Department store La Maison Simons’ move last week to announce it will lease most square feet in two sites that were former Nordstrom stores in Ontario has upped speculation that the same thing could happen in Vancouver.
Despite people like Retail Insider owner and consultant Craig Patterson telling BIV that “you don’t need to be a brain surgeon to connect the dots,” the reality, according to mall co-owner and property manager Cadillac Fairview yesterday, is that all leasing discussions for the former Nordstrom space in Vancouver remain at an extremely initial stage.
Nordstrom Inc. (NYSE:JWN) on June 13, 2023, closed its 230,000-square-foot store at CF Pacific Centre, leaving a gaping shell of prime real estate in downtown Vancouver.
La Maison Simons’ name arose immediately as a prime candidate for the space among analysts and observers. Uniqlo, Eataly and even Ikea were also floated as ideas.
Cadillac Fairview’s then senior vice-president for Canadian retail, Tom Knoepfel, told BIV in March 2023 that many potential tenants had contacted him following news that the site would become available. Cadillac Fairview owns a 50-per-cent stake in the mall, following its sale of the other 50 per cent to Ontario Pension Board (OPB) and the Workplace Safety and Insurance Board (WSIB) in 2017.
Fast forward more than a year and, while Knoepfel has largely retired, the company’s answer is still the same.
New Cadillac Fairview senior vice-president of retail Lillian Tummonds told BIV yesterday that while her company has had talks with potential tenants, these are “initial discussions.”
BIV asked Tummonds if she could confirm that discussions had taken place with representatives at La Maison Simons and she said “No.”
BIV asked if this was because the discussions were confidential, and she said that was not the reason.
“In all transparency, honestly, they are initial discussions,” she said of talks her company was having with potential tenants. “Nothing is agreed to, like none of it. It’s not like we’re even close to anything getting done.”
All options remain on the table, such as breaking up the space in various ways, she said.
“We still have to work through all those details: who, where, what, and what its going to look like,” she said. “There are so many moving pieces.”
While the site sits empty, Cadillac Fairview is missing out on revenue while still having to cover expenses, such as insurance and taxes.
BIV asked Tummonds if it were true that every day the site is not filled is a missed opportunity.
“100 per cent,” she responded.
So why is it taking so long to decide what to do with valuable real estate?
“We want to make sure that we get the right mix,” she said.
“We don't want to embark on like, ‘Oh, we're just going to shove somebody in there.’ It’s one size and then that's it. So, it's just working through the details of who is in the right mix to go in there, and what is it going to look like.”
Cadillac Fairview in 2000 bought valuable land at 1133 West Georgia Street and left it untouched for years. That site at the time housed a concrete shell of a building, which had been left derelict since the 1990s. Cadillac Fairview eventually sold the property to Holborn, which developed it following botched initial attempts to create projects such as a Ritz-Carlton hotel. The site now houses an Arthur-Erickson-designed structure that first included a Trump hotel, and is now the Paradox Hotel Vancouver.
The point here is that Cadillac Fairview is a very large company that can afford to take time developing sites. It is one of downtown Vancouver’s largest landlords, if not the biggest. It owns buildings such as the TD Tower above its CF Pacific Centre as well as 609 Granville and RBC Place.
Wholly owned by the Ontario Teachers’ Pension Plan, the company has more than $30 billion worth of assets under management, according to its website.
That may make it less pressing for it to wring money out of the former Nordstrom space.
It was March 2, 2023 when Nordstrom announced that it would cease Canadian operations, closing 13 stores and laying off about 2,500 workers. This came nine years after the company launched Canadian operations.
La Maison Simons’ announced transactions last week included leasing 110,000 square feet at downtown Toronto’s Cadillac-Fairview-owned CF Toronto Eaton Centre. The company is set to lease even more space – 118,000 square feet – at the metropolis’ Yorkdale Shopping Centre.
Cadillac Fairview does not own that Yorkdale mall, underscoring how the two La Maison Simons transactions were separate.
The message Simons sent with the two transactions, however, is that it is in expansion mode and former Nordstrom sites are desirable locations to operate.
