Can a grocery store in a district with too few residents work?

The downtown population is 3,106 according to eHealth Saskatchewan which is down from a high of 3,331 in 2020.


With this limited population base, Saskatoon has struggled to attract a downtown grocery store.

Long term problem compounded

Saskatoon has been without a downtown grocer since 2004.

It was early in Don Atchison mayoral role at the time and there was a focus on trying to lure residents into making downtown their home.

Unfortunately, Atchison and his councilors were unable to deliver any meaningful growth during their tenure.

Extra Foods on Broadway Ave closed officially last month; the City Park Shop Easy also closed in 2015.

Ingredient to success

I’ve heard many different estimates on the required minimum population for a grocery store to be viable. Obviously that estimate will be somewhat dependent upon the footprint of the store.

I believe there are three important elements that could make or break a grocery merchant in an underpopulated district and the proposed “Pitchfork Market and Kitchen” for Midtown Plaza checks all three boxes.

Pitchfork Market and Kitchen already has a proven track record in our market.

They opened in the Meadows neighbourhood, most often referred to as the home of the new Costco, in 2021.

Their concept is to bring farm to table on a larger grocery scale which is a unique concept that will draw customers from neighboring areas.

They carry national brands like other grocers, but their additional curated selection of local fare is what sets them apart.

Make or break components

Sufficient adjacent parking is critical for a grocery store’s success. That’s not easy to accommodate in a core area but Midtown Plaza has that to offer.

Successful merchants from many different retail sectors have proven that customers will travel out of their area to a new store design and an engaging shopping experience can draw customers.

If the outstanding negotiations can be successfully completed, I’m betting on this to a win for downtown Saskatoon.

Required steps to valuing development lands

As brokers, landowners engage us to provide an opinion of value on development land.


At the same time, those landowners often offer, what is believed to be, comparable land sales within close proximity to the subject property.

What they may not realize is that there could be a whole back story to that supposed comparable land sale that render it incompatible as a sale comp.

Building blocks to value

It’s wise to either engage a commercial real estate professional who is experienced in the particular asset class or to do your own research before too quickly jumping to conclusions on value.

So what influences value of land?

Size of parcel: The price per acre of a 160-acre parcel can vary significantly when compared to the value of a 10-acre parcel due to the considerable difference in prospective buyer profiles for each size.

Current Zoning: The specific asset class that is likely to be permitted and the density of the development will play a huge part in how the construction proforma pencils.

The Planning District : In Saskatoon this is referred to as the P4G and includes the greater trading area of Warman, Martensville, and the RM of Corman Park.

What is the current zoning? You’ll need to research the municipality (sector plan), neighborhood (OCP) and potential new zoning (FUD) plans.

A jurisdiction’s prediction of land absorption: Is the subject parcel likely to be absorbed within 5, 10 or 20 years?

This can be difficult to determine and may require some historical research to determine the past pace of new development.

Servicing: Is the site expected to have full services?

When are the services expected to be available for the site?

Who is controlling the surrounding lands? It’s not uncommon for a major developer to have considerable political influence over the timing of development and can sometimes interrupt extension of utility services if it’s in their best interests.

Who is the potential buyer? How many prospective purchasers might there be for the subject property

How long could it take to sell, and should that influence the asking price?

Does it require a sophisticated development plan: To determine the number of residential and/or commercial lots a parcel will accommodate, a full development plan will be required which include but not limited to site elevations, utility servicing plan, roadways and required green space.

Further to what I mentioned above, if you are contemplating involvement in any way in this sector, be sure to engage a professional who has a depth of experience to guide your decisions.

Face Your Fear and Do It! That was advice I received from a client

That was advice I received from a client many years ago when I was considering investing in my first commercial real estate property.

I took his advice, partnered with a colleague, bought the apartment building, and had no regrets.

It was the right message, delivered at the right time and have since repeated that same message to clients when the time was appropriate.

We’re only human
Fear is the human condition that limits most people from making bold moves that could impact their circumstances exponentially.

I’ve said before, when I truly believe a client should or should not go forward with a transaction, it is my job to pull together all of the persuasion skills I possess to convince them.

I have studied and practiced this skill all of my working career.

We invested a relatively small amount of capital into refurbishing that first property and sold it not long thereafter for considerably more than our total investment.

Keeping ourselves honest
It’s important to state here that due to ICR’s non-compete clause I can’t seek my own investments in Saskatoon.

Our company is proud that, “ICR registrants, partners/shareholders and employees shall not compete with ICR clients by virtue of the sale, lease, property management or development of commercial real estate within their primary market.”

Therefore, any commercial real estate investments we make are outside of our primary market.

Fear had me pinned
Some years later I had an opportunity to purchase a multi-tenant office building.

It was the right size of investment for my wife and I to acquire without a business partner.

I negotiated the purchase and proceeded with our due diligence.

This was at a time when there happened to be many storm clouds forming around the economy. Fear descended upon my judgement.

I remember stopping at a coffee shop on my way to the Listing Broker’s office to ponder the final decision.

We did not do the deal. Looking back on that day I realized it was absolute fear that overruled the decision.

I presented the opportunity to a good client and friend who did complete the purchase of the property.

He offered me an option to purchase a one third investment in the building based on the same price he acquired it for at any time within two years after his closing.

We exercised that option and held the property for several years.

A time arose when the right thing to do was sell it and we did; at just over three times the original acquisition price.

That entire capital gain coulda, shoulda been ours but instead, due only to my fear, we realized one third of that profit.

That was a very important life lesson for me.

When I find myself faced with a major business decision, I often look back on that experience to discern how much fear may be playing in my decision process.

Ask yourself honestly, how much does fear affect your life journey?

Meet Marla Sluzalo ICR Commercial Real Esatate Sales Associate

Marla has been in the top 5 of deals completed in the last 4 years and has been number 1 in deal making in the last 2 years

Saskatoon industrial market far exceeds my 2021 prediction

I was a bit off the mark!

One year ago, I predicted that the Saskatoon Industrial vacancy rate would slip under 5 per cent by year end. It was sitting at 5.32 per cent at that time.

We’re just about to release our 4Q 2021 market reports which will show that the average industrial vacancy rate declined by 1.33 per cent to 3.99 per cent.

With a positive net absorption of 42,147 SF quarter over quarter, that rate of decline accelerated after a 1.23 per cent drop that took place over the two previous years.

Saskatchewan Economic Forecast

TD Economics is forecasting continued strong growth in 2022 with 3.4 per cent GDP and the unemployment rate dropping to 5.5 per cent

Saskatoon Industrial Market continues as strongest sector

Despite the strength demonstrated in this sector, there were only seven building permits totalling 73,041 SF issued in the Marquis Industrial area in 2021.

There are already shortages of lease options in a few size categories of warehouse. I believe we are fast approaching a critical situation where there will be a significant undersupply for tenants needing to expand in 2022.

There is currently a 6 – 8-month lead time to order steel. That means a developer needs to place an order 12 to 16 months before anticipated project completion. Many tenants don’t plan that far ahead.

It’s going to be an interesting year.

What’s my prediction for 2022?

I see a record setting vacancy rate under 3 per cent by the end of the year.

Not only do we have a supply issue, but inflation has impacted building costs significantly.

This will result in an increase in our average asking net rental rate from $11.41 PSF to well over $12.00 PSF.

In order for a developer to realize a reasonable return on investment, new shell space needs to be priced close to $14.00 PSF net.

I will report back to you in 12 months with a debrief of my 2022 predictions. You can hold me accountable!