More gas stations will be disappearing from Vancouver because of the hot real estate market, as Chevron Canada Ltd. plans to put another five stations in the pricey west side up for sale.
The company decided to sell the five locations after marketing three others last year, including one on Georgia Street that is currently one of only two gas stations in the downtown core. Although sales haven’t finalized on the first three, interest in the properties was strong enough to persuade the company to go further.
“They’re all successful businesses, but rising real estate values are driving the decisions,” said Adrien Byrne, a company representative. “It makes sense to put them on the market.”
That decision is not surprising, retail experts say. In a city such as Vancouver, it just doesn’t make sense for certain kinds of low-rise retail to continue to occupy almost whole city blocks.
“For now, it’s just the gas stations, but they are the canary in the coal mine,” said Jim Smerdon, vice-president and director