RioCan Real Estate Investment Trust Announces That it has Completed the Establishment of Its American Platform

RioCan Real Estate Investment Trust Announces That it has Completed the 
Establishment of Its American Platform 
TORONTO, ONTARIO -- (Marketwired) -- 10/10/13 -- RioCan Real Estate
Investment Trust ("RioCan") (TSX:REI.UN) today announced that its
operating platform in the United States is now fully staffed and
operational. RioCan has consolidated its ownership of virtually all
of the US properties that were previously owned through joint venture
arrangements. Working from two regional offices located in Mount
Laurel, New Jersey and Dallas, Texas and supported by RioCan's
headquarters in Toronto, Ontario, Canada, RioCan's 26 full time
employees in the United States will manage RioCan's American
portfolio.  
In less than four years, RioCan has assembled a US portfolio that
comprises 47 properties with nearly ten million square feet of net
leaseable area representing approximately 20% of RioCan's total
portfolio by square feet. RioCan's US portfolio is diversified across
two regions in the US, the Northeast and Texas, with more than one
thousand tenancies. This high quality portfolio derives 86% of its
annualized rental revenue from National and Anchor tenants, with the
largest tenant being grocery operator Royal Ahold (10.4%). No other
US tenant represents more than 5% of RioCan's US rental revenue.
Together, grocery tenants generate 20% of RioCan's US annualized
rental revenue. 
"Our expansion into the United States has been a tremendous source of
growth for RioCan. It has been nearly four years since our first US
acquisitions, and through our initial partnerships we have developed
the local knowledge that we felt we needed before assuming management
ourselves," said Edward Sonshine, Chief Executive Officer of RioCan.
"RioCan's American portfolio currently represents approximately 14.1%
of RioCan's revenue base, and with our regional offices in place we
have a scalable American platform that will be the foundation for
RioCan's continued growth in the United States and serve as
diversification from our Canadian assets. Not only do we expect that
our cost of operating this platform will be less than the third party
fees we were paying, we are also confident that RioCan's US portfolio
will be an important part of our organic growth." 
As described below, with the exception of one property, RioCan will
own a 100% interest in all of its US properties. RioCan's Texas
portfolio focused in the four major markets of Dallas, Houston, San
Antonio and Austin, will total 5.1 million square feet in 19
properties and will generate approximately 54% of RioCan's annualized
rental revenue in the US.  


 
Summary of RioCan's US Property PortfolioTexas Portfolio                    
                                                                            
                                          RioCan GLA Major Tenants          
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Austin                                                                      
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1890 Ranch                                   486,896 Cinemark, Office Depot,
                                                     Petsmart, Target(i),   
                                                     Hobby Lobby(i)         
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Southpark Meadows                            921,141 Walmart, JC Penny,     
                                                     Hobby Lobby, Target(i) 
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Total                                      1,408,037                        
                                                                            
Dallas/Fort Worth                                                           
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Lincoln Square                               471,577 Best Buy, Ross,        
                                                     Petsmart, Stein Mart,  
                                                     Michael's              
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Market Street -                               72,617 Market Street          
 Colleyville Centre                                  Supermarket            
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Great Southwest Crossing                     153,105 Office Depot, PetsMart,
                                                     Kroger Supermarket,    
                                                     Sam's Club(i)          
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Timber Creek                                 474,441 Walmart, Sam's Club, JC
                                                     Penny                  
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Montgomery Plaza(ii)                         232,897 Marshalls, Ross, Office
                                                     Depot, Petsmart,       
                                                     SuperTarget(i)         
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Las Colinas Village                          104,741 Staples                
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Market Street -                               88,389 Market Street          
 Stonebridge Ranch                                   Supermarket            
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Suntree Square                                99,269 Tom Thumb Supermarket  
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Total                                      1,697,036                        
                                                                            
