RioCan REIT (REI-UN-T) has announced closings or firm deals to sell a total of five apartment buildings in Toronto, Ottawa and Calgary, to three separate buyers, for just over $197.3 million.

The sales come as the Toronto-based retail and multifamily REIT continues to advance a strategy to monetize its portfolio of new-build properties to pay down debt, improve liquidity and capitalize on strong property values in the sector.

RioCan held a 50 per cent interest in each of the properties it is divesting.

“With RioCan Living, we’ve developed a portfolio of transit-oriented, mixed-use properties in Canada’s major markets. Having achieved its intended scale, we are focused on generating maximum value from this one-of-a-kind portfolio,” Jonathan Gitlin, president and CEO of RioCan, said in the announcement.

“These strategic dispositions are a significant milestone in the RioCan Living asset monetization strategy, demonstrating the portfolio’s immense value.”

The properties RioCan is selling

The $197.3-million total includes (all figures are at RioCan’s 50 per cent ownership stake):

• Brio in Calgary, which is being sold to Boardwalk REIT (BEI-UN-T) for $37.4 million. The two were development partners in the 12-storey tower;
• Frontier, Latitude and Luma in Ottawa, which are being sold to RioCan’s development partner Killam Apartment REIT (KMP-UN-T) for $136 million; and
• the sale of Strada in Toronto, which closed late in 2024, to CAPREIT (CAR-UN-T) for $23.9 million (CAPREIT acquired 100 per cent of the building from RioCan and Allied Properties REIT).

“Given the numerous attributes that differentiate our portfolio in this competitive market, we have full confidence in the trust’s ability to continue to unlock its intrinsic value,” Gitlin said in the release. “The outcome is increased financial flexibility for RioCan and a simplified business model focused on our core retail business.”

As of Q1 2025, the RioCan Living residential rental portfolio included 13 income-producing properties and two properties under development and was valued at approximately $1 billion. RioCan is selling individual assets or subsets of the portfolio, a process it plans to focus on over the next 12 to 24 months.

RioCan and its portfolio

RioCan is one of Canada’s largest real estate investment trusts, and also one of its largest retail property owners. RioCan owns, manages and develops retail-focused, mixed-use properties in high-density transit-oriented areas. 

As at March 31, its portfolio was comprised of 177 properties comprising approximately 32 million square feet (at RioCan's interest).

The trust reports it is also in the final stages of negotiations to sell an additional residential rental property in Toronto. All the transactions (other than Strada) are expected to close by the end of Q3.

In addition to debt reduction, RioCan also plans to use a portion of the proceeds to continue its Normal Course Issuer Bid (NCIB) program. So far this year, the trust has purchased and cancelled 5.5 million units at a weighted average price of $17.99 per unit - which it notes is below its net asset value per share. 

RioCan’s stated balance sheet objective is to maintain an adjusted debt to adjusted EBITDA ratio within the 8.0x to 9.0x range.

Upon completion of the transactions, the purchasers will assume existing CMHC-insured mortgages, improving its unsecured debt to total contractual debt ratio, which is expected to improve from 57.3 per cent as at Q1 2025 to approximately 60 per cent.