Stephen Johnson, president and CEO of Choice Properties. (Image courtesy Plaza REIT)

Stephen Johnson, one of the founding fathers of Canadian REITs, will retire from his position as president and CEO of Choice Properties REIT in May.

The announcement was made late Wednesday as Choice (CHP-UN-T) released its Q4 and 2018 financial results. He will be succeeded by Rael Diamond, who is currently chief operating officer at Choice Properties.

Johnson and Diamond were appointed to their current roles following Choice Properties’ acquisition of Canadian Real Estate Investment Trust (CREIT) in May 2018. Prior to that acquisition, Johnson served as the CEO of CREIT for more than 20 years, during which time he shaped it into one of the country’s pre-eminent real estate organizations.

“Choice Properties has benefited from Stephen’s leadership, which was instrumental in cementing the powerful combination of two strong Canadian real estate businesses last year,” said Galen G. Weston, chairman and CEO of George Weston Ltd., the majority shareholder of Choice Properties, in a release. “We are grateful for the legacy of Stephen’s vision, deep knowledge, and sound management during his tenure and wish him well. This transition from one of Canada’s finest real estate executives to another keeps Choice Properties on a very strong course.”

During what will be Johnson’s final annual earnings call Thursday afternoon, he accepted congratulations and accolades from several analysts who have covered the REIT sector for many years. He was lauded as “a founder of the Canadian REIT industry,” who has enjoyed an “admirable career”. Another cited what he called Johnson’s “outstanding track record over the years.”

Transition from CREIT to Choice

Johnson cited his role in the merger of CREIT and Choice as one of his most satisfying accomplishments.

“It has been a pleasure to have led CREIT for over 20 years. Further, it has been an honour to have been instrumental in bringing together two strong real estate entities and to set the stage for Choice Properties’ next evolution of growth,” he said in the release. “I retire as president and CEO with the greatest confidence in the leadership team and in particular, Rael, who is very well suited to lead Choice Properties into the future.  I am proud of all that Choice Properties has accomplished and look forward to its continuing success.”

Diamond also served on the senior management team at CREIT before the acquisition by Choice Properties. During Thursday’s conference call, during a brief statement about his pending retirement, Johnson said he “is absolutely delighted” that Rael will transition into the CEO’s job.

“We have in-hand ideal circumstances for succession,” said Anthony Graham, chairman of the board, in the release. “Rael assumes his new role after seven years with the business and four years as CREIT’s president and COO. He understands both the organization and the industry exceptionally well, and we look forward to Rael’s leadership through the next chapter of growth at Choice Properties.”

Johnson a REIT pioneer

Johnson has spent approximately 40 years in the real estate industry, including more than two decades leading CREIT. When he became head of CREIT in 1996, there were only a handful of REITS in Canada as the fledgling sector began to get off the ground.

When CREIT and Choice became one entity, it created Canada’s largest real estate investment trust, surpassing RioCan REIT. Choice owns and manages 753 properties with a value of about $16 billion. They comprise almost 67 million square feet of space.

Between now and his retirement, Johnson will transition the role of CEO to Diamond, and will remain as an advisor to Choice Properties for the next year. Among his other memberships and involvements, Johnson is a member of the board at Plaza Retail REIT.

In assuming the CEO’s role at Choice Properties, Diamond takes over Canada’s largest diversfied real estate investment trust. Choice is the owner, manager and developer of 753 properties totalling 66.8 million square feet of gross leasable area.

The portfolio is comprised of retail properties predominantly leased to necessity‐based tenants; industrial, office and residential assets concentrated in attractive markets; and an unmatched development pipeline.

Choice Properties’ strategic alliance with its principal tenant, Loblaws, is a key competitive advantage providing long-term growth opportunities.