In the fall of 2009 RioCan REIT made it clear that it wanted to break into the U.S. market in a very methodical manner. No massive one-time acquisitions. Nothing too alarming.
On Monday the firm continued with this plan by acquiring five more grocery anchored retail centres in the northeastern United States for $134-million. The properties total 936,000 square feet, almost doubling the 1.0 million sq. ft RioCan owned south of the border as of June 30.
Two more properties are also in the works, which would add another 864,000 square feet to RioCan's U.S. portfolio. As of June 30, U.S. properties accounted for 3.1 per cent of the firm's annualized rental revenue.
RioCan's U.S. acquisitions are made through a joint venture with Cedar Shopping Centers Inc., a U.S. REIT focused on supermarket-anchored shopping centres and drugstore anchored convenience centre. Last October RioCan took a 15 per cent equity position in the company and bought an 80 per cent interest in some of Cedar's properties.
The new acquisitions were made on the same basis as the initial portfolio: 80 per cent RioCan, 20 per cent Cedar. The two firms agreed to buy new properties using this split over a two year period.