There are a few factors at play:
– New vs old – New construction is expensive/valuable so rents/property taxes will be higher. The property taxes on highly assessed commercial spaces is probably one of the reasons for high vacancy rates for older existing buildings on Robson St. and Denman St.
– Design – Retail space is subject to design constraints on exterior appearance. The City could relax restrictions, and/or architects and the Urban Design Panel could allow facades that easily allow tenant modifications (i.e. flat facades, removable individual awnings instead of continuous awnings). I think the biggest culprit is the continuous awning – the uniformity deprives the retail frontages of individual character, and prevents the installation of unique signage.
Despite East is East’s experience, I note that the Dublin Gate Pub on Main St. in the new Central office block has a “personalized” façade (though I think it looks out of place on the modern building!)
– WRT large versus small spaces, I think that the majority of retail spaces under condo builds are small, awkward spaces unfit for large retail tenants (unless originally designed for them, such as L’Hermitage). That’s because of all the services/common areas for the condo building eating into the ground level floorplate. That’s also why you hear of people complaining that condo retail is littered with hairdressers and nail salons (which are often independent businesses!).
– Tenant mix is also tied to ownership structure – retail spaces that remain corporately owned by the developer tend to be more successful on retail mix – because it’s like a mall and the landlord can control the mix to make the project attractive to the community (i.e. drug store, grocer, coffee shop). The classic local example is Pacific Boulevard. The retail units on the north side were sold to small independent businesses as strata units (largely immigrant investors). For the first 10 years or so, the mix of “small businesses” was disappointing (including a button store). The retail on the south side was retained by Concord Pacific as landlord and more reputable “anchor” businesses such as Urban Fare and HSBC opened up.
It’s really an evolving environment. West Fourth probably used to be a lot cheaper than it is now – in both old and new buildings. There have even been a number of one storey retail buildings rebuilt as modern one storey retail buildings on that street. The incubator zones have moved to Main St. and Fraser St. from West 4th and Cambie (or even Granville). Gastown used to be an incubator area, but has taken off in recent years too.
For older buildings, I guess the bottom line is that you can’t pay incubator rent in a very popular area, and the popularity of different areas changes over time, and with the general trend of increasing population, more areas are becoming popular (and higher rent comes with that).
For new buildings, the high construction costs (translated to higher base rent) and the newly improved premises (translated to high property taxes (additional rent)) means that the space may sit vacant for some time until a tenant able or willing to pay the rent comes along.
Up to the arrival of a building-permit application (roughly around 1983, if I recall), the block in the 1100-block Denman contained some well-loved local services – a hair salon, butcher shop and, notably, Pauline’s Books. The redevelopment was for a single use: a Burger King (in a neighbourhood with almost no fast-food chains). That was enough to cause outrage in the community. But, further, the development permit proposed only interior changes, avoiding the need to go to the Development Permit Board or, possibly, Council. In fact, all but one wall was demolished and the site totally redeveloped. Further outrage!
The Harcourt Council authorized the Planning Department to draw up new guidelines for retail strips in the West End, including the 25-foot requirement – which you can see in the current configuration. Ironically, the Burger King failed to survive economically; people didn’t go to Denman Street for fast-food chain restaurants. (Fast food, yes; but in subsequent years even a McDonald’s and three or four other chains failed to gain sufficient patronage.)
The best example of the requirement for small storefronts, even if they’re simply the frontage for a bigger box behind, can be found here – the London Drugs at Robson and Bute.
I’d be interested in Guest’s take on the success of these projects.