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Downtown Real Estate

I have little confidence in 10 year projections, almost none in 20 year projections. If you look at the Alberta economy things were not so great from 2014 to 2021 and the figures for that period reflect that. On the other hand, the economic cycle in central Canada was very different and the decade before was tougher for them and from 2014 on was fairly good.

I think the different economic cycles over the last two decades explain a lot here. As for anyone who can predict the economic future with certainty, go make the right investments, you will be rich.
 
We can, obviously, improve from where we are without massive increase in population, such as attracting more entertainment options to the area (a bowling alley and a Rec Room wouldn't hurt at all, for example), or a few more clubs and lounges. Downtown looks and feels like a whole different place when we have games and concerts, for example, but we can't rely on those. People don't go to either of these every day, especially on weekdays, during the daytime, and now we have maybe half of the workforce we did back in 2018/19, on a the best of days. How is downtown supposed to become vibrant with less workers, more and harder competition for business from other places in the city without increasing the population?
 
You missed the part where I mentioned the rise of WFH in large scale, meaning a SEVERE reduction on the working population commuting to downtown every day. Not to mention other things, like the insane growth in popularity of the WEM or the rapid growth of areas like Windermere, for example. The downfall of the big department stores also dealt a massive blow, as those stores were a huge draw for food traffic, especially to the ECC. We also tore down a bunch of older buildings that had small, established businesses that couldn't afford to wait for the replacements to be built, or to come back there with the higher lease rates...

Right now, our downtown has two ways to become more vibrant and sustainable, in the long term: grow resident population or working population. If you have any ideas of how to make it vibrant, with successful businesses. It's not a matter of arbitrary number, just simple math: without people to shop, daily, it will simply not work, especially with how much spread out the city has become, and the terrible perception that the area has, right now, pushing visitors away.
Oh many things have happened over the last 37 years, some unique to Edmonton, some not. WEM is obviously unique, but much of it was already built in the pre-1986 period, so arguably the impact then and now from it are similar. I believe Windemere the community and power centre both did not exist in 1986, so if people living around Windemere are not coming downtown now, well they weren't then either. Yes, the demise of department stores is a blow, although all other cities a similar size have managed to keep more of that than us. WFH on a large scale happened because of COVID which has been mentioned a number of times here and elsewhere. It is certainly not unique to Edmonton, yet other places have managed better. Likewise the related increase and social disorder is not unique to Edmonton, but it oddly has seemed to have a more negative perceptual impact here than in other places.

My greatest concern is the current severe lack of retail downtown will further discourage people from visiting, living or moving downtown, which is why I constantly harp so much about it. Yes, I would like to see more people downtown, but frankly why would people move to a place with so few retail businesses? If you want a walkable lifestyle, frankly 124 St or Whyte Ave are better.

There are things that can attract more people to visit downtown. Maybe the much delayed Valley LIne LRT (whose construction and delay ironically also contributed significantly to the current state of the area) will, if it ever gets up and running. Charging for parking in most parts of downtown on Saturday is ridiculous and is something pushing people away. It might have made sense years ago, but not in the current environment. More periodic festivals or events are good, but if the area is overwhelmed on some days and dead on others, that is not healthy either.
 
Oh many things have happened over the last 37 years, some unique to Edmonton, some not. WEM is obviously unique, but much of it was already built in the pre-1986 period, so arguably the impact then and now from it are similar. I believe Windemere the community and power centre both did not exist in 1986, so if people living around Windemere are not coming downtown now, well they weren't then either. Yes, the demise of department stores is a blow, although all other cities a similar size have managed to keep more of that than us. WFH on a large scale happened because of COVID which has been mentioned a number of times here and elsewhere. It is certainly not unique to Edmonton, yet other places have managed better. Likewise the related increase and social disorder is not unique to Edmonton, but it oddly has seemed to have a more negative perceptual impact here than in other places.

My greatest concern is the current severe lack of retail downtown will further discourage people from visiting, living or moving downtown, which is why I constantly harp so much about it. Yes, I would like to see more people downtown, but frankly why would people move to a place with so few retail businesses? If you want a walkable lifestyle, frankly 124 St or Whyte Ave are better.

