HBC Launches New CRE Investment Business

October 20, 2020

North America’s oldest retailer has created HBC Properties and Investments to manage its 40 million-square-foot portfolio.

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The 350-year-old HBC LP, the oldest retailer in North America, continues its transformation into its new incarnation—that of a holding company structure centered on distinct portfolio businesses operating at the intersection of retail and real estate—with the launch of HBC Properties and Investments, a real estate and investments business.

The new entity focuses on the management and maximizing of Toronto-based HBC’s portfolio of assets, which currently consists of wholly and joint venture owned properties totaling 40 million square feet of gross leasable space in key demographic markets of the U.S. and Canada.

HBCPI is tasked with enhancing HBC’s portfolio, which includes properties housing the company’s three retail operating companies: luxury chain Saks Fifth Avenue, Canada’s multi-category retailer Hudson’s Bay and off-price retailer Saks OFF 5TH. As Richard Baker, CEO of HBC, said in a prepared statement, the new management business will also continue to generate value from the assets, as HBC did with the disposition of such properties as the Lord & Taylor flagship building in Manhattan. Having announced a deal to sell the 676,000-square-foot landmark building at 424 Fifth Ave. to WeWork in 2017, HBC finally closed the $1.1 billion transaction in early 2019.

HBCPI will also oversee Streetworks Development, HBC’s large-scale property development division focusing on the creation of transformative mixed-use properties. Streetworks currently has 20 million square feet of mixed-use projects under development.

Evolution of a company

HBC’s launch of HBCPI comes seven months after HBC, originally Hudson’s Bay Co., announced the completion of its privatization. The company delisted from the Toronto Stock Exchange in March 2020, following the purchase for cancellation of all its common shares at a cash consideration of CAD $11.00 per share, or approximately $8.35 per share. During the then-public company’s third quarter 2019 earnings conference call on December 10, 2019, former CEO Helena Foulkes said, “Whether we are a public or private company, our strategy remains the same: making focused investments to drive growth in each of our businesses, enhancing the customer experience across all channels, reducing operating costs and complexity while continuing to fix the fundamentals and capitalizing on the value of our real estate.“