For nearly five decades, the Toronto Eaton Centre has been anchored by a department store or clothing retailer. Could a water park, cluster of restaurants or conference centre be next?
With Nordstrom’s announcement last week that it’s pulling out of Canada, some of the most desirable commercial real estate in the country is suddenly up for grabs.
Retail and real estate experts say the cavernous space currently occupied by the U.S. retailer in downtown Toronto could become anything from a conference centre to yet another Toronto Metropolitan University outpost — or even a water park.
The least likely option, they say, would be another huge department store. Not in an era where more consumers are shopping online.
Whatever happens, the massive mall, home to more than 200 shops, will survive. As of 2019, it was the busiest shopping mall in Canada, with more than 50 million visitors per year, and its owner, commercial real estate giant Cadillac Fairview, is used to reinventing large spaces to accommodate new uses.
Big-box retailers such as Ikea are already in the neighbourhood, and fashion retailers have struggled since the COVID-19 pandemic, so that makes them an unlikely option, said retail analyst Lisa Hutcheson.
“It’s such a big space. Something entertainment-focused could really work. It would also be good for food and beverage,” said Hutcheson, managing partner at retail consultancy J.C. Williams Group. “I could also see conference rooms or maybe Toronto Metropolitan University could be interested in it.”
Nordstrom announced Thursday it was closing its 13 Canadian stores, including six operating under the main Nordstrom brand and seven under the discount Nordstrom Rack banner. The stores will be closed by late June. Among them are three Nordstrom stores in Toronto, including the 220,000-square-foot location that opened with great fanfare in 2016 at the Eaton Centre, in a space that began as an Eaton’s when the mall opened in 1977, then eventually became a Sears.
As more consumers have been shopping online, malls and their tenants have been forced to adapt, to make the case that there’s still something to be gained walking into a store, rather than just clicking a mouse.
Hutcheson pointed to American Dream, a mall and entertainment complex in East Rutherford, N.J., which contains an indoor amusement park — complete with roller coasters and a minigolf course — as well as a water park, NHL-sized skating rink and an indoor ski resort.
“About 30 per of American Dream is entertainment-based,” Hutcheson said.
While the space now occupied by Nordstrom could still end up having some retail use, Hutcheson doubts it would be filled by a single company — it’s just too big.
“That’s a really big space. It’s probably not going to be a single tenant. I think they’ll probably end up carving it up,” said Hutcheson, who also doubts any clothing-focused retailer will end up occupying the space.
The pandemic hammered clothing retailers worldwide, not least because it accelerated the work-from-home trend. That makes Hutcheson doubt that a fashion-dominated company like Quebec-based Simons would take over the space.
“To put in another fashion retailer, I don’t think that will work,” said Hutcheson.
A spokesperson for Cadillac Fairview said the company is already looking for ways to fill the space.
“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,” spokesperson Janine Ramparas said.
Coun. Chris Moise, who represents the area where the Eaton Centre is located, hopes the space will be split up into smaller units.
“Personally, I would like to see the space converted into smaller spaces like they did with the lower level of the old Sears. We’ve seen that these big-box department stores aren’t a successful model anymore,” said Moise.
On Twitter, some Toronto residents had their own suggestions, ranging from well-known retail names — both Canadian and international — to more recreational options.
“I vote to turn the Eaton Centre Nordstrom space into a laser tag arena and bowling alley,” tweeted Mona Hillis.
“With Nordstrom closing, it’s time for the Eaton Centre to reject modernity and embrace tradition,” wrote Mike Beauvais, alongside a picture of the Zellers logo replacing Nordstrom.
Others suggested Giant Tiger or Dollarama.
Kate Camenzuli, vice-president at commercial real estate brokerage CBRE, said Torontonians hoping for the largest dollar store in North American history will likely be disappointed. But there are major international retailers who’d love to crack the Canadian market in such a marquee location, said Camenzuli, who didn’t name specific companies.
“These are institutional-grade, phenomenal pieces of real estate. I think there’s going to be a lot of interest. I do think it will stay consumer-facing, and stay in some type of retail,” said Camenzuli, who specializes in retail real estate.
Camenzuli agreed that entertainment or restaurant operators could be a realistic option for the Nordstrom spaces at the Eaton Centre and other Canadian malls.
“The space is very well suited for experiential things, food and beverage or entertainment. They’re all about the same asks. They’ve got their nuances but they’re very quick turnaround,” said Camenzuli. “If the right player came to town, every single one of those landlords would be able to accommodate anything that came in.”
Camenzuli scoffed at suggestions that mall landlords are overly concerned about the Nordstrom pullout.
“No one’s panicking. This is what the landlords do every day. They’re used to carving up space and making sure that it’s appropriate and suitable for new groups coming in,” Camenzuli said.
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