RioCan Moves Forward with $123.3M Purchase of Stake in Eight Inland Western Retail Properties

RioCan and Inland Western announced the formation of their institutional joint venture in May. The eight new format and grocery-anchored assets of which RioCan will now acquire 80 percent account for approximately 1.1 million square feet of retail space in the Houston, Dallas-Fort Worth and Austin markets.

July 14, 2010
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user Krikit

It’s almost a done deal. Toronto, Ont.-based RioCan has waived due diligence conditions and firmed up a contract to acquire eight Texas shopping centers with Oak Brook, Ill.-based Inland Western Retail Real Estate Trust Inc. in an 80/20 joint venture agreement. RioCan will plunk down $123.3 million for its majority stake, leaving Inland Retail to hold on to a minority interest in the assets that it acquired within the last several years.

RioCan and Inland Western announced the formation of their institutional joint venture in May. The eight new format and grocery-anchored assets of which RioCan will now acquire 80 percent account for approximately 1.1 million square feet of retail space in the Houston, Dallas-Fort Worth and Austin markets. The Houston portion of the portfolio includes the 311,300-square-foot Riverpark Shopping Center, the 87,900-square-foot Bear Creek Shopping Center, the 148,000-square-foot New Forest Crossing and the 116,400-square-foot Cypress Mill Plaza. The Dallas-Fort Worth assets encompass Suntree Square, a 96,500-square-foot grocery-anchored shopping center; the 91,400-square-foot Coppell Town Center grocery-anchored property; and Great Southwest Crossing, a 92,300-square-foot new format retail center. Rounding out the portfolio is Southpark Meadows I, a 266,800-square-foot new format retail center in Austin.

The $123.3 million that RioCan will pay for its portion of the joint venture endeavor consists of a $55.1 million net equity investment and the assumption of a $68.2 million portion of existing mortgage debt. For RioCan, the transaction will allow the REIT, Canada’s largest, to continue its quest of acquiring premium quality defensive assets in major markets with growth potential.

For Inland Western’s part, the partnership with RioCan paves the way for the company to make good on one of its 2010 initiatives: execute future accretive asset acquisitions through joint ventures.

The portfolio purchase is on target to close in stages, subject to lender consents, during the third quarter of this year.