Vancouver’s downtown retail core will soon be left without one of its flagship anchor tenants, as U.S.-based Nordstrom Inc. pulls up stakes and exits the Canadian market.
The move marks the third time a major retailer has left the massive Pacific Centre location empty, after previously being home to Eatons and Sears.
“We were surprised and shocked just as almost everyone seems to have been, so it was a disappointment for sure. But now we go into the mode of how do we go forward,” Downtown Vancouver Business Improvement Association interim president and CEO Jane Talbot told Global News.
“I don’t want to minimize this. It is a disappointment to downtown Vancouver, but it is temporary. And, you know, I have full faith in Cadillac Fairview and their their expertise and their ability to find the best tenant for downtown Vancouver.”
Nordstrom first occupied the prime and pricey 200,000-square-foot location in 2015, as the high-end Seattle retailer expanded northward. Nordstrom has signalled it plans to be out of the space by June, and the restaurants and food services offered at the downtown site will shut down later this month.
While the departure has some worried about the effect it could have on nearby businesses, it has also fuelled intense speculation about who could move into the space.
Martin Moriarty, a senior vice-president with commercial real estate agency Marcus & Millichap, said he’s aware of three to five large international groups that could be interested.
He said it’s unclear whether a single retailer would end up taking over the entire space, but that his instincts tell him it’s more likely it could be subdivided into multiple outlets.
“There is a lineup of users in the 30,000, 50,000, 70,000 square-foot frame, and I think that would be a pretty attractive option for the landlord,” he said.
“It’s always nice to add more diversity and a different mix of users, it also downgrades the risk profile of the asset.”
Moriarty said despite the national decision, the downtown Vancouver Nordstrom location was one of the company’s best Canadian performers, and that Pacific Centre is also thriving.
Coupled with the strong demand his company is seeing for retail space, he said it probably won’t take long for the property to get snapped up, whether it’s a single tenant or multiple.
“I think the landlord and the ownership here will be very careful, and I’m sure they will be very selective in their process to ensure they get the right mix,” he said.
“The mall has been a great performer, the street is very busy, and they have some time to get this right. It’s a very unique block of space, and I am sure they will do a great job in the remerchandising of that.”
Talbot said her BIA will be ready to help landlord Cadillac Fairview secure a tenant in any way it can, including providing data on the area’s vacancy rates, foot traffic and visitation rates.
While no one wants to see a major tenant pull out, she added, she’s encouraged by Vancouver city council’s recent moves to focus on helping the Granville strip.
“The revitalization of Granville Street is perfectly timed for this actually,” she said.
“The city has invested in Granville Street, has made it known they are working hard to revitalize that street, and they’ll take this in stride.”
In January, Vancouver councillors approved a plan to begin revitalizing the Granville Entertainment District, which will open the door to reviewing zoning, exploring a car-free area and more public space options and encouraging hotel development.
That plan is in its infancy, however, with staff expected to take up to 18 months to produce an initial report laying out options for concrete change.
“What this announcement signals, if anything, is it underlines the importance of moving ahead with the Granville Street planning and revitalization effort,” Vancouver Coun. Sarah Kirby-Yung said of the Nordstrom situation.
“It is going to be a significant gap.”
In the meantime, Kirby-Yung said the city remains focused supporting initiatives to keep the area vibrant.
She pointed to plans by the Hudson’s Bay Company to redevelop its flagship Granville and Georgia location, which proposes a heritage restoration along with the addition of a 12-storey office tower and renewed transit hub.
“It’s going to fill a hole in the retail landscape, and the gap Nordstrom would leave in terms of the large stores,” she said.
Longer term, she said council was open to a variety of options for the Nordstrom space, including arts and culture, the tech industry or a food-focused space along the lines of U.S.-based Eataly.
Nordstrom, an upscale department store chain that sold a mix of designer goods, first announced plans to expand to Canada in 2012 and opened its first store in Calgary at CF Chinook Centre in September 2014.
The company is expected to cut an estimated 2,500 jobs in its exit from Canada.