CBRE is marketing the largest shopping centre in Northern Ontario's Sault Ste. Marie region, Station Mall, the most recent large shopping centre in the province to be put up for sale under receivership proceedings.

“I think there's a lot of upside potential for the property,” CBRE executive vice-president Lauren White told RENX in an interview that also included vice-chairman Mike Czestochowski, senior VP Brad Walford and senior VP Sean Comiskey.

Markham, Ont.-based SM International Holdings Ltd. acquired the mall at 293 Bay St. for $30 million on June 30, 2022 from Algoma Central Corporation, the company that built it in the early 1970s. The deal involved $12 million in cash and an $18-million vendor take-back mortgage. 

It went into receivership following a months-long court battle over that unpaid $18-million mortgage. The court action against SM International was launched by mortgage-holder Algoma Central Properties Inc., a subsidiary of Algoma Central Corporation.

Algoma Central Properties is the lone secured creditor, according to a list of creditors dated Jan. 31. There were 41 unsecured creditors owed $6.69 million on the list, topped by the City of Sault Ste. Marie, which is owed $2.1 million in property taxes.

B. Riley Farber was appointed receiver on Jan. 22 and CBRE was subsequently chosen to act as Station Mall’s property manager and to find a new owner for the shopping centre. CBRE is an unsecured creditor and was owed $391,456.97, according to the above-mentioned list.

CBRE was awarded the listing in April and started marketing Station Mall in mid-May.

“We'll be running a fully transparent process,” Czestochowski explained. “We're out there to get the best deal possible for the receiver and the lenders and we're not leaving any stone unturned.”

Station Mall tenants and leasing activity

Station Mall was completed in 1973 and expanded with a second phase in 1981 and a third in 1988. It spans over 473,000 square feet of gross leasable area and is one of the largest enclosed shopping centres in Northern Ontario. It has also undergone extensive roof repairs in recent years.

The mall is home to 66 stores and services and a food court, but is only about 45 per cent occupied. Anchor tenants include Cineplex, SportChek, H&M and Sephora.

“There seems to be some interest in the market for leasing,” Walford said, “Just for whatever reason, the existing owners were unable to move forward with some of the opportunities in front of them.

“Sephora just moved in there, which made a lot of headlines locally, and there are some other tenants who are just on the brink of finalizing lease deals. There seems to be some leasing momentum and an opportunity for someone to run with that.”

Location provides redevelopment opportunities

Station Mall occupies a prime 35.1-acre waterfront site on the St. Marys River in Sault Ste. Marie’s downtown core. It has surplus land currently used for 2,250 surface parking spots that could accommodate additional retail pads, a hotel or a multifamily residential development.

“There was a hotel group that was interested in moving forward with the previous landlord, but for whatever reason they couldn't come to an agreement,” Comiskey said.

“We've seen in the past, where we have large blocks of retail space, that other users come forward,” Czestochowski noted. “Office users may come forward or recreational users. I see, long-term, that there's going to be various uses both within the mall and around it.”

“There's also vacancy on both ends of the mall in space that previously was a Walmart and a Sears,” White added. “So someone could come in and decide that they want to keep those end units or take those down for more redevelopment area.”

The location offers direct access to the Trans-Canada Highway and the Canada-United States border. The site is across the street from Gateway Casinos, GFL Memorial Gardens and a fire station. It’s within walking distance of restaurants, hotels and waterfront paths.

“We're already getting a lot of interest and a lot of calls from both institutional and private investors, both local and international,” Czestochowski said. “At the end of the day, we believe it's somebody that's going to be versed in dealing with large-scale retail investments.

“Would I be surprised to see some kind of cross between a user-investor, somebody that came in and utilized space for one of their retail platforms and their investment side came and bought the mall? That wouldn't surprise me.” 

No bid date deadline has been set.

Other Ontario malls in receivership

A few other prominent Ontario shopping centres have gone into receivership over the past couple of years. 

Woodbine Mall Holdings Inc. et al., Ontario companies under common ownership that own various properties across Ontario, including Woodbine Mall & Fantasy Fair and Rexdale Mall in Etobicoke, were placed in receivership on May 2, 2023 following an application by Romspen Investment Corporation, which was owed approximately $333.3 million.

EY was appointed receiver and engaged Avison Young as property manager for Rexdale Mall and Woodbine Mall. Neither has yet been sold.

The three-level, 340,000-square-foot King Square Shopping Centre at 9390 Woodbine Ave. in Markham, previously owned by King Square Ltd., went into receivership after an application by MarshallZehr Group in December 2023. 

Markham-based Homelife Landmark Realty Inc. Brokerage and Toronto-based AimHome Realty Inc. Brokerage were chosen by receiver EY to sell vacant retail units and parking spaces at the shopping centre. 

According to a report prepared by EY last spring, the mall consisted of 560 commercial units, with approximately 150 — around 87,000 square feet — still owned by King Square. Forty-six of those were being leased to third parties.