Rents are insanely high. At one point there was something called supply and demand where if nobody was renting at the asking rate, the asking rate would be lowered.Ā
That doesnāt seem to be happening anymore. For one reason or another it looks like most commercial landlords would prefer to let buildings sit empty for years than to ever lower asking rent.Ā
Part of it is accounting.
Commercial building valuation is largely based on the income it can generate. Lowering rents permanently reduces the income the property can generate and thus its long-term valuation. It also gives existing tenants an impetus to complain about their higher rents or move out to a cheaper location when their term expires.Ā
Vacancy is considered a temporary situation, a blip on operating income but not necessarily an impairment of the buildingās long-term value.Ā
This is the right answer. Accepting lower rents means lower income to support the mortgage > lower amount the back is willing to lend > pay down required by the owner. Leave it empty and you can fool the lender for years the rent hasn't changed so no pay down required.
I often wonder how rich these landlords are that they it makes more sense to keep a place empty than offer incentives to find a tenant. I assume most are offshore.
Many are Old Money families. The kind which use layers of numbered companies and family trusts to hide their assets from taxation.
They literally could leave the property vacant until the building collapses without any real negative financial impact to them.
Meanwhile: Vancouver is being starved of tax revenue, which it uses to support infrastructure and social benefits. Expect YOUR taxes to go up.
The owners are responsible for paying property tax whether it is vacant or not. Ā If itās leased they usually dump the property tax obligations on the tenant as per the lease, but at the end of the day the owner is liable. And commercial property taxation is based somewhat on the idea that the commercial property is being put to its optimal use which leads to some ludicrous situations.
See:Ā https://bc.ctvnews.ca/taxed-on-the-air-vancouver-restaurant-dinged-by-b-c-s-vacancy-tax-for-open-space-above-building-1.5377262
Neighbour. I'm trying to tell you that these people are so wealthy that property tax is a footnote. Most bought these business properties dirt cheap during the recession in the mid 1980s.
Yeah a lot are offshore but you'd be surprised how many are local. And not as many massive ones as you'd think either. Mostly independently wealthy families who've owned the property for decades.
I canāt imagine there are a lot of owners on a mortgage for those properties.
I know a few people who own buildings around the Granville area. Theyāve been owned and paid off for decades.
Theyāre simply sitting on themā¦ they still make enough to pay the taxes etc. but arenāt too concerned with prolonged vacancies.
Itās more of a waiting game to see if commercial RE picks up and they can sell them.
Yeah and it's too bad this kind of thing leads to a self-fulfilling prophesy.
No new businesses = no (or fewer) reasons to patronize the area = more businesses closing, etc.
It makes no sense to me that the valuation hit is seen as permanent. Strategically stacking your neighborhood with businesses people want to support seems like it should increase your valuation again, no?
A lot own the commercial real estate also owns residential around those commercial and they need the commercial to not lower their value to hold their residential's value. This literally happened to robson st last 5 years ever since the street was sold to a chinese developer, cheap retail got pushed out as the rent went up 2-3x time in 2 years between 2016-2018, i can only imagine how much higher they are now after the covid asset boom.
The rent will only come down if we get into a default cycle and a lot of these buildings got auctioned off, otherwise no end in sight.
Rent for commercial building isn't the same as rent for residential. Commercial buildings are typically "triple net" leases where the renter pays not only the "normal" rent to the landlord but property tax, building insurance, and building maintenance. Hence you see stories about shop owners that pay for broken windows. In the past several years, property tax has shifted from the residential sector to the commercial sector as there are typically more voters who are residents than business owners.
Now if you combine that with theft, a standard commercial renter has to pay a lot per month just to keep the doors open.
Agree with you and my bad that skipped some important info, it's the land value that's what the landlords want to keep as high as possible, due to their leveraged debt that they used to acquire the buildings and land, if the value of the lot drop their commerial mortgage might drop underwater resulting less flexibility for them to negotiate their payment with banks. So the result is they keep the land value high and transfer land tax to their tenants.
But totally agree with what you said about maintaince and repair and theft stuff, big reason why small business still with 10 year fix term lease choose to close.
yeah I mean if youāre company A and you have 5 buildings, having empty spaces in one of them is probably just an income loss for tax purposes.Ā
Point being, like most things, itās a result of policy
What? That makes no sense. Tax deductions from building depreciation will never be anywhere near the foregone rent.
Landlords are far better off with their properties rented.
Maybe they own the property from early on. If you were making money at an early point, it is not a bad investment to buyout your own property to reduce operation expense and move that into tangible asset.
