RioCan Real Estate Investment Trust and Tanger Outlets to Acquire Two Outlet Malls in Montreal

RioCan Real Estate Investment Trust  and Tanger Outlet Centers, Inc. , through their co-ownership agreement, announced they have waived conditions to acquire two outlet centres in the Montreal area, Les Factoreries St. Sauveur and Bromont Outlet Mall. The co-owners will purchase the properties on a 50/50 basis at an expected aggregate purchase price of $94.7 million . RioCan will provide development and property management services and Tanger will provide leasing and marketing services. The co-owners intend to add value to the properties by implementing their operational and marketing programs and rebranding the properties under the Tanger Outlets flag.
The purchase price includes the assumption of the aggregate in place financing at Les Factoreries St. Sauveur of $18.8 million (Canadian dollar, at 100%) which carries a weighted average interest rate of 5.7% and matures in 2015 and 2020. Bromont Outlet Mall is being acquired free and clear of financing. Both transactions are scheduled to close in November 2012. The acquisition of these centres will enable the co-owners to expand beyond the Greater Toronto Area and implement their outlet centre strategy immediately, as Tanger Outlet Centers enter into another Canadian market.
Les Factoreries St. Sauveur, is located approximately 60 kms northwest of Montreal, QC adjacent to Highway 15 in the town of St. Sauveur, QC. The property was built in 1980, and expanded in 2006, and is approximately 116,000 square feet with the potential to expand to approximately 131,000 square feet on the adjacent 1.1 acres of land which will also be acquired. This well established outlet centre features many national brands such as, Nike, Tommy Hilfiger, Reebok, Guess, Jones New York, Naturalizer and Parasuco. The Saint Sauveur Valley is a first class resort destination ideal for outlet shopping that combines outdoor activities with shopping, performing arts and entertainment. The mountains provide the backdrop for great skiing and winter activities and the nearby lakes offer endless summer hiking, biking, boating and more.
Bromont Outlet Mall, is located approximately 85 kms east of Montreal, QC near the eastern townships adjacent to Highway 10 in the town of Bromont, QC. The property was built in 2004 and expanded through 2011, and is approximately 162,000 square feet with the potential to expand to approximately 251,000 square feet. This outlet centre features many national brands such as, Point Zero, Tommy Hilfiger, Guess, Puma, Mexx, and Urban Planet. Bromont is located at the base of Mont Brome. The area is a well known tourist destination for downhill skiing, mountain biking and equestrian events.
"We are very pleased to expand our co-ownership with Tanger and bring our collective expertise into a second market with two well established, well located properties that will bring the Outlet Center experience to the Montreal area", said Edward Sonshine, Chief Executive Officer of RioCan. "These sites in Montreal represent an exciting opportunity to bring Tanger Outlet Centers into a second Canadian retail market. We are also seeking to add a new centre in the Ottawa market which will provide our tenants with the opportunity to be in multiple locations across Canada."
"This opportunity allows RioCan and Tanger to build on the success of Tanger Outlets Cookstown by expanding our footprint into another thriving market," said Steven B. Tanger, President and Chief Executive Officer of Tanger. "Acquiring and rebranding these two proven outlet assets as Tanger Outlet Centers will enhance the co-owners' Canadian platform for our retail partners."

on October 31, 2012