March 31, 2025
Brookstone is excited to announce the acquisition of Henday Center Mall, a two-building retail center in Innisfail, Alberta, finalized on March 31, 2025, for $11.25 million. This landmark deal not only elevates Brookstone’s commercial property assets to nearly $50 million but also underscores a potentially game-changing strategy: using its securities as a versatile, value-driven currency in transactions.
The $11.25 million deal was structured with a groundbreaking mix of consideration:
- $8.75 million in cash (via a traditional mortgage)
- $2 million in Brookstone Series “A” Convertible Preferred Shares
- $500,000 in Brookstone Subordinated Debentures
The sellers, prioritizing post-sale income and tax benefits, opted for this blend, including a Section 85 rollover for tax deferral. The securities include:
- Preferred Shares Series “A”: $2 million at $1,100 per share, with a 5% annual dividend and 1:1 conversion to common shares
- Subordinated Debentures: $500,000 at 8.25% APR over 60 months, with monthly payments
This innovative use of securities as currency enabled a win-win outcome, offering sellers liquidity, steady income, tax deferral (e.g., Section 85 rollover), and ongoing real estate exposure—benefits that outshine all-cash deals.
- Over $100k in additional debenture interest;
- Over $100,000 each year in dividend payments; and
- Equity stake in fast growing and diversified Brookstone!
Brookstone’s ability to leverage its securities as a transactional tool marks a transformative leap for the company and the commercial real estate landscape. By integrating income-generating instruments like Preferred Shares and Debentures into deals, Brookstone creates a compelling alternative to all-cash transactions. This approach:
- Expands Opportunities: Attracts sellers seeking tax advantages, ongoing income, or sustained real estate growth exposure
- Enhances Flexibility: Blends liquidity with long-term value, positioning Brookstone’s securities as a trusted currency for property deals
- Drives Scalability: Sets a precedent that could accelerate future acquisitions and propel Brookstone toward its $100 million asset goal
