RioCan REIT and Boardwalk REIT team up to create a joint venture to develop a mixed use retail and rental residential tower at RioCan's Brentwood Village Shopping Centre
RioCan Real Estate Investment Trust (TSX:REI.UN, "RioCan") and;
Boardwalk Real Estate Investment Trust (TSX:BEI.UN, "Boardwalk")
TORONTO and CALGARY, Nov. 10, 2016 /PRNewswire/ - RioCan and Boardwalk are pleased to announce the formation of a joint venture to develop a mixed use tower on a discrete portion at RioCan's Brentwood Village Shopping Centre in Calgary, AB. RioCan will maintain a 100% ownership interest in the remainder of the centre.
The project will consist of an at-grade retail podium totaling approximately 10,000 square feet and an 11-storey residential tower with approximately 120,000 square feet of residential space, totaling approximately 165 apartment units. The development will include two levels of underground parking and will provide premium rental housing minutes from downtown Calgary along the Northwest Light Rail Transit line, while providing close proximity to the University of Calgary, McMahon Stadium, and Foothills Hospital.
Sam Kolias, Chairman and Chief Executive Officer of Boardwalk REIT commented: "We are excited to announce the formation of this joint venture with a like-minded partner who shares similar values and goals as our own, to maximize the potential of well-located, transit oriented mixed use developments that can be constructed to create new communities that Residents are proud to call home."
"We are very pleased to partner with Boardwalk on our first rental residential development in the Calgary market. Boardwalk brings a wealth of management expertise to the rental residential segment, particularly within the Alberta market," said Edward Sonshine Chief Executive Officer of RioCan. "This rental residential tower will be an excellent addition to this mixed use shopping centre, and a great example of just one of the many urban intensification projects that RioCan has on hand within its portfolio of high quality urban locations in Canada's six major markets."
The joint venture involves an equal 50% interest, in which, each will provide its best-in-class retail and residential expertise to co-develop the asset. To maximize the value of the development, RioCan will manage the retail component, and Boardwalk will manage the residential component each on a cost basis.
RioCan and Boardwalk are currently working together to finalize the submission of plans for a development permit. Subject to certain conditions including the receipt of both the development permit and the subdivision of the lands on terms and conditions satisfactory to both RioCan and Boardwalk, closing is expected to occur in mid-2017, with construction beginning as early as Q3, 2017.
Based on the determination of total buildable area, Boardwalk will pay RioCan approximately $2.9 million for its 50% interest in the sub-divided land at closing. Subject to the finalization of building plans and specifications, it is estimated that the total construction for the project will be between $60 million to $70 million ($30 million to $35 million per partner.)
About RioCan
RioCan is Canada's largest real estate investment trust with a total enterprise value of approximately $15 billion as at September 30, 2016. RioCan owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 301 Canadian retail and mixed use properties, including 15 properties under development, containing an aggregate net leasable area of 47 million square feet. For further information, please refer to RioCan's website at www.riocan.com.
About Boardwalk
Boardwalk REIT strives to be Canada's friendliest landlord and currently owns and operates more than 200 communities with over 33,000 residential units totaling over 28 million net rentable square feet. Boardwalk's principal objectives are to provide its Residents with the best quality communities and superior customer service, while providing Unitholders with sustainable monthly cash distributions, and increase the value of its Trust Units through selective acquisitions, dispositions, development, and effective management of its residential multi-family communities. Boardwalk REIT is vertically integrated and is Canada's leading owner/operator of multi-family communities with 1,400 Associates bringing Residents home to properties located in Alberta, Saskatchewan, Ontario, and Quebec.
Boardwalk REIT's Trust Units are listed on the Toronto Stock Exchange, trading under the symbol BEI.UN. Additional information about Boardwalk REIT can be found on the Trust's website at www.BoardwalkREIT.com.
Forward Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian securities laws. This information includes, but is not limited to, statements made with respect to RioCan's and Boardwalk's development program, their joint venture, the ability of the joint venture to achieve any necessary development approvals, and other statements concerning RioCan's and Boardwalk's objectives, their 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 information 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 information reflects management's current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements.
Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan's or Boardwalk's current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described under "Risks and Uncertainties" in both RioCan's and Boardwalk's Management's Discussion and Analysis ("MD&A") for the period ended September 30, 2016, their most recent Annual Reports and Annual Information Forms, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity and general market conditions; tenant concentrations and related risk of bankruptcy or restructuring (and the terms of any bankruptcy or restructuring proceeding), defaults, including the failure to fulfill contractual obligations by the tenant or a related party thereof; retailer competition; access to debt and equity capital; interest rate and financing risk; joint ventures and partnerships; the relative illiquidity of real property; development risk associated with construction commitments, project costs and related approvals; environmental matters; and property management, . liquidity in the global marketplace associated with current economic conditions, occupancy levels, access to debt and equity capital, interest rates, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions or dispositions, construction, environmental matters, legal matters, reliance on key personnel, income taxes, the conditions to the transactions not being satisfied resulting in the failure to complete some or all of the proposed transactions described herein, the trading price of the securities of Boardwalk, lack of availability of acquisition or disposition opportunities for the Trust and exposure to economic, real estate and capital market conditions in North America. Although the forward looking information contained in this News 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 News 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 News Release.
The Income Tax Act (Canada) contains provisions which potentially impose tax on publicly traded trusts (the SIFT Provisions). However, the SIFT Provisions do not impose tax on a publicly traded trust which qualifies as a REIT. RioCan and Boardwalk both currently qualify as real estate investment trusts for Canadian tax purposes and intends to qualify for future years. Should this not occur, certain statements contained in this News Release may need to be modified.
Except as required by applicable law, neither RioCan nor Boardwalk undertake any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
SOURCE Boardwalk Real Estate Investment Trust
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