The commercial real estate market in Calgary has been evolving rapidly, and retail properties, in particular, are experiencing a significant transformation. With the city’s growing population, shifting consumer behaviors, and increasing demand for dynamic retail experiences, identifying high-potential commercial retail properties is more crucial than ever for investors and business owners alike.
At JR Mercantile Real Estate Advisors Inc., we specialize in guiding clients through the complex landscape of Calgary’s retail real estate market. Whether you’re looking to invest in a retail location or expand your business, understanding what makes a commercial retail property high-potential is key to making informed decisions. Here’s a breakdown of the factors you should consider when evaluating retail real estate opportunities in Calgary.
1. Location, Location, Location
The importance of location in retail real estate cannot be overstated. The success of a retail property often hinges on its proximity to high-traffic areas, accessibility, and visibility. When assessing potential retail properties in Calgary, consider the following:
- Foot Traffic: Retail properties located in areas with high pedestrian traffic offer immediate visibility and the opportunity to attract walk-in customers. Think of areas like Calgary’s Beltline, Stephen Avenue, and East Village, which are bustling with foot traffic and popular with both locals and tourists.
- Proximity to Key Attractions: Retail properties near popular destinations—such as shopping malls, transit hubs, entertainment venues, or office districts—tend to have higher foot traffic and customer engagement. Consider how close the property is to Calgary’s major shopping centers like CF Chinook Centre or Market Mall, or to transit stations like the Calgary CTrain.
- Neighbourhood Demographics: Take into account the surrounding area’s demographics. Is it a busy commercial district, a residential neighborhood, or a mixed-use zone? The right location for your retail investment depends on aligning with the target market you want to reach.
2. Accessibility and Visibility
For retail properties, ease of access and visibility are crucial for attracting customers. When evaluating a property’s potential, consider:
- Public Transportation Access: Calgary’s CTrain and bus routes can significantly impact the success of a retail property. Proximity to these transit options makes it easier for customers to visit the store without the hassle of parking, which is especially important in urban areas.
- Parking Availability: Ample parking is an essential factor for customers driving to your retail location. A property with sufficient parking spaces, especially in high-density areas, is likely to attract a broader range of customers.
- Signage Visibility: A retail property with excellent street-facing exposure, high signage visibility, and clear access points helps attract customers even from a distance. Ensure that the property’s location allows for prominent signage that stands out in the surrounding area.
3. The Building’s Condition and Layout
When considering a retail property, the condition of the building and its layout are key factors in its potential for success. A well-maintained property in a prime location can be a great investment, but the design and layout must meet the needs of modern retail businesses.
- Interior Space: Evaluate the interior space for flexibility and functionality. Can the layout accommodate different types of retail businesses, such as fashion, food & beverage, or electronics? Open floor plans often offer more flexibility for a range of retail operations and make it easier to adapt to changing consumer demands.
- Building Condition and Upgrades: A property in good condition, with recent updates or the ability to undergo renovations, can save you from costly repairs down the road. Buildings with energy-efficient features, modern electrical systems, and upgraded HVAC infrastructure are more desirable, as they reduce long-term maintenance costs.
- Ceiling Height and Storefront Design: High ceilings and aesthetically appealing storefronts create an inviting atmosphere for customers. An attractive façade and large windows can help showcase merchandise and draw in foot traffic.
4. Surrounding Retail and Competition
A well-chosen retail location should be situated near complementary businesses rather than direct competitors. A cluster of retail establishments that attract a similar target audience can increase overall foot traffic and create a stronger commercial environment.
- Retail Cluster Potential: Consider properties in retail hubs or high-density shopping districts that bring customers in with a diverse mix of offerings. For instance, Calgary’s Kensington or 17th Avenue SW are prime examples of areas that draw shoppers due to the variety of stores, restaurants, and cafes nearby.
- Avoiding Over-Saturation: While clusters of retail businesses are valuable, too many of the same type of store can lead to oversaturation. For example, an area that is already dominated by fashion retailers might not be the best choice for opening another clothing store. Instead, consider offering a unique product or service that can stand out.
5. Future Development and Area Growth
When evaluating a retail property, it’s essential to consider the long-term potential of the area. Calgary’s retail landscape is constantly evolving, with new developments and urban revitalization projects breathing new life into certain neighborhoods.
- Urban Development Plans: Look for areas in Calgary that are poised for growth or undergoing revitalization. For example, Calgary’s East Village and Beltline have experienced significant redevelopment in recent years, creating opportunities for retailers to capitalize on the new influx of residents, businesses, and visitors.
- Population and Demographic Growth: Areas with population growth and changing demographics can signal increasing demand for retail spaces. Consider locations where new residential or commercial developments are underway, as these areas are likely to experience a surge in retail demand over time.
6. Lease Terms and Financial Viability
When assessing the financial potential of a retail property, understanding the lease terms and overall cost structure is critical.
- Rent and Operating Costs: Compare the asking rent to other similar properties in the area to ensure it aligns with market rates. Additionally, take into account operating expenses such as property taxes, utilities, and maintenance fees.
- Lease Flexibility: A retail property with flexible lease terms, such as options for expansion or shorter lease durations, can provide businesses with more agility. This flexibility allows tenants to adjust to market conditions or growth opportunities without being locked into long-term commitments.
Conclusion: Identifying High-Potential Retail Properties in Calgary
Identifying high-potential commercial retail properties in Calgary requires careful attention to a variety of factors, from location and accessibility to building conditions and the surrounding retail environment. Whether you’re an investor looking to expand your portfolio or a business owner seeking the perfect space, understanding these key criteria will help you make informed decisions and maximize the value of your investment.
At JR Mercantile Real Estate Advisors Inc., our team of experts is here to assist you in navigating Calgary’s competitive retail real estate market. With our deep understanding of the local market and commitment to client success, we can help you identify the best retail properties that align with your business goals and investment strategy.
Contact us today to learn more about how we can help you achieve your commercial real estate objectives with confidence and certainty. You can reach out to us at either http://www.jrmercantile.com , 403-770-3071 or at hello@jrmercantile.com
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