CBRE Finds Buyers for Hudson’s Bay Buildings Across Canada

Former Hudson’s Bay Co. buildings in Vancouver, Calgary, Ottawa, and Windsor, ON have new owners thanks to the efforts of CBRE’s National Investment Team.

The high-profile properties were marketed and sold as part of the HBC receivership process, which was carried out by FTI Consulting Canada.

We spoke to the CBRE teams behind the deals for details on how the transactions came together.

‘True Downtown Trophy Asset’ in Vancouver

In Vancouver, CBRE’s National Investment team – led by Vincent Minichiello and supported by Jim Szabo –sold the flagship Hudson’s Bay building at Granville and West Georgia Streets to Vancouver-based developer Onni Group.

In marketing materials for the building, CBRE noted that it represented a “rare opportunity to acquire a true downtown trophy asset, an iconic landmark with enduring architectural significance and exceptional connectivity,” integrated with CF Pacific Centre and the SkyTrain network.

CBRE partnered with Marcus & Millichap’s Mario Negris and Martin Moriarty to serve as exclusive local agents for the listing, one of Vancouver’s most prominent buildings and an architectural gem with a cream-terracotta heritage façade and ornate Corinthian columns.

The building’s sale process generated significant buyer interest both nationally and internationally, according to Minichiello. “There were no stones left unturned,” he says. “We did everything we could do to maximize exposure.”

The six-week marketing effort led to three rounds of competitive bidding for the property, which comprises a total of 617,628 sq. ft. with average floor plates of ~70,000 sq. ft.

Ultimately Onni Group prevailed and is now in possession of a historic building that presents a multitude of value-add repositioning and redevelopment possibilities. “The world is your oyster with this property,” Minichiello says.

While Vancouver has seen reduced market participation from institutional capital in deals lately, he notes that the sale of the Hudson’s Bay building reinforces a broader theme.
“When the right asset comes to market, capital shows up,” says Minichiello, pointing to the sale of The Post, another deal done by him and CBRE NIT – Vancouver, as further evidence.

Conversion Opportunity in Calgary

Calgary’s 115-year-old downtown Hudson’s Bay building was sold by CBRE’s National Investment Team - Calgary to local developer Astra Real Estate Corp.

The 448,834 sq. ft., six-storey property is clad in terracotta and was the model for subsequent Bay buildings in Vancouver and Victoria.

CBRE’s Calgary NIT lead Richie Bhamra brokered the sale of the building and says the marketing process resulted in six bids for the asset, three of them unconditional offers. Astra, a firm that specializes in office-to-residential conversions and adaptive reuse, proved to be the successful proponent.

“This could be a great redevelopment site,” says Bhamra. “There is a real opportunity to make a significant impact on the downtown core.”

The Bay building was constructed between 1911 and 1913 as Canada’s largest department store, and was expanded in 1929 and 1956.

“The expanded areas can be identified by the wider column spacing on the southern half of the building, which resulted in floorplates that are quite large, at 60,000 sq. ft.,” Bhamra says. “So it took some creative conceptualizing from the groups that were looking at buying it.”

The building, which sits on 1.65 acres of prime real estate along Stephen Avenue, is “a key piece of our downtown core,” says Bhamra. “It’s a great area for tourism and business, with lots of restaurants and pedestrian traffic. So hopefully no matter what ends up happening with the property it remains an active site.

“Because no other repurposing project in the downtown core will have a bigger impact than this.”

Bought by a Local Homebuilder In Ottawa

In the nation’s capital, the Hudson’s Bay building on Rideau Street in Ottawa’s ByWard Market area was purchased by Claridge Homes, a local developer.

CBRE’s NIT-Ottawa point man Nico Zentil, working with Jamie Boyce, ended up securing the ideal buyer for the property in Claridge Homes. “A local buyer, a local developer,” Zentil says. “It was the best possible outcome in this case.”

Claridge has developed over 14,000 properties, most of them in the National Capital Region, including the city’s tallest residential building, the Claridge ICON, a 45-storey tower.

CBRE’s marketing materials noted that the property, which is attached to CF Rideau Centre by a skywalk, provides “a generational repositioning / redevelopment opportunity offering scale, diversity and cachet – making this one of Ottawa’s most exciting community building opportunities in the city’s history.”

Zentil says the deal was complicated by the fact that the property consists of three separate parcels, two of which are freehold and one is on a long-term land lease with the City of Ottawa. “There were lots of different historical legacy agreements with the City that had to be renegotiated.”

While Claridge has not made its plans publicly known, Zentil says the building likely will be part of a full mixed-use redevelopment. “There is a 60,000 sq. ft. site there, so they'll be able to do something significant.”

“It's a pretty unique site, which is why we had so many people looking at it with great interest.”

Circle Retail Properties Wins the Bay in Windsor

The Hudson’s Bay property in Windsor, part of Devonshire Mall, went to Circle Properties, an affiliate of Primaris REIT, which owns the mall.

The building boasts 165,584 sq. ft. of leasable retail space on a 8.16-acre parcel of land immediately adjacent to Devonshire Mall, which is the Windsor region’s dominant enclosed shopping centre, with 155 stores and 6.7 million shoppers annually.

CBRE’s Hillel Abergel and Ian Kitt led the sale process and the property received a wide variety of interest from groups looking to repurpose the former Bay building, which had been an anchor for Devonshire Mall. In the end it made the most sense for the property to be acquired by the owners of the mall.

“You have a Hudson’s Bay store that's attached to the existing shopping centre,” Abergel says, “and so the landlord is going to want to control the entirety of the mall, and the repurposing, re-leasing and reutilization of that space to ensure the best overall site and shopping experience in the short, medium and long term for their asset.”

Abergel adds that the ability to own a large box that is connected to a top performing regional shopping centre provides Circle Properties with “a lot of optionality and flexibility.”

As seen in previous experiences when mall anchors upped stakes and left behind big boxes to fill (see: Target, Sears, Nordstrom), the mall owner is the most incentivized to buy the box and control their own outcomes. “Naturally in these situations the shopping centre landlord is the most logical investor to make their vision for the broader property become a reality,” Abergel says.

CBRE Leveraged Depth of Relationships

Abergel isn’t surprised that FTI Consulting tasked CBRE with selling Hudson’s Bay buildings across Canada.

Being awarded those mandates “speaks to the depth of our relationships in the market and our ability to ascertain the highest and best use and to procure the highest and best pricing from the broadest network of buyers,” he says.

“Leveraging our depth of relationships with all categories of investors – whether that's developers, private capital, REITs or institutional buyers – promised to provide the receiver with the greatest possible result in all of these cases.”