Vacancy might be a dirty word in real estate but on Toronto’s iconic Yonge Street, it’s become a signal for creative space uses ranging from pop-up arts and culture, to second-storey restaurants and quirky destination stores.
As part of the Yonge Love community consultation, Downtown Yonge BIA (DYBIA) wants to know what types of stores and services you’d like to see fill in the vacant spaces on Yonge Street in the future. Share your opinion here.
“Vacancies in Downtown Yonge have remained stable at 7%-8% over the past five years,” says DYBIA senior economic development manager Pauline Larsen.
“What has shifted, however, is that vacancies are now on second storeys rather than on the street.”
But as brokers will tell you, leasing second storey spaces poses a particular challenge.
Tenants worry that spaces are too tucked out of the way, pose accessibility challenges, and don’t attract walk-in businesses.
On the plus side, rents are significantly lower. Net rents being achieved for street-level stores on Yonge Street right now can reach four times the cost of second-storey space, at $130/sf compared to $30/sf net.
“That opens opportunities for innovative uses like pop-ups, arts and culture uses and even incubators and start-ups,” says Larsen.
Vacancies are bad for neighbourhoods because they create empty, often unkempt, spaces that look dark and unsafe. Occupied spaces, on the other hand, bring light and activity and energy to a street.
The challenge is to match community demand with financial viability.
In Downtown Yonge, demand is already alive and kicking – as are increasingly innovative space uses.
About 175,000 people live within a 10 minute walk of Yonge and College, and more than half a million work in the same area. Ryerson University brings more than 100,000 people into Downtown Yonge regularly and then there are the tourists and visitors from elsewhere in the GTA.
“Plus the majority of people in the district are here three to five times a week, because they either work or live in the area,” she adds.
Those demographics are behind the opening of a new medical clinic on the second floor of 407 Yonge Street, above Starbucks and across from the AURA condo development. The 1,800sf clinic is due to open in early September 2014 and will feature a family practice with a walk-in clinic supported by a pharmacy.
“As more people come into the area to live, work and study, a new medical clinic is a natural fit for the neighbourhood,” says property owner Arif Dharamshi of Jencel Properties Inc.
“It’s taken two years to find the right use, but we’ve found it now and believe it optimizes the space and the location.”
The growing neighbourhood also needs to eat, but tenants aren’t always open to leasing space for restaurants on the second floor, as Sutton Group-Admiral Realty Inc. broker Emile Amar points out.
“Restaurants take several years to become profitable, there can be a relatively high turnover rate which landlords see as risky, and often there is specialist equipment that needs to be installed, limiting future uses,” he says.
But then there is Salad King, he adds, which killed the myth that second-storey restaurants don’t work.
The ever-popular Thai restaurant is on the second floor of the historic Thornton Smith building at 340 Yonge Street. A fire forced the restaurant to move from its previous location across the road a few years ago, a decision that has proven successful.
“Salad King has built a loyal base and is a destination in its own right,” says property owner Ken Rutherford, who is looking to transform his vacant third floor into an upmarket event space that evokes Downtown Yonge’s history as a venue for live entertainment.
“The opportunity for this area is to get retailers that are different, so that people are excited to stay on the street. And entertainment, assuming it’s done right, is a great opportunity for second and third floor spaces in this area,” he explains.
A second-storey café with a destination twist is Roll Play Café.
Established a year ago by entrepreneur Shan Ho, the 2,400sf board-game café is tucked away on Edward Street and provides what Ho calls a “21st century watering hole” for families and friends to hang out, plays games and – most importantly – engage.
“Traditional street-front space downtown is pricey,” he explains.
“I wanted a space that was, multi-cultural, creative – and came with no preconceptions.”
He deliberately opted for a location off Yonge Street because “it offers too many distractions”.
Other examples of quirky, local destination stores on upper floors in Downtown Yonge include the Silver Snail, which moved from Queen West into the area about a year ago, and the Hairy Tarantula.
Pop-ups stores are an approach that’s also been used to fill vacant spaces in Downtown Yonge.
In June, a nomadic arts collective called Carrier Arts leased space at 1 Gerrard West to launch an exhibit entitled Out of Pocket.
Once a massage parlour, the 4,000sf space was transformed into a living gallery for both private and public viewing – bringing people and life into a space that would otherwise have been standing empty.
Because pop-stores are a relatively new concept in real estate, finding a willing landlord is not always easy. For the Carrier Arts exhibition, broker Cory Rosen of Goudy Real Estate saw the opportunity for marketing the space in a creative way.
“Both the landlord and I were willing to look at new ways to showcase the space, and present it in a new light,” he says.
Other examples of pop-ups include DYBIA’s own Yonge Love storefront located at 444 Yonge Street in College Park; and the innovative 7,000sf at Yonge and Gould called The Lot @ 335 which is available for outdoor pop-up uses.
Going forward, says Amar, look for smaller grocery stores, specialty and artisanal stores like patisseries and bakeries, and on-street services like drycleaners and shoe repair.
“Downtown Yonge will attract new concepts too, because there’s always demand here,” he adds.