TORONTO, August 3, 2021 — RioCan Real Estate Investment Trust (“RioCan” or the “Trust”) (TSX: REI.UN) and BentallGreenOak announced the expansion of their strategic partnership, with a new joint venture in a three-property portfolio based in the Greater Toronto Area. An agreement signed by both firms would position new investment capital from BentallGreenOak client, Sun Life Assurance Company of Canada (“Sun Life”), to assume a 50% non-managing interest in the portfolio owned and managed by RioCan. Under the terms of the agreement, the total sale price of $151.2 million represents a blended cap rate of 4.1% based on in-place, net operating income (“NOI”) for the income-producing retail properties, and stabilized NOI for the residential property which is currently in lease-up.
The portfolio is comprised of a Toronto-based, multi-family residential rental property called Pivot™, and two grocery-anchored retail assets, RioCentre Oakville and Spring Farm Marketplace in Thornhill, ON. The partnership between both leading Canadian commercial real estate investment managers expands on the success of their pre-existing relationship to deliver new growth and investment opportunities for both firms. The transaction for the three properties is expected to close in the third quarter of 2021, subject to customary closing conditions.
“Through our relationship with BentallGreenOak, we are delighted to strengthen our partnership with Sun Life, particularly at this juncture as we accelerate our growth trajectory while market activity rebounds. The quality of our assets and our established management expertise have laid a strong foundation for our partnership with BentallGreenOak to thrive,” said Jonathan Gitlin, President and Chief Executive Officer of RioCan. “We will continue to capitalize on new opportunities as they arise to attract institutional investment and monetize the value that we have created in our portfolio. RioCan’s capital recycling activity provides an extremely effective source of capital to fund value creation initiatives, including future mixed-used developments that generate additional fee income and fortify our balance sheet to set us up for sustainable growth.”
“BentallGreenOak, on behalf of Sun Life, is pleased to have creatively structured a complimentary portfolio deal, in two highly-favored asset classes, with a likeminded and highly-respected investment manager like RioCan, where outstanding growth, income generation, and sustainable investment performance will be the common pursuit of our partnership,” said Christina Iacoucci, Managing Partner and Canadian Chief Investment Officer for BentallGreenOak. “We are leveraging the strength of our relationships to immediately add high quality multi-family rental stock in a top market, and two well-positioned, needs-based retail assets to our portfolio, to deliver valuable income-producing assets that are rare finds in today’s real estate market.”
Pivot is RioCan Living™’s newly constructed 36-storey residential tower. This 361-unit professionally managed building offers its tenants superior amenities and forward-thinking design. Pivot is connected to RioCan’s recently redeveloped Yonge Sheppard Centre (“YSC”) with direct access to the intersecting subway lines of Yonge Street and Sheppard Avenue. YSC’s 237,000 square feet of retail and 395,000 square feet of office space allow residents to shop and work in one well-constructed development. The breadth of YSC’s retail and food service offering features compelling tenants such as Longo’s, Winners, and Shoppers Drug Mart. Pivot commenced leasing in December 2020 and is currently approximately 45% leased.
RioCan has obtained CMHC financing for its 50% interest in Pivot. Maximizing CMHC financing is a key component of the Trust’s debt strategy as it provides access to a new source of financing and lowers the overall cost of debt.
RioCentre Oakville and Spring Farm Marketplace
RioCentre Oakville and Spring Farm Marketplace are grocery-anchored, open-air shopping centres comprising approximately 107,000 square feet and 73,000 square feet of retail space, respectively. The properties feature needs-based tenants and are located in the growing suburbs within the Greater Toronto Area, characterized by high traffic and affluent demographics. RioCan will generate fees as the ongoing property manager for both sites.
RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density, transit- oriented areas where Canadians what to shop, live and work. As at March 31, 2021, our portfolio is comprised of 223 properties with an aggregate net leasable area of approximately 38.0 million square feet (at RioCan’s interest) including office, residential rental and 15 development properties. RioCan’s development pipeline as at March 31, 2021, is estimated at 41.8 million square feet, of which 14.1 million square feet is already zoned primarily for mixed-use developments. To learn more about us please visit www.riocan.com
BentallGreenOak is a leading, global real estate investment management advisor and a globally- recognized provider of real estate services. BentallGreenOak serves the interests of more than 750 institutional clients with approximately $62 billion USD of assets under management (as of March 31, 2021) and expertise in the asset management of office, industrial, multi-residential, retail and hospitality property across the globe. BentallGreenOak has offices in 24 cities across twelve countries with deep, local knowledge, experience, and extensive networks in the regions where we invest in and manage real estate assets on behalf of our clients in primary, secondary and co-investment markets.
BentallGreenOak is a part of SLC Management, which is the alternatives asset management business of Sun Life.
The assets under management shown above include real estate equity and mortgage investments managed by the BentallGreenOak group of companies and their affiliates. As of Q1 2021, BentallGreenOak changed its definition of Total AUM to include certain uncalled capital commitments for discretionary capital until they are legally expired and continue to exclude certain uncalled capital commitments where the investor has complete discretion over investment.
For more information, please visit www.bentallgreenoak.com
Forward Looking Information
This News Release contains forward-looking information within the meaning of applicable Canadian securities laws. This information reflects RioCan’s objectives, our strategies to achieve those objectives, as well as statements with respect to management’s beliefs, estimates and intentions concerning anticipated future events or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements.
Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described in the “Risks and Uncertainties” section in RioCan's MD&A for the period ended March 31, 2021 and in our most recent Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release.
Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information.
The forward-looking statements contained in this News Release are made as of the date hereof, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
RioCan Real Estate Investment Trust
President and Chief Executive Officer
416-866-3033 | www.riocan.com