Coffee shops forced to be creative in pricey real-estate markets
Customers who don’t work in the building that houses Kento Kitayama’s tiny cafe in Gastown better be prepared to settle for takeout. He can only take orders through a little window facing the sidewalk.
Iktsuarpok Coffee Stand, which opened late last month, has no seating and sparse furnishings. Kitayama could likely stand in the middle of his shop and touch the sink, refrigerator and shelving unit, counter and espresso machine that mark the shop’s boundaries without moving.
It reminds the co-owner of how tobacco shops sold goods in his native Japan, but also suits his budgetary constraints. Kitayama and other business owners challenged by high rents in Canada’s two most expensive housing markets are turning to creative solutions in tiny spaces to open cafes that otherwise might not be profitable.
For a typical 85-square-metre cafe space in the city, Kitayama said he’d likely pay about $3,000 monthly.
That’s unaffordable for his new business.
Figures on average food retail lease prices in Canada don’t exist.
But in October, Toronto’s average commercial lease rate per square foot was $21.31, according to the Toronto Real Estate Board — down 1.1 per cent from the same monthin2017.
But that includes all retailers, and the data is part of only 40 total lease transactions that month where the price was disclosed.
Three of the four most expensive main streets in Canada are in Toronto and Vancouver, according to an annual report from Cushman & Wakefield. In June, rents on Toronto’s Bloor Street were $300 per square foot and $100 on Queen Street West. On Vancouver’s Robson Street, rents averaged $183.
High and rising rents have caused several restaurants in both cities to shutter their doors in recent years.
Wild Rice Market Bistro in New Westminster served its last patrons on New Year’s Eve.
“We are all familiar with our high cost of living which is reflected in higher rents, increasing food costs and the difficulty in recruiting and retaining staff,” proprietor Andrew Wong said in a note to customers, adding the restaurant “is no longer viable in our current economic climate.”
Joshua Campos believes his less than two-square-metre shop (roughly the area of a twin mattress) may be the smallest in the world. The Coffee Lab operates out of a window in a small nook of a Toronto building. Floor-to-ceiling glass lets curious passersby or customers see one staff member prepare drinks inside.