Less than one week after Best Buy abruptly shut its doors at Uptown, discussions are already well underway to fill the 38,000-square-foot void.
“Certainly you never want to see a store closure … but this (particular vacancy) is great news from our perspective because it has excellent loading, high exposure, great location, ample parking – and that makes it an in-demand unit,” said Geoff Nagle, Morguard Investment’s director of development for Western Canada.
Nagle remains optimistic that ongoing talks will result in a new tenant taking over that space in the near future, but a retailer packing up shop and increasing Uptown’s vacancy rate is not something he wanted to see. With about 800,000 square feet overall at Uptown, Best Buy occupied about four per cent of the shopping centre’s floorspace.
Uptown has seen large retailers such as H&M and Forever 21 recently open up shop, and Rebalance MD health care clinic has taken up 10,000 square feet of space, but the centre is still struggling to find enough commercial tenants.
Nagle says 82 per cent of the site’s overall retail space is called for, while 40 per cent of the office space is leased.
“The story since 2009 and 2010 has been one of uncertainty and long, slower decision-making. Every deal is a long discussion, and a lot of pre-leasing that would’ve occurred prior to construction completion isn’t happening anymore – globally,” he said. “Everybody’s being very careful with their capital investments.”
The real estate market has changed in the last decade, Nagle says, referring to his predictions 10 years ago around what Uptown would be when it was just a seed of an idea.
“Probably the biggest difference between a decade ago and now is we won’t build on spec – just build and they will come. Now you’ve got to be very conservative, make sure you’ve got your deals before you execute,” he says.
Nagle says Uptown’s leasing rates are competitive, and what they can offer to businesses – LEED gold buildings in a prime location – is desirable. But the demand isn’t there.
“We can’t force a market,” he said.
The same can be said for the still-planned third phase of Uptown: two 36-storey residential towers. Those plans will stay on hold until there’s a demand for it and there’s sufficient financial backing.
But Nagle sees trends moving in a positive direction for the future of Uptown, albeit slowly right now.
“It’s a testament to the site. This is the bull’s eye of the region,” he said. “Until it’s 110 per cent leased with people waiting, I’m never happy.”