Hudson's Bay Co. is selling two properties that house its Toronto flagship store and executive offices to Cadillac Fairview _ the company that operates the neighboring Toronto Eaton Centre.
HBC says it will receive $650 million for the retail complex and the adjoining Simpson's Tower, which is at the corner of Bay and Queen Streets.
Hudson's Bay will then lease back the properties for 25 years with options to extend nearly 50 additional years.
HBC also says its recently acquired Saks Fifth Avenue subsidiary will open a full-service store at the Yonge and Queen location, across the street from the Eaton Centre, and share space with the Bay store.
Saks Fifth Avenue will also open a full-service department store in the southwestern end of Toronto _ at Sherway Gardens mall, which is also owned by Cadillac Fairview.
Cadillac Fairview is the property management arm of the Ontario Teachers Pension Plan, with real estate holdings in several major cities.