hudson-s-bay
Is it an example of shifting tastes and market demand? One of the most iconic downtown buildings, the Granville Street Hudson’s Bay store is going to be sold as reported in Business in Vancouver. The present store was built in 1927 and is instantly recognizable with its white terra cotta exterior. The six-storey Granville Street store built in 1927 is known for its iconic cream terra cotta exterior and Corinthian columns.  This retailer has been a Vancouver tradition since 1887 when its first store opened on Cordova Street in Gastown.  While the 650,000 square foot building is assessed at 59.7 million ” the property is expected to sell for as much as $900 million.”
Earlier the Hudson’s Bay Company stated that their New York City store would be sold for nearly 1.1 billion dollars, leasing floor space to WeWork.  WeWork is described as ” an American company which provides shared workspace, community, and services for entrepreneurs, freelancers, startups, small businesses and large enterprises. ” It is expected that the Vancouver store will continue operating in a smaller footprint with space in the building  also being leased to WeWork.
Can a major redevelopment proposal for this significant corner at Granville and Georgia Streets be far behind?
corner_of_georgia_and_granville_streets_vancouver_1928
Granville and Georgia Street, 1928 Wikicommons photo
 

Comments

  1. “Can a major redevelopment proposal for this significant corner at Granville and Georgia Streets be far behind?”
    That would be repulsive. This isn’t the type of signature building that you redevelop.

  2. I heard that HBC wants to lease back the lower four floors with the upper two made available for office space. Redeveloping the site, even with HBC occupying 2/3rds of the floor space, would first and foremost test the strength of the city’s heritage planning policy on Class AAA buildings when the inevitable added height is proposed, and second, force HBC into a temporary and likely far less awesome retail location for two years while construction is occurring.

  3. I’m guessing that building is designated as a heritage building? What kinds of protections would that entail? I would hope that the entire building would be protected and not just the facade – as in, no new floors, no substantial structural changes, nothing. Is that right?

  4. “Can a major redevelopment proposal for this significant corner at Granville and Georgia Streets be far behind?”
    It’s far less likely to be redeveloped than many other heritage buildings because it’s Municipally designated – which means the existing building has to remain. Being on The Heritage Register – even as an ‘A’ building – doesn’t guarantee retention, but designation is a different level of protection.
    As The Bay want to lease back most of the building, and the top two floors are proposed as office space, it doesn’t appear that redevelopment is intended here – the owners are just cashing in an asset.

  5. That’s right – other newspaper reports have stated that Hudson’s Bay will lease back a number of floors for its store.
    It should be noted, though, that many commentators view the sale of real estate assets (used as collateral against which financing can be secured) as the start of a downward spiral for any department store retailer (i.e. Woodwards, Eaton’s, Sears).
    WRT HBC, as part of the sale of the New York Lord & Taylor building (owned by HBC) to office space provider WeWork, HBC entered into a deal whereby that building’s Lord & Taylor store would be scaled back from 10 floors to 3 floors, and WeWork would establish its head office in the 7 upper floors of that building.
    In conjunction with the New York sale, HBC agreed to rent to WeWork the top floors (how many is unclear) in each of its Toronto Queen St. Hudson’s Bay, Vancouver downtown Hudson’s Bay and Frankfurt Galeria Kaufhaus stores for use as office space.
    So irrespective of the sale of the Vancouver store, the Vancouver Hudson’s Bay will be downsized so WeWork can take the “upper floors” for offices – how many floors we don’t know.
    That means the relatively newly renovated Men’s Wear floor on the 6th floor will be moved (hopefully not into the claustrophobic sub-basement (or remainder of the basement not occupied by TopShop/TopMan) which HBC had been trying to rent to third parties without any takers..
    It’ll be interesting to see how many floors Hudson’s Bay ends up occupying (the maximum may be subbasement, basement and floors 1-4, with WeWork on at least 5 and 6). It may even downsize further over time if WeWork wants to expand more.
    We might look to Seattle’s downtown Macy’s store (formerly Bon Marche) for guidance.
    Its upper floors were sold off to a third party and leased to Amazon a couple years ago with the store remaining on 4 floors. Last month, 2 more floors were sold off to the owner of the upper floors and also leased to Amazon. The downtown Seattle Macy’s is (or will soon be) only 2 floors – basement and main floor. Quite sad, but Macy’s is closing lots of stores nationwide in the US.
    https://www.geekwire.com/2017/amazon-will-move-macys-building-landmark-seattle-real-estate-deal/

    1. Great given your example we can expect HBC to be downsizing to success and occupying the space currently occupied by the Ladies Room!

    2. Well, Nordstrom (all clothing, I think) occupies 3 floors of Eaton’s/Sears former 8 floors.
      Hudson’s Bay, so far, still has departments like housewares , bedding and furniture.

  6. My post has been quarantined, but here’s an edit:
    The Seattle Macy’s is scaling back to 2 floors (not 1) plus basement originally 8 plus basement).

  7. First you siphon off money by selling real estate assets…Then the zombie retailers keeps on “living” for a few more years while piling on debt…and then they go bankrupt…see SEARS…

    1. Exactly.
      That may also be why there’s a desire for department stores to beheld privately- you don’t have to cater to shareholders wanting to make a fast buck.
      Ultimately, the response should be –
      “We are a retailer, you bought shares in a retailer, not a real estate trust. Our real estate portfolio is in integral part of our assets used to secure and stabilize our retail business.”
      Nordstrom founders wanted to take that company private, but could not find financing in the wake of many retail failures (ToysRUs, etc). There were rumours that HBC may be taken private.
      Privately held department store Simons is in expansion mode – and is said to be doing well – but it’s likely a drain on the budget that would not be tolerated by shareholders.
      Likewise, as the Federal Liberals discovered, companies like to hold on to and invest revenues when they have them, so they are available in future when business is down – shareholders would want those distributed immediately as dividends (and that’s what happened at Sears, draining the company).
      On the other hand, Chevron made the decision to sell real estate assets and close gas stations in valuable locations because it could make more money on the real estate play than something like 30 years of selling gas (told to me by a Chevron employee). It didn’t help that Chevron was escaping BC and sold its BC assets (including Burnaby refinery) to Parkland Fuels of Alberta.

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