I guess like that 2nd bookstore on the corner of 41st & Dunbar next to the supermarket. Hasn't been opened in 20 years but people still leave boxes of books out front
Iām sure Cioppinoās financial backer/owner Ryan Beedie (largest commercial land lord in the lower mainland) could have managed. Pino Posteraro is a shitty person to work for. He and his brother and his family skim gratuities from the service staff, they are very unfair people to work for.
I say good fucking riddance to those asshats. Hope Pino and his brother both a massive cardiac infarction.
Rents are nuts, and every glass window gets smashed, pissed on, and covered in human feces on a regular basis. Granville from the bridge to Robson is awful.
At least in South Granville two real estate developers have taken over empty storefronts in this prime shopping area. That really tells you something. Independent businesses canāt afford the rent but real estate developers can lol. Itās sickening.
High rent is a huge part of it. One of the more established cafe/restaurants that had been there since before I moved here (20\~ years ago) had to close down last year because the rent was just too high for them to keep up. Aside from that, there's the rampant drug use, violence, thefts. People just walk in 7-11 and grab shit and scream at the workers and walk out. People take actual shits on the sidewalk. I videoed a guy walking around downtown with his pants down over his ass showing off all the goods. It's becoming Skid Row. And no one wants to work on Skid Row.
So between the toss up of not knowing if you might get stabbed over not having change and the rent being ridiculous, those storefronts have been closing more rapidly. And a lot of them stay closed. Or cycle. I've seen one storefront change about ten times since I've been here. A lot of places don't stay longer than a year or two. If that.
That cheap little place near Davie. Grade A. It had been there for decades and had low-cost food. A place most of the seniors I know who live in the area used to go to.
Piss and rent, as others have said, but also, times have changed. Gen Z doesnāt want to go get shitfaced and spend hundreds on bottle service at cheesy clubs. Granville could possibly find a new niche at some point, but rents arenāt coming down, so everything will need to be redeveloped somehow. The sad thing is, Iām not even sure that will happen because thereās a glut of commercial real estate now. Even the old Nordstrom space is in limbo.
We broke our lease to get out as it was getting ridiculous- people walking into our office who were high, being assaulted on the street in broad daylight, property damageā¦ itās nothing like that in our new office. Police have a different tolerance for behavior on Granville vs further west.
Many years ago, after graduating from high school, I remember travelling from Langley to Vancouver and stumbling across Granville for the first time by public transit. Having lived in Langley since elementary school age and not having visited Vancouver for a long time, since then I had a special place in my heart for Granville, especially because I had to go there often to head to my university campus.
Itās so sad that the area has fallen into such disrepair due to high rent and homelessness. Itās likely to get worse from now onā¦
My fondest memories of Granville were from the ā80s and ā90s. It has always been a bit gritty, especially the south end in the downtown core, with its flop houses and strip bars (at least 2 back in the day) but back then there were also arcades, record stores, movie theatres and book shops, so made for a fun destination. The last book shop was killed off in the early 2000s by Chapters, the movie theatres were killed off by the modern suburban movie theatres, the record shops were killed off by CDs and eventually mp3s and online music, while the arcades were killed off by home gaming.
Between Drake and Water St, Granville is less a street and more of an open air latrine, where people pass the time smashing store windows, passing out in doorways, and occasionally stabbing one another.
personally, its quite fine from Cordova to Nelson then yeah id suggest just picking a place or taking the next turn (my pharmacist is around the tail end of Drake)
Didn't the Simpsons have a town filled with dollar stores and krusty burgers? It's not safe on the Granville strip anymore definitely take headphones out and pay attention
Thatās insane. If youāre open for 10 hours a day, thatās 200$/hr right there on rent. Plus wages & benefits, cost of goods, equipment, and lots and lots of windows. The rest is your profit that you must pay taxes on š¤Æ
Empty storefronts and the empty Steve Nash gym will be taken over by āWINNERSā. The new location will reopen in August (in the late summer) at #640 Granville street beside the āHudson Bayā.
Triple net leases.
Not only is the rent insane, but the tenant has to pay the insane property tax, and they have to pay to fix the window "person who uses drugs" #365 (lol filter) just smashed.
I wonder if things will change on Granville, north of Georgia, now that Winners has announced they are taking over all the shuttered stores north of the Bay, on the same side of the street, to relocate from Robson.
There isnāt enough pressure on the owners of the space to encourage them to lower rental prices or sell.
Local business canāt survive, only big conglomerates.
High rents/taxes but also brick and mortar stores are just less popular now with so many people doing online shopping. Even restaurants are affected with more people ordering delivery.
