Plazacorp has offered $8.35 per unit in stock and cash for KEYreit, up from an earlier proposal of $8 per unit.
Like Plazacorp's proposal, the amount of cash is limited to about half the $124-million offer for the KEYreit units, while the remainder would be paid in shares of the Fredericton-headquartered property company.
Including KEYreit debt to be assumed under the deal, Plazacorp's offer is worth $325 million.
The board of trustees at KEYreit unanimously has recommended unitholders accept the Plazacorp's increased offer.
"We are very pleased that unitholders will benefit from an increase of 35 cents in the revised offer price, making Plazacorp's increased offer of $8.35 per unit a significant achievement from our value maximization process," KEYreit chairman Donald Biback said in a statement.
Units in KEYreit, which has 226 properties in nine provinces across Canada, closed up seven cents at $8.13 on the Toronto Stock Exchange.
The increased Plazacorp offer requires at least two-thirds of KEYreit's units be tendered and includes a break fee of $6.5 million, up from an earlier agreed fee of $5 million if the deal did not close.
Huntingdon raised its offer for KEYreit to $8 per unit in cash and stock last week, however its offer did not put a limit on the amount of cash available.
Huntingdon, which already owns a 5.4 per cent stake in KEYreit, owns and manages a portfolio of 36 industrial, office, retail and aviation-related properties.
Plazacorp is an owner and developer of real estate properties in Atlantic Canada, Quebec and Ontario.