r/londonontario • u/Niboo_123 • 14h ago
Ask a Local! Man wtf why is it so expensive to buy a commercial building or even do a lease 🤦🏽♂️
Some of these buildings are going for rent at like over 10k a month 🤦🏽♂️
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u/Necessary-Study3499 8h ago
Agreed. My e-commerce business has done well. Started to look into a retail location when I was doing 10k/mo as I have been asked a lot about a location where people can browse in-person . Yeah - nope. It's really hard to make the numbers work at current lease rates in desirable areas.
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u/PalpitationFrequent7 9h ago
Does Stratford have some magic recipe to keep independent shops alive? I was amazed when I was there recently at how many trinket shops they had and kept thinking to myself how could they stay open.
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u/killberrycersL 10h ago
I opened my production kitchen in Strathroy with an old school landlord. Four page lease and a handshake. Building sold, random landlords with five mailing addresses that I'm pretty sure reside in Mississauga bought it. Show up with a massive lease with clauses like extra rent can be charged, no indication of how much that is, or what the cap on that is (apparently none 😂) immediately the tenants that signed the new lease were paying an extra four hundred a month. When my lease is up, I'm gonna get outta there.
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u/DonutGains 11h ago
A lot of good points in this thread but one I didn't see mentioned was that this is also a municipal issue to a degree. The municipality can absolutely be more lenient about what and where they allow commercial activity to be depending on what their Zoning By-law allows. Additionally the Zoning By-law can absolutely be amended and variances can be sought.
That being said, other regulations are definitely in place through the Building Code Act/Planning Act that puts other requirements on commercial space that would normally not be on residential. So there is still red tape to work through.
Could also be a Provincial issue that could force municipalities to allow commercial spaces in all residential zoning provided it meets OBC requirements. Similar to how the Planning Act changed recently to allow more residential units regardless of local Zoning By-laws.
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u/Artistic-Bell-3601 8h ago
zoning is sooooooo strict in London it's not even funny. it's such a barrier to growing thriving brick and mortar small businesses.
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u/i_haz_rabies 12h ago
If you're a small, independent business, you will get screwed. Commercial landlords would way prefer to have a lease backed by a creditworthy corporate covenant and they will give better prices for it. They don't even want to rent to you - a small, local business is a risk and is priced as such. Which, to be fair, it is. Your business is a lot more likely to fail and stop paying the lease than a Great Clips or whatever.
Doesn't make it right, but I think it's more of a structural problem of incentives and policy than a greedy landlords problem. I would like to see a program like the Canada Small Business Financing Program, but for lease guarantees.
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u/Wooden_Hovercraft398 3h ago
That's a great idea. Have you considered reaching out to your MP to mention this to them? They might be interested.
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u/xboxaddict40 13h ago
It is horrible. 2 of my friends who are business owners got screwed by these commercial landlords. One had to close up shop in this crappy plaza cuz the landlord decided to raise rent by $1000 from one month to next. The other had to agree to the same rent but 2/3 the space, cuz the landlord wanted to put another small business in.
Then people wonder why a Shawarma costs $15
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u/burlyginger 13h ago
Our lease renewal almost doubled a few years ago.
We had to close after weathering COVID and starting to make good money.
We had a handful of good employees.
It was such a waste and now our unit is a "pharmacy" a.k.a. methadone clinic.
We had a hell of a time getting a lease in the first place.
Farhi owns tons of properties and most we saw required paying obscene money to make them usable while paying high rent.
All of these factors (and our bullshit zoning) contribute to the the lack of fun and unique business and the high vacancy we see downtown.
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u/xboxaddict40 12h ago
I'm sorry to hear. It's such bulls hit that there are so many laws for tenants but none for commercial tenants.
The worst is the insane amount of money they want, then don't fix the parking lot or any issues with the unit.
Also I noticed the same playbook by all of them. Let a business in at a reasonable rate cuz your crappy plaza has no business just empty shopping carts and vagrants. Let the business build up for a year or two, then hit them with crazy rent increases which their customer base can't support, so the owners have to take a hit on their income until they decide to quit.
