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TORONTO-RioCan Real Estate Investment Trust and Ramco-Gershenson Properties Trust have called off a planned $1.5-billion joint venture for the acquisition and development of shopping centers in the US. GlobeSt.Retail reported on the would-have-been partnership in early December.

RioCan is Canada's largest REIT. Its portfolio totals 50.7 million sf in 204 properties, and its market capitalization is $7.6 billion. Ramco-Gershenson, also a REIT, owns 18.3 million sf in 81 properties.

The initial memorandum of understanting between the two with regard to the partnership was that RioCan would own a 70% interest in the JV and that Ramco would own the remainder. It also called for RioCan to contribute to the JV $450 million of its existing centers. Ramco was to oversee the acquisition, development, redevelopment, management and leasing of the assets. The marriage was to be the exclusive catalyst for the acquisition and development of US centers for both companies for two years.

The partnership agreement was to be finalized this quarter. Its terms included the purchase of 4.5% of Ramco's stock by RioCan, at $36.39 per share, and its right to purchase an additional 4.5% over the next three years at $43.15 per share.

This would not have been the first joint venture RioCan has undertaken with a US shopping-center owner. A joint venture it has with New Hyde Park, NY-based Kimco Realty Trust has owned Canadian centers since 2001. In February the firm signed an agreement with TIAA-CREF to acquire $500 million in value-add assets in Canada.

Instant Insights /

RioCan, Ramco Nix JV Plans

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