Hudson’s Bay Landlord Lease Deal in Question

Hudson’s Bay is doubling down on its commitment to offloading commercial properties to a British Columbia billionaire.

The Canadian commercial property holding company filed a motion in court seeking to force landlords to sell 25 leases to billionaire Ruby Liu, CBC reported. The latest motion comes after Liu signed two deals in May to buy a combined 28 leases that belonged to Hudson’s Bay and Saks.

Fifteen of the 25 leases in question include properties in Ontario, including Fairview Mall, Sherway Garden, Bayshore Shopping Centre and Bramalea City Centre. The remaining 10 are split evenly between Alberta and British Columbia and include West Edmonton Mall, CF Market Mall and Guildford Town Centre.

In total, the group of leases will cost about $69 million, as well as additional fees Liu must pay as part of the deal. If the court forces the deal through, Hudson’s Bay is estimated to pay down $50 million in debt of the roughly $1.1 billion it had when it filed for creditor protection in March.

Hudson’s Bay chose Liu to take over the leases because her presence will help the company repay creditors, offer jobs to former Hudson’s Bay employees and fill vacant properties so landlords avoid “the visual and economic blight of a ‘dark’ or empty store for a significantly prolonged period,” CBC reported.

Liu, an entrepreneur who made her fortune in Chinese real estate, owns three malls in British Columbia on her own. She’s offering to sell the Woodgrove Centre and Mayfair Shopping Centre if it allows her to take over Hudson’s Bay’s properties.

Once landlords began meeting with Liu, they reportedly discovered she didn’t have much information to share about her plan to open a new department store named after herself, complete with dining, entertainment and recreational spaces. Liu only shared that she planned to open 20 stores within 180 days of signing leases. Cadillac Fairview had the impression that Ms. Liu was “making this up,” while Primaris REIT thought her plans were “predicated upon hope, optimism and not on experience,” according to CBC.

The billionaire is reportedly budgeting $375 million for her venture and is looking at opening flagship, platinum and standard tiers of her eponymous department store.

“Much has been made of my public comments around the retail concepts that I believe may appeal to modern shoppers,” Liu told CBC. “However, this should not be taken as any intention to ignore the terms of the lease.”

Liu looks to invest $120 million on “overdue” repairs to roofs, HVAC systems, bathrooms, elevators and escalators plus an additional $135 million on initial inventory. She predicts her plan will create at least 1,800 new jobs and generate more than $420 million in annual sales by 2027.— Chris Malone Méndez