NEW HYDE PARK, NY—Kimco Realty Corp. is unwinding its 15-year joint venture with Toronto-based RioCan Real Estate Investment Trust, the two companies said Thursday. The first phase of the unwinding is slated to occur by month's end as RioCan acquires Kimco's interest in 19 properties, part of a 22-property portfolio for which the Canadian REIT will pay a total of US$715 million, including the assumption of $231 million in debt. In all, the JV controls 35 properties.

“Our longstanding relationship with RioCan has been excellent and this transaction allows both companies to pursue their own longer-term strategic objectives,” says Kimco CEO David Henry. “This sale enables Kimco to continue simplifying its operations by reducing the number of properties in joint ventures, including those that we do not manage, and provides an important source of capital to fund redevelopment activities and further strengthen our balance sheet.”

Phase two of the unwinding process involves 10 institutional-quality retail assets which the partners have agreed to market for sale; one is currently under a conditional contract to be sold. Kimco and RioCan plan to dispose of the remaining nine in the first half of 2016. Also part of the JV are three “transitional” properties formerly occupied by Target, which will be dealt with at a future date.

The dissolution of the JV does not mark Kimco's exit from the Canadian market. It still has more than two dozen retail properties across the country that are not part of the JV with RioCan, according to its website.

Conversely, RioCan announced in late July that it was exploring its options for its US portfolio, including a possible sale. The REIT hired Morgan Stanley and the Royal Bank of Canada for a strategic review of its US operations, which are concentrated mainly in Texas and the Northeast. Alternatives for RioCan's holdings in this country include, but are not limited to, continuing to operate and invest in the US portfolio, selling some or all of its properties in the US or forming a joint venture. Bloomberg Business reported that the portfolio could be worth US$2 billion to $2.2 billion.