Houston                                                                     
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Cinco Ranch                                   97,761 HomeGoods, Michaels,   
                                                     Office Max,            
                                                     SuperTarget(i)         
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Bear Creek Shopping                           87,912 HEB Supermarket        
 Centre                                                                     
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Louetta Central                              179,995 Kohl's, Ross,          
                                                     Michael's, Walmart(i)  
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Riverpark Shopping Centre                    253,011 HEB Supermarket,       
                                                     Walgreen's, L.A.       
                                                     Fitness, Dollar Tree   
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Total                                        618,679                        
                                                                            
San Antonio                                                                 
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Alamo Ranch                         
         465,371 Dick's Sporting Goods, 
                                                     Best Buy, Ross,        
                                                     Marshalls              
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Arbor Park                                   139,718 Ross, Office Max,      
                                                     Michael's              
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Ingram Hills Shopping                         80,347 La Fiesta Supermarket  
 Centre                                                                     
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Total                                        685,436                        
                                                                            
Other Texas Markets                                                         
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Las Palmas Marketplace                       637,272 Lowe's, Kohl's, Bed    
                         El Paso                     Bath & Beyond, Ross    
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Bird Creek Crossing                          124,941 Best Buy, Petsmart,    
                         Temple                      Target(i), Home        
  
                                                   Depot(i)               
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Total                                        762,213                        
                                                                            
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Total Texas:                               5,171,401                        
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(i) Shadow Anchor (ii) RioCan owns an 80% interest in Montgomery Plaza.     
                                                                            
RioCan Northeastern US Portfolio                                            
                                                                            
Connecticut              City             RioCan GLA Major Tenants          
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Montville Commons        Montville           117,916 Stop & Shop            
                                                     Supermarket, Home      
                                                     Depot(i)               
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Stop & Shop Plaza        Bridgeport           54,510 Giant Foods Supermarket
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Total                                        172,426                        
                                                                            
Maryland                                                                    
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First Colony Centre      California           98,186 Giant Foods            
                                                     Supermarket, Michaels, 
                            
                         Target(i) Lowe's(i)    
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Marlboro Crossroads      Upper Marlboro       67,975 Giant Foods Supermarket
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Total                                        166,161                        
                                                                            
Massachusetts                                                               
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Northwoods Crossing      Taunton             159,562 BJ's Wholesale Club    
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Shaw's Plaza             Raynham             176,609 Shaw's Supermarket,    
                                                     Marshalls              
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Total                                        336,171                        
                                                                            
New Hampshire                                                               
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Village Shoppes at Salem Salem               170,270 Sports Authority,      
                                                     PetSmart, Best Buy,    
                                                     Michaels, DSW          
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New Jersey                                                                  
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Cross Keys Place         Turnersville        148,173 Sports Authority, Old  
                                                     Navy, Bed Bath &       
                                                     Beyond, Home Depot(i)  
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Deptford Landing         Deptford            517,096 Walmart, Sam's Club,   
                                                     hhgregg, Michael's,    
                                                     Petsmart               
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Sunrise Plaza            Forked River        260,895 Home Depot, Kohl's     
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Total                                        926,164                        
                                                                            
New York                                                                    
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Beekman Stop & Shop      Hopewell             40,416 Stop & Shop Supermarket
                         Junction                                           
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Huntington Square        East Northport      116,221 Stop & Shop            
                                                     Supermarket, Best Buy  
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Total                                        156,637                        
                                                                            
