Tag: shopping mall

• The hard things about retail

  

  Retail is one of the hardest – if not the hardest – real estate category to get right. If you don’t have the right setup, the right location, and the right tenant mix, you can fail pretty easily. It’s a bit of an art. And that obviously applies to both landlords and tenants. I mean, we all know what recently happened with Target Canada.

  This past weekend I had the opportunity to visit the Aura Condos in Toronto, which is supposedly the tallest and largest residential condominium in Canada. There’s about 1.1 million square feet of residential space across 79 floors and somewhere around 150,000 to 180,000 square feet of retail space (the estimates I found online varied). The main anchors include Bed Bath & Beyond, Marshalls, and Hard Candy Fitness (which also serves as the gym for the residences above).

  

  But what’s probably most unique about the retail component of this building is the P1 level (the first underground level). It’s made up of small retail condos, some of which looked to be about 90 square feet. That means that each retail unit is individually owned, just like a residential condominium, and there’s no singular landlord focused on curating the tenant mix and ensuring the entire retail center does well.

  Now, I’m told that this approach works perfectly well in other parts of the world and I know that we’re trying it in other parts of the Greater Toronto Area, but I worry about the long term viability of this (P1) space in particular. When I was there on Saturday there was almost no foot traffic and probably half of the retail units were vacant.

  Maybe it’s because there isn’t enough employment density in the area. Maybe it’s because it’s not well connected to other P1 level retail. Or maybe it’s because the anchors all sit above this space, as opposed to around it (as they do in traditional malls). Whatever it is, I wasn’t feeling product/market fit.

  I hope I’m wrong.

  Images: P1 Retail at Aura Condos

  2015.01.26

• Mall or Main Street?

  It’s December. You’re in Toronto. The high for today is 5 degrees celsius. But the overnight low is expected to reach -11. Would you rather shop inside a warm mall or outside along a hip urban Main Street?

  This is a question that has come up a number of times in retail real estate meetings here in Toronto and the general consensus is often that people in our climate don’t want open air malls and Main Streets. They prefer enclosed malls.

  However, this is not to say that we don’t have open air malls and that we don’t have a thriving downtown, because we do.

  What I am saying though is that when the pension funds sit around contemplating what retail investments to make, they’re still largely thinking enclosed shopping centers. That’s why it seems like every major mall in Toronto is going through an expansion.

  But still, I wonder what the actual consumer preference is. Is it really our climate? Or have we just become accustomed to driving to the mall? Here’s a similar blog post talking about the Finnish obsession with shopping centers and malls.

  Generally speaking, I don’t love malls. There’s no urban authenticity. I find it much more enjoyable shopping at one-off and independent stores. But is this just a snobby architect, planning thing? I’d love to continue the conversation on twitter.

  2013.12.29