TORONTO, ONTARIO, May 11, 2010 (Marketwire) -- RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) today announced that it has waived conditions and expects to acquire a new format retail centre located in Reading, Pennsylvania, which is located approximately 65 kilometres west of Philadelphia, PA. The property is being acquired from a third party on a joint venture basis with Cedar Shopping Centers, Inc. ("Cedar") on the same 80/20 basis as past joint venture acquisitions. The purchase is expected to close during the third quarter of 2010.
Exeter Commons is a 361,000 square foot new format retail centre anchored by a 171,000 square foot Lowe's Home Improvement Warehouse, on a land lease, and an 82,000 square foot Giant Foods supermarket both with leases expiring in 2029, and is shadow anchored by a 133,000 square foot Target. The property, which was completed in 2009, is currently 98% leased and is tenanted by other national and regional tenants such as Staples and Petco. Other notable tenants include Wachovia/Wells Fargo, Sonic, and Five Guys Burgers. Approximately 94% of the rental revenue is generated by national or strong regional tenants. The weighted average lease term for the property is approximately 17 years, and short term lease renewal risk is minimal as only about 3.7% of leases by square feet come due within the next five years.
The property will be acquired at a cap rate of 7.75%. The total purchase price is expected to be US$53 million; RioCan's interest will be approximately US$42.4 million. The property is being acquired unencumbered and RioCan expects that financing for the property will be arranged in due course.
"We are very pleased to attract another very high quality acquisition through our joint venture platform with Cedar," said Edward Sonshine, Q.C. President and CEO of RioCan. "This acquisition represents an excellent opportunity to acquire a new format retail centre that includes a defensive grocery anchor, a Lowe's, and a Target shadow anchor in a well established market in the Northeasterm US."
About RioCan
RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $8.4 billion as at March 31, 2010. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 261 retail properties, including 12 under development, containing an aggregate of over 60 million square feet. RioCan owns an 80% interest in seven grocery anchored shopping centres in the United States through its joint venture arrangement with Cedar. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centres and drug store-anchored convenience centres located predominantly in the Northeastern United States. For further information, please refer to RioCan's website at www.riocan.com.
Forward-Looking Information
This news release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements made in this news release, and other statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan", "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. All forward-looking statements in this Press Release are qualified by these cautionary statements.
These statements are not guarantees of future events or performance and, by their nature, are based on RioCan's estimates and assumptions, which are subject to risks and uncertainties, including those described under "Risks and Uncertainties" in its management discussion and analysis dated March 31, 2010 which could cause actual events or results to differ materially from the forward-looking statements contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity in the global marketplace associated with current economic conditions, tenant concentrations, occupancy levels, access to debt and equity capital, interest rates, joint ventures/partnerships, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel, unitholder liability, income taxes, the conditions to the transactions not being satisfied resulting in the failure to complete some or all of the proposed transactions, real estate and capital market conditions. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include: a less robust retail environment than has been seen for the last several years; relatively stable interest costs; an increase in acquisition capitalization rates; a decrease in land costs for greenfield development; a continuing trend towards land use intensification in high growth markets; more limited but available access to equity and debt capital markets to fund, at acceptable costs, the future growth program and to enable the Trust to refinance debts as they mature and the availability of purchase opportunities for the joint venture. Although the forward-looking information contained in this Press Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this Press Release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this Press Release.
