Target returns 55 leases to landlords after failing to attract bidders

TORONTO — Target Canada is preparing to auction off dozens of store leases next week as its court-supervised windup continues.

“We’re looking forward to next week’s auction,” said Tracy Sandler, partner at Osler Hoskin & Harcourt LLP, which represents Target.

“We think it’s going to be robust and we’re looking forward to finalizing and entering into transactions that will let us maximize the value of our portfolio.”

The U.S. retailer announced in January that it would shut all 133 of its Canadian stores, only two years after its highly anticipated launch north of the border.

The discount retailer said that underwhelming sales figures indicated its Canadian locations would not be profitable for several years.

In March, Target struck a deal to sell 11 properties in desirable locations to Oxford Properties Corp. and Ivanhoe Cambridge for $138 million before taxes.

Sandler says it is possible that a number of other landlords will decide to buy back their properties during the upcoming auction.

But no bidders came forward for 55 other properties by the deadline for next week’s auction.

Those Target properties have been returned to their landlords.

Target is also terminating its lease agreements for 19 other facilities — a combination of offices and warehouses.

The auction will be held next Tuesday, Wednesday and Thursday at Osler’s Toronto offices, according to a report filed with the Ontario Superior Court.

The report of monitor Alvares & Marsal Canada Inc. said that Target’s financial adviser, Lazard Freres and Co. LLC, had been in touch with about 260 prospective parties about their interest in the leases.