Toronto-based RioCan Real Estate Investment Trust broke off its proposed joint venture with Ramco-Gershenson Properties Trust leaving the Farmington Hills, Mich.-based REIT's president and CEO Dennis Gershenson smarting.

The $1.5 billion deal, announced in December, was to give RioCan, Canada's largest REIT, entry into the United States. But, without warning, says Gershenson, RioCan backed out. Now Ramco has begun courting other potential partners.

RioCan president and CEO, Edward Sonshine released a statement January 10, calling off the deal, stating it was “not in the best interest of either party.”

Just two days before, Gershenson says, he and Sonshine had been amicably discussing which properties should be entered into the joint venture. The following afternoon, Gershenson says he received a phone call from Sonshine terminating the negotiations.

Gershenson says the only source of dissatisfaction he could think of is that Ramco-Gershenson offered RioCan a couple of properties in secondary markets, as opposed to its desire for centers in major metro areas. RioCan executives did not return repeated calls from Retail Traffic seeking comment.

Cantor Fitzgerald analyst Philip Martin wrote venturing onto the international stage might have proved trickier than RioCan anticipated. “This [termination] is due, in our opinion to cross-border issues (such as taxes, etc.)…. We believe Ramco's investment pipeline remains attractive, and the company will be able to execute on their growth plan.”