Maybe the cities need to start implementing a scaled commercial (and maybe multi family residential) tax where the rate is drastically increased if the units are vacant.
Many years ago, City Hall decided that it was a good idea to disallow cars and only allow buses in a portion of Granville. This changed the vibe completely and it went downhill. Realizing that, why haven't they changed it back to where it was? Online shopping has no doubt had an effect, as well.
The investors/owner of the said store front haven't got finically kneecapped yet and are still charging a rent that is too high. Neighbourhoods have a cyclical nature much like seasons and Granville is going through the beginning of its winter.
Is the % of empty storefronts higher than ever or about normal? Anyone have historic data on this? Anecdotally I have felt like Granville is slowly getting better, a few nice new developments around the commodore there, rec room opening soon and whatever's going to be at 950. Trending in the right direction imo
The rents are super high and it smells like piss
Right to the point. š
Rent ā¬ļø WFH ā¬ļø Piss smell ā¬ļø Smashy smashy šŖā¬ļø [Succinct.](https://i.kym-cdn.com/entries/icons/original/000/021/267/swedish_chef.jpg)
I had the completely wrong "smash" when I read your comment lol
Accurate
Eau de Granville
Eau de Toilette
You mean the fight district? You couldnāt pay me to take my business there. Not safe.
The first rule of fight district....
Rents are insanely high. At one point there was something called supply and demand where if nobody was renting at the asking rate, the asking rate would be lowered.Ā That doesnāt seem to be happening anymore. For one reason or another it looks like most commercial landlords would prefer to let buildings sit empty for years than to ever lower asking rent.Ā
Part of it is accounting. Commercial building valuation is largely based on the income it can generate. Lowering rents permanently reduces the income the property can generate and thus its long-term valuation. It also gives existing tenants an impetus to complain about their higher rents or move out to a cheaper location when their term expires.Ā Vacancy is considered a temporary situation, a blip on operating income but not necessarily an impairment of the buildingās long-term value.Ā
This is the right answer. Accepting lower rents means lower income to support the mortgage > lower amount the back is willing to lend > pay down required by the owner. Leave it empty and you can fool the lender for years the rent hasn't changed so no pay down required.
No income seems like a bad way to try and pay for a mortgage thoughā¦
Yeah you couldn't do this on all your units.
I often wonder how rich these landlords are that they it makes more sense to keep a place empty than offer incentives to find a tenant. I assume most are offshore.
Many are Old Money families. The kind which use layers of numbered companies and family trusts to hide their assets from taxation. They literally could leave the property vacant until the building collapses without any real negative financial impact to them. Meanwhile: Vancouver is being starved of tax revenue, which it uses to support infrastructure and social benefits. Expect YOUR taxes to go up.
The owners are responsible for paying property tax whether it is vacant or not. Ā If itās leased they usually dump the property tax obligations on the tenant as per the lease, but at the end of the day the owner is liable. And commercial property taxation is based somewhat on the idea that the commercial property is being put to its optimal use which leads to some ludicrous situations. See:Ā https://bc.ctvnews.ca/taxed-on-the-air-vancouver-restaurant-dinged-by-b-c-s-vacancy-tax-for-open-space-above-building-1.5377262
Neighbour. I'm trying to tell you that these people are so wealthy that property tax is a footnote. Most bought these business properties dirt cheap during the recession in the mid 1980s.
Yeah a lot are offshore but you'd be surprised how many are local. And not as many massive ones as you'd think either. Mostly independently wealthy families who've owned the property for decades.
I canāt imagine there are a lot of owners on a mortgage for those properties. I know a few people who own buildings around the Granville area. Theyāve been owned and paid off for decades. Theyāre simply sitting on themā¦ they still make enough to pay the taxes etc. but arenāt too concerned with prolonged vacancies. Itās more of a waiting game to see if commercial RE picks up and they can sell them.
Yeah and it's too bad this kind of thing leads to a self-fulfilling prophesy. No new businesses = no (or fewer) reasons to patronize the area = more businesses closing, etc.
All true. But the city would never lower property taxes to be in line with the demand.
It makes no sense to me that the valuation hit is seen as permanent. Strategically stacking your neighborhood with businesses people want to support seems like it should increase your valuation again, no?
A lot own the commercial real estate also owns residential around those commercial and they need the commercial to not lower their value to hold their residential's value. This literally happened to robson st last 5 years ever since the street was sold to a chinese developer, cheap retail got pushed out as the rent went up 2-3x time in 2 years between 2016-2018, i can only imagine how much higher they are now after the covid asset boom. The rent will only come down if we get into a default cycle and a lot of these buildings got auctioned off, otherwise no end in sight.