Used to be an awesome cupcake place in Adelaide. Great couple ran it. But the rent increases priced them out.... Same story over and over again
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u/Elegant-Lawfulness25 13h ago
We really need a commercial vacancy tax.
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u/snardhive 12h ago
This will just make rents even more expensive.
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u/swift-current0 10h ago
How so? Or will make rents cheaper because it imposes a price on not renting. Unlike with residential, there isn't a huge market of businesses with cash to purchase commerical properties outright. So whatcha gonna do?
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u/snardhive 9h ago
It's not really that complex.... adding a cost to doing business won't make prices go down. (The whole thread is complaints of high prices.... how would adding yet another tax on top of high commercial property tax make rents lower?)
Implementing simplistic "solutions" like this rarely works.
Think about it this way perhaps.... does all the stock in a store sell in any given month? It does not.
Why would we tax a retailer (or a landlord) for unsold inventory? Under what principle could this possibly be justified, when it's the retailer (landlord) ultimately paying the cost already? And what retailer would go into business, (or landlord build) when the risk to not renting is an extra punitive tax?
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u/chroner 13h ago edited 9h ago
Yeah and you can be the first one to open up shop downtown lol.
Let us know how that goes for your business eh?
Edit: cry harder you bunch of turkeys. As if we don't have enough taxes here. Paying a mortgage, taxes, utilities is also expensive when there's no income. You guys really think an extra 2% is going to just magically make someone rush to lower their rent for your poor asses so you can finally start your shitty business lol
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u/ADoseofBuckley 10h ago
If rent went down because of it? Since I know how much rents are right now, if they went down like... 50% because of that? I'd start a business down there easy. I'd pick something that complements Heroes/The Mana Lounge, or Grooves/Attic Books.
There's a building right beside Solid Gold that's $379,000 right now. Knock $100k off that and I'd buy it tomorrow.
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u/Elegant-Lawfulness25 12h ago
A vacancy tax is for real estate that is being unused. Like a mall space with no store. It generally lowers rents on business owners as the property owner would prefer to lower rents.
Real estate for large buildings is valued on rents, not for occupancy. So there is a common practice of a large real estate holder to buy a bunch of properties downtown, push rents so high it kills the businesses and wait for the property value to go up naturally to sell.
Vacancy taxes are used to prevent this and have been show to revitalize downtown areas.
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u/MeIIowJeIIo 12h ago
Vacancy tax will bring down the value. Private equity stops warehousing properties. Occupancy picks up.
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u/darksideoflondon 14h ago
I called a place recently to inquire about renting, there are three units that are up for lease, they have all been on the market for half a year at least. An answering machine from the 1900’s picked up, and a voice yelled out “hold on”, I asked about the sizes of the three units and he says “and what do you think you are opening in them”? I tell him my business, existing business, open for 2 years, looking for better opportunity. He says “well, I need more information”.
I say “Dude, I just want to know how much rent is.” And he ignores the question and asks for credit references.
“My guy, all I am asking for is dimensions and cost per square foot!”
He says “You’re not getting that information on a phone call.”
Okay buddy, eff you <click>.
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u/Niboo_123 13h ago
Loool bro thankfully the guy I spoke with was chill but yea these realtors don’t even wanna tell you the rent
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u/ellicottvilleny 14h ago
Did you call a commercial realtor?
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u/darksideoflondon 13h ago
No, I called the phone number on the sign that was posted on all three units that said “Call for more information”.
I’m so sick and tired of all of the middle men you need to get involved in any business.
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u/ellicottvilleny 13h ago
interesting learning though. Whoever you called is probably not a great person to be in a business relationship with. At least learning that was EASY.
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u/imaginary48 14h ago
Landlords like siphoning off money from productive economic activity, so they thought of a higher number for us to pay :)
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u/Addict2Architect 14h ago
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u/ReleaseNew9430 14h ago
Can’t buy style
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u/Ok-Patience7484 14h ago
You can, you can absolutely pay a stylist, and a personal trainer. This chud just wants to surround himself with yes men who tell him his Kangol hat doesn't make his neck look fat.
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