RioCan Real Estate Investment Trust Provides Update on Hudson's Bay Company's CCAA Filing

TORONTO — In connection with Hudson’s Bay Company’s (“HBC”) CCAA filing announced on March 7, 2025, RioCan Real Estate Investment Trust (“RioCan” or the “Trust”) (TSX: REI.UN) provides an update on its exposure to the Hudson’s Bay Company ULC (“HBC”) given its relationships with HBC as both landlord and partner in the RioCan-HBC Joint Venture (“the JV”).

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HBC’s recent CCAA filing is disappointing. RioCan understands that restructuring can be a necessary step for companies to stabilize their operations and financial position; however, it is essential that any restructuring steps are on fair and balanced terms. RioCan remains committed to protecting the interests of its Unitholders and other stakeholders. To achieve this, RioCan will pursue all available business and legal avenues, and will leverage its extensive leasing and development capabilities to achieve the best possible outcome for each of the properties within the JV.

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“The HBC locations in the JV include prime real estate within Canada’s major markets, that have value either as operating retail centres or redevelopment opportunities. Our team has a proven track record of finding solutions for vacant space and will work to protect the value of the real estate in the JV. This process will take time, expertise and collaboration among all stakeholders,” said Jonathan Gitlin, President and CEO of RioCan. “With a strong core business, team and balance sheet, RioCan is well-positioned to navigate this situation. We will provide updates as we progress.”

HBC Exposure:

For the year ended December 31, 2024, RioCan’s exposure to HBC is as follows:

The RioCan-HBC JV had a carrying value of $249.0 million (or 3.3% of Equity) and contributed $23.7 million of NOI (or 3.2% of NOI on a proportionate share basis) and $13.6 million of FFO (or 2.5% of FFO).
RioCan has provided credit support totaling $88.7 million in the form a loan guarantee and mezzanine loans to HBC through the JV. In exchange, RioCan has protected its interests through the receipt of security in several joint venture properties. RioCan earned $6.6 million in fees in respect to the guarantee and financing services as well as $3.3 million of interest income from the JV. Further details are provided in the table on page 2.

RioCan’s HBC location summary:

		As at December 31, 2024
Name	Address	RioCan Ownership	NLA ⁽¹⁾
**HBC locations held in the JV** ⁽²⁾
Downtown Montreal	585 Ste-Catherine St. W, Montreal, QC	22%	144.2
Downtown Vancouver	674 Granville St., Vancouver, BC	22%	140.1
Downtown Calgary	200 8^th Avenue S.W., Calgary, AB	22%	98.7
Downtown Ottawa	73 Rideau St., Ottawa, ON	22%	73.8
Yorkdale Shopping Centre ⁽³⁾	3401 Dufferin St., Toronto, ON	22%	66.8
Scarborough Town Centre ⁽³⁾	300 Borough Drive, Toronto, ON	22%	51.0
Square One Shopping Centre ⁽³⁾	Hwy 10/Burnhamthorpe, Mississauga, ON	22%	44.2
Carrefour Laval ⁽³⁾	3045 Boulevard Le Carrefour, Laval, QC	22%	38.9
Devonshire Mall	3030 Howard Avenue, Windsor, ON	22%	36.4
Promenades St. Bruno ⁽³⁾	Boulevard des Promenades, St. Bruno, QC	22%	29.0
*HBC locations in multi-tenanted assets (the JV owns 50% and RioCan owns 50% directly)*
Oakville Place ⁽⁴⁾	240 Leighland Avenue, Oakville, ON	61%	59.7
Georgian Mall ⁽⁴⁾	509 Bayfield St., Barrie, ON	61%	45.4
*HBC location in multi-tenanted asset that is not part of the JV*
Tanger Outlets Ottawa ⁽⁵⁾	8555 Campeau Dr., Ottawa, ON	50%	14.2
13 HBC locations			842.4

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1)		Net Leasable Area (NLA) represents property level NLA for the 10 standalone HBC stores. NLA for Oakville Place, Georgian Mall and Tanger Outlets Ottawa represent the NLA of the HBC stores within these properties. NLA is in thousands of square feet and at RioCan ownership percentage.
2)		RioCan has a 22% ownership interest in the 10 single-tenant HBC stores through the RioCan-HBC JV.
3)		The stores operate under long-term ground leases.
4)		RioCan has a 61% ownership interest in Oakville Place and Georgian Mall through 50% direct ownership and 22% ownership interest in the JV. RioCan has exclusive decision-making rights with respect to certain operation and leasing decisions relating to these two assets, without requiring the consent of the RioCan-HBC JV and has certain termination options to protect RioCan as the landlord.
5)		RioCan has a Saks OFF 5TH store as a tenant at its co-owned Tanger Outlets Ottawa property. RioCan has a termination right at this property.

