‘A trophy asset': Developers are lining up to buy iconic downtown Bay building

Montreal Gazette

10-06-2025

Developers have already started bidding to purchase Montreal's iconic Hudson's Bay building on Ste-Catherine St.
The new vocation for the 134-year-old building that helped launch Montreal's modern downtown core has yet to be determined, however.
A little more than a month after it was announced the flagship store would be liquidated, one of 80 Hudson's Bay stores nationwide to be shut and sold because of faltering sales, interested buyers have put in bids, said Glenn Castanheira, director of the Montréal centre ville business development corporation.
Who the bidders are and what their plans are for the building won't be known for another month or two, Castanheira said. Montréal centre-ville has been in regular contact with Hudson's Bay officials to discuss how to keep the site from becoming an urban eyesore until a new development project begins.
'We're happy, but we're not surprised there are multiple offers on the table, given how much of a trophy asset this building is,' Castanheira said.
Located downtown across from the recently renovated Phillips Square, and with the reconstruction of Ste-Catherine St. in that sector completed, the area sees 90,000 people walking by on a good day. With its direct access to the métro system and proximity to a future REM light-rail station that will take passengers to Trudeau airport in 20 minutes, the building could be redeveloped in numerous ways, Castanheira said. Possibilities include a multi-storey residential development, a hotel or a mixed-use project with commercial spaces on the bottom floors and a condo tower or office buildings on top.
'On the ground floor you could imagine a mixed retail experience, with something like (gourmet Italian grocery store) Eataly,' he suggested. Or a hotel, with a lobby on the street level along with restaurants and specialized services like a spa and beauty salon.
Brent Robinson, managing director for the Montreal branch of commercial real estate developer Cushman and Wakefield, also predicted The Bay building would be coveted.
'You're right on top of the métro, you're right on Ste-Catherine St. I'm not surprised to hear there's already some offers because the location alone is A class. I'm sure a lot of the major developers in the city are licking their chops over it.'
Possible uses could include putting a large retailer on the lower floors, then residential or office space above. While vacancy rates for Class B and C office space is close to 20 per cent in Montreal's central core, according to Cushman and Wakefield's latest report, there is a lack of higher-quality Class A office space in downtown Montreal, Robinson said.
There was a development proposal in 2021 to erect a 25-storey office tower on the north end of The Bay's building, which had the approval of city officials. Soaring vacancy rates caused by the COVID-19 pandemic scuttled that project.
Lower interest rates and the levelling off of construction costs means 'the timing is better today for this project to hit the market than it would have been 18 months ago,' Robinson said.
A challenge for any developer will be to maintain the heritage value of the distinctive red sandstone structure built in 1891.
Two beaver pelts and one elk hide
Major cities Canada-wide are grappling with how to repurpose their Bay stores. Winnipeg's six-storey Hudson's Bay closed in November 2020 after years of falling sales. Valued at $0 because of the predicted cost of renovations, The Bay handed over ownership in 2022 of the then 96-year-old building to an Indigenous organization in exchange for the symbolic payment of two beaver pelts and one elk hide. The Southern Chiefs Organization planned to spend $130 million to turn it into a mixed-use building that would include affordable housing for First Nations people, restaurants and a museum.
The Ste-Catherine St. store is evaluated at $64,130,000, according to Montreal's property assessment roll. Hudson's Bay paid $2.2 million in taxes on the 564,000-square-foot property in 2024.
British Columbia billionaire real estate developer Weihong (Ruby) Liu signed an agreement to purchase the leases for 28 Bay stores across Canada to create her own retail chain. She chose suburban sites that she said would be easier to redevelop than flagship stores.
Converting the Montreal property could take as long as 10 years, Castanheira said. Local merchants are worried the building could fall into disrepair, becoming a magnet for graffiti, drug use, squatters or worse. Many of Montreal's vacant sites have been the victims of arson. They include the three-storey building next to the Super Sexe strip bar across the street from the Eaton Centre, which burnt down in 2021. The lot where it once stood is still a vacant hole on Ste-Catherine St. in the heart of the downtown core.
'Montreal has some very lax bylaws when it comes to managing vacant properties,' Castanheira said.
His main worry is the property will be bought by a building speculator who lets it sit vacant for decades.
Another concern is that Montreal, which has ultimate say over zoning laws, could take a long time to issue the necessary permits to allow redevelopment, said Concordia University economist Moshe Lander.
'Whether you're putting in residential space or commercial or industrial space, it's often the municipalities that become the impediment, saying we need to review,' Lander said. 'That's partly why Canada as a whole finds itself in a major housing crisis. And Montreal happens to be particularly bad.'
Montréal centre-ville is in talks with the Hudson's Bay Company to maintain the facade and dress up the windows of the hulking edifice with images showing the history of the building.
With other large downtown retail sites possibly facing the same fate as The Bay, Montreal needs to develop an urban plan to prepare for their departures, Lander said.
'The Bay is one of many changes that are going to happen over the next 10 to 20 years,' he said. 'Is there a plan in place? Is there a vision, or are we going to keep doing this in a piecemeal sort of way?'
History of The Bay building
Scottish-born retail magnate Henry Morgan made the risky decision to move his flourishing business from Victoria Square in lower Montreal to the mainly residential area on Ste-Catherine St. W. in 1891. Morgan was betting urban development would move further north and was proven right, with his store selling dry goods, dresses and fashion items paving the way for the development of Montreal's modern downtown core.
Morgan spared little expense, importing high-quality red sandstone for the facade of the four-storey building. He hired Scottish architect John Pierce, who designed the department store in the grand Richardsonian Romanesque style, characterized by heavy stonework, rounded arches and deeply recessed openings. The building was considered to be 'the finest structure devoted to the retail business in North America,' historian Robert N. Wilkins wrote in The Gazette in 2014.
The store, run by Morgan's family after his death in 1893, was prosperous. In 1923, it expanded northward with the construction of an eight-storey structure. There was a Steinberg's grocery store in the basement starting in 1952.
In 1960, the Hudson's Bay Company bought Morgan's and enlarged the store again, moving it all the way to de Maisonneuve Blvd. by 1967. It was still known as Morgan's till 1972.
The Hudson's Bay Company announced in April it would be liquidating all of its 80 stores across Canada.