Strathearn Heights Redevelopment | 81m | ?s | Nearctic Group | GEC

[archited]

If the developers were smart -- and I'm not saying that they are not -- they would help the tenants relocate to a temporary location and then help them with redesign in the new location when it is ready for TIs. They could nurture a solid relationship here.

 

[Kaizen]

I absolutely love this proposal and can't wait, it's been years/decades in the making. And it's about time, please please happen.
But man I can't help but feel bad for all those tenants (they'll get over it I'm sure!) I just worry about some of those businesses eventually being priced out and/or the bad timing after all the shutdowns for their bottom line.

That strip mall has a most diverse mix of tenants/mom n' pops and is always busy, thus a very low vacancy rate. It is rare to see such a solid commercial offering and is so unique nowadays, I think so anyway. If not familiar with the location google maps stroll by.
Plus no vape/cannabis/liquor store/crap, etc (that I know of), though it did have a fairly shady bar in there a few years ago.

I'd guess they will build the podium/midrise first, maybe even the highrise contiguous before knocking down the adjacent apartments as it's a fairly big site.
Hope we find out soon

 

[IanO]

Multiple posters on here may recall being invited to a meeting with the developer at this strip mall circa 2007/8. This was working to drive support for their project and seems like another lifetime ago.

 

[northlands]

The 100,000 square feet of retail space and 2000+ new customers will result in a much more useful set of stores for the community. Short term pain for long term gain.

I hate to sound like a pessimist, but given the massive glut of empty new built CRUs across the city at virtually every recent development, the majority are going to sit with CBRE/Avison Young/Colliers/Omada signs in the windows for years, and whatever is rented will likely be for a pharmacy, pot shop and/or liquor store. These mom and pop shops can’t afford those rents, and developers would rather have them sit empty than effect their cap rate.

 

[TAS]

If the developers were smart -- and I'm not saying that they are not -- they would help the tenants relocate to a temporary location and then help them with redesign in the new location when it is ready for TIs. They could nurture a solid relationship here.

Love the idea. I don't think that is happening. The letter from the developer to the tenant was very formal as shown in the newscast and at the end stated "we wish you the best in your future endeavours".

Yeesh

 

[archited]

It's never too late @TAS!

 

[TAS]

It's never too late @TAS!

There's no time like the present @archited

 

[archited]

A stitch in time saves nine.

 

[David A]

I hate to sound like a pessimist, but given the massive glut of empty new built CRUs across the city at virtually every recent development, the majority are going to sit with CBRE/Avison Young/Colliers/Omada signs in the windows for years, and whatever is rented will likely be for a pharmacy, pot shop and/or liquor store. These mom and pop shops can’t afford those rents, and developers would rather have them sit empty than effect their cap rate.

Cap rate? They do know that the rate of return on empty space is less than zero, don't they?

 

[northlands]

Cap rate? They do know that the rate of return on empty space is less than zero, don't they?

Opportunity cost vs waiting for higher paying higher quality tenant

 

[Oilers99]

Cap rate? They do know that the rate of return on empty space is less than zero, don't they?

That's not how it works exactly. Zero is better from an overall standpoint than having a significant discounted tenant with a long term lease.

 

[Oilers99]

The news cast attempts to portray the developer in a negative light when they are doing what's fully in their rights?

 

[David A]

That's not how it works exactly. Zero is better from an overall standpoint than having a significant discounted tenant with a long term lease.

Actually, I didn't write zero, I wrote less than zero and I even bolded it, so hopefully the message would get across. Lets see "how it works" - the landlord still has to pay all the building costs related to the empty space. So, to clarify it is a negative return (ie. zero revenue less costs). Empty space still has to be heated, lenders still want interest, whether the space is occupied or not, there are security costs, etc ....

Now perhaps some those pension funds don't pay that close attention to how their properties are managed, or those in Edmonton are not as evident to them as in other places where commercial rental has been much more robust over the last decade or so.

It seems to me some spaces here have sat empty 3 to 5 years or longer, so all those carrying costs have to add up. At some point expecting a mythical tenant to come in and pay premium rates in a tough market is really faint hope so it is unlikely you will come out ahead after being in the hole for several years. I think that's how it works.

 

[Oilers99]

Actually, I didn't write zero, I wrote less than zero and I even bolded it, so hopefully the message would get across. Lets see "how it works" - the landlord still has to pay all the building costs related to the empty space. So, to clarify it is a negative return (ie. zero revenue less costs). Empty space still has to be heated, lenders still want interest, whether the space is occupied or not, there are security costs, etc ....

Now perhaps some those pension funds don't pay that close attention to how their properties are managed, or those in Edmonton are not as evident to them as in other places where commercial rental has been much more robust over the last decade or so.

It seems to me some spaces here have sat empty 3 to 5 years or longer, so all those carrying costs have to add up. At some point expecting a mythical tenant to come in and pay premium rates in a tough market is really faint hope so it is unlikely you will come out ahead after being in the hole for several years. I think that's how it works.

I am aware it is a negative return, but not all the owners of CRUs are institutional funds from Toronto. The majority of owners have determined that having these properties vacant is better than at a discounted rate. Not sure what to tell you but that's how it works.

 

[David A]

It is a free country, so they are free to made poor decisions. Perhaps they have plenty of money, so it may be easy to sit on empty space, rather than adjust their rates, which is what the market it actually trying to tell you when there is a lot vacancy.

I get that is a choice some landlords make, but what irks me is trying to portray it as a smart choice.