CBRE is seeking a grocery retailer for a major redevelopment of the former Star Phoenix newspaper headquarters, with the planned store expected to serve new residents and workers in Saskatoon’s downtown core.
The redevelopment, led by Duchuck Holdings, involves adding three floors to the existing 96,134-square-foot building, along with two residential towers. CBRE Saskatchewan managing director Michael Bratvold is working with the developer to find a grocery operator for the project.
“Saskatoon hasn’t seen a downtown grocery store in decades,” said Bratvold. “It’s an extremely important part of this development and something residents have been talking about for a long time.”
Demand and development
The downtown area has several convenience stores and small markets, but residents generally have to travel to suburban locations for larger grocery purchases, said CBRE.
“It’s a bit of a food desert downtown,” says Bratvold. “So it’s high time we got a grocery store here. It’ll drive the rest of the development and help revitalize our city, as well.”
The search for a grocery tenant has been complicated by the economics of the business, according to Bratvold. Developers have considered a downtown grocery store for years, but finding an operator that fits the location has proved difficult.
“But there are so many challenges with finding a suitable partner,” Bratvold said. “Grocery stores operate on thin margins. The business is driven primarily by volume.”
The project faces what Bratvold describes as a “chicken and egg” problem: retailers want a large nearby customer base, while residents are attracted to areas where grocery stores are already available.
CBRE says the proposed location has several potential sources of customer traffic. About 30,000 people work downtown, while another approximately 30,000 live within two kilometres of the Star Phoenix site, according to CBRE local research.
The University of Saskatchewan is also identified as a potential source of customers, with the university described as being about an 18-minute walk from downtown and having 28,000 students living on campus grounds, it said.
Residential growth
CBRE said the redevelopment’s residential component is expected to add another source of demand for a grocery operator. The two planned residential towers will add 600 units and 540 parking spaces to the area. The development is described by CBRE as the largest and tallest residential complex in Saskatchewan history.
“The residential component of this project is substantial,” said Bratvold. “It’s going to be a huge source of demand for the grocer onsite.”
Bratvold said the grocery store would also be positioned along a route between downtown and the university.
“Our prospective grocer would be in an ideal location, benefitting from traffic along the route from downtown to the university,” said Bratvold.
The search is continuing for a national-scale grocery retailer to occupy the planned space.
“It’s not hard to see that the demand will be there,” he said. “The closest grocery store is probably three or four kilometres away from the city centre right now.”
Retail role
CBRE is also positioning the grocery component as an important part of the broader redevelopment, saying grocery-anchored retail can support neighbouring businesses by generating regular customer traffic.
“We’re confident in the success of this project,” Bratvold said. “A future grocer at this site will thrive off of the natural traffic in the area, and in return help generate much needed foot-traffic and complementary commerce for downtown Saskatoon.”
The former Star Phoenix property, owner by Postmedia, was sold last year by Bratvold and his CBRE Saskatchewan team to Duchuck Holdings, one of the province’s largest private real estate developers.
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