Sears Canada has submitted plans to redevelop its owned 8.9 acre parcel at Burnaby BC’s Metropolis at Metrotown. The estimated redevelopment cost will be about $1 billion. The project will include five residential towers and two office buildings over a retail component that will include a new Sears store. The site currently includes a 217,283 square-foot Sears department store, a 37,422 square foot Toys “R” Us store and acres of parking.
Sears is in the enviable position of owning its Metrotown store, land and adjacent parking. It therefore has the option of redeveloping this valuable real estate asset. We can expect Sears to utilize similar real estate assets, though it only owns about a dozen of its Canadian stores. The other Canadian Sears locations are leased and Sears will capitalize on selected leases as well. For example, Sears recently sold back three store leases to landlord Cadillac Fairview for $170 million, paving the way for Nordstrom to open in Canada.
Sears Canada is also seeking to either subdivide, sublease or even redevelop other store locations. It has hired consultants previously used by The Hudson’s Bay Company to determine potential subleasing options and other best-use scenarios for Sears’ existing real estate holdings. Sears’ American parent is also actively looking to sublease space and has even created a website specifically to do so.
The Globe & Mail reports that the current 140,000 square foot Metrotown Sears store will be demolished and a 100,000 square foot replacement store will be built as part of the new project. Review of Metrotown leaseplans, however, show Sears as being over 217,000 square feet. Plans submitted by Sears state that a replacement Sears store will be a “flagship” location. Flagship locations usually indicate a store that is larger than most in its chain and which carries all or at least most product lines. We’re not sure if a 100,000 square foot replacement Sears store could meet the definition of a “flagship” location given these qualifications.
We’ll report on updates to this development and we’ll follow up with trying to determine the correct size and configuration of the future newly-built Sears store at Burnaby’s Metrotown.
The submitted planning document by Sears to the City of Burnaby to redevelop its site can be found here. The Sears application starts at page 334.
[Metropolis at Metrotown website]