Not any more

RioCan buys 5 U.S. retail centres in $134M deal

In Canada on August 16, 2010 at 18:53

RioCan Real Estate Investment Trust REI.UN-T says it will add at least five retail centres in Pennsylvania, Virginia and New Jersey to its portfolio in a deal valued at $134 million.

Toronto-based RioCan is also in talks to acquire two other properties, for a total of seven, from Pennsylvania Real Estate Investment Trust.

Both of the additional properties are in Pennsylvania. One would be acquired under an 80-20 joint venture agreement with partner Cedar Shopping Centers Inc. and the other on a 50-50 basis with Cedar.

The initial five properties are being acquired from PREIT at a cost to RioCan of $107 million.

They are: Monroe Marketplace in Sellinsgrove, central Pennsylvania; Creekview Center in the Philadelphia suburb of Warrington; Sunrise Plaza in Forked River, N.J., about 90 kilometres east of Philadelphia; New River Valley Center in Christiansburg, Va., about 90 kilometres north of the Virginia-North Carolina border and Pitney Road Plaza in Lancaster, Pa., midway between Philadelphia and Harrisburg.

A potential purchase of a sixth property located in Pennsylvania, Red Rose Commons, is subject to certain conditions, including reaching an agreement with a third party joint-venture partner of PREIT.

The seventh property, Whitehall Mall in Whitehall Township, a suburb of Allentown, Pa., is to be owned on a 50-50 basis with Cedar with the expectation that the parties will eventually redevelop the property. Closing of the purchase is also subject to an agreement with a third-party joint venture partner of PREIT.

For all seven properties, the aggregate purchase price for RioCan’s interest would be approximately $150 million, exclusive of closing costs and adjustments, the company said in a news release.

“We are very pleased with the progress we have had through our joint venture platform with Cedar to attract high quality acquisition opportunities,” said RioCan president and CEO Edward Sonshine.

“This portfolio of new format retail and grocery anchored retail centres in well established markets represents an excellent opportunity for RioCan to expand its portfolio in the northeastern U.S. at an attractive cap rate and with an excellent opportunity to realize additional growth through leasing.”

RioCan is Canada’s largest real estate investment trust with a total capitalization of some $8.6 billion. It owns and manages Canada’s largest portfolio of shopping centres with ownership interests 267 retail properties, including 11 under development, containing an aggregate of over 60 million square feet.

RioCan also owns an 80 per cent interest in nine grocery anchored shopping centres in the United States through its joint venture arrangement with Cedar, in which is also has a 14 per cent equity interest.

Cedar is a real estate investment trust focused on supermarket-anchored shopping centres and drug store-anchored convenience centres predominantly in the northeastern United States.

RioCan units were down 12 cents at $20.22 in midday trading Monday on the Toronto Stock Exchange.

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