Continued from Industry News



Lory O knows Filipino grocers have been struggling since No Frills and Shoppers Drug Mart opened in Fraserhood because both chain retailers carry Filipino products.


O knows this because her family’s Filipino tofu and dessert shop, O! Taho, took over the space of a grocery that closed due to the stiff competition in 2014.


O had no doubt about where O! Taho should open.


“Fraser is a Filipino place,” she said.


“We had to open here.”


There’s the possibility of higher rent due to Fraser’s rising popularity, said O, but she just wants to focus on making fresh treats for the community. O! Taho has quickly become a neighbourhood favourite.


Kelvin Luk, a Colliers associate vice-president, has some ideas why certain Vancouver neighbourhoods are getting new identities.


“Attention is moving away from the west side, where it’s harder for some businesses to survive, to the east side, where there are more happening pedestrian locations.”


The highest rents on west-side business strips like West 4th and South Granville stop just shy of $70 per square foot, according to Luk.


Main Street rents, he said, range between $20 and $40 per square foot and are highest between 12th and 16th avenues. Luk predicts Fraserhood will catch up to Main.


What Luk calls a “trickle effect” from the west side is more than just businesses. Born of Bâtard Boulangerie has also noticed it with people.


Her parents own Finest at Sea, a seafood provider on Arbutus near 33rd Avenue.


“All of our old customers’ kids have moved over here from the Arbutus and Dunbar areas,” she said.


“Lots of young people who really want to raise a family. It’s quite the migration east.”


Whether this new buzz around the east side is due to branding, the challenge of making full use of coveted, land-challenged Vancouver is drawing attention to quieter parts of the city where there was previously far less attention.

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Streetscape renewal poised to drive rents higher A walk between Burrard and Thurlow streets on Alberni Street reveals a streetscape that is at odds with its luxury tenants. Blotches of white filler concrete form a patina with darker grey pavement.


There are no benches to encourage shoppers to linger. Nor are there flower baskets or any other touches that delineate high streets in other cities. Prada has Photoshopped out telephone poles and street lamps in widely available images of its new Vancouver store. Landlords are keen to have the street improved to attract more luxury retailers and increase the pedestrian traffic needed to generate higher sales and help pay for higher lease rates.


“Conditions are subpar for what the street has evolved into,” admitted Downtown Business Improvement Association (DVBIA) CEO Charles Gauthier. He successfully lobbied the city several years ago, when the West End Community Plan was being drafted, and the city agreed to Gauthier’s pitch for the city to remake the street in what he called a “distinctive” way, similar to how it resurfaced Granville Street before the 2010 Winter Olympics.


“There’s a clear division of responsibilities here,” Gauthier said. “As has been practised in other parts of the city, major revitalization projects tend to be done by the city because the business improvement associations don’t have the budget or the wherewithal.” The city, however, is waiting to generate the needed funds from community amenity contributions (CACs). Those in-kind or cash contributions come from property developers after city council grants development rights through rezoning. Once future rezonings pass and developers pay the city the CACs, the money could flow.


Gauthier estimated that $2 million will be spent on the street, and he thinks that it could take between three to five years for the funds to be available. “We’ll be advocating for some kind of new streetscape design for the sidewalk so it looks and feels different than anywhere else in the city,” he said. “That’s the argument we made for Granville Street – that this is a different street than anywhere else in the city. The normal sidewalk is what they call broom-finish concrete. We’ve said that we want something different.”


Once the street is revitalized, the DVBIA will pick up the tab for banners, flower pots, additional trash bins and other small improvements. “We would be pretty excited to have [revitalization] happen as soon as possible,” said Burrard Group vice-president of development Jason Wexler, “but it’s a pretty big project and it’s not like the retailers are avoiding putting work into their stores.”



Being too large can kill restaurants in off-prime locations

Some of Metro Vancouver’s largest restaurants have opened in recent years in marquee locations, such as at Telus Garden, Jack Poole Plaza and the Olympic Village.


Yet, while the owners of those restaurants tout the benefits of increased size, one recent restaurant closure highlights the danger small operators face when they expand too much in an off-peak location, where there is less foot traffic.

Justin Ault’s landlord had a bailiff change the locks on Ault’s 5,500-square-foot Hapa Izakaya at the corner of Robson and Nicola streets on June 7, after Ault failed to pay three months rent, or nearly $97,000.


“The problem was that it was too much space,” Ault told Business in Vancouver.


He still owns two profitable Hapa Izakaya restaurants: a 2,700-square-foot location on Hamilton Street in Yaletown and a 3,100-square-foot bistro on West Cordova Street in Coal Harbour. 


“I told the landlord that unless you drop our rent, we can’t stay here.”

Ault had tried to sell the restaurant and the lease but found no one interested in paying the $199,000 asking price.

Hapa Izakaya was booming when Ault opened in an 1,800-square-foot unit on the site in 2003.


Two years later, he expanded to the adjacent 2,000-square-foot corner unit. But his decision to add another 1,700 square feet in 2009 by absorbing a third unit, to the east, made the venture unviable.


The 1455 Robson Street site, up the hill from other popular Japanese restaurants on Robson Street, was too far for some diners to trek.


What could have been the final nail in the Robson Street Hapa Izakaya’s coffin, however, was that an investor has been trying to buy the building that Ault was occupying. 


Ault said owners of the 45 condominiums above the site’s commercial space have already voted more than 80% to aggregate and sell their units as a block.


Optimum Realty representative Andrew Leung, who managed Ault’s Robson Street site on behalf of the landlord, confirmed to Business in Vancouver that the owner has had an offer to sell the four street-level strata retail units as part of that aggregation.

Ault being behind in his rent gave his landlord the opportunity to kick him out. 


Had the rent been paid, the landlord would have had to provide an inducement for Ault to leave, given that Ault’s lease was not set to expire until mid-2019 and the agreement had no demolition clause.

The north side of the 1400-block of Robson Street also includes the Riviera Hotel and a grassy patch of land at the corner of Robson and Broughton streets, which has been vacant for decades.


If a buyer acquires the building at the corner of Robson and Jervis streets, the rest of the block could be included in a future aggregation.


Meanwhile, as Ault reflects on the lesson not to expand too fast in a non-prime location, other restaurateurs say the operating efficiencies of an extra-large restaurant can deliver a significant payoff. 

Glowbal Group owner Emad Yacoub and Tap & Barrel owner Daniel Frankel told BIV that larger restaurants have lease rates based primarily on prime street-front square footage and that having deep restaurants or ones that have basements mean that they can get extra space for virtually nothing. 


Indeed high rents, increased labour costs and city requirements that enable fewer washroom stalls per patron in larger restaurants have combined to fuel a trend toward entrepreneurs opening huge facilities.