RioCan marks 30 years as a publicly traded REIT • RENX

January 18, 2024
5 mins read
RioCan marks 30 years as a publicly traded REIT • RENX


The Well in downtown Toronto, one of RioCan's landmark development projects in a partnership with several other developers. (Courtesy RioCan)
The Well in downtown Toronto, one of RioCan’s landmark development projects in a partnership with several other developers. (Courtesy RioCan)

When RioCan REIT (REI-UN-T) chief operating officer John Ballantyne rings the bell to open the Toronto Stock Exchange tomorrow morning (Jan. 19), it will mark the trust’s 30th year as a public-traded company.

Founded by its original CEO Ed Sonshine in 1993, RioCan completed its IPO one year later. Sonshine then led the trust’s growth until March 31, 2021, when he was succeeded by Jonathan Gitlin. Sonshine became non-executive chairman of the trust. 

Ballantyne joined RioCan in February 1994 and is its longest-serving top executive, so he received the ceremonial TSX honour, but he told RENX that RioCan has retained many of its employees for 25 years or more.

“People come here for a long time and their priorities and their efforts are so aligned with the vision and the values of the company that it’s comforting to know that — between the balance sheet, the team we have in place and the underlying portfolio — what we can do over the next 30 years is very exciting,” Ballantyne said.

RioCan’s expansion

Ballantyne has a 30-year tenure with RioCan. It formally became one of Canada’s first two REITs (along with Canadian Real Estate Investment Trust) in 1994, transitioning from a real estate mutual fund trust which couldn’t fill redemption requests because no cash was being generated from building sales.

During the past three decades, Ballantyne has seen RioCan grow from having a portfolio of 11 properties totalling approximately a million square feet to having 340 properties totalling about 54 million square feet.

RioCan has owned different types of retail assets from Victoria, B.C. to Newfoundland and launched a successful 1998 hostile takeover bid for Realfund REIT, becoming the country’s largest trust at that time. 

RioCan also expanded into the United States in 2010 by purchasing 49 retail properties that had dropped in price due to the “great financial crisis” of 2008.

It came to a point, however, where Ballantyne said RioCan realized “bigger isn’t necessarily always better and we really worked on quality as opposed to quantity.”

Changing priorities

The U.S. portfolio was sold to Blackstone Real Estate Partners VIII for close to $1 billion in profit in 2015. RioCan then launched a major markets strategy and began also selling the large majority of its properties outside of Toronto, Montreal, Ottawa, Calgary, Edmonton and Vancouver.

The REIT has evolved into overseeing a retail-focused and increasingly mixed-use portfolio with 192 properties totalling 33.6 million square feet of leasable area – with 94.7 per cent of that space in those six major markets as of Sept. 30, 2023.

“We’re really focused on the classes where we believe we can drive the most growth and the most return to our unitholders, and that’s really grocery-anchored shopping centres and urban mixed-use centres,” Ballantyne noted.

RioCan had 565 employees, a development pipeline of 43.7 million square feet and a total enterprise value of $12.7 billion at the end of Q3 2023.

After being born out of the early 1990s recession, negotiating the financial crisis that ended the first decade of this millennium, and dealing with Target’s entry and quick abandonment of Canada from 2013 to 2015, Ballantyne said “difficult times can create opportunities”. RioCan has also managed to handle the COVID-19 pandemic and higher interest rate environment of recent years.

“It really helped us focus on the quality of our tenant mix,” Ballantyne said. “It really created a focus here of investing more in our existing real estate and really rebuilding that tenant mix.”

The Canadian REIT market and consolidation

John Ballantyne, chief operating officer of RioCan REIT. (Courtesy RioCan)
John Ballantyne, chief operating officer of RioCan REIT. (Courtesy RioCan)

Real Property Association of Canada CEO Michael Brooks told RENX last April Canada had 38 REITs with a market cap totalling approximately $77 billion, so the investment sector has obviously grown along with RioCan since its early days.

“They’re very specialized now, with REITs in every class, and I think the format has proven itself over the years,” Ballantyne noted. “Ultimately, investors have identified with the opportunity of having a tax-efficient and very liquid way of owning real estate.”

There’s been some consolidation of Canadian REITs over the past three decades, and Ballantyne believes more will happen in the next couple of years. He said RioCan’s 1998 acquisition of Realfund REIT was a major turning point.

“Until that point, we were an investment shop. We bought and sold and that was really it. Coming out of that, we understood that we had to better own our real estate, better manage our real estate, internalize management and internalize leasing. And it really kicked off our development program.”

Focusing on a strong balance sheet

While RioCan is always looking for ways to grow and improve, Ballantyne emphasized a strong balance sheet is now the No. 1 priority.

“We’ve got a massive land bank in the major cities of Canada,” Ballantyne said. “We have an intensification program that we can flip the switch and turn on and turn off and intensify over time and realize the highest-and-best use of these properties that have been in our portfolio for a lot of years.

“We have a current development pipeline of about 43 million square feet, and almost 17 million of that is zoned and ready to go. It gives us the optionality of changing and evolving those sites over time when the communities need it and when it’s financially the right time for RioCan.”

Gitlin told RENX in November RioCan would delay new construction projects due to economic conditions, but the REIT has been working to ensure its major market development sites are shovel-ready. 

Ballantyne said that’s still the case and the REIT will be “absolutely ready” to develop new projects when it makes financial sense.

“We’ve positioned sites where we’ve freed up components that we can either build right away, we can bring in partners and build with them, or we can even sell components if it works out better for us,” Ballantyne explained.

RioCan Living and The Well

RioCan Living was launched in 2018 to deliver purpose-built rental apartments and condominiums while leveraging RioCan’s retail and mixed-use properties. Its portfolio includes 17 buildings and projects in the Greater Toronto Area, the Greater Montreal Area, Ottawa and Calgary that are occupied, renting or under development.

“It’s done a very good job of not only adding housing and bringing added revenue to RioCan and our partners, but also making the underlying assets better,” Ballantyne said. “The retail around them is a great amenity for the residential space we built.”   

A prime example is The Well, a three-million-square-foot development at Spadina Avenue and Front Street West in downtown Toronto developed in partnership with Allied Properties REIT, Tridel and Woodbourne

It has 1,700 residential units throughout six purpose-built rental and condo buildings, 1.2 million square feet of office space, and 320,000 square feet of retail and food service space.

“We’ll get to critical mass early this year and I think the city is going to be absolutely blown away when all the restaurants are operating, when all the market units are operating,” Ballantyne predicted.

Future mixed-use developments

As it looks ahead to future developments, RioCan’s acquisition of 5.6 acres of City of Calgary-owned land beside the Glenmore Landing plaza site was just approved by the city’s infrastructure and planning committee. 

Glenmore Landing, one of the original properties in RioCan’s portfolio, currently encompasses 10.4 acres and approximately 147,000 square feet of retail and office space in an unenclosed shopping centre and a three-storey office building in southwest Calgary. 

The REIT is seeking to densify the adjacent land once it’s officially acquired to create a mixed-use residential community over the next 15 to 20 years.

“We haven’t done much on the acquisition side over the last couple of years, but we have been buying little pieces that are adjacent to existing sites as add-ons that will definitely pay off in the future,” Ballantyne said. 

RioCan Durham, at the intersection of Kingston Road East and Salem Road in Ajax, Ont., was created through an assembly of several properties. It now offers 1.09 million square feet of retail space and Ballantyne said one parcel of land has now been approved for the construction of a residential tower.



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