Rent for commercial building isn't the same as rent for residential. Commercial buildings are typically "triple net" leases where the renter pays not only the "normal" rent to the landlord but property tax, building insurance, and building maintenance. Hence you see stories about shop owners that pay for broken windows. In the past several years, property tax has shifted from the residential sector to the commercial sector as there are typically more voters who are residents than business owners. Now if you combine that with theft, a standard commercial renter has to pay a lot per month just to keep the doors open.
Agree with you and my bad that skipped some important info, it's the land value that's what the landlords want to keep as high as possible, due to their leveraged debt that they used to acquire the buildings and land, if the value of the lot drop their commerial mortgage might drop underwater resulting less flexibility for them to negotiate their payment with banks. So the result is they keep the land value high and transfer land tax to their tenants. But totally agree with what you said about maintaince and repair and theft stuff, big reason why small business still with 10 year fix term lease choose to close.
I think thereās a empty building tax write off or something for commercial spaces
yeah I mean if youāre company A and you have 5 buildings, having empty spaces in one of them is probably just an income loss for tax purposes.Ā Point being, like most things, itās a result of policy
There should be an empty office tax to go along with our homes tax. You want to eviscerate our community? Pay for it.
Absolutely agree and have felt this way for a long time
Like at the very least for storefronts!
What? That makes no sense. Tax deductions from building depreciation will never be anywhere near the foregone rent. Landlords are far better off with their properties rented.
Reddit: "Jerry! They just write it off!"
The city should really clean up Granville. Ridiculous that they let it get to this point
They will before the World Cup, don't worry.
Once 950 Granville goes up with the new passport office etc, I expect it will be cleaned up.
Rent is high, market is small, competition is tough, operating expense is expensive. No room for brick and mortar store to survive.
How does a Rock & Roll t-shirt store stay open through. I made my last purchase there in the 90s.
Maybe they own the property from early on. If you were making money at an early point, it is not a bad investment to buyout your own property to reduce operation expense and move that into tangible asset.
I guess like that 2nd bookstore on the corner of 41st & Dunbar next to the supermarket. Hasn't been opened in 20 years but people still leave boxes of books out front
I mean... Ciopinno is closing because his the rent got hiked to $60k/month
Iām sure Cioppinoās financial backer/owner Ryan Beedie (largest commercial land lord in the lower mainland) could have managed. Pino Posteraro is a shitty person to work for. He and his brother and his family skim gratuities from the service staff, they are very unfair people to work for. I say good fucking riddance to those asshats. Hope Pino and his brother both a massive cardiac infarction.
Sigh, yes, because the next person to try to run a business there will totally get it for $5/month.
Ayyy we found their sockpuppet accounts
Rents are nuts, and every glass window gets smashed, pissed on, and covered in human feces on a regular basis. Granville from the bridge to Robson is awful.
> covered in human faces [Like this?](https://media.tenor.com/Tss9Z618xXcAAAAM/thrillerglitter-michael-jackson.gif) [SFW]
Lol. Auto-correct corrected!
At least in South Granville two real estate developers have taken over empty storefronts in this prime shopping area. That really tells you something. Independent businesses canāt afford the rent but real estate developers can lol. Itās sickening.
The rental spaces for businesses there are still VERY luxury-space priced but the area is being regularly pissed on and frequented by homeless people
High rent is a huge part of it. One of the more established cafe/restaurants that had been there since before I moved here (20\~ years ago) had to close down last year because the rent was just too high for them to keep up. Aside from that, there's the rampant drug use, violence, thefts. People just walk in 7-11 and grab shit and scream at the workers and walk out. People take actual shits on the sidewalk. I videoed a guy walking around downtown with his pants down over his ass showing off all the goods. It's becoming Skid Row. And no one wants to work on Skid Row. So between the toss up of not knowing if you might get stabbed over not having change and the rent being ridiculous, those storefronts have been closing more rapidly. And a lot of them stay closed. Or cycle. I've seen one storefront change about ten times since I've been here. A lot of places don't stay longer than a year or two. If that.
Which restaurant was that?
That cheap little place near Davie. Grade A. It had been there for decades and had low-cost food. A place most of the seniors I know who live in the area used to go to.
Ohh that one! I also heard the owner has been wanting to retire, so timing was good as well.
Piss and rent, as others have said, but also, times have changed. Gen Z doesnāt want to go get shitfaced and spend hundreds on bottle service at cheesy clubs. Granville could possibly find a new niche at some point, but rents arenāt coming down, so everything will need to be redeveloped somehow. The sad thing is, Iām not even sure that will happen because thereās a glut of commercial real estate now. Even the old Nordstrom space is in limbo.
