TORONTO, ONTARIO -- (Marketwired) -- 05/06/13 -- RioCan Real Estate Investment Trust ("RioCan") (TSX: REI.UN) today announced that it has entered into an agreement to dissolve its joint venture arrangement with Retail Properties of America, Inc. ("RPAI"). Since 2010, RioCan and RPAI have amassed a high quality portfolio of 13 properties in Dallas, Houston, Austin, San Antonio and Temple, Texas that are owned on an 80/20 basis (80% owned by RioCan and 20% owned by RPAI). Under the terms of the dissolution, RPAI will convey its 20% managing interest in eight properties to RioCan. RioCan will, in turn, convey its 80% interest in the remaining five properties to RPAI. The transaction is expected to close on October 1 2013.
When completed, RioCan will increase its ownership in eight high quality retail assets in Texas from 80% to 100%, including the dominant power centres in Austin and San Antonio. The portfolio includes four Target shadow anchored centres in Austin, San Antonio and Temple, as well as four exceptional grocery anchored or shadow anchored centres in Houston and Dallas. The additional 20% interest will provide RioCan with a 100% ownership interest for 2.5 million square feet of RioCan's 4.3 million square foot portfolio in Texas. The aggregate value of the eight properties exceeds $480 million. RioCan will take over the leasing and management functions of the properties on closing, thereby establishing the basis for a second regional office in Texas, which is in addition to RioCan's northeastern US office that was opened earlier this year.
Included in the transaction are properties such as Southpark Meadows and 1890 Ranch, which serve as two of Austin's dominant power centres. Both are shadow anchored by a Super Target. Southpark Meadows is also anchored by a Super Walmart on a ground lease. At over one million square feet, Southpark Meadows is a key shopping destination in the Austin market, one of America's top performing local economies.
Similarly, Alamo Ranch, shadow anchored by a Super Target, serves as the dominant power centre in the growing northwest region of San Antonio.
Riverpark Shopping Center, is a dominant shopping centre located in the Houston submarket of Sugar Land, with more than 300,000 square feet that is anchored by a 80,460 square foot HEB Supermarket on a long term lease (2023 maturity). Bear Creek Crossing, also in Houston, benefits from a HEB anchor. HEB is one of the United States' largest independent food retailers and the dominant grocer in Texas.
RioCan sees a meaningful growth trajectory in the eight asset portfolio it is acquiring as a result of both absorption of vacant units (the portfolio is currently 94.4% occupied) and organic rental growth.
"Our relationship with RPAI has been a great experience for RioCan, as we have amassed an exceptional portfolio of thirteen retail assets in Texas, the second region that RioCan has entered into in the United States. We have been able to acquire from RPAI a number of grocery anchored or Target anchored centres consistent with our disciplined approach to expansion in the United States," said Edward Sonshine Chief Executive Officer of RioCan. "We have developed a great deal of local knowledge these past three years and RPAI has been an important partner in their contribution to the acquisition and management of these assets. When complete, RioCan will manage a portfolio of 2.5 million square feet in Texas, and we are excited about opening RioCan's second office in the United States. Our presence in Texas will provide RioCan the ability to take advantage of the opportunities within our portfolio and will substantially increase the scale of our operating platform in the United States."
Most Popular Stories
- 15 Myths That Could Ruin Your Hispanic Ad Campaign
- Bitcoin Clones Lurch Onto Financial Scene
- General Motors Names Mary Barra as First Female CEO
- AIG to Create 230 Jobs in Charlotte
- Clinton to Keynote Annual Simmons Leadership Conference
- How Bitcoin and Other Cryptocurrencies Work
- Californians Want to Legalize Marijuana
- Pacific Trade Pact Delay Hinders U.S. Pivot to Asia
- Budget Deal Sets Off Grumbles in Both Houses
- Russia Says Nyet to Canada North Pole Claim