Target Corporation has reached an agreement with RioCan Real Estate Investment Trust over its abandoned leases in the Canadian market.
On Nov. 23, Monday, RioCan announced that it had reached a settlement with Target, one of the largest retail stores in the US, regarding the over 18 leases the latter vacated after it closed stores in Canada this year, The Wall Street Journal reported.
Target paid $132M to its former Canadian landlord to avoid any more responsibilities to the sites it abandoned. This payment includes $92M, which belongs to RioCan, declared to be the settlement fee from the dispute over the subject leases. The remaining $40M will be distributed to various RioCan co-owners, the company said in a statement (via Market Wired).
In return for the settlement, the investment firm has released Target Corporation from all its obligations.
RioCan stated early on that most of the amount obtained from the settlement would be used to lessen the losses brought about by the pulling out of Target retail stores from the Canadian market. When the American corporation announced it was leaving Canada, it had a total of 133 stores operating in the country and 26 of these belonged to RioCan.
Seven of the vacated establishments were quickly leased to new tenants, but RioCan was not able to find any lessors for the remaining abandoned sites. These are the sites the Canadian real estate investment trust mentioned in its dispute against Target.
At present, RioCan continues to look for tenants to occupy the remaining locations left unfilled after the American retailer closed its stores in Canada. The Trust is now aiming to maximize the space which will be rented to improve the shopping experience for customers and to increase revenues as well.
RioCan said in the statement that the company has done significant improvements so far and is still making progress in its attempt to have the sites leased. All unleased sites are expected to be completed by the end of 2017 and ready to be occupied by then.
