Yorkdale landlord fights proposed Fairweather takeover of former Hudson’s Bay space
Oxford Properties asked a court to block Fairweather from taking the former Hudson’s Bay anchor at Yorkdale, saying the retailer would be unsuitable and could cost the mall hundreds of millions.
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By Torontoer Staff
Oxford Properties asked a court on Wednesday to block a proposed sublease that would let clothing retailer Fairweather occupy the prime anchor space left by Hudson’s Bay at Yorkdale Shopping Centre. The landlord says approving the deal could lock it into a long-term arrangement with an unsuitable tenant and expose the mall to losses in the hundreds of millions of dollars.
The dispute follows the receivership of a joint venture between Hudson’s Bay and RioCan after Hudson’s Bay filed for bankruptcy last year. RioCan, which holds a $75 million mortgage on the former Bay lease, supports the sublease and says it would face heavy losses if the lease reverted to Oxford.
Oxford’s case in court
Oxford lawyer D.J. Miller told Justice Jessica Kimmel that approving the sublease would effectively bind the landlord to a lease that could run as long as 50 years with what he described as an unsuitable anchor tenant. In written submissions, Oxford said Fairweather’s current operations at two other malls look "temporary and down-market," which conflicts with Yorkdale’s positioning as a leading luxury retail destination.
You are being asked to allow (the receiver and RioCan) to take a gamble with my client’s crown jewel asset that is worth billions of dollars, and hope for the best.
D.J. Miller, lawyer for Oxford
Miller told the judge that a vacant anchor space generating no rent would be preferable to having what he called an unsuitable anchor tenant in place.
FTI, RioCan and Fairweather push back
FTI Consulting, representing the receiver and RioCan, countered that Oxford’s opposition is motivated by commercial self-interest. FTI said a failed Fairweather transaction could allow Oxford to reclaim the Hudson’s Bay lease, which carries below-market rent and redevelopment constraints.
FTI lawyer Orestes Pasparakis noted Fairweather’s long history as a tenant at Oxford properties and said the company has an established track record in Canadian retail. Pasparakis said Oxford produced almost no examples of Fairweather failing to pay rent on time.
There’s no suggestion anywhere in the material that having Fairweather in Yorkdale was a bad experience or harmful to Oxford or to the mall.
Orestes Pasparakis, FTI Consulting
Fairweather, owned by Isaac Benitah, has said it aims to revive the Ailes department store banner. The company has finalised agreements with Primaris to open two Ailes stores in former HBC locations in Quebec City and Montréal in the first half of 2026.
Lease terms and financial stakes
Under the proposed sublease, Fairweather would pay gross rent of either $1 million per year or 12 per cent of sales at Yorkdale, whichever is higher, until May 2029. That compares with the roughly $2.8 million per year Hudson’s Bay paid under its prior arrangement. RioCan told the court it is prepared to subsidize the difference to make the deal viable.
- $75 million mortgage held by RioCan on the former Hudson’s Bay lease
- Proposed rent: $1 million per year or 12% of sales, whichever is higher, until May 2029
- Previous Hudson’s Bay rent: about $2.8 million per year
- Oxford warns of a potential long-term commitment up to 50 years and losses in the hundreds of millions
Oxford told the court it has not been provided direct evidence such as a detailed business plan or proof of financial resources from Fairweather to demonstrate that the company is a creditworthy replacement for an anchor-level tenant. FTI responded that Fairweather is no newcomer to Oxford-managed malls, and that its decades of retail experience include operating department stores such as Zellers and Les Ailes de la Mode.
What happens next
Justice Kimmel did not release a ruling at the hearing on Wednesday. The court will decide whether to approve the receiver and RioCan’s proposed sublease, or to deny it and leave the former Hudson’s Bay lease to be addressed under the receivership process.
The decision will determine whether Yorkdale’s prime anchor space is filled quickly under the proposed terms, or whether the landlord regains control of the lease and any redevelopment rights. Both outcomes carry significant financial and commercial implications for the mall and its tenants.
For now, the future of the 300,000-square-foot anchor space remains uncertain, and the court ruling will be closely watched by retail landlords, lenders and mall operators across the country.
YorkdaleOxford PropertiesFairweatherRioCanretail
