Empty storefronts pockmarking 麻豆传媒映画strolls such as Robson Street, Denman Street and south Main Street are the result of a mix of higher rents and taxes, development pressures and storeowners following their customers to the suburbs, analysts say. Small retailers are the most affected.
Empty storefronts in the 1100 block of Robson Street, where average rents are the second-highest in the city | Photo: Rob Kruyt
Craig Patterson, editor of聽Retail Insider, who has been consulting with the City of 麻豆传媒映画on the issue, pointed to the 1100 block of Robson, parts of Denman Street and the Punjabi market area around Main Street and East 49 Avenue as retail areas that are struggling.
鈥淐ertain areas of 麻豆传媒映画are hollowing out,鈥� Patterson said.
On Denman and Robson, he suggested it is due to higher rents, some of which is tied to rezoning potential.
鈥淪ome landlords don鈥檛 want to lower [retail] rents because it reduces the value of their building,鈥� he said. 鈥淭hey would rather leave [storefronts] empty.鈥�
Retail lease rates on Robson Street range from $120 to $250 per square foot, the second highest in the city behind Alberni Street, according to a recent survey by Cushman & Wakefield.
A second-quarter 2018 study by commercial realtor Marcus & Millchap showed the average price of a retail property sold in 麻豆传媒映画this year was in excess of $1,000 per square foot, up 25% from 2017. Average retail rents now average $30.10 per square foot, up nearly 10% from 2017, the agency added.
Higher taxes could also convince some smaller 麻豆传媒映画retailers to close.
BC Assessments values a commercial building for its best use, which means that a retail site that is re-zoned for higher-density development could see a substantial increase in its assessed value, with the subsequent tax increase often passed on to the retail tenant.聽麻豆传媒映画businesses pay 4.87 times the residential tax rate 鈥� the highest multiple in Canada 鈥� according to Altus Group and Real Property Association of Canada.
On south Main Street, the increasing number of vacancies is due to retailers following their customers to Surrey and other parts of the Fraser Valley, Patterson said. However, he noted some 麻豆传媒映画retail strips are booming, including West Fourth Avenue, South Granville and Commercial Drive.
Commercial real estate agencies suggest the current vacancies being seen in 麻豆传媒映画retail could be a localized, short-term cycle. They note that Metro 麻豆传媒映画retail spending in May reached $3.4 billion, up 5.4% from May of 2017 鈥� the second-highest annual increase among major Canadian cities. Vancouver鈥檚 retail vacancy rate is 1.7% and it is 2.5% in the downtown area, both among the lowest in the country.
鈥淒espite all the doom and gloom surrounding mid-level retail stores closing, both high-end and low-end retail, as well as food-service locations, continue to perform well,鈥� noted Andrea Wellburn, manager of information and research for Cushman & Wakefield in Vancouver.
