Photo: James Bombales
This year saw the demise of Canadian retail giant Sears, which announced it would liquidate its remaining 130 stores in October. The news had many industry watchers buzzing about the decline of the Canadian commercial real estate market. But one expert says the market’s doing just fine — it’s just in a period of transition.
“You’re seeing brands realize the importance of placemaking, of making their store a destination, not just a place to shop,” LiveWorkLearnPlay partner and principal Rob Spanier tells BuzzBuzzNews.
Spanier says that, now that most of consumers’ needs can be met through online shopping, brick-and-mortar locations need to draw people in with what he calls “experiential retail.”
“When you look at something like what’s happening in Yorkdale, almost every store you look at is very consciously thinking about what in-store experiences will draw in customers,” says Spanier. “You have huge lines for things like Drake’s store. These are brands that are taking the necessary steps to make their store a destination.”
It’s advice that Canadian brands seem to be taking to heart. While Canada’s remaining department store seems to be struggling — the Bay’s shares have dropped 22 per cent so far in 2017 — other companies are doubling down on their brick-and-mortar locations.
This week, Roots announced plans for an additional 10 Canadian and 14 US locations in the new year, after a year of 10 per cent sales growth. Roots president Jim Gabel says that the company will also be renovating existing stores, in an attempt to — you guessed it — add to the “in-store experience.”
Meanwhile, earlier this year, Cadillac Fairview converted a former Vancouver Sears’ location from a 700,000-square-foot department store into a mixed-use building, complete with a 250,000-square-foot Nordstrom and office tenants, which include Microsoft.
Nearly 15 million square feet of retail space will be added to the Canadian commercial real estate market now that Sears’ has closed, and mixed-use spaces may be one use for the abandoned locations.
According to Spanier, mixed-use is key to good placemaking. But he also says that it has to be done thoughtfully if it’s going to work.
“When we talk about mixed-use buildings, doing the bare minimum isn’t enough anymore,” says Spanier. “For instance, if you have a condo building and you put a Tim Hortons or a Shoppers Drug Mart at the bottom, that’s not placemaking.”
Spanier says that, when it comes to commercial real estate in 2018, thoughtfully curated mixed-use buildings are the future. “A carefully planned out collection of local businesses, which will attract local consumers and add to a sense of community, is key,” he says.