Sonshine, the only CEO the company has known during its 26-year history, will retire on March 31, 2021, subject to a possible one-year extension. In addition, RioCan has announced the promotion of Jonathan Gitlin to president, adding the role to his current position of chief operating officer.
Upon his retirement in March 2021 (or March 2022 if extended), Sonshine will become the non-executive chairman of the board for two years to ensure an orderly transition with his successor. Paul Godfrey, the current chair of the board, has agreed to step down at that time to become lead trustee.
“The members of the board of trustees are all very pleased that Mr. Sonshine has agreed to remain as CEO of the trust for the next two to three years and that he will continue to play an important role in the ongoing leadership of the trust following his retirement,” said Godfrey in the release. “He continues to bring a tremendous amount of leadership to the management team as he guides RioCan in its strategic vision for continued growth.”
Once Canada’s largest REIT
Sonshine built RioCan into Canada’s largest REIT in the 1990s and early 200s, a position it held until one year ago, when Choice Properties REIT combined with Canadian REIT (CREIT) to surpass RioCan and take the No. 1 spot.
“I am gratified that the board and I have agreed to arrangements to provide for an orderly transition at RioCan,” said Sonshine in the release.
“The major initiatives that we have underway, ranging from the creation of Canada’s best residential rental portfolio to the completion of some of our major development projects, including The Well and Yonge Sheppard Centre, require the additional time that we have now arranged.
‘I am looking forward to an exciting and fruitful next couple of years.”
Gitlin joined RioCan in 2005 and has been the head of the trust’s investment team since 2007 where he has played a major role in the trust’s growth. He has led RioCan’s ongoing $2-billion disposition program as part of its accelerated major market strategy and execution of the trust’s residential program.
“I would like to offer my sincere congratulations to Jonathan Gitlin on his well-deserved promotion to president & COO,” Sonshine said in the release. “Since his assumption of the role of COO in August of 2018, Jonathan has been a key contributor to our leadership team and to the ongoing success of the major initiatives that RioCan has underway.
“I am confident in his abilities to lead our operations as we move towards the next phase of our growth and development.”
Sonshine has been one of the most recognizable names in Canadian business circles for decades. Although best known for his role as a founder of Canadian REITs in the early 1990s, Sonshine is a graduate of the University of Toronto and Osgoode Hall law school and was a lawyer by trade for almost 15 years before moving into real estate. He was named Queen’s Counsel in 1983.
He has served on numerous boards of directors over the years. Sonshine’s charitable and community involvement includes organizations such as Mount Sinai Hospital in Toronto, the Israel Bonds Organization of Canada, and United Jewish Appeal among others.
While Sonshine’s efforts to create the entity which became RioCan began during a major real estate downturn in 1992, the trust was first listed on the Toronto Stock Exchange in 1993, making it the second REIT in Canada (behind the now-defunct CREIT).
The other of the original three REITs, RealFund, was merged with RioCan in 1999 after a takeover bid. It was part of an aggressive expansion strategy by RioCan, which included several major portfolio purchases during those years.
The retooling of RioCan
In recent years, as retail – RioCan’s predominant sector – struggled with closings of anchor chains and the emergence of a new retail landscape due to e-commerce, Sonshine and recently Gitlin have retooled RioCan’s business model.
While still predominantly a retail-based REIT, the trust created a RioCan Living residential arm, is in the latter stages of divesting about $2 billion in retail properties in secondary or non-core markets, and has embarked on a series of major partnerships, developments and redevelopments.
Some are stand-alone projects, such as the mixed-use The Well or the King Portland Centre in Toronto, while others are intensifications at or near its existing retail sites such as Frontier apartments in Ottawa, adjacent to RioCan’s Silver City Gloucester complex.
RioCan remains one of Canada’s largest real estate investment trusts with a total enterprise value of approximately $13.2 billion at Dec. 31, 2018.
RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas. The portfolio is comprised of 233 properties, including 16 development properties, with an aggregate net leasable area of approximately 38.7 million square feet.