Two years after the COVID-19 pandemic all but shuttered the hospitality business, Brent Kyle is doing what people thought might be an impossible task on the North Shore – opening a restaurant.
Kyle, the owner of Catch 122 bistro which has operated in Gastown for the past 10 years, is excited about the prospect of moving his café to a new location in Carrie Cates Court and the lively street scene in Lower Lonsdale this fall.
After two years of people being discouraged from social mingling, Kyle said customers are eager to get out again.
And after years of operating on Vancouver’s West Hastings Street and its increasing share of social problems, Kyle said he was keen to try a different environment. Activity near the City of North Vancouver’s Shipyards District fit the bill.
“Lots people like walking around there. You'll find lots of families, and it's right on the Spirit Trail,” he said. That’s in contrast to the way his customers have felt recently coming into his café downtown, he said.
Resurgence of optimism
Kyle isn’t alone in feeling a resurgence of optimism about business on the North Shore after two years of battling the pandemic and its attendant restrictions.
“I think the biggest thing we're seeing is people are much more comfortable having people back into their businesses, whether it's staff or customers. And I think everyone's really welcoming and enjoying it,” said Patrick Stafford-Smith, chief executive officer for the North Vancouver Chamber. “We've all been missing each other's company.”
Some businesses did well throughout the pandemic, said Stafford-Smith – bike shops, fitness equipment stores and most businesses connected to home renovations among them. But others, like the tourism and hospitality sectors, are on a path to recovery after a very difficult two years.
The rebound in business has been reflected in the commercial real estate market, say real estate agents who specialize in that area.
Retail space being leased again
“I think in the last six months, we've seen retail space get leased up. There's not a lot of retail out there right now,” said Ross Forman of Forman Pilkington. Over the past two years, there have been vacant spaces sitting along the Marine Drive corridor, for instance. But now “a lot of those small ones that have been sitting for a long time have now been taken,” he said.
Businesses “survived COVID – now they're kind of on their way up and they're doing a little bit better, which is a great sign,” Forman said.
Forman said he recently had an 1,800-square-foot space in Central Lonsdale open up “and I had six offers on it from all kinds of retailers. If you go up and down Lonsdale now, there’s very little vacancy.”
Ian Whitchelo, a specialist in North Shore commercial real estate with Avison Young, agrees.
“There are a number of groups chasing the same space right now,” he said. One retail space near 3rd Street and Lonsdale Avenue, that was hard to drum up interest in two years ago, recently had four competitive offers, Whitchelo said.
“So I think there are people anxious and eager to start new businesses or get back into businesses,” he said.
Market for industrial space extremely tight
The market for industrial and warehouse space in North Vancouver is especially tight, say both Forman and Whitchelo.
Businesses that did well in COVID – wholesalers, distributors, and any business connected to home renovations – are either hanging on to space or looking to expand, said Forman.
Sales of industrial-zoned strata spaces have been brisk, said Forman. “And they've been fairly high prices – probably $100 a square foot higher than what they were last year,” he said. That, in turn is pushing lease prices higher.
“The rates are expensive,” said Forman. “I'm not doing deals anymore at $17 and $18 a square foot net for industrial space. I'm doing deals at $20 to $22 a square foot.”
The vacancy rate for industrial space in North Vancouver is currently under one per cent, said Whitchelo. “Which really means that there’s virtually nothing in the market,” he said.
The nature of who is using that space is also changing. Some spaces that used to be known for automotive-type businesses are now occupied by breweries, for instance, which generate more revenue. “You can’t compete with that if you’re looking to fix cars,” said Whitchelo.
Demand for office space on the North Shore has also remained fairly steady, said both agents – in contrast to the mass exodus from offices in downtown Vancouver prompted by increased work-from-home arrangements.
Demand for office space steady
“I thought I would see more turnover,” said Forman. But among small- to medium-sized offices, that hasn’t happened on the North Shore, he said.
In fact, in contrast, the vacancy rate for office space on the North Shore has been steadily declining, said Whitchelo, to a near-record low of 4.6 per cent.
The office tower at Westview Shopping Centre, for instance, is full, said Forman, and “It’s been full all the way through COVID.”
How much work will be done from home versus how much will be done from the office is an issue many businesses are still grappling with, said Stafford-Smith, especially as keeping employees happy becomes an important factor in the labour market shortage.
“Hiring people is still a massive issue for across the board for all business sectors, whether it's entry level jobs, all the way through to the top paying jobs, there seems to be a real demand,” said Stafford-Smith.
That, in turn, impacts other nearby businesses, he added. “What does that mean in terms of where they’re driving to or from and where they’re shopping during the day? There’s a lot of things up in the air.”