RioCan Real Estate Investment Trust, the largest Canadian REIT, is joining the move by Canadian investors into the U.S. market. The Toronto-based company is launching a $1.5-billion joint venture with Ramco-Gershenson Properties Trust, which owns and operates community centers in the Midwest, the Mid-Atlantic and the Southeast. The venture will allow RioCan to build a U.S. portfolio, while Ramco-Gershenson will benefit from acquisition,, property management and leasing fees.
RioCan, which operates community and power centers in Canada, will hold a 70 percent stake and Ramco-Gershenson will have a 30 percent interest. Thecalls for Ramco-Gershenson to contribute up to 18 of its shopping centers to the venture, with a total value of $450 million or more. RioCan has also agreed to purchase a 4.5 percent stake in Ramco-Gershenson.
“We wanted someone who had very similar tenants in their portfolio or even exactly the same tenants,” says Edward Sonshine, Q.C., president and CEO of RioCan. Wal-Mart, Staples and A&P are all on RioCan's tenant list.