'Buying a lifestyle'; Toronto neighbourhoods are becoming branded, and part of the brand is defined by local retailers

'Buying a lifestyle'; Toronto neighbourhoods are becoming branded, and part of the
brand is defined by local retailers
National Post
Mon 01 Oct 2007
Page: A14
Section: Toronto
Byline: Garry Marr
Source: National Post
Toronto's real estate market has been on an 11-year tear, and continues to set new records
every month. The boom has dramatically transformed the city's skyline and
neighbourhoods, and changed the way many of us live. Today, Garry Marr on what
makes a neighbourhood hot.
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If you own a house in one of Toronto's "in'' neighbourhoods, the last thing you want to
see is Bruce Elliot packing up one of his company's stores.
Mr. Elliot, the president of The Second Cup Ltd., says it happens rarely, but it will "if the
retail mix or the neighbourhood has changed. It's not good [for the neighbourhood] if we
leave."
Chi-chi coffee operators need a critical mix of high density and high incomes; retail
specialists say Second Cup and Starbucks want to see household income of at least
$90,000. "If you are a premium brand, you are looking for high household income, that is
a key driver," Mr. Elliot said.
This relationship, however, goes two ways: Buyers want to be where the premium brands
are. A neighbourhood's retailers have become so important that some agents have taken
to putting the names of the local businesses in their real estate listings, said Michael
Polzler, executive vice-president of Re/ Max Ontario-Atlantic Canada.
"People love the idea of popping into a Pusateri's in the area and buying some superexpensive
freshly squeezed orange juice. They want something they can walk to or have
a short drive to," he said. "[The local stores] play a significant role in where people want
to live."
Toronto areas have become branded, and part of the brand is defined by the shops, he
said: "People will ask where do you live: The Beach, Bloor West Village, The
Kingsway? The name of your area is synonymous with the car you drive and the stores in
your area."
Kimberley Kofman, a communications specialist, said she was more than a little excited
there was a Starbucks down the street from the house she bought in the Yonge and
Lawrence area, although it was not the deciding factor.
"The shops are an added bonus. We've got everything where we live; there's a butcher
shop, a small grocery store. You can walk to pick up anything. We have only one car, so
it's important to be able to walk to everything," Ms. Kofman said. "We like that there's a
mix of different restaurants in the area."
Rick Pennycooke's Lakeshore Group is one of the firms companies such as Second Cup
hire to scout out what the next big area will be. He said the chains will make a call on
what the next great neighbourhood will be, but for the most part real estate prices have
already begun to rise by the time the Second Cups and Starbucks come through.
"They'll look at an area and ask whether there is potential for growth. The way to do that
is to consider [zoning] applications in the area. Those take two or three years to go
through the system, so you can see what is coming down the pipe," he said. Starbucks,
said Mr. Pennycooke, wants ''a young professional from about 22 to 45 years old. That's
their core audience."
While Starbucks, Second Cup and Timothy's covet the high-end consumer, a Tim
Horton's in your neighbourhood is no sign to panic.
"They don't just service lower-income people. There are some people who are just rabidly
Tim's, regardless of income class," Mr. Pennycooke said.
Mr. Elliot said his chain is discerning on placement of a $350,000 franchise. While he
loves his 360 Second Cup stores, he is not so sure they add value to property in the area.
If anything, he thinks the presence of the high-end chain comes a bit after the fact.
And it does not have to be chains. Sometimes unbranded trendy stores in a
neighbourhood will drive housing sales. "It's the cheese boutique," Mr. Polzler said. You
don't want to see rundown diners in your neighbourhood, he added.
Take a drive along the Danforth/ Bloor corridor and you can witness the ebb and flow of
retail and how it matches the accompanying housing. "Go further east and it ain't so great,
but then you get to Greektown, then Yorkville, then it's Bathurst and then it falls off a
little. It's OK but not so great. Then you hit Bloor West Village and you're at a trendy
area," said Mr. Polzler, adding that's where the housing prices climb again.
It has almost become a game for areas to try to reinvent themselves as the place to be to
attract homeowners and retail chains.
"The Junction was lost in times for years [but] not anymore," Mr. Polzler said. "The
Junction was able to do it because people wanted to live in Bloor West but couldn't afford
to. They realized they could get the same house a little bit further north. Then the retailers
get together and they'll brand the area with signs. The Junction has that, there are signs
everywhere."
Then there's what are called "tag-along neighbourhoods" such as the North Beach or the
North Annex. "It means so much to define your neighbourhood," and that means
something to retailers, Mr. Polzler said.
"People who live in the city are buying a lifestyle and purchasing that lifestyle means
they are purchasing everything that is around them. It's a badge of honour to walk around
with your expensive coffee."
That's why it's just a bit disconcerting to see a low-end coffee shop come into your
neighbourhood or, worst yet, a cheque-cashing chain.
"Those [stores] brand a neighbourhood, too. I can tell you something about Rosedale.
The only cheque-cashing service you'll see in Rosedale is the Royal Bank of Canada."
gmarr@nationalpost.com
THE NEXT HOT AREAS:
Six next hot areas coveted by retailers, as chosen by Lakeshore Group:
1. The motel strip area of South Etobicoke along Lakeshore between the Humber River
and Fleeceline Road.
2. Queen Street West between Shaw and Dufferin (near the Drake Hotel and the CAMH
redevelopment area).
3. The Town of Milton on the east side along Derry Road between Thompson and James
Snow Parkway.
4. Sheppard Avenue between Bayview and Leslie (around the area of the former
Canadian Tire site that is being redeveloped).
5. King Street West between Shaw and Dufferin. Starbucks just went in last month at the
DNA condo building. The area will likely see another Starbucks or Second Cup-type
retailer in the next year.
6. The Town of Bracebridge in Muskoka.
Illustration:
• Black & White Photo: Tyler Anderson, National Post / A neighbourhood's retailers have
become so important that some agents are putting the names of the local businesses in
their real estate listings, says Michael Polzler, executive vice-president of Re/Max
Ontario-Atlantic Canada.
• Black & White Photo: Tyler Anderson, National Post / King Street West between Shaw
and Dufferin will likely see another Starbucks or Second Cup-type retailer next year.
Idnumber: 200710010024
Edition: Toronto
Story Type: Business
Length: 1081 words