HBC and RioCan Real Estate Investment Trust are looking at selling the retailer’s marquee Vancouver location.
No decision has been made on an ultimate sale of the Hudson’s Bay department store, which is currently under a long-term lease at 674 Granville St., and even if its sold, HBC is committed to continuing to operate the Bay at that location.
“We are exploring a sale of this flagship property as the Vancouver real estate market has appreciated significantly over the past several years,” said HBC Executive Chairman and interim CEO Richard Baker in a release.
As part of a HBC-RioCan joint venture formed in 2015, HBC (HBC.TO) and Rio Can (REI_u.TO) said they expect to close on a $200 million mortgage on the property. The mortgage is expected to be for a four-year term at a rate of prime plus one per cent. The proceeds of the mortgage would be shared by the partners.
BMO Capital Markets Real Estate Inc. is acting as the exclusive adviser on this financing. CBRE and Brookfield Financial Real Estate Group have been hired to explore a possible sale of its Vancouver property.
The Hudson’s Bay Company operates its namesake department store in Canada along with Saks Fifth Avenue and Lord & Taylor.The venture with RioCan comes as HBC comes under fire from investors to unlock the considerable value of its real estate holdings. Activist investors Land & Buildings Investment Management LLC has been pushing HBC to sell off real estate, including its flagship Saks Fifth Avenue location in New York City.