Mall landlords likely to get ‘creative’ to fill Nordstrom vacancies: experts
TORONTO –
Nordstrom’s departure from Canada’s retail panorama will depart vital holes in purchasing malls, and a few analysts say landlords might want to get inventive to fill the house.
If malls wish to discover comparable tenants to Nordstrom, they may look to division retailer rivals Hudson’s Bay, Simons or Saks Fifth Avenue, mentioned Tamara Szames, government director and trade adviser of Canadian retail on the NPD Group analysis agency.
But with such corporations closely engaged within the attire business — the one trade NPD Group tracks that has but to recuperate from the COVID-19 pandemic — she thinks it is extra possible that Nordstrom’s landlords will suppose outdoors the field to fill the Seattle division retailer’s areas.
“Consumers are going back into stores and we’ve seen they’re really looking for an entertainment experience (along with) shopping, so being creative with the leases and rentals of these properties is something that mall owners will have to look at,” she mentioned.
She pointed to pop-ups, meals properties and experience-based areas just like the World of Barbie — an interactive, ticketed model of Barbie’s Dreamhouse on the Square One Shopping Centre in Mississauga, Ont., as potential Nordstrom replacements.
Kate Camenzuli, vice-president of retail at actual property agency CBRE, echoed these sentiments.
“The world is our oyster,” she mentioned. “These (landlords) travel globally, to see everything that’s available, and so it may be something that we haven’t even seen yet in the Canadian market, and that might not be a department store. It may not even be a food hall.”
Nordstrom’s largest Canadian landlord, Cadillac Fairview, has but to stipulate particular plans for the departing chain’s areas, which are sometimes anchor tenants at its malls.
“Cadillac Fairview is constantly assessing the ever-changing retail landscape and while it’s too early to speculate what we will do with these spaces in the future, our team is working diligently to manage this change and work toward an outcome that is in the best interests of our centres and our long-term success,” mentioned spokesperson Janine Ramparas, in an e mail.
Nordstrom’s six Canadian shops — CF Chinook Centre in Calgary, CF Rideau Centre in Ottawa, CF Pacific Centre in Vancouver and CF Eaton Centre, Yorkdale Shopping Centre and CF Sherway Gardens in Toronto — have between seven and 10 years remaining on their leases.
Nordstrom Rack, which promised luxurious manufacturers at discount costs, has seven Canadian shops with between 5 and eight years left on their leases.
Nordstrom intends to shutter each chains’ Canadian places by June, leaving its 2,500 Canadian employees unemployed and a whole lot of 1000’s of sq. ft of house to fill.
The CF Eaton Centre location alone took over 220,000 sq. ft over three ranges, when it opened in 2018.
Camenzuli expects Nordstrom’s landlords to have a look at every house individually and assess what kind of vibe they’re trying to curate on the property.
For some, that would result in Nordstrom being changed by one other giant format retailer or a world model trying to broaden or break into Canada.
In different situations, it’s going to imply the hulking areas Nordstrom occupies will probably be damaged into smaller shops that may be leased to a wider vary of tenants not needing as a lot house.
Dollarama Inc. and TJX Companies Inc., which owns Winners, HomeSense and Marshalls, have all been on the lookout for house, together with grocers, liquor shops, pet companies, nail and hair salons and medical workplaces and clinics, RioCan Real Estate Investment Trust has mentioned in latest quarters.
Many have been eyeing Bed, Bath and Beyond places, that are on account of shut as a result of the corporate has filed for chapter safety.
Asked whether or not Hudson’s Bay or Saks Fifth Avenue could be all for Nordstrom properties, chief government Richard Baker mentioned his corporations are “optimistic” about their means to develop market share.
“It is unfortunate for Canadian retail and consumers to lose a high-quality business like Nordstrom,” he added, in an e mail.
Any firm trying to broaden will discover Nordstrom’s previous digs engaging, mentioned Camenzuli, as a result of the corporate had prime properties in high-traffic areas.
Even if Nordstrom’s landlords have been caught off guard by the chain’s departure, she mentioned most giant actual property corporations at all times have plans for who they wish to appeal to ought to their tenants depart.
“As much as it’s sad to see a Nordstrom player leave, it gives us an opportunity to do things that haven’t been done before,” she mentioned.
“And all of those teams that now have these opportunities have probably like had all these things in their back pocket that they’ve been thinking about for months.”
This report by The Canadian Press was first revealed March 3, 2023.
