Vancouver’s downtown shopping economy has continued to suffer since Nordstrom Inc. (NYSE:JWN) closed its flagship Vancouver store last June.
The decision—part of the Seattle-based retailer’s exit from Canada—has caused no shortage of speculation from experienced retail operatives and observers about how the vacant space could be filled.
The 230,000-square-foot prime retail location at CF Pacific Centre has sat empty since June 13, 2023.
Cadillac Fairview, the mall’s property manager and 50-per-cent owner, is in no hurry to redevelop or fill the space, its senior vice-president of retail Lillian Tummonds told BIV earlier this month.
“Nothing is agreed to, like none of it,” Tummonds said. “It’s not like we’re even close to anything getting done.”
The Ontario Teachers’ Pension Plan-owned Cadillac Fairview, which bills itself as having more than $30 billion in assets under management, and other large players have more leeway to take their time redeveloping and filing space than do smaller mall owners.
A similar project delay is happening at the former site of the Four Seasons Hotel Vancouver.
Friction between Cadillac Fairview and the Four Seasons prompted lawsuits and the hotel chain’s 2020 departure from a 30-storey, Cadillac-Fairview-managed tower on Howe Street above CF Pacific Centre. The property had been a Four Seasons hotel for more than 40 years.
Inside reconstruction took place during the pandemic and is ongoing, but no new hotel brand has been announced.
Tummonds told BIV that her company’s stance is the same as it was in December 2023.
That was when now-retired Cadillac Fairview senior vice-president of retail Tom Knoepfel told BIV: “We haven’t finalized our plans for the building. There may be a residential component to it. I don’t know. We haven’t determined the final use for the building. I would expect that, ultimately, at least a portion of the building will be a hotel.”
Other Cadillac Fairview projects have sat idle in Vancouver.
Cadillac Fairview in 2000 bought valuable Vancouver real estate at 1133 West Georgia Street and left it untouched for years. The site at the time housed a concrete shell of a building, which had been left derelict since the 1990s.
The company eventually sold the property to Holborn, which developed it following a failed attempt to build a Ritz-Carlton hotel. The site now houses an Arthur-Erickson-designed structure that has condominiums above what was a Trump hotel and is now the Paradox Hotel Vancouver.
Other large companies have left large pieces of real estate empty over extended periods.
Deep-pocketed, 96-year-old Hong Kong-based real estate tycoon and billionaire Lee Shau-kee primarily owns Henderson Development Canada Ltd., although his sons Martin and Peter manage his holdings.
Henderson owns International Village Mall at 88 West Pender Street, which has throughout most of its 25-year history had significant upper-floor retail space vacancies.
In the aught years, Henderson sought Vancouver-based mall owner Thomas Fung to help it fill that empty space, Fung told BIV in 2008.
Fung instead focused on filling his own Aberdeen Centre in Richmond, which he spent $100 million to build in 2003, and at the time had critics who believed his mall would flounder.
Fung, whose roots are in owning the Cantonese- and Mandarin-language broadcaster Fairchild Group, was able to fill his mall with some third-party tenants but also dozens of brands for which he was the franchisee or that he either owned outright.
He founded companies such as Saint Germain Bakery and Price Just 4 You, and brought to Canada brands such as Beard Papa as the Canadian master franchisor.
Fung told BIV earlier this month that it can take more than a year for a landlord to find the right tenant to fill a large space in a mall.
He said B.C.’s retail economy is not as strong as it was years ago, and that he doubts any single retailer would want to take the entire former Nordstrom space.
Fung has not contacted Cadillac Fairview about the space but he said he might be interested in leasing 25,000 to 30,000 square feet. He would then bring in an Asian brand or brands.
To be interested, Cadillac Fairview would need to offer three key things, he said:
- Desirable neighbouring tenants;
- Flexible rent that includes at least a component that is fixed to a percentage of his sales; and
- Financial help with site improvements to build out his stores.
“A very attractive long-term, percentage-rent agreement may attract some tenants in there,” he said.
Complementary businesses in the site are key, he added.
Rumours have swirled that Québec-City-based La Maison Simons is interested in leasing space.
That company earlier in June announced two separate deals to lease most of two former Nordstrom locations in Toronto at CF Toronto Eaton Centre and Yorkdale Shopping Centre.
“You don’t need to be a brain surgeon to connect the dots,” said Retail Insider owner and consultant Craig Patterson.
He told BIV that his sources have told him that La Maison Simons is in talks with Cadillac Fairview about leasing space at CF Pacific Centre.
He said he also believes Eataly—a grocery store chain that has with restaurants inside it and operates four Toronto-area locations—is looking to expand to Vancouver and could be interested in CF Pacific Centre.
“In a negotiation, it has to be a win-win for both parties,” Patterson said.
“Tenants are going to have a say if they are really good tenants, and Cadillac Fairview is going to give a building allowance, so they will pay for part of the construction, including probably for Simons.”
Given scarce blocks of large retail space, however, Patterson said Cadillac Fairview probably has the upper hand in negotiations.
He said he thinks Cadillac Fairview should try to fill its space sooner than later because the absence of a large anchor tenant is likely hurting other tenants in the mall’s main corridor.
“Look at the sales per square foot at CF Pacific Centre compared to 2019—it is way, way lower,” Patterson said.
He pointed to Retail Council of Canada research showing that the average sales per square foot at CF Pacific Centre in 2023 was $1,324. Patterson said that before the pandemic, that figure was almost 41 per cent higher, at $1,865 per square foot.
“It could be more indicative that the recovery downtown hasn’t happened in Vancouver for foot traffic and shopping,” he said.
