The Bay’s former flagship store on Rideau Street in downtown Ottawa will likely hit the market soon, an Ottawa broker says. Kevin Houlahan, a sales representative at Colliers who specializes in retail leasing, says Hudson’s Bay and RioCan Real Estate Investment Trust, which own the property in a joint venture, are expected to put the […]
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The Bay’s former flagship store on Rideau Street in downtown Ottawa will likely hit the market soon, an Ottawa broker says.
Kevin Houlahan, a sales representative at Colliers who specializes in retail leasing, says Hudson’s Bay and RioCan Real Estate Investment Trust, which own the property in a joint venture, are expected to put the 330,000-square-foot property up for sale “in short order” as the embattled department store chain looks to generate cash to repay some of the $1 billion it owes creditors.
The retailer filed for creditor protection in March and permanently closed all of its stores across Canada at the start of June.
While the Bay leased many of its locations, it owns a number of properties in the joint venture with RioCan that was established in 2015 and was made up of 12 locations the department store leased from the partnership.
RioCan has said it has a 22 per cent ownership interest in 10 Bay stores in the venture. Those stores include locations in downtown Montreal, Vancouver, Calgary and Ottawa, along with Yorkdale and Scarborough Town Centre in Toronto, Square One Shopping Centre in Mississauga, Devonshire Mall in Windsor and Carrefour Laval and Promenades St. Bruno in Quebec.
In August, RioCan chief executive Jonathan Gitlin told analysts on a conference call to discuss the REIT’s second-quarter earnings that it was cutting financial ties to five stores – the Square One Shopping Centre in Mississauga, Scarborough Town Centre in Toronto, the downtown Calgary HBC store, and the Carrefour Laval and Promenades St-Bruno locations in Quebec – and was still reviewing the status of the other locations.
“There’s going to be different outcomes, some of which will be consistent with what’s already happened, some of which will be released, some of which will be sold,” Gitlin said at the time.
Houlahan told OBJ last week that RioCan would be a “likely candidate to seriously consider” purchasing the property outright, adding he expects the prime piece of real estate across from the Rideau Centre to garner interest from other REITs and institutional property owners as well.
“The street is revitalizing itself,” Houlahan said, citing Live Nation’s 2,000-seat music and entertainment venue that’s slated to open early next year in the former Chapters store at the corner of Rideau Street and Sussex Drive and the new 99 VIP Seafood Restaurant that recently opened at the former McDonald’s location at 99 Rideau St. as examples.
Still, the veteran broker said it could be years before the five-storey space that previously housed the Bay is converted to a new use.
“It wouldn’t be surprising to see it take 24 months (for a new owner) to kind of figure out what they’re going to do with it,” he said.
“It’s one of those things that I think people are going to come at it from a different light – everything from hotels to redevelopment with condos to redevelopment of that existing site with retail on the ground floor, maybe retail potentially on the second floor. You could see mixed-use development in it with potentially office, potentially residential.”
The fate of the other empty Bay stores in Ottawa remains uncertain. But Candice Lerner-Fry, head of the retail leasing division in the Ottawa office of Marcus & Millichap, told OBJ last week she recently spoke with representatives from Bayshore Shopping Centre, Place d’Orléans and St. Laurent Shopping Centre and was informed that all three malls have candidates to fill the vacancies.
