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RioCan CEO places bets on building more rental housing as retail sector lags

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For the past 25 years, Edward Sonshine has been known as Canada’s shopping mall king.

Now, the chief executive of one of the country’s largest real estate investment trusts wants to be known for something else too: housing.

“It’s not me that changes,” Sonshine said in an interview at RioCan REIT’s head office in Toronto.

“Change in our strategy has always been a reaction to the world changing, business changing, the economy changing.”

Since it was founded in 1993, RioCan has built a portfolio of about 250 properties of retail, warehouse and office properties.

For the past year, the company has been eyeing how it could better use the prime locations of its retail and plaza malls, many of which sit on existing or soon-to-be built transit lines.

A worker walks past a gate at RioCan’s ePlace project, a commercial/residential development, in Toronto in December 2017. Since it was founded in 1993, RioCan has built a portfolio of about 250 retail, warehouse and office properties. (Chris Helgren/Reuters)

Sonshine said it was a no-brainer for RioCan to turn these retail outlets into mixed-use properties by adding rental units and office space to meet a growing demand for housing, especially in the country’s biggest cities.

Last month, Canada Mortgage Housing Corp. reported that demand for rental housing continues to outpace supply due to growth in immigration, the senior population and millennials.

“When you make it harder for people to buy, they are going to rent. They have to live somewhere,” said Sonshine. “The population of big cities continues to grow. We look at it as, the rental market has nowhere to go but be good.”

‘Demand for retail space … will not grow’

Sonshine says the shift is serendipitous because the company is already looking to reduce its exposure to retail, as consumer habits continue to move toward online shopping instead of shopping at a big-box mall.

“There is no question in my mind that the demand for retail space over the next five to 10 years will not grow,” he said.

Sonshine said this first crystallized for him in 2015 when the company’s major tenant, U.S. retailer Target, announced it was shutting down its Canadian locations.

Since then, RioCan has been pulling out of cities like London, Ont., and Grande Prairie, Alta., and reinvesting in the country’s six major urban markets, where it projects the biggest growth. By 2020, RioCan wants more than 90 per cent of its rental income to be generated by properties located in these big cities, up from the current 75 per cent now.

There are currently eight purpose-built rental projects, or 2,300 units, under construction in Toronto, Ottawa and Calgary. The first two developments will launch in the first quarter and the summer of 2019.

The Frontier building is seen in the Gloucester neighbourhood of Ottawa. Within five years, Sonshine sees RioCan’s portfolio being made up of 10 per cent residential properties and five per cent office properties, with the vast remainder still coming from the retail market. (RioCan via Canadian Press)

Within five years, Sonshine sees RioCan’s portfolio being made up of 10 per cent residential properties, five per cent office properties, with the vast remainder still coming from the retail market.

Although the company’s purpose-built rental properties will still be a minority stake in the company’s portfolio, Sonshine still sees it as a big departure for the company.

“The truth is we’re really changing the mix,” he said.

“It’s a five- to 10-year process to really get things going. Sometimes I feel like a juggler. I’m trying to turn this big ship and move forward in the reinvention of things. It’s a big juggle.”

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Real Estate

Couple from Toronto buys dream home in Mushaboom

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MUSHABOOM – A couple who lived and raised a family in downtown Toronto developed a five-year plan in 2015 to purchase their dream home.

In September they moved into the home – located on Malagash Island in Mushaboom on Nova Scotia’s stunning Eastern Shore – that met and exceeded their best dreams for their retirement.

The Camerons, Bruce and Tanya, decided in 2019 they would explore the Maritimes to see what real estate was available to become their potential retirement home. In the spring of 2020, during a global pandemic, the real estate boom hit their city, and they were hearing the same for Nova Scotia. Our province was their first-choice for attaining their desire for an entirely different lifestyle – away from the busyness of the city.

“We had $300,000 to $350,000 as a home value in mind to buy. Our semi-detached located off Danforth in Toronto was priced at $850,000. We wanted to come out ahead, so we would be secure in retirement,” Tanya said.

Their century-old home had prime location near the subway and GO Transit Line for a great 13-minute commute downtown.

“We enjoyed our community,” explains Bruce “… we had great neighbours, young children around and street parties – lots of social activity.”

Bruce says, “Our agent suggested a starting quote of $899,000. We did not do any renovations and only some staging. Fifty couples went through and we received four significant offers. Six days later we sold – with zero conditions – and a price of over a million dollars. We just requested a closing of September 2020 to get the kids off to school – which we got.”

The couple got more than they had anticipated.

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Real Estate

Rabobank Announces Leadership Changes in U.S., Canadian Offices

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NEW YORK, Dec. 16, 2020 /PRNewswire/ — Rabobank, the leading global food and agribusiness bank, has appointed two of its top executives, Tamira Treffers-Herrera and Robert Sinescu, to become Co-Heads of North American Client Coverage, positioning the Bank for future growth in the region.

Treffers-Herrera has also assumed the role of Vice Chairperson and Head of the Atlanta office, where she additionally oversees Rabobank Mexico, which is led by Eduardo Palacios. Sinescu is the Head of the Chicago office, and also oversees Rabobank Canada, led by Marc Drouin, who was recently appointed as Canada’s General Manager.

