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BMO and Cadillac-Fairview Redeveloping Sears Space

Bank Moving Employees from Other Toronto Locations as Part of Bold Remake of Retailer's Former Eaton Centre Space
February 27, 2018
Bank of Montreal and Cadillac-Fairview Corp. are set to announce Thursday that the financial institution is taking over 350,000 square feet of space at Sears' former head office, CoStar News has learned.

Multiple sources have confirmed the bank is planning to join with Cadillac-Fairview in a major redevelopment of the former Sears Canada space at 290 Yonge St.

"We're building something big," Bank of Montreal employees were told in an internal email. "We're unifying, simplifying and accelerating. And we are on the move!"

A press conference is set to be held at the Toronto Eaton Centre, part of the Cadillac-Fairview empire, with Darryl White, chief executive of Bank of Montreal, John Sullivan, chief executive of Cadillac Fairview, and Toronto Mayor John Tory attending.

Officials with Cadillac-Fairview, the real estate arm of the Ontario Teachers' Pension Plan Board, and Bank of Montreal could not be reached for comment.

"My understanding is they will be moving employees from other parts of the GTA," said one source, who couldn’t say what specific parts of the operation will be moved to the new site, which is expected to be ready for tenant fixtures in June 2020.

Cadillac's redevelopment group was brought in for the extensive remodel, which is expected to include recladding all four stories of space in glass. "There were no windows at all there," said the source.

The makeover is expected to include a four-storey light well or atrium-type central space, which could take up to 10 percent of the overall new build; each floor is about 80,000 square feet.

Sears Canada announced in 2007 that it was moving its head office from 222 Jarvis St. to the Toronto Eaton Centre. It sold that space to the government of Ontario, which has since modernized the building.

The retailer took over space from Eaton's, which once occupied all eight floors at 290 Yonge St., but Sears eventually reduced its retail space to four levels.

"This decision makes great sense for Sears Canada and its associates," said Dene Rogers, chief executive of Sears at the time. "We have surplus space at the Toronto Eaton Centre, which has been underutilized for some time. Occupying the top four floors as office space will help improve the productivity of the remaining four floors used for the store."

There has been a growing movement to convert higher level retail into alternative uses as store sales fall victim to more online shopping. Macy's said this week it was selling the top half of its flagship store in Chicago to Brookfield Asset Management, which will convert it to office use.

Cadillac-Fairview, which owns and manages the CF Pacific Centre in Vancouver, pulled off the same type of redevelopment there, converting former retail space into four floors of office space that now houses Microsoft Canada, Sony Imageworks and Miller Thomson law firm.

In October, retailer Hudson's Bay Co. struck a deal that saw some of its downtown retail space in Toronto and Vancouver converted into office space.

Cadillac-Fairview and Bank of Montreal are expected to announce more details about design plans for the new space at the Thursday press conference.

"Be the first to hear what our workplace of the future will look like," the bank told employees, promising "bold new workplace for BMO at Yonge-Dundas Square."

Garry Marr, Toronto Market Reporter  CoStar Group   


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