Hudson’s Bay Company, Simon Property Group Announce Closing of $1.8 Billion Joint Venture

July 24, 2015

Willkie represents HBC in formation of a real estate-focused joint venture.

On July 22, Willkie client Hudson’s Bay Company (HBC), owner of Saks Fifth Avenue and other leading department stores, and Simon Property Group Inc., a major retail real estate owner, announced they have closed the formation of a joint venture focused on credit tenant, net-leased and multi-tenanted retail buildings in the United States and internationally.

The joint venture, valued at $1.8 billion, will build on the strength of HBC’s existing real estate assets as well as identify new real estate growth opportunities in the above-mentioned sectors, including department stores. The transaction is structured to facilitate an IPO or other monetization of the joint venture at a future date.

The joint venture expects to use a portion of the $846 million of third-party CMBS debt financing arranged in conjunction with the closing towards the proposed acquisition of properties in Germany, which HBC plans to acquire upon completion of its announced acquisition of GALERIA Kaufhof, a leading department store in Germany. Willkie is also advising HBC on the Kaufhof acquisition.

Hudson's Bay Company, founded in 1670, is North America's longest continually operated company. HBC operates primarily in the United States and Canada under banners that include Hudson's Bay (Canada's most prominent department store), Lord & Taylor, Saks Fifth Avenue and Saks Fifth Avenue OFF 5TH.

Willkie’s multidisciplinary deal team was led by partners Gordon Caplan, Russell Leaf and Gregory Astrachan, and included partners Thomas Henry, David Drewes, Henry Cohn and Hillel Jacobson.

In November 2014, Willkie represented HBC in a $1.25 billion CMBS financing deal secured by HBC’s flagship Saks Fifth Avenue store property in New York. The firm also represented HBC in its acquisition of Saks International for $2.9 billion in 2013 and in the acquisition of Galeria Kaufhof for EUR 2.83 bn in June 2015.