Treffers-Herrera and Sinescu report to David Bassett, Head of Wholesale Banking North America, the Bank’s corporate and investment banking business for the region based in New York.

“Both Tamira and Robert have a demonstrated history of strong leadership, operational excellence and passion for our clients,” Bassett said. “Their broad experience and deep sector expertise will be invaluable in delivering dynamic results for clients while accelerating our growth trajectory in North America.”

Each office will have an even greater focus on key Food & Agribusiness sectors and clients: The Chicago office will drive growth in sectors including Dairy, Farm Inputs and Grains & Oilseeds, which are also key areas of focus for the Canada office. The Atlanta office will focus heavily on sectors such as Animal Protein, Beverages, Sugar, and Supply Chains, which are important sectors in Mexico as well.

“Rabobank is fully committed to our clients throughout North America, and we believe our new sector-focused coverage will improve our ability to provide knowledge-based, value-added solutions that benefit our clients,” Bassett said.

Treffers-Herrera was most recently based in London as CEO of Rabobank’s European Region from 2016-2020, where she took the organization through Brexit. Prior to that, she worked in the Atlanta office from 2002-2016. During her tenure in Atlanta, Treffers-Herrera served as Global Sector Head – Consumer Food & Beverages, and prior to that she was a senior banker for a portfolio of large beverage and consumer foods clients. She holds a Bachelor of Arts degree from the University of Kentucky, a Master of Arts from the Patterson School of Diplomacy and International Commerce and has studied at The University of Chicago Booth School of Business and Harvard Business School.

Sinescu has been with Rabobank for over 21 years and was previously General Manager of Rabobank Canada, where he oversaw all operations, business development, commercial strategy and relationships with regulators. In addition, he continues to serve as CEO of Rabo Securities Canada Inc. Prior to Canada, he was a senior banker, Head of Corporate Banking, European Sector Head for Sugar, and a member of the Management Team for Rabobank France. He holds a Bachelor of Science in Business from the Bucharest School of Business, a Master of Business Administration & Management and a Master of Science in Banking and Corporate Finance from Sorbonne University in Paris, and has studied at Brown University.

Drouin has worked with Rabobank’s Canadian team for more than nine years and most recently served as a senior banker, Head of Rabobank Canada’s AgVendor Program and a member of Rabobank Canada’s Management Team. He brings extensive wholesale banking experience within the Dairy, G&O, CPG and Supply Chain sectors. Drouin holds a Bachelor of Arts degree from McGill University and a Master of Business Administration in International Finance, Marketing and Management from the Schulich School of Business at York University.

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Real Estate

Greybrook Realty Partners & Marlin Spring Brand Jointly Owned Asset Manager – Greyspring Apartments

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TORONTO, Dec. 14, 2020 (GLOBE NEWSWIRE) — Greybrook Realty Partners and Marlin Spring are pleased to announce the new branding of their jointly owned investment and asset management firm, Greyspring Apartments. With a portfolio of more than 2,000 units and CAD$375 million in assets under management, Greyspring Apartments is focused on the acquisition and repositioning of multi-family assets throughout Canada.

The new name and branding is an important step in Greyspring’s evolution as an independent operating business. Formed in 2018 by long standing-partners Marlin Spring and Greybrook Realty Partners, Greyspring Apartments was established with the goal of building a leading asset management firm with a robust portfolio of residential rental real estate assets in primary and secondary markets across Canada.

Greyspring’s talented team of real estate, asset management and finance professionals is overseen and guided by the Management Board, whose members include Benjamin Bakst, CEO, Marlin Spring; Elliot Kazarnovksy, CFO, Marlin Spring; Sasha Cucuz, CEO, Greybrook Securities Inc.; Peter Politis, CEO, Greybrook Realty Partners; Chris Salapoutis, President & COO, Greybrook Realty Partners; Ashi Mathur, President, Marlin Spring; and Karl Brady. In addition to his role on the Management Board, Karl Brady leads Greyspring Apartments as its President. 

“We are pleased to announce the official name and branding of a business we formed with our partners at Marlin Spring a few years ago,” said Peter Politis, CEO, Greybrook Realty Partners. “Greyspring has been diligently focused on the execution of strategic value-add programs across its portfolio that are improving the quality of housing for tenants and overall asset values. For Greybrook investors, expanding from our core business in real estate development to the value-add space through Greyspring, has allowed us to provide our clients with investment opportunities that diversify their real estate investment portfolios.”

“Marlin Spring and Greybrook have partnered on many residential real estate projects in recent years,” said Benjamin Bakst, CEO and Cofounder, Marlin Spring. “To a great extent, Greyspring illustrates our approach to partnerships. We believe in, and strive for, responsible growth through deepening our relationships with our trusted partners. With Greyspring, we’ve formalized our focus on providing better and more affordable living experiences for Canadians. This vision aligns with our mission to deliver exceptional real estate value to all our stakeholders with an uncompromising adherence to our core values.”

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