Pennsylvania           City             RioCan GLA Major Tenants            
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Blue Mountain Commons  Harrisburg          123,353 Giant Foods Supermarket  
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Columbus Crossing      Philadelphia        142,166 Super Fresh Supermarket, 
 Shopping Centre                                   Old Navy, AC Moore       
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Creekview              Warrington          136,423 Giant Foods Supermarket, 
                                                   LA Fitness, JoAnn        
                                                   Fabrics, Lowe's(i),      
                                                   Target(i)                
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Exeter Commons         Exeter              361,321 Lowe's, Giant Foods      
                                                   Supermarket, Target(i)   
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Gettysburg Marketplace Gettysburg           82,785 Giant Foods Supermarket  
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Loyal Plaza            Williamsport        293,825 Kmart, Giant Foods       
                                                   Supermarket, Staples     
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Monroe Marketplace     Selinsgrove         364,929 Giant Foods Supermarket, 
                                                   Kohl's, Dick's Sporting  
                                                   Goods, Best Buy,         
                                                   Target(i)                
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Northland Centre       State College       111,496 Giant Foods Supermarket, 
                                                   CVS Pharmacy             
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Pitney Road            Lancaster            45,915 Best Buy, Lowe's(i)      
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Sunset Crossing        Dickson City         74,142 Giant Foods Supermarket  
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Town Square Plaza      Muhlenberg          127,678 Giant Foods Supermarket, 
                                                   Petsmart, AC Moore,      
                                                   Target(i)                
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York Marketplace       York                305,410 Giant Foods Supermarket, 
                                                   Lowes                    
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Total                                    2,169,443                          
                                                                            
Rhode Island                                                                
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Super Stop & Shop      Richmond             60,488 Stop & Shop Supermarket  
 Plaza                                                                      
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Virginia                                                                    
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New River Valley       Christiansburg      164,663 Best Buy, Ross, Bed Bath 
                                                   & Beyond                 
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Towne Crossing         Richmond            111,016 Bed Bath & Beyond,       
 Shopping Centre                                   Michael's                
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Total                                      275,679                          
                                                                            
West Virginia                                                               
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The Commons            Martinsburg         274,096 Dick's Sporting Goods,   
                                                   Best Buy, TJ Maxx,       
                                                   Petsmart, Target(i)      
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Total Northeast                          4,707,535                          
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Total US PORTFOLIO:                      9,878,936                          
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 (i) Shadow anchor 
Dissolution of Texas Joint Ventures:  
RioCan has successfully completed the dissolution of its joint
venture arrangements with its Texas partners, Retail Properties of
America, Inc. ("RPAI") and Dunhill Partners ("Dunhill"). RioCan has
also entered into an agreement to dissolve its joint venture
arrangement with Sterling Corporation ("Sterling") by agreeing to
purchase their managing interest in two properties in Texas. 
In total, RioCan has acquired its partners' interests in 14
properties at a total purchase price of US$211.7 million at a
weighted average capitalization rate of 6.6%. RioCan has completed
two additional acquisitions, the Kroger grocery store parcel at Great
Southwest Crossing at a purchase price of US$6.3 million at a
capitalization rate of 6.8% and Beekman Stop & Shop, Hopewell
Junction, New York at a purchase price of US$15.3 million at a
capitalization rate of 6.2%.  
In addition, RioCan has entered into a firm contract to purchase the
Gander Mountain parcel which is part of Riverpark Shopping Center in
Houston, Texas at a purchase price of US$9.3 million. RioCan has also
entered into an agreement with Sterling to acquire their 10% interest
in Ingram Hills, and their 20% interest in Cinco Ranch.  
Terms of the RPAI Transaction: 
RioCan and RPAI's joint portfolio totalled 13 properties in Dallas,
Houston, Austin, San Antonio and Temple, Texas that were owned on an
80/20 basis (80% owned by RioCan and 20% owned by RPAI). Under the
terms of the dissolution, RPAI sold its 20% managing interest in
eight properties to RioCan. RioCan, in turn, sold its 80% interest in
the remaining five properties to RPAI.  
Texas Properties acquired from RPAI by RioCan: 


 
--  1890 Ranch, Austin Southpark 
--  Meadows, Austin     
--  Bear Creek Shopping Center, Houston 
--  Riverpark Phase, Houston 
--  Great Southwest Crossing, Dallas 
--  Suntree Square, Dallas     
--  Alamo Ranch, San Antonio 
--  Bird Creek Crossing, Temple

