More than 20 vacancy signs as Vancouver’s Robson Street undergoes ‘transition’

More than 20 vacancy signs as Vancouver’s Robson Street undergoes ‘transition’

By Justin McElroy, The Province May 1, 2012
Scott Sherman is a retailer for Colliers and a member of the Downtown Vancouver Business Improvement Association. There are currently 20 retail properties empty on Robson street in Vancouver on May 1,  2012

Scott Sherman is a retailer for Colliers and a member of the Downtown Vancouver Business Improvement Association. There are currently 20 retail properties empty on Robson street in Vancouver on May 1, 2012

Photograph by: Mark van Manen , Province

One of the famed Starbucks at Robson and Thurlow will close at the end of May after 24 years in business.

And when a “for lease” sign is placed on the building, it will have plenty of company on Robson.

From the departed HMV to the bankrupt Blockbuster, empty stores dot Vancouver’s highest profile commercial street. West of Burrard, more than 20 retail properties on Robson sit empty. And realtors have taken note.

“For years you’ve never seen lease signs up and down Robson,” said Sherman Scott, associate vice-president at Colliers International, which currently has a number of properties open.

“Now there certainly are, which is unusual.”

Tourism Vancouver President Rick Antonson characterized the vacancies as part of a “transition” but he is bullish on the street’s long-term vibrancy.

“Some international operators can anchor a street and draw traffic. What one always wishes to avoid is a generic street or city. [But] Robson street will get through this transition and retain its reputation as having a healthy variety of retail outlets.”

Following the 2010 Olympics, prices climbed to new heights on Robson. According to one real estate report, the average rent last year was $240 US per square foot, trailing only Bloor Street in Toronto for Canadian supremacy.

“Expectations are changing on Robson. The value of real estate has increased,” said Mark Renzoni, managing director of CB Richard Ellis.

He did, however, admit “the economy is not as strong as we’d like.”

“There’s lots of noise around big deals, but the noise around smaller deals, it’s not as active as it was,” he added.

Scott said aside from the economy, clauses allowing owners to tear the building down were giving owners pause.

“I run into demolition clauses all the time,” he said. “It’s pretty tough to spend all the money outfitting the store, getting it up and going, and to be subject to [that].”

Nonetheless, he’s confident about Robson’s long-term viability.

“I’ve seen a downward pressure on lease rates, the international climate isn’t that great [but] having said that, Vancouver’s a pretty popular place to be,” he said. “There’s a rejuvenation going on.”

But Menzoni said that certain blocks of Robson were looking at 12-18 months of “continued recovery.”

“The vacancy is a welcome change. It may be visibly concerning . . . but we will see a new trend for different users coming into the market place. And it just takes a little more time to adjust to rental rates.”

“I think you’re going to see a lot more American retailers moving in,” speculated Howard Malachy of DTZ Barnicke, which specializes in commercial real estate.

“Robson is like Rodeo Drive, it’s like Park Avenue. People want to be there to be there.”

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COMMENT:
When I was younger, Robson Street (then called Robson Strasse) was a quaint European themed street.
It was aimed at the average person, not the upper class.
A high vacancy rate shows that the real estate market speculated that the gravy train would go on, and those that leased the  space are showing that the gravy train is over.
Only solution I can see is collapse in real estate prices, thus lower assessment, hence lower taxes (via Triple Net). In essence the new renters will set the price , a new equilibrium called “reality” will kick in. The old party is over.
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