National Post (National Edition)
`MR. SUNSHINE' HEADS into the SUNSET
Real estate mogul and RioCan founder Ed Sonshine gets ready to step back
Ed Sonshine, the founder and chief executive of RioCan Real Estate Investment Trust, was, he admits, one of those people who hated cottages. All his friends knew it, his wife, Fran, knew it, and his kids, who wished they had a family cottage to go to, knew it, too.
But Sonshine wasn't interested in sitting by a lake until, that is, he started to think about what he was going to do after he scaled back his work commitments. Going to Europe, as he and Fran often did, was getting old, and even a man who loves playing golf with his buddies can only play it so much.
So it came to pass a couple of years back that a cottage-hating, 71-year-old exec told his spouse of 50-plus years that he was buying a cottage in the Muskokas north of Toronto.
“My wife almost fell off her chair,” Sonshine recalled, laughing. “But the thought of playing golf every day with the same guys, it is too much, and so I said, `Let's try a cottage.'”
For much of the past summer, he worked remotely from, you guessed it, the cottage, all while entertaining a mess of nine grandchildren, plus their parents, at different points — a “marvellous” time, Sonshine reports.
It was also a hint (partly) of what is to come for the now 73-year-old as he “transitions” out of the top job at the company he started in 1993 to become non-executive chair at the end of March 2021.
But Sonshine is not so much retiring, he said, as stepping back to serve in an advisory role to his successor, current RioCan president and chief operating officer Jonathan Gitlin, a 15-year company veteran.
“I can't say enough nice things about John Gitlin,” Sonshine said.
“At a certain point, you've got to let him step up, or you run the risk of him leaving, or somebody else poaching him.”
Asked why he's making the move now, Sonshine erupted with laughter, and said he wished he had made it a year ago, since the pandemic sparked the most ferociously busy seven-month stretch of work that he can recall having in years.
RioCan's bread and butter is owning, managing and developing retail-focused and increasingly mixed-use properties, located in prime, high-density transit-oriented areas.
The economic shutdown meant many retailers and tenants stopped paying rent, which was bad news for a business that has a portfolio of 221 properties and more than 38 million square feet of leasable space.
“In 26 years of running this place, the issue of collecting the rent was never an issue,” Sonshine said.
Things have since stabilized, and the rent cheques are rolling in again, but the pandemic continues to be a seismic event. The new normal, whenever it gets here, promises to reflect some enduring changes. E-commerce may not remain at peak pandemic levels, but what was once a toehold among shoppers is now more like a headlock around consumer behaviour. We click, we buy and we wait for the delivery, while those poor folks with a storefront, selling shoes, shirts and whatever else are in big trouble.
RioCan made a name for itself owning malls, but started pivoting five years ago to more mixeduse developments, with the people living on top, and service-oriented tenants anchoring the ground floor. “You can't get your nails done over the internet,” as Sonshine points out.
And you also can't launch a real estate trust, in 1993, in the middle of a real estate crash, in a country with no real estate trusts to model one's business after, without possessing some serious chutzpah and a hardy work ethic.
Hugh MacKinnon, chief executive of Toronto-based law firm Bennett Jones LLP, and chair of Canada's Outstanding CEO of the Year program, which counts Sonshine among its past winners, summarized his accomplishments thusly: “You have a guy, a lawyer, who builds one of the biggest, best REITs anywhere, cross-border, the U.S., Canada, that's no small matter.”
Paul Godfrey, a friend of Sonshine for almost four decades, and current RioCan chair (and executive chair of Postmedia Network Canada Corp., which owns Financial Post), describes his friend as someone who lives up to his name: Mr. Sunshine.
Famously approachable, and hilariously prone to letting the odd swear word fly, even in polite company, Sonshine isn't someone out to knock heads and make boardroom enemies.
A RioCan unitholder once even serenaded him at an annual general meeting with Stevie Wonder's You Are the Sunshine Of My Life.
Somewhat less enamoured of him were the residents of Kensington Market, a historic and hip downtown Toronto neighbourhood, where Sonshine wanted to build a home for a Walmart. The plan never materialized, but the NIMBY crowd stuck Mr. Sunshine with a different nickname, “Darth Vader.”
His wife, meanwhile, knows him as Eddie, as his father once did. Ben and Helen Sonshine were Holocaust survivors. They came to Canada with nothing, built a life and taught their eldest child that all the brains in the world don't add up to much, unless you are willing to work hard.
Sonshine did more than work hard: he built a company from scratch, turning it into an income distribution-paying juggernaut with a $4.65-billion market cap.
He is not retiring come spring, he swears, but you know just where to find him next summer.
“All my friends thought I was an idiot when I bought that cottage,” Sonshine said, laughing again.
“But I am looking forward to having more time to read, and having a little more time to think.”