productivity to $774 per square foot.

After accounting for dilution management expects the deal to be modestly accretive to FFO and importantly, it doesn’t change the 4-6x leverage target (the acquired mall has no debt).

The path to that accretion is clear, with uncharacteristically low in-place occupancy at Lime Ridge due to two large department store vacancies (HBC and Sears)…

… which brings PMZ’s total HBC footprint to 10 malls, representing 7% of square footage…

… but only 1.4% of annual rents, presenting an attractive long-term opportunity to repurpose and re-lease to higher quality, higher rent paying tenants.

Near-term, the Hudson’s Bay default has been an overhang on impacted REITs…

… but after a few quarters of execution, the narrative on Primaris could turn quickly.