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RioCan, TIAA Form Retail JV

TORONTO- RioCan Retail Value Limited Partnership II will combine $150 million of equity with debt to acquire retail properties.

By Brian K. Miller | Updated on February 13, 2006

TORONTO-Locally headquartered RioCan REIT has formed a partnership with TIAA-CREF that will combine $150 million of equity with debt to acquire $500 million of value-add retail properties. RioCan Retail Value Limited Partnership II will acquire assets over the next three years and, once the money is spent, will have five years to liquidate the portfolio.

RioCan, which owns and manages a 50.8 million-sf retail shopping center portfolio, will be the partnership manager responsible. As such, it will oversee all initiatives undertaken to increase the value of the properties, including all asset and property management, leasing and construction management services. RioCan chief executive Ed Sonshine tells GlobeSt.com the goal is for a weighted average Internal Rate of Return of 15% or better.

The value-add plays that may be utilized include remerchandising the asset to enhance the overall tenant mix; taking advantage of expansion or redevelopment opportunities; solidifying income from the existing tenant base; extending the terms of the existing tenant base; and increasing the proportion of national and anchor tenants.

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