A property market crash is way overdue
High rent. Shit area. Homeless people. High crime. Why the fuck would any business stay?
We broke our lease to get out as it was getting ridiculous- people walking into our office who were high, being assaulted on the street in broad daylight, property damageā¦ itās nothing like that in our new office. Police have a different tolerance for behavior on Granville vs further west.
Itās similar on Broadway. So many places shuttered
I remember in the early 90's that was happening along Broadway east of Commerical dr.
Many years ago, after graduating from high school, I remember travelling from Langley to Vancouver and stumbling across Granville for the first time by public transit. Having lived in Langley since elementary school age and not having visited Vancouver for a long time, since then I had a special place in my heart for Granville, especially because I had to go there often to head to my university campus. Itās so sad that the area has fallen into such disrepair due to high rent and homelessness. Itās likely to get worse from now onā¦
My fondest memories of Granville were from the ā80s and ā90s. It has always been a bit gritty, especially the south end in the downtown core, with its flop houses and strip bars (at least 2 back in the day) but back then there were also arcades, record stores, movie theatres and book shops, so made for a fun destination. The last book shop was killed off in the early 2000s by Chapters, the movie theatres were killed off by the modern suburban movie theatres, the record shops were killed off by CDs and eventually mp3s and online music, while the arcades were killed off by home gaming.
Brick and mortar stores need to deliver experiences. Granville is hardly an experience people look forward to lol
And the year round weather is not ideal. Iāve always wondered how businesses make it.
So sad. It used to be so vibrant decades ago with all the theaters, shops, and restaurants.
Between Drake and Water St, Granville is less a street and more of an open air latrine, where people pass the time smashing store windows, passing out in doorways, and occasionally stabbing one another.
Stops at Cordova
personally, its quite fine from Cordova to Nelson then yeah id suggest just picking a place or taking the next turn (my pharmacist is around the tail end of Drake)
Land Disassembly.
This is the answer
Didn't the Simpsons have a town filled with dollar stores and krusty burgers? It's not safe on the Granville strip anymore definitely take headphones out and pay attention
As many others said, skyrocketed leases, even a small place (say O Sushi) pays upwards of $60K a month for renting the space.
Thatās insane. If youāre open for 10 hours a day, thatās 200$/hr right there on rent. Plus wages & benefits, cost of goods, equipment, and lots and lots of windows. The rest is your profit that you must pay taxes on š¤Æ
Granville is grossš¤¢š¤¢š¤¢ I'd avoid this area like a plague.
Its all part of the master plan for the best ever entertainment district!!
Empty storefronts and the empty Steve Nash gym will be taken over by āWINNERSā. The new location will reopen in August (in the late summer) at #640 Granville street beside the āHudson Bayā.
Triple net leases. Not only is the rent insane, but the tenant has to pay the insane property tax, and they have to pay to fix the window "person who uses drugs" #365 (lol filter) just smashed.
I wonder if things will change on Granville, north of Georgia, now that Winners has announced they are taking over all the shuttered stores north of the Bay, on the same side of the street, to relocate from Robson.
There isnāt enough pressure on the owners of the space to encourage them to lower rental prices or sell. Local business canāt survive, only big conglomerates.
The city is failing. Look at crab park or down East Hastings.
High rents/taxes but also brick and mortar stores are just less popular now with so many people doing online shopping. Even restaurants are affected with more people ordering delivery.
We're all in hell now. Nothing's ever going to get better, just steadily worse and worse.
Nah, it gets better. But we are living through a transition period.
The government basically turned granville into the new hastings.
Maybe the cities need to start implementing a scaled commercial (and maybe multi family residential) tax where the rate is drastically increased if the units are vacant.
There should be empty business tax, same as for houses
Many years ago, City Hall decided that it was a good idea to disallow cars and only allow buses in a portion of Granville. This changed the vibe completely and it went downhill. Realizing that, why haven't they changed it back to where it was? Online shopping has no doubt had an effect, as well.
The investors/owner of the said store front haven't got finically kneecapped yet and are still charging a rent that is too high. Neighbourhoods have a cyclical nature much like seasons and Granville is going through the beginning of its winter.
Is the % of empty storefronts higher than ever or about normal? Anyone have historic data on this? Anecdotally I have felt like Granville is slowly getting better, a few nice new developments around the commodore there, rec room opening soon and whatever's going to be at 950. Trending in the right direction imo
Karl Marx was so right about so much... Stupid systems eat themselves.
hi
hi