RioCan is shuffling its management team as one of Canada’s largest real estate investment trusts grooms senior vice-president Jonathan Gitlin as a potential successor for 71-year old founder and chief executive Ed Sonshine.
Mr. Gitlin, RioCan’s senior vice-president of investments and residential, has been promoted to the trust’s No. 2 job of chief operating officer. He will replace current COO and president Raghunath Davloor, who will resign at the end of July.
“Trial by fire,” Mr. Sonshine said.
The management shakeup is part of RioCan’s succession planning to replace Mr. Sonshine. The RioCan Real Estate Investment Trust CEO founded the trust in 1993 and has served as its top executive ever since.
Although the RioCan board has been discussing succession for some time, there is no timeline for Mr. Sonshine’s retirement.
“I don’t know what timeline, if any, there is. I know our board is very focused on succession, as is Ed,” Mr. Gitlin, who is 46, said.
Along with the COO responsibilities, Mr. Gitlin will continue to oversee investments and the trust’s newly established multiresidential unit, RioCan Living. Mr. Gitlin will move into his new role Aug. 1 after the departure of Mr. Davloor, who is also known as “Rags.” (RioCan declined to provide Mr. Davloor’s age.)
Mr. Gitlin has been in charge of divesting dozens of shopping centres across the country so that RioCan can focus on the country’s six largest real-estate markets of Toronto, Ottawa, Vancouver, Montreal, Edmonton and Calgary.
Once the secondary-market properties are sold, the trust expects to pull in more than 90 per cent of its rental revenue from its six major markets.
Mr. Gitlin joined RioCan in 2005 from Canadian law firm McCarthy Tétrault, where he worked as a commercial real-estate lawyer for six years.
Mr. Gitlin would not comment on his status as heir apparent. “I am focused on the first step, which is this new role of COO and making sure that there is a seamless transition from Rags to me,” he said.
No change in strategy is expected under the new management team. Mr. Gitlin has worked closely with Mr. Sonshine for years. The duo came up with the idea to redevelop some of their prime retail property located close to public transportation into apartments or other multiresidential buildings.
RioCan has identified 43 properties that can be redeveloped, nearly three-quarters of which are in the Toronto area. The rest are in RioCan’s other major markets.
Mr. Gitlin’s promotion was viewed favourably. “We were somewhat surprised to see Rags leave. Jonathan Gitlin is a good choice to replace him,” said Michael Smith, managing director of global research at RBC Capital Markets.