RioCan Demands Payment From Hudson’s Bay, Files For Receivership Of Joint Venture

Toronto-based RioCan REIT has moved to take strong legal action against its joint venture partner, Hudson’s Bay Company (HBC), by filing an application to place their shared property venture into receivership. This dramatic step follows HBC’s filing for creditor protection under Canada’s Companies’ Creditors Arrangement Act in March 2025, which allowed the historic retailer to stop paying rent to the venture—a move RioCan called unprecedented.

The joint venture began in 2015, when HBC contributed ten properties—five owned outright and five leased—and RioCan pitched in a 50 percent share of two Ontario malls, Georgian Mall and Oakville Place, plus cash. The result was the RioCan-HBC Limited Partnership, in which HBC held roughly 79 percent ownership and RioCan held about 21 percent. The properties included major shopping centres in cities like Mississauga, Scarborough, Laval, Vancouver, Calgary, Montreal, Ottawa, Windsor, Barrie, and Oakville.

When HBC entered creditor protection, it halted rent payments to the joint venture, which stopped nearly two-thirds of the JV’s income stream. RioCan protested the decision in court and eventually negotiated a deal forcing HBC to pay about $7 million per month—out of $10 million owed—for rent. Despite that, HBC’s continued financial distress compelled RioCan to seek full payment.

On May 29, RioCan formally demanded immediate repayment of over $38 million in second-mortgage financing following defaults on advances provided in 2024. Specifically, RioCan claimed roughly $24 million pertaining to the Georgian Mall and about $14 million linked to the downtown Ottawa property. Unpaid rent and these financing defaults were cited as critical threats to the JV’s ability to meet secured debt obligations.

In its receivership application, RioCan reported that no suitable buyers emerged during the court-approved sales and investment process. With HBC disclaiming certain JV leases and fully stopping rent payments, RioCan argued that the venture would fail to meet its financial duties after June 2025 unless courts intervened. The aim of appointing a receiver is to preserve and maximize the value of the jointly held properties.

Ontario’s Superior Court approved the receivership on June 3, appointing FTI Consulting to take charge. FTI’s role includes stabilizing the properties, handling debt, and exploring options such as selling, leasing, redeveloping, and financing, all to benefit secured lenders and other stakeholders. This marks a significant shift in Canada’s commercial real estate landscape—one that signals the end of HBC’s role in the joint venture and opens a new chapter for these high-profile assets.