HBC and RioCan (REI-UN-T) are about to expand their six-year-old partnership on several Canadian properties, announcing they will move ahead with the redevelopment of HBC’s downtown Montreal property into a 25-storey office tower.
The mixed-use redevelopment will include construction of an office tower of approximately one million square feet and the transformation of Hudson’s Bay’s existing retail space. HBC is finalizing details of the project with the City of Montreal and other stakeholders.
“As consumers continue to evolve the way they live, work and shop, we are committed to capitalizing on these shifts, while unleashing the full potential of our prime properties throughout North America and reinvigorating the urban districts in which they are situated,” said Ian Putnam, president and CEO of HBC Properties and Investments, in the announcement Monday morning.
“HBCPI is excited to lead the way to unlocking the value and potential of our joint venture portfolio for our most significant flagship properties throughout Canada.”
The project is expected to be underway by 2023, with completion targeted for 2027. The Hudson’s Bay Sainte-Catherine Street store will continue to operate throughout the construction process.
Transforming an “iconic property”
“RioCan is looking forward to the transformation of this iconic property to meet evolving consumer and office user expectations,” said Jonathan Gitlin, president and CEO of RioCan, in the release.
“This highly attractive, transit-oriented site in the heart of downtown Montreal will be revitalized and expanded with resilient uses and offer forward-thinking amenities driving value creation for the long term.”
This project is part of the partners’ strategy to maximize and enhance their shared portfolio of real estate assets. Through the joint venture, HBC (79.8 per cent) and RioCan (20.2 per cent) own or control 10 properties comprising over three million square feet across Canada.
The cost of the project will be shared on a proportionate basis.
“We are reimagining the Hudson’s Bay retail experience in downtown Montreal, creating a digitally connected store with elevated service and a curated assortment to showcase the best of what Hudson’s Bay has to offer,” said Iain Nairn, the president and CEO of Hudson’s Bay, in the release.
New office tower to feature glass curtain
The office tower, to be clad in a glass curtain, will focus on employee well-being and concern for the environment, while respecting the heritage of the flagship building. HBC and RioCan says it will be designed to provide the type of flexibility and space required by high-growth businesses.
It will incorporate a state-of-the-art approach to design and align with LEED standards, featuring large, flexible floor plates of up to 60,000 square feet. There will be high ceilings and a biophilic design to increase occupant connectivity to the natural environment through maximum exposure of natural light and other features.
The heritage building’s original architecture will be protected. This includes restoration of the facades, the reopening of windows and returning showcases to their original states. Four tiered terraces will be created on the four green roofs of the office tower.
The main entrance and tallest part of the tower will be on the de Maisonneuve Boulevard side.
Links to downtown Montreal transit
“The Hudson’s Bay redevelopment project represents the next chapter in HBC’s retail history and its continued commitment to Montreal,” said Richard Hamori, COO of Streetworks Development, the real estate development arm of HBC Properties and Investments, in the announcement.
“We intend to honour the heritage of our flagship building, as well as that of historic Sainte-Catherine Street, while expressing our confidence in the future of Montreal’s downtown.
“This project is another step towards our goal of maximizing the value of our portfolio of downtown properties throughout North America, while diversifying our holdings to a mix of retail, residential and office space.”
The building features existing connections to Montreal’s Metro and the upcoming Réseau express métropolitain (REM) McGill station.
Built in 1891, the former Morgan’s store was purchased by HBC in 1960 and renamed The Bay in 1972. It is across from Phillips Square and is one of the most iconic stores in HBC’s portfolio.
About HBC and RioCan
HBC, LP is a holding company of portfolio businesses and a long-term investor. HBC’s assets span top markets and prime locations across North America.
Among HBC’s portfolio companies are Saks Fifth Avenue; Hudson’s Bay; and Saks OFF 5TH.
HBC owns or controls, either entirely or with joint venture partners, approximately 40 million square feet of gross leasable area.
HBC Properties and Investments, the company’s real estate and investments portfolio business, manages these assets along with additional real estate offerings, including Streetworks Development, its property development firm that creates transformative multi-use environments.
Founded in 1670, HBC is North America’s longest continually operating company and is headquartered in Toronto and New York.
RioCan is one of Canada’s largest real estate investment trusts. It owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas.
As of Dec. 31, 2020, RioCan’s portfolio comprised 223 properties with an aggregate net leasable area of approximately 38.3 million square feet (at RioCan’s interest) including office, residential rental and 14 development properties.