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RioCan REIT to sell stake in Ottawa apartment buildings for $136M

May 28, 2025

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RioCan Real Estate Investment Trust has agreed to sell its stake in three Ottawa apartment buildings for more than $130 million in one of the city’s biggest commercial real estate transactions in years. RioCan said Wednesday it is divesting its 50 per cent interest in three local rental properties – the Frontier and Latitude complexes just off Blair Road and the Luma building near the corner of Smyth and Russell roads – for a total sale price of $136 million. The buildings, which include a total of about 600 rental units, are being sold to Halifax-based Killam Apartment REIT, which already owns a 50 per cent stake in the properties. The deals are expected to close in the third quarter of 2025. The sales were part of a series of transactions RioCan announced Wednesday. The Toronto-based REIT said it closed the sale of an apartment building in Toronto for $23.9 million and reached an agreement to sell another rental complex in Calgary for $37.4 million. RioCan said the sales are part of its plan to focus on “generating maximum value” for its residential rental portfolio, which was estimated to be worth about $1 billion at the start of the year. In a news release Wednesday, RioCan president and chief executive Jonathan Gitlin called the sales a “significant milestone” in the REIT’s asset monetization strategy. “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. “The outcome is increased financial flexibility for RioCan and a simplified business model focused on our core retail business.” The transaction is one of the National Capital Region’s largest commercial real estate deals in recent memory. The sale price of $136 million is the second-biggest of any deal in that asset class in the past 24 months, trailing only Forum Asset Management’s $183-million acquisition of a 579-unit student residence from Choo Communities last October. The deal also continues a strong recent run for the multi-family sector in Ottawa. The asset class accounted for more than half of Ottawa’s total commercial real estate sales volume of $2.23 billion last year, according to figures compiled by Colliers, and 2024 marked the fifth consecutive year that multi-family properties outperformed all other asset classes. Colliers said strong demand for rental housing fuelled by “population growth and a preference for rental living” was attracting investors seeking “high-quality properties, stability and resilient returns.” Colliers vice-president of national investment services Michael Pyman told OBJ earlier this year it was no surprise that rental and townhome complexes dominated the list of transactions. “I think all the underlying fundamentals in that space continue to be strong,” Pyman said in an interview in February. “Multi-family was definitely the darling last year. There’s a lot of interest in that sector.”