The largest anchor tenant at Coquitlam Centre has been forced to shutter its doors.
A representative with the shopping mall told Daily Hive Urbanized the lease for Hudson’s Bay Company (HBC) has been terminated after the retailer failed to pay rent.
Hudson’s Bay was Coquitlam Centre’s largest anchor retailer for decades, occupying a 120,500 sq. ft. of space over two levels at the southwest corner of the 914,000-sq-ft complex.
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Mississauga-based companies oversee the shopping centre in Coquitlam, with Pensionfund Realty Limited as the owner and Morguard Investments managing the property.
Morguard Investments also manages Abbotsford’s Sevenoaks Shopping Centre, where Hudson’s Bay is an anchor, but the department store along with others elsewhere within the Lower Mainland currently remain open.
Daily Hive Urbanized has reached out to HBC for further comment.
Few details on the Coquitlam property are available at the moment, but a report by the Toronto Star today indicates the storied retailer’s issues are not isolated to the location, and that the company could be facing mounting financial issues exacerbated by COVID-19.
According to the report, HBC has not paid any rent to eight landlords in Ontario, Quebec, British Columbia, and Florida, based on legal filings. The leases are worth $20 million monthly across 21 locations.
In the BC interior, the landlord of Cherry Lane Mall in Penticton served their HBC location with an eviction notice last week, and filed a lawsuit against the retailer for unpaid rent totalling $546,000.
On the same day, HBC filed a lawsuit against Cherry Lane Mall, blaming the landlord for their loss in revenue resulting in an inability to pay rent and seeking court protection from eviction. The retailer’s lawsuit accused the mall operator of failing to adopt health safety protocols, and asserted its sales at the location dropped by 47% over the past eight months compared to 2019.
In Eastern Canada, landlord Oxford Properties sued HBC for $2.3 million in unpaid rent for two locations in Quebec City and Ottawa. The retailer indicated its sales at the two locations fell by more than 99% in April. Furthermore, HBC has reportedly not paid rent for its stores at eight of the 11 Oxford-owned malls in Canada where it has locations.
For HBC’s locations at Oxford’s Hillcrest Mall and Richmond Hill, last month an Ontario judge ordered the company to pay 50% of seven months of rent that it owed. The landlord had filed eviction notices, and the retailer complied with the court decision.
Up until last year, when the retailer was still a publicly traded company, its financial performance and cash flows were known as it was required to issue quarterly public updates to investors. HBC was taken private in October 2019 in a deal that valued the retailer at $1.9 billion, including its Saks Fifth Avenue chain of stores.
In the third quarter of the previous fiscal year, before the company was taken private, HBC reported it lost $984 million during the quarter, with comparable sales falling by 3.4% at Hudson’s Bay, increasing by 0.6% at Saks Fifth Avenue, and growing by 3.4% at Saks Off 5th.
In 2018, Hudson’s Bay reached an agreement with Quadreal Property Group, the owner of Oakridge Centre, that provides the retailer with $172.5 million. The agreement stipulated HBC will use $151.5 million to repay its credit borrowings, and the remaining $21 million to outfit the new store within the Oakridge Centre redevelopment under construction.
Just last month, HBC announced it formed a new real estate development arm to generate a new revenue stream by modernizing its stores and other real estate assets. Such redevelopment projects will create a mix of uses, including office, residential, retail, and entertainment. It will maximize the value of the company’s property, which totals 40 million sq. ft. of gross leasable area across North America.
The flagship store in downtown Vancouver is a likely frontrunner for extracting more value through redevelopment.
Earlier in the year, with the pandemic as a contributing factor, HBC announced its decision to wind down and shutter its longtime store locations in the downtowns of Edmonton and Winnipeg, but these properties are also being evaluated for their redevelopment potential.
As for how this will impact Coquitlam Centre’s visitation traffic, its other anchor retailers include Walmart, T&T Supermarket, Best Buy, London Drugs, and Sport Chek. Department stores Eaton’s and Woodward’s were previously some of the mall’s first anchors.
On behalf of the property owner, Morguard Investments has been in the early stages of planning a major high-density, mixed-use redevelopment of the 60-acre Coquitlam Centre property over the long term.