THE PRICE OF PROGRESS
Retail rents rise in Riversdale. Is the neighbourhood finally catching up?
T im Carroll doesn’t see well these days — declining eyesight ended his hobby of fixing pinball machines and arcade games — but he’s observed much about the neighbourhood around a small building he bought 20 years ago.
At different times, Carroll’s building at 120 20th St. West in Riversdale was the only occupied space on the north side of the block.
Now, leased to Fabric Frenzy, the building is the only one on its side of the block not owned by property developer Tom Maltman, who Carroll said has wanted to buy it for years. Now, the first several blocks of 20th St. are filled with shops and restaurants.
Carroll likes the new Riversdale, specifically the revived commercial district on 20th Street. The Saskatoon neighbourhood once called the “Harlem of the Prairies” by a national newspaper is now one of the trendiest areas of the city thanks to reduced crime, increased pedestrian traffic, condo developments and attractive rental
“WE REALLY LIKE THE IDEA OF RIVERSDALE AND WHAT’S HAPPENING THERE ... IT’S A REALLY VIBRANT PLACE. I’D HATE TO SEE OTHERS MOVE OUT BECAUSE OF RENT HIKES.” JACKIE FORRIE, THISTLEDOWN MANAGING EDITOR
rates for small businesses.
“We had a lot of catching up to do,” Carroll said in an interview in his workshop on 20th Street. “It’s the explosion in Saskatoon, and it finally came here.”
The net cost to lease retail space along 20th Street West has doubled since 2008 to $16 per square foot, according to Colliers International. Retailers and restaurateurs are moving in at a blistering pace, despite the lack of any new commercial construction in those six years; they’re filling renovated properties that sat empty for years.
“Rents have gone up, but people have invested a lot of money into these buildings,” Carroll said. “It changed faster than I thought.”
Riversdale’s commercial rush has resulted in at least one casualty of change. With a lease set to expire and faced with a doubling of rent, small literary publisher Thistledown Press — one of the early adopters of the new Riversdale — moved out of the neighbourhood to find cheaper rent.
Trace the path Thistledown Press took to its new location on Second Avenue just north of 25th Street — the awning of the building’s former tenant, a clothing store, still hangs above the door — and you’ll find a guide to Saskatoon’s trendy neighbourhoods.
The company had its office just off Broadway Avenue until rent increases forced a move in 2010. It then found a home in a small street-front office on 20th Street West. Last year, faced with another rent increase at the end of a threeyear lease, Thistledown decided to move to the fringes of downtown.
“We really like the idea of Riversdale and what’s happening there,” said Thistledown managing editor Jackie Forrie. “It’s a really vibrant place. I’d hate to see others move out because of rent hikes.”
Thistledown Press was paying $14 per square foot at the end of its lease in Riversdale, and the renewal offer would have almost doubled that at its end, Forrie said. The company now pays $17 per square foot, she said.
Forrie said she doesn’t begrudge property developers recouping the costs of renovating long-neglected buildings. She said the community spirit is strong and special in Riversdale, but she wonders where all the hype will lead.
“If rent keeps increasing, it could become a problem for small businesses.”
One incident does not make a trend. Commercial lease rates in Riversdale are still well below other retail districts such as Broadway Avenue ($25-$35 per square foot, as high as $40) and the downtown centre ($25-$30 per square foot), according to Colliers International.
Riversdale will likely see rates rise if demand is strong, but it will be gradual, not dramatic, said Tom McClocklin, president and managing director of Colliers. He estimates a new retail development on a vacant lot along 20th Street West could fetch up to $30 per square foot in the not-too-distant future.
“Ten years ago, most of us wouldn’t have guessed this would happen here,” McClockin said.
At its worst, 20th Street West could only command up to $2 per square foot for retail space and leases were often month-to-month, said Randy Pshebylo, executive director of the Riversdale business improvement district.
The area had a lot of catching up to do, he said.
“We’re on our way to being an average neighbourhood in Saskatoon,” Pshebylo said, adding he’s not convinced rent increases will become a problem.
“The amount of space we still have that is empty — people talk about gentrification, which is organized displacement — how can you displace anybody when you still have eight per cent vacancy? We’re a generation away from that conversation.”
Aman Saleh looked to 20th Street to find a place for a restaurant he plans to open this year. He found a large space with an affordable long-term lease for a fraction of the cost of leasing on Broadway or Eighth St. East, he said.
“People have been on Broadway forever and there’s no room for others to move in,” said Saleh, who has managed restaurants on Broadway. “(In Riversdale) you can do something real, where it’d just be a dream anywhere else.”
The key is a long-term lease, he said.
“That’s the big fear — you need to have a good lease because it could be Broadway in 10 years.”
Cakes by Jen owner Jen Salzsauler opened her store on 20th Street in 2013 after signing a fiveyear lease for a space three times larger than anything she found in the downtown or on Broadway, and for half the price.
“I knew where the street was going,” Salzsauler said. “Everyone wants to be here.”
She doesn’t think rising rent is scaring anybody away because it’s still more affordable than anywhere else in Saskatoon — for now. She wonders if she’ll have to move when her lease expires.
“I could see it going as high as Broadway,” Salzsauler said. “I could sub-lease this place and sit at home and make money, with the way it’s changed in the past year.”
Kari Fox, an associate broker at The Commercial Group, is protective of the resurgent Riversdale and was reluctant to be interviewed about rising commercial rents along 20th Street.
“I don’t think it’s a story,” Fox said.
She’s worked with property owners in Riversdale for the past six years, finding buildings for clients to buy or businesses to fill them. At first, few saw the potential in the dilapidated neighbourhood, she said.
“Five years ago, I was making calls to people and now my phone rings every day with people asking what’s available,” said Fox, whose clients include Maltman, the property developer who leased to Thistledown Press.
“It happened a lot faster than I imagined, the interest here.”
With regional and national retailers moving into Saskatoon, the demand for retail space increased across the city and smaller businesses were forced to look to other neighbourhoods; that chain reaction ended in Riversdale, Fox said.
The rising tide helped float many new boats in Riversdale, but demand hasn’t turned the area into a yacht club. It’s still the most affordable commercial area in Saskatoon, Fox said.
“Are we chasing people out? Absolutely not. One particular business made a choice to move.”
Fox helped Thistledown Press move to Riversdale from Broadway in 2010 when it needed a cheaper lease. Three years later, Fox helped the company search for other 20th Street locations before it decided on a downtown location.
“Am I concerned about the neighbourhood in the future being unaffordable?” Fox said. “My answer is a flat-out no.”