Robson Street could be on the road to a major retail rejuvenation in 2012.
Among the high-profile retailers set to open stores on Vancouver's highest-traffic shopping street next year are potentially Apple Inc., J. Crew, Forever 21 and Crate and Barrel.
Other prospective international retailers are waiting to see who will lease the 42,000-square-foot HMV Canada site on the northeast corner of Robson and Burrard streets before inking firm commitments – believing that the heritage site's transformation will set the tone for how the entire shopping strip will evolve.
More potential retail space in the HMV building will be up for grabs when CTV, which leases 80,000 square feet of space on four floors, downsizes to either two or three floors when its lease expires in August 2012.
HMV Canada's lease expires at the end of January. Healthcare of Ontario Pension Plan owns the building, but Morguard Investments Ltd. handles the building's lease on its behalf.
Morguard's retail asset manager Bob Nicholson said his company is negotiating with a luxury car dealership, restaurant chains and fashion retailers as potential new tenants.
Rumours have swirled that Apple would lease the space, but Nicholson said that talks with Apple broke off months ago.
According to several brokers, including one who has had direct talks with Apple, the gadget giant plans to open a store on Robson Street between Burrard and Thurlow streets as part of the Robson Galleria, which is under construction.
The broker said Apple would take space west of the Forever 21 store that is scheduled to open in the galleria next year. Others say that is far from firm.
On the south side of that block, across from the alleged future Apple store, J. Crew plans to open in the 4,000-square-foot space where Tommy Hilfiger has operated since 2002. It replaced a Superstar Athletic Footwear Ltd. location when that shoe seller went bankrupt.
Tommy Hilfiger executives did not return calls from BIV.
Two developments bookend Robson Street's prime shopping blocks:
•a condo tower and new retail space replacing the former Pacific Palisades Hotel on the northeast corner of Jervis and Robson; and
•a new retail-office project on the southwest corner of Granville and Robson streets.
Housewares giant Crate and Barrel plans to open a 10,000-square-foot CB2 store in the former Pacific Palisades Hotel site.
CB Richard Ellis senior vice-president Mario Negris is negotiating with several tenants for the remaining 6,000 square feet in that development.
Negris also handles leasing for the proposed five-storey development at the southwest corner of Robson and Granville streets, which would have 17,100 square feet of retail space on two floors.
More dramatic change could occur at that intersection were Sears to relinquish its long-term lease on the northwest corner of Granville and Robson, said Urbanics Consultants principal Phil Boname.
Boname believes the highest and best use for the Sears block is to tear the department store down and build something similar to the multi-tower mixed-use Telus Garden development slated for the block bounded by Robson, Seymour, West Georgia and Richards streets.
So far, cheap rent is keeping the Sears store viable.
"I know Sears is paying less than $2 per square foot," Boname told BIV. "They purchased the Eaton's rental contract. Eaton's, having been part of the original part owner of the development, saw that they would be looked after nicely as the years passed."
Sears' corporate communications director Vince Power told BIV that his company would not reveal when its lease is up, what its lease rate is nor whether the lease rate is a significant factor in its Robson Street store?s viability.
Robson street lease rates soared several years ago to the $200- to $250-per-square-foot level for street-front space between Burrard and Bute streets.
Speculation today is that the rates have fallen to around $160.
Available space in those blocks includes the former Esprit site, which has been vacant for five months.
"There's a bit of downward pressure [on lease rates]," confirmed Macdonald Commercial broker Brian Tattrie.
"American retailers aren't running up to Vancouver as they have in the past."
Tattrie is negotiating with one American and two Canadian retailers to take either or both the 5,260-square-foot former Esprit site and the 2,262-square-foot site next door, which skincare retailer Shifeon plans to vacate early next year. •
New shopping hot spots
Consensus among real estate brokers is that Robson Street has lost its mojo, and that new international marquee tenants will provide badly needed renewal.
"It used to be that Robson Street was all about what was cool and leading edge, and Pacific Centre was all about what was boring," said Sitings Realty Ltd. principal Stephen Knight, whose company represents dozens of retail tenants. "Pacific Centre has become where the cool retailers are and Robson Street is where all the boring retailers are."
He lauded Cadillac Fairview Corp. for:
•spending $55 million to give the 40-year-old Pacific Centre a much-needed facelift;
•allowing Holt Renfrew to expand to take an entire 137,000-square-foot building north of the Dunsmuir overpass; and,
•courting marquee tenants, such as H&M, to help fill Holt Renfrew?s former 67,000-square-foot space.
He pointed to new tenants on South Granville such as the high-end women?s accessories and home décor store Anthropologie and the chic boots store Ugg as examples of that street becoming Vancouver?s hippest new outdoor shopping area.
Orange National Retail Group owner Lenora Gates said the faded lustre of being on Robson is reflected in street?s high vacancy levels. "We're seeing vacancy on Robson Street that we haven't seen probably in the last 10 to 20 years."
Gates added that Granville Street has evolved significantly in the past several years. "It's becoming more difficult for [retailers] on Robson Street at rents of $200 to $250 per square foot. They can go two blocks over to Granville Street where there's some good foot traffic and they don't have to pay close to the rents that they do on Robson." •