The three HBC stores integrated within RioCan managed shopping centres include two Hudson’s Bay stores located at Georgian Mall and Oakville Place, and a Saks OFF 5TH store at Tanger Outlets Ottawa. These three stores are paying below market rents and have strong backfill prospects. RioCan has certain termination options and rights at these properties to protect the Trust as the landlord.

RioCan’s guarantee and loan summary

Over the last 15 months RioCan has provided credit support to HBC through the RioCan-HBC JV. RioCan’s guarantees and loans, and related security are detailed below:

	Maturity	As at December 31, 2024 ($M)	RioCan’s Security
RioCan’s Guarantee on first position mortgage on RioCan-HBC JV’s head leasehold interest in Yorkdale Shopping Centre ⁽¹⁾	Q1 2027	$58.5	Pledge of JV interest in: Yorkdale Shopping Centre Scarborough Town Centre JV’s freehold interest in: Downtown Montreal (2^nd position) Devonshire Mall (1^st position) JV’s 50% freehold interest in Oakville Place (2^nd position)
Georgian Mall mezzanine loan ⁽²⁾	Q1 2029	$19.1	JV’s 50% freehold interest in Georgian Mall (2^nd position)
Downtown Ottawa mezzanine loan ⁽³⁾	Q4 2029	$11.1	JV’s freehold interest in Downtown Ottawa (2^nd position)

1)		In connection with the refinancing of the JV’s Yorkdale Shopping Centre head lease, RioCan provided a 100% guarantee on the $75.0 million first mortgage. This guarantee is inclusive of RioCan’s 22% interest in the loan, which is $16.5 million. The $58.5 million guarantee represents HBC’s interest in the loan. The guarantee is secured by a pledge of units of YSS1 LP that have ownership interest in the Yorkdale Shopping Centre and Scarborough Town Centre, as well as the JV’s freehold interests in the Devonshire Mall (first position), Downtown Montreal property (second position) and the JV’s 50% freehold co-ownership interest in Oakville Place (second position).
2)		In connection with the Georgian Mall refinancing, RioCan provided a mezzanine loan of $24.5 million to the RioCan-HBC JV. This is inclusive of RioCan’s 22% interest in the mezzanine loan, which is $5.4 million. The $19.1 million represents HBC’s interest in the mezzanine loan. The mezzanine loan is secured by a second mortgage in the JV’s 50% co-ownership interest in the property.
3)		In connection with the Downtown Ottawa property refinancing, RioCan advanced a mezzanine loan of $14.2 million to RioCan-HBC JV. This is inclusive of RioCan’s 22% interest in the mezzanine loan, which is $3.1 million. The $11.1 million represents HBC’s interest in the mezzanine loan. RioCan also provided a 22% guarantee, equal to its ownership percentage of the JV, on the first mortgage. The mezzanine loan and the guarantee are secured by a second mortgage in the JV’s interest in the Downtown Ottawa property.

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About RioCan

RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at December 31, 2024, our portfolio is comprised of 178 properties with an aggregate net leasable area of approximately 32 million square feet (at RioCan’s interest). To learn more about us, please visit www.riocan.com.

Forward Looking Information

This News Release contains forward-looking information within the meaning of applicable Canadian securities laws. This information reflects RioCan’s objectives, our strategies to achieve those objectives, as well as statements with respect to management’s beliefs, estimates and intentions concerning anticipated future events or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements.

Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described in the “Risks and Uncertainties” section in RioCan’s MD&A for the year ended December 31, 2024 and in our most recent Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release.

Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. The forward-looking statements contained in this News Release are made as of the date hereof, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.