 
RioCan acquired the 20% interest in the eight properties at a
purchase price of US$96.6 million, (US$95.5 million net of a US$1.1
million mark to market adjustment on the outstanding debt)
representing a capitalization rate of 6.9%. Under the terms of the
transaction, RioCan assumed RPAI's share of the existing in place
mortgage financing on five of the properties aggregating US$41.8
million, which carries an average interest rate of 3.7% and has an
average term to maturity of 2.5 years. Three of the properties were
acquired free and clear of financing.  
As part of the dissolution, RioCan sold its 80% interest in five
properties that were previously owned through the joint venture for
US$102.8 million (US$99.9 million net of a US$2.9 million mark to
market adjustment on the outstanding debt), representing a
capitalization rate of 6.8% and represents a total of approximately
600,000 square feet (at a 100% interest). RPAI assumed RioCan's
portion of the in place mortgage financing of US$54.3 million that
carries a weighted average interest rate of 4.8%.  
Texas Properties sold to RPAI: 


 
--  Coppell Town Center, Dallas     
--  Southlake Corners, Dallas 
--  Cypress Mill, Houston    
--  Sawyer Heights, Houston 
--  New Forest Crossing, Houston  

 
RioCan has also agreed to purchase the Riverpark Shopping Center
Phase III at a purchase price of US$9.3 million which equates to a
capitalization rate of 8.0%. Riverpark Shopping Center Phase III is a
64,329 square foot sporting goods store operated by Gander Mountain
as part of the Riverpark Shopping Center that was originally part of
the joint venture arrangement. This parcel will be acquired free and
clear of financing. 
Additional Acquisitions 
RioCan has acquired Beekman Stop & Shop in Hopewell Junction, New
York from RPAI at a purchase price of US$15.3 million which equates
to a capitalization rate of 6.2%. The property is a standalone 40,416
square foot Stop & Shop grocery store (Royal Ahold). The property was
acquired free and clear of financing.  
RioCan has also purchased the Kroger at Great Southwest Crossing in
Grand Prairie, Texas from DDR at a purchase price of US$6.3 million
which equates to a cap rate of 6.8%. The Kroger at Great Southwest
Crossing is a 60,835 square foot grocery store operated by Kroger and
is part of the Great Southwest Crossing shopping centre that was
originally part of the joint venture arrangement. This parcel was
acquired free and clear of financing.  
Terms of the Dunhill Transaction: 
RioCan and Dunhill's joint portfolio totalled six properties in
Dallas, Houston, San Antonio and El Paso, Texas. Under the terms of
the dissolution, RioCan has purchased Dunhill's managing interest at
a total purchase price of US$83.5 million at a weighted average
capitalization rate of 6.4%. RioCan has assumed Dunhill's share of
the existing in place mortgage financing of US$41.9 million that
carries a weighted average interest rate of 5.0%.  
RioCan also acquired Kimco's 31.7% interest in Las Palmas Marketplace
in El 
Paso, which was previously owned in a joint venture arrangement
with Dunhill and Kimco, at a purchase price of US$31.7 at a
capitalization rate of 6.4%. RioCan assumed Kimco's share of the
existing in place mortgage financing of US$15.5 million that carries
an interest rate of 5.4%. 
Texas Properties acquired from Dunhill by RioCan: 


 
--  Las Colinas, Dallas 
--  Lincoln Square, Dallas   
--  Arbor Park, San Antonio 
--  Las Palmas Marketplace, El Paso 
--  Timber Creek Crossing, Dallas    
--  Louetta Central, Houston

