There were substantial changes to the commercial real estate landscape in Saskatoon during 2018. I think it’s is a story of renewal and growth. Would you agree?
Sears Canada officially called it quits and closed the doors on its Saskatoon anchor space at Midtown Plaza in January. Having been a Canadian retailer for 65 years, the estimated 160,000-square-foot vacancy created by its departure was a blow to the downtown mall.
However late in 2018, the Midtown announced it has secured Mountain Equipment Co-op (MEC) and that plans to renovate the Sears vacancy were underway.
Large anchor tenants are not easily secured in mid-sized markets.
The Midtown recognized it needed a massive overhaul to make the best use of the hole left by Sears. A new food court will be moved to the second floor, with diversified tenancies to fill the remainder of space.
Sprawl has become a dirty term as regards urban planning, but Saskatoon’s suburban neighbourhoods continue to thrive.
The vacancy rate in Stonebridge, for example, closed out the year at 0.9 per cent.
Pre-leasing in Dream’s development at Brighton has been brisk, with Wilson’s Lifestyle Centre and Landmark Cinema already open for business. The total development will bring on some 235,000 square feet of inventory once it’s fully built-out.
Meadows Market, forming part of the Rosewood suburban area, will be home to 400,000 square feet of retail when it completely leases up. Costco anchors the project, which has attracted Dollar Tree, PetSmart, Marshalls, Visions, Scotiabank, Co-op Liquor and Tim Hortons already.
With the announcement of Nutrien’s commitment to a new home at River Landing, there is some uncertainty in the office market.
It’s certainly exciting to see new construction, and renewal projects like River Quarry on 4th. However, there will be substantial existing vacancy coming on to the market as these projects fill.
The Saskatoon Square has been the largest victim so far, losing SaskTel to the north end in addition to multiple other tenancies committing to new space at River Landing.
The upside is there is good opportunity for office tenants looking to expand or secure space in the core. Landlords are eager to backfill and are offering great incentives to make the move downtown.
Time will tell if this will be sufficient to help recover the 16.7 per cent vacancy rate for competitive downtown office at the end of 2018.
As we head into the New Year, I’m optimistically cautious for all sectors of our Saskatoon commercial inventory.
I think deals can be hatched in this market given the right creativity on both sides of the negotiating table.
With a little help from our potentially recovering resource sector, I am optimistic we will see continued recovery in the Saskatoon and Saskatchewan economies as a whole.