RioCan to Buy Out 22 Properties From Kimco for C$715 Million

  • Companies to unwind 35-property joint venture after sale
  • To be completed in two phases in 2015 and early 2016

RioCan Real Estate Investment Trust will pay C$715 million ($533 million) to buy stakes in 22 properties from Kimco Realty Corp. as it unwinds its Canadian joint venture with the U.S. retail REIT.

“This acquisition improves RioCan’s Canadian portfolio by increasing the concentration of the trust’s portfolio located in Canada’s six largest markets, most notably in the greater Toronto area,” Edward Sonshine, chief executive officer of Toronto-based RioCan, said in a statement Thursday.

Under the terms of the deal, RioCan, Canada’s largest REIT by market value, will also assume Kimco’s share of the joint venture’s debt, amounting to C$231 million.

The purchase of the mostly retail real estate will be completed in two phases, the companies said. The first stage, with 19 properties, is expected to close this month. The sale of the other three will be completed in the first quarter.

The deal enables Kimco to simplify its operations and “provides an important source of capital to fund redevelopment activities and further strengthen our balance sheet,” Dave Henry, CEO of the New Hyde Park, New York-based REIT, said in the statement.

The companies had 35 properties in their joint venture. Of the real estate not included in the transaction, 10 institutional-quality retail assets will be sold, while three other transitional properties that were previously occupied by Target Corp. will be “dealt with at a future date,” according to the statement.

RioCan rose 1.7 percent to close at C$24.70. Kimco slipped 1.2 percent to $23.93.

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