RioCan Real Estate Investment Trust T.REI.UN

Subletting underway

[materialsgirl]

Shopify Inc. SHOP-T put its massive office space in downtown Toronto on the sublet market on Tuesday, flooding the country’s largest business hub with even more unused space.

The e-commerce company’s lease is for 348,103 square feet, spanning seven floors of a newly built office, residential and retail complex, according to documents marketing the new space.

Ottawa-based Shopify had been expected to be the major tenant in The Well complex owned by real estate investment trusts Allied Properties and RioCan. But late last year, Shopify disclosed that it would no longer make the move to the new location.

[hroark7]

 “While we were looking forward to welcoming Shopify at the Well, their recent decision will not have a financial impact on the project, as Shopify is bound by the terms of their lease agreement until March 2037,” RioCan told CBC News in a statement.

[materialsgirl]

hroak That is 100% correct.  If the new subletter goes bankrupt then Shopify is  still on the hook unless Riocan contracts in advance to let them off the hook. mat

[bttmfischer]

matgirl as you well know the Devil is always in the details.

[materialsgirl]

bottom fisher  This is a rare case where the devil in not in the detail. We get 100% of contracted rent.  Period. No matter what. Conceptually we could get more than 100% if we rented  to a new tenant and we let SHOP off the hook but this  outcome is quite unlikely mat

[hroark7]

We have Shopify by the nuggets, love it.

[bttmfischer]

I do hope that you are right; however if there is a dispute of a contract, and members of the Upper Canada Law Society are getting billable hours, the outcome of that dispute is not always easy to predict. But, we shall see, won't we?

[hroark7]

This is a cut and dried case with lots of precedent behind it. No credible lawyer would take the case for Shopify. And a company like Shopify is smart enough to know it cannot be won.

[bttmfischer]

So was the O.J Simpson case. Right?

[bttmfischer]

Just for disclosure, I am a REI unit holder, and have been since 2011, collecting the cash distributions all along. I also visited 5000 Yonge Street a number of times, so I have a vested interest in this, Still, you never know, some ambulance chasers may give it a go. 

[hroark7]

We're talking about The Well.

[bttmfischer]

5000 Yonge St in Torornto is the head office of Riocan.

[hroark7]

We know, but we're discussing The Well. Try and keep up.