 
Terms of the Sterling Transaction 
RioCan and Sterling's joint portfolio totalled two properties in
Houston, and San Antonio, Texas. RioCan has agreed to purchase
Sterling's managing interest in Ingram Hills, San Antonio and Cinco
Ranch, Houston at a total purchase price of US$6.2 million at a
weighted average capitalization rate of 6.2%. RioCan will assume
Sterling's share of the existing in place mortgage financing of
US$2.3 million that carries a weighted average interest rate of 7.1%. 
About RioCan 
RioCan is Canada's largest real estate investment trust with a total
capitalization of approximately US$13.7 billion as at June 30, 2013.
It owns and manages Canada's largest portfolio of shopping centres
with ownership interests in a portfolio of 348 retail properties
containing more than 83 million square feet, including 50 grocery
anchored and new format retail cen
tres containing 13.7 million square
feet in the United States through various joint venture arrangements
as at June 30, 2013. RioCan's portfolio also includes 15 properties
under development in Canada. For further information, please refer to
RioCan's website at www.riocan.com. 
Forward-Looking Information 
This News Release contains forward-looking statements within the
meaning of applicable securities laws. These statements include, but
are not limited to, statements made in this News Release (including
the sections entitled "Summary of RioCan's US Property Portfolio",
"Dissolution of Texas Joint Ventures", "Terms of the RPAI
Transaction", "Terms of the Dunhill Transaction" and "Terms of the
Sterling Transaction"), and other statements concerning RioCan's
objectives, its strategies to achieve those objectives, as well as
statements with respect to management's beliefs, plans, estimates,
and intentions, and similar statements concerning anticipated future
events, results, circumstances, performance or expectations that are
not historical facts. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as
"outlook", "objective", "may", "will", "would", "expect", "intend",
"estimate", "anticipate", "believe", "should", "plan", "continue", or
similar expressions suggesting future outcomes or events. Such
forward-looking statements reflect management's current beliefs and
are based on information currently available to management. All
forward-looking statements in this News Release are qualified by
these cautionary statements.  
These forward-looking statements are not guarantees of future events
or performance and, by their nature, are based on RioCan's current
estimates and assumptions, which are subject to risks and
uncertainties, including those described under "Risks and
Uncertainties" in RioCan's latest financial statements and RioCan's
Management's Discussion and Analysis for the period ended June 30,
2013, which could cause actual events or results to differ materially
from the forward-looking statements contained in this News Release.
Those risks and uncertainties include, but are not limited to, those
related to: liquidity in the global marketplace associated with
economic conditions, tenant concentrations, occupancy levels, access
to debt and equity capital, interest rates, joint
ventures/partnerships, the relative illiquidity of real property,
unexpected costs or liabilities related to acquisitions,
construction, environmental matters, legal matters, reliance on key
personnel, unitholder liability, income taxes, the investment in the
United States of America ("US"), fluctuations in the currency
exchange rate between the Canadian and US dollar and RioCan's
qualification as a real estate investment trust for tax purposes.
Material factors or assumptions that were applied in drawing a
conclusion or making an estimate set out in the forward-looking
information may include, but are not limited to: a stable retail
environment; relatively low and stable interest costs; a continuing
trend toward land use intensification in high growth markets; access
to equity and debt capital markets to fund, at acceptable costs, the
future growth program to enable the Trust to refinance debts as they
mature; the availability of purchase opportunities for growth in
Canada and the US; and the impact of accounting principles adopted by
the Trust effective January 1, 2011 under International Financial
Reporting Standards ("IFRS"). Although the forward-looking
information contained in this News Release is based upon what
management believes are reasonable assumptions, there can be no
assurance that actual results will be consistent with these
forward-looking statements. Certain statements included in this News
Release may be considered "financial outlook" for purposes of
applicable securities laws, and such financial outlook may not be
appropriate for purposes other than this News Release.  
The Income Tax Act (Canada) (the "Act") contains legislation
affecting the tax treatment of publicly traded trusts (the "SIFT
Legislation"). The SIFT Legislation
 will not impose tax on a trust
which qualifies under such legislation as a real estate investment
trust (the "REIT Exception"). RioCan currently qualifies for the REIT
Exception and intends to continue to qualify for future years. Should
this not occur, certain statements contained in this News Release may
need to be modified. 
Except as required by applicable law, RioCan under takes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. 
Contacts:
RioCan Real Estate Investment Trust
Edward Sonshine, O.Ont, Q.C.
Chief Executive Officer
(416) 866-3018
 
 
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