There are things that can attract more people to visit downtown. Maybe the much delayed Valley LIne LRT (whose construction and delay ironically also contributed significantly to the current state of the area) will, if it ever gets up and running. Charging for parking in most parts of downtown on Saturday is ridiculous and is something pushing people away. It might have made sense years ago, but not in the current environment. More periodic festivals or events are good, but if the area is overwhelmed on some days and dead on others, that is not healthy either.
I agree, on some degree, but there are things that I think need to be ponderedÇ

WEM was already built, but by 1986, phase III had just been completed and the last expansion was only in 1989. Also, over the past few decades, WEM has become ever so more relevant, especially considering that it is likely Edmonton's most visited tourist attraction, if you can call it that.

Edmonton lost quite a few offices to other cities (mainly Calgary and Vancouver) between 1986 and now. We already had a very limited downtown workforce, which made things even worse with COVID. Most cities are still struggling with it, but considering the already small base, Edmonton's downtown is probably suffering more than other places with WFH.

Windermere might have not existed at the time (and therefore the population there) but the biggest impact it has is that it is attracting a LOT of things that are unique and/or new to Edmonton, and bringing in people to shop and eat there from all over the city, unlike most other power centres. It has added competition to Downtown (and even WEM, to a much smaller degree) in terms of attractiveness for businesses.

Now, as for the lack of retail, is a little bit of chicken and egg, isn't it? Because why would you open a business downtown if there are no customers?

I do agree that some "small" and/or localized initiatives could very well help it become more attractive than it is now, like parking costs on the weekends, cleanliness, etc... which would help considerably with the perception of decaying area Downtown has. Working on safety would also help, including LRT stations (turnstiles, where are you?), even though a lot of these issues are more about perception than the actual state of affairs. As I mentioned, adding more entertainment options for all age groups and tastes would help a lot, as well, such as working to attract a Rec Room, maybe a bowling alley, etc. I'm pretty confident

But when I think about really successful and pleasant downtowns, the first that comes to mind is Vancouver, which coincidentally, has invested heavily over the past few decades, in becoming more residential, and family friendly, and it has paid off.

Regardless of what made things the way they are, we need to look at how we can make it different, and more sustainable in the long term. Having a larger resident base is likely to be the best way and, while I agree with you about the lack of retail options, this is an issue hard to address by conventional means. On the other hand, investing money in amenities, such as more, AND BETTER parks, improving schools and other public services, adding incentives for developers to build family friendly units (3 and 4 bedrooms, especially podium townhomes), safety, cleanliness, better upkeep (paving, fixing sidewalks, etc...) would all work a long way towards attracting more residents (and even businesses, in the case of the safety/upkeep), and making it more vibrant.

We definitely also need to figure out a way to attract more workers to Downtown, be it with incentives for companies to set up offices here, or whatever else we can find, because it brings two benefits: it increases the workforce AND residential population (even if not all, a proportion of workers will likely want to live close to work).
 
Yes, WEM's last expansion was a few years after 1986, but downtown population also increased by over 300% since 1989 too. It seems to have peaked around 2014, when coincidentally the economy here was doing quite well. Since then it the economy here has not been so great, although perhaps the last year or so it is improving. I do think if that continues, eventually a healthier economy will be reflected in some degree of revival of downtown. I recall a similar situation here in the mid 1990's, although quite frankly this time the decline seems much more severe. I think it is the interaction between COVID restrictions and a tough economic time hit particularly hard. Fortunately neither are necessarily permanent situations, so I wouldn't predict the future based on that.

I also think the city took a much more proactive approach towards downtown revival in the 1990's, by bringing in incentives to build downtown housing units. It was controversial at the time, but it really worked in increasing the downtown population considerably in a decade. Perhaps after that success we became complacent - things seemed to start to fall apart after 2018/2019 despite the completion of the new downtown arena just before that. Oddly, Calgary which has no downtown area had a downtown that continued to grow after that time.

