HBC, RioCan joint venture explores sale of downtown Vancouver property

A joint venture between Hudson’s Bay Co. and RioCan Real Estate Investment Trust announced it may sell its downtown Vancouver property on Granville Street. RioCan HBC JV announced in a statement that it’s engaged with CBRE and Brookfield Financial Real Estate Group to explore a sale.

HBC, Vancouver, RioCan, Hudson's Bay
The Bay in Downtown Vancouver (2006). Photo by Arnold C (Own work), via Wikimedia Commons

Additionally, the JV expects to close on a $200 million mortgage on the same property, the proceeds of which would be distributed on a pro-rata basis to the JV partners. The mortgage is expected to be for a term of four years at a rate of prime plus 1.0% and has no prepayment penalty in the event of a sale of the property. BMO Capital Markets Real Estate Inc. is acting as the exclusive advisor on this financing.

“We are exploring a sale of this flagship property as the Vancouver real estate market has appreciated significantly over the past several years. While no decision to sell has been made, we continue to explore opportunistic transactions to enhance shareholder value,” stated Richard Baker, HBC Governor, Executive Chairman and interim Chief Executive Officer. “We are committed to operating our Hudson’s Bay store at this location and any possible sale would include the continued operation of Hudson’s Bay at this property.”

Reportedly worth close to a billion dollars, the Granville Street property is currently occupied by a Hudson’s Bay department store, which has a long-term lease.  In addition to the marquee Vancouver property, the joint venture owns or controls 10 flagship properties in Canada, including in Calgary, Ottawa, and Montreal, as well as a 50% interest in Oakville Place and Georgian Mall. Formed in 2015, the JV has a mandate to explore future acquisitions that would grow and diversify its real estate portfolio. As of June 30, 2017, the JV was owned 88.1% by HBC and 11.9% by RioCan.

 

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