Hudson Pacific Properties looking to the future of Bentall Centre
Credit to Author: Joanne Lee-Young| Date: Sun, 29 Sep 2019 19:02:26 +0000
Bentall Centre, Vancouver’s most-expensive and highest-profile commercial property, has been “neglected” and its new owners envision bringing it out of a years-long limbo, according to Hudson Pacific Properties chairman and CEO Victor Coleman.
Hudson bought the four office tower and retail mall complex in downtown Vancouver through a partnership with Blackstone Property Partners this past June.
The price was said to have been more than the $1.06 billion that China’s Anbang Insurance Group paid for it in 2016, before having to sell it, along with other assets in North American and Europe, when Beijing seized control of the company to deal with its high debt, allegations of corruption, and the jailing of its former chairman.
Now, Hudson Pacific Properties has emblazoned its logo at every office tower entrance and is beginning a transformation of the entire Bentall Centre property. To start, there is a pending new lease deal for the athletic facility.
Both Hudson and Blackstone are U.S.-based companies. The partnership involves Hudson owning 20 per cent and acting as the operating partner of the complex. Blackstone, which is part of a private equity empire that oversees hundreds of billions of dollars in assets, owns the remaining 80 per cent.
When Anbang owned the property, there were initial plans for changes to the basement retail concourse, but tenants didn’t know what to make of them as business headlines highlighted Anbang’s woes and Beijing pulled back on the overseas investment activities of Chinese companies.
Coleman is pinning the future of the Bentall property on a new wave of technology and media companies from Los Angeles, San Francisco and Seattle that want to set up in Vancouver.
“It’s about attracting a tenant base and tenants and employees who want something different. This is not my grandfather’s kind of property anymore,” he said. “It has been a little bit of lazy landlords, and institutionalized, and not prepared for the wave of tenant needs that comes with (these) companies.
While traditional corporations such as banks and financial services might operate within set office hours, tech and media companies such as Google and Netflix, which are tenants in Hudson’s U.S. properties, want 24-hour access to much more state-of-the-art amenities.
Three of the towers at Bentall Centre are named for the major banks and accounting firms that are anchor tenants. They include TD Canada Trust, BMO and Deloitte. The Bentall Two tower is named for WeWork after the U.S. real estate company that offers workspace for technology companies and startups. Following years of rapid expansion, there have been recent signs of a significant slowdown ahead as the company botched an initial public offering attempt and saw the resignation of its young CEO.
Coleman brushed aside concerns about the unraveling, saying there is a “role for co-working spaces” and that most of the WeWork tenants at Hudson properties are enterprise companies rather than smaller, start-up firms. “If something happens to WeWork, (the clients) don’t walk away, they go direct with us,” he said.
We Work leases around 200,000 square feet, which is the equivalent of 1.4 per cent of the rentable square footage Hudson Pacific owns.