I think to get people to live or visit downtown, we need to make it more attractive. Some things are happening - safety concerns are getting attention, atlhough it took a while and it got quite bad before governments responded. Festivals and events can be nice, but if they end up creating a lot of noise and congestion, they might attract temporary visitors, but discourage people from living downtown. Maybe it will gradually improve, due to more people coming back to work, a better economy and a combination.

However, people aren't going to want to live downtown if the jobs are all in suburban locations, so we have to work on that too and they aren't going to want to live downtown if there are few of the goods and services downtown one expects in a city this size.
 
So for educational institutions, just recently we already have the U of A which has announced more staff for Enterprise Square and MacEwan not too far away which has announced a new business building and which has already grown considerably downtown in the last several decades.

The business sector in Edmonton is fairly suburban, so it may be a weaker link. Although the insurance company which recently announced it was moving downtown is also a bit of good news. Edmonton is getting to the size where you can't necessarily serve the whole city well from the west end or south side, so being downtown does offer a more central location.

There continues to be residential development downtown, so I think eventually it might also be people who live there that will push back if a business or organization they work for wants to move elsewhere.

I do see the past several years as a bit bleak, but I think the future may be a lot better.
 
This article is focused on the U.S. marketplace but the ins and outs apply to Canada as well. Commercial Office Space is going to take years to recover to pre-COVID numbers and Retail is essentially dying a not-so-slow death. Want to help? Stop making online purchases which now account for more than half of all retail sales... shop local, shop small venues, avoid Amazon, avoid Walmart. In its dying breath, Retail has lost its personality, its neighborliness, and its product awareness.
 
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This article is focused on the U.S. marketplace but the ins and outs apply to Canada as well. Commercial Office Space is going to take years to recover to pre-COVID numbers and Retail is essentially dying a not-so-slow death. Want to help? Stop making online purchases which now account for more than half of all retail sales... shop local, shop small venues, avoid Amazon, avoid Walmart. In its dying breath, Retail has lots its personality, its neighborliness, and its product awareness.
I suppose in general this same situation applies everywhere. I can see the crunch coming for for commercial landlords, as a lot of leases that were for 5 years or so, may not get renewed or renewed with less space now, and they may have to face higher interest rates too.

I think the landlords for retail space also have to think differently, maybe look to renting more to local and small stores and not just focusing on the big chains/department stores.
 
I think the landlords for retail space also have to think differently, maybe look to renting more to local and small stores and not just focusing on the big chains/department stores
Agreed, but it has historically been the case that big chains and department stores have dictated market rates for retail space, leaving no room for so-called mom-and-pop stores able to gain leasable footing. Some communities have fought back by requiring large stores to meet parking mandates that are punitive, leaving small retail spaces able to thrive. Small retail spaces generally are more functional for retail venture-ism akin to the needs of mom-and-pop enterprises.
 
it has also "historically been the case" that banks and lenders and investors and appraisers have been much more enamoured with the [presumed] stronger covenants and traffic that big chains and department stores bring to the table.

it has also "historically been the case" that many jurisdictions have permitted projects and spaces catering to the big chains and department stores in their search for additional development and employment and higher property tax revenues.

in an industry completely reliant on banks and lenders and investors and appraisers and permits, it's not just landlords that need to think differently...
 
it has also "historically been the case" that banks and lenders and investors and appraisers have been much more enamoured with the [presumed] stronger covenants and traffic that big chains and department stores bring to the table.

it has also "historically been the case" that many jurisdictions have permitted projects and spaces catering to the big chains and department stores in their search for additional development and employment and higher property tax revenues.

in an industry completely reliant on banks and lenders and investors and appraisers and permits, it's not just landlords that need to think differently...
Historically buggy whips were popular too. If there are no department stores expanding and few big chains, they have to face reality. I agree, its not just landlords, but others too.

It will not be an easy for landlords over the next few years, I feel the ones who do better will be the ones not stuck in the past and more willing to be flexible and look at different things.
 
Yes, I suspect online shopping with larger and generic chain stores will continue to be a challenge for their brick and mortar stores.

Again, that is why landlords will need to look towards different tenants than in the past. Some do get it.

 

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