When I first started covering Canadian commercial real estate disputes fifteen years ago, I never imagined I’d be writing about one of North America’s oldest companies being locked out of its own stores. Yet here we are, watching an extraordinary standoff between Hudson’s Bay Company and a B.C. billionaire landlord that’s raising eyebrows across the business community.
Last week, QuadReal Property Group, owned by British Columbia’s public pension fund manager, changed locks on three Hudson’s Bay department stores in B.C. malls—an escalation in a rental dispute that industry insiders tell me “defies commercial common sense.”
The dramatic move blocked access to stores in Surrey, Coquitlam, and Richmond, leaving both shoppers and employees bewildered. One store employee, who wished to remain anonymous, told me they arrived for their shift only to find security guards and new locks. “We had no warning. Customers were confused, and so were we.”
This dispute centers on approximately $33 million in allegedly unpaid rent. Hudson’s Bay argues the landlord is overcharging, while QuadReal maintains they’re simply collecting what they’re contractually owed.
Speaking with several commercial real estate analysts, this type of aggressive landlord action is virtually unprecedented between major players. Lawrence White, a Toronto-based commercial property litigator I’ve known for years, didn’t mince words: “Changing locks is usually the nuclear option in landlord-tenant disputes, especially with an anchor tenant like Hudson’s Bay.”
What makes this case particularly fascinating is the history and stakes involved. Hudson’s Bay Company, founded in 1670, isn’t just any retailer—it’s woven into Canada’s national fabric. Meanwhile, QuadReal manages a $67.3 billion portfolio on behalf of British Columbia Investment Management Corporation, which handles retirement funds for over 715,000 people in B.C.
The dispute highlights the broader challenges facing traditional department stores. Data from Statistics Canada shows department store sales have fallen nearly 20% since 2015, while e-commerce has surged. The pandemic only accelerated these trends.
“Department stores occupy massive footprints that don’t generate the sales per square foot they once did,” explains Retail Council of Canada analyst Jenna Morrison. “This creates tension with landlords who need to maximize returns, especially when those landlords answer to pension contributors.”
Court documents reveal Hudson’s Bay claims QuadReal is attempting to “intimidate” them into accepting “commercially unreasonable” lease terms. The retailer has launched legal action seeking damages for what it calls an “unlawful lockout.”
I spoke with Maya Thompson, a commercial lease consultant who works with major retailers, who offered a perspective I hadn’t considered: “What’s unusual here is that both sides presumably have sophisticated legal teams who understand the reputational damage from this kind of public spectacle. It suggests negotiations have completely broken down.”
The timing couldn’t be worse for Hudson’s Bay, with the crucial holiday shopping season approaching. The company has been struggling for years, taking on significant debt after going private in 2020. Industry data shows foot traffic at department stores typically increases 40-60% during November and December.
For mall operators, the situation creates another headache. Anchor tenants like Hudson’s Bay traditionally drive foot traffic that benefits smaller retailers. Empty department store spaces can be nearly impossible to fill with single tenants.
The dispute also reflects a power shift in commercial real estate. “Landlords hold more leverage than they did five years ago,” notes commercial real estate broker David Chen. “With interest rates higher and financing harder to secure, tenants have fewer options to relocate or expand.”
Local shoppers I interviewed expressed frustration about the situation. “I’ve been coming to this Bay location for twenty years,” said Richmond resident Eleanor Kwon, 67. “Where am I supposed to get my holiday gifts now? This feels like adults fighting while the customers suffer.”
The standoff raises questions about how commercial real estate disputes should be resolved. Legal experts point out that most commercial leases contain arbitration clauses specifically designed to prevent disruptive actions like lockouts.
QuadReal defended its actions in a statement, claiming they came only after “repeated attempts to reach a resolution” and pointed to Hudson’s Bay’s “ongoing refusal to honor its legal obligations.” Hudson’s Bay countered that the lockout was “unlawful” and “harmful to employees and customers.”
What’s clear is that this dispute represents more than just a disagreement over rent. It’s a microcosm of the broader transformation happening in retail, where legacy brands and traditional real estate models are being forced to adapt or face extinction.
For now, the locked doors remain a powerful symbol of how commercial relationships can unravel in today’s challenging retail environment. As one industry analyst put it to me, “When a 350-year-old company gets locked out of its stores, you have to wonder what message that sends to the rest of the retail sector.”
While court proceedings continue, thousands of shoppers are left wondering when—or if—they’ll be able to return to these Hudson’s Bay locations. And in boardrooms across the country, executives are likely reviewing their own lease agreements, wondering if they could be next.
