Toronto-based RioCan Real Estate Investment Trust has issued a statement in response to the Hudson’s Bay Company’s (HBC) recent filing under the Companies’ Creditors Arrangement Act (CCAA). The REIT, which has a long-standing relationship with HBC through the RioCan-HBC Joint Venture (JV), expressed its disappointment over the development but reiterated its confidence in mitigating any negative impacts on its portfolio.
HBC, which filed for CCAA protection on March 7, 2025, has been a key tenant in multiple RioCan properties. The restructuring process will likely lead to significant operational and financial changes for Canada’s oldest department store chain.
RioCan’s Exposure to HBC
According to RioCan, its financial exposure to HBC remains significant. As of December 31, 2024, the company held a $249 million carrying value in the RioCan-HBC JV, with the venture contributing $23.7 million to Net Operating Income (NOI) and $13.6 million to Funds From Operations (FFO). Additionally, RioCan has provided $88.7 million in credit support through a combination of loan guarantees and mezzanine loans to HBC, with collateral securing its interests in several JV properties. The company also earned $6.6 million in fees for these financial services and an additional $3.3 million in interest income from the JV.
Despite these figures, RioCan emphasized its strategic approach to protecting its assets and minimizing financial risk. The REIT stated that it has secured termination options and other rights to safeguard its position within the JV, ensuring flexibility as the situation unfolds.
Prime Locations and Redevelopment Opportunities
RioCan’s JV with HBC includes 13 properties, many of which are located in major Canadian cities, such as Montreal, Vancouver, Calgary, and Ottawa. Some of these locations operate as standalone HBC stores, while others exist within multi-tenant properties like Oakville Place and Georgian Mall. One of the 13 stores is a Saks OFF 5TH at RioCan’s Tanger Outlets in Ottawa.
Jonathan Gitlin, President and CEO of RioCan, highlighted the value of these properties and their long-term potential. “The HBC JV assets are located in prime urban markets and hold substantial value, either as operating retail centres or as redevelopment opportunities,” said Gitlin.
Gitlin also reaffirmed RioCan’s ability to adapt to changing retail landscapes. “RioCan has a demonstrated track record of successfully backfilling vacancies and repositioning assets. We are well-prepared to manage this situation and will take the necessary steps to protect the interests of our unitholders and stakeholders.”
Navigating the Uncertainty
While the impact of HBC’s restructuring remains uncertain, RioCan remains committed to actively managing the situation. The company acknowledged that navigating the complexities of HBC’s financial restructuring will require collaboration with all involved stakeholders.
“This process will take time and will require a thoughtful and strategic approach,” Gitlin added. “We have a strong core business, a dedicated team, and a solid balance sheet that positions us well to address these challenges.”
