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General Construction Updates

retrofiturbanism said:
That's gotta be yearly. That is almost $100/ft2 a year. Chinook doesn't even get that high. $8.14 psf is low for retail, but it fits in considering what the level of fixturing, etc is.
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Hmm. What did the units sell for - this article has 250 square feet at $229,000 https://www.avenuecalgary.com/Shopp...lgary/New-Stores/Inside-the-New-Horizon-Mall/. Cost of capital plus return (total of 11%) is $100 per square foot.

Even a super low cost of capital plus return of 6% is $55 a square foot. And that doesn't even count operating costs and common spaces!

Those numbers are bad. A traditional operator buying out the entire thing might be the best option, but I doubt the owners could be made whole.
 
I don't know enough about this project, but it could be $100 psf due to very small spaces. Rates vary a lot based on lease area, I've seen up to $1,000+ psf here for very small kiosk and food court spaces in some of the super regional malls and office towers.

On a side note, seeing this project makes me truly disappointed that they didn't build something similar in Chinatown instead. Hope to at least see the 1st St Chinatown development get started soon.
 
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It’s more than Chinook but small spaces often have higher rates if they are a kiosk in a busy mall spot. Of course that doesn’t apply here and maybe that’s why it’s empty.
retrofiturbanism said:
That's gotta be yearly. That is almost $100/ft2 a year. Chinook doesn't even get that high. $8.14 psf is low for retail, but it fits in considering what the level of fixturing, etc is.
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Surrealplaces said:
New Horizon Mall is open regular hours now.....though it is mostly empty. Most of the stalls are still for lease, and a handful of businesses are actually up and running.

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Wow, that is incredible. Thanks for the great shots! I hope they get some tenants in there ASAP because a project of that size sitting empty is a bit scary.
 
Senecant said:
$96 psf here. $120 psf here. Food court spot for $190 psf.
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My experience in commercial retail real estate is limited, but $120 psf seems out of this world expensive. Few spots on 17th avenue get even close to that high.

As I understand, rent works out to about 7%-10% of gross sales. That means these places are estimating $1200 to $1700 of sales per square foot. That is higher than Chinook ($1075). Yorkdale in Toronto has the highest sales psf and it is at $1650.

I think a bunch of people just got fleeced.
 
retrofiturbanism said:
My experience in commercial retail real estate is limited, but $120 psf seems out of this world expensive. Few spots on 17th avenue get even close to that high.

As I understand, rent works out to about 7%-10% of gross sales. That means these places are estimating $1200 to $1700 of sales per square foot. That is higher than Chinook ($1075). Yorkdale in Toronto has the highest sales psf and it is at $1650.

I think a bunch of people just got fleeced.
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I suspect somebody talked people in thinking that if you have a small enough kiosk, and do a reasonable turnover the overall rent isn't that high due to the small square footage. I think you're right about people getting fleeced.
 
It looks like the realtor on Reddit, confirmed that $5,700/month is indeed the lease rate. Wow.

I could see it if it's a kiosk in the busiest spot in the core, or Chinook.
 
That’s ridiculously high rent and it makes sense as to why there are very few businesses in there. $5700 to run a unit for the whole year in a building like that is actually a really good deal and the place would probably be 80% full.
 
retrofiturbanism said:
My experience in commercial retail real estate is limited, but $120 psf seems out of this world expensive. Few spots on 17th avenue get even close to that high.

As I understand, rent works out to about 7%-10% of gross sales. That means these places are estimating $1200 to $1700 of sales per square foot. That is higher than Chinook ($1075). Yorkdale in Toronto has the highest sales psf and it is at $1650.

I think a bunch of people just got fleeced.
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For major malls in Calgary, the gross occupancy costs (GROC) are closer to 20% on average.

I agree though, project is odd being a niche offering in the middle of nowhere with no real residential density around. Should have build in Chinatown or further north down Centre Street.
 
Probably worth mentioning is that likely few or none of these operators would even be able to acquire space in Chinook or any similar regional mall. If we're assuming that most of the potential vendors are re-sellers of Alibaba bric a brac, those very small businesses are not likely to be attractive to nor have the covenant required by sophisticated landlords. A comparison of unit price to a major regional mall is not a reasonable direct comparison without also considering that those seeking to occupy units could likely never occupy the major regional malls. A better comparison might be something like a Pacific Place Mall or Northland Village. Though even those probably don't have enclosed spaces of as little as 145 square feet. It may well be that those who would be inclined to have tenancy at New Horizon may not actually have many other reasonable options for the type of business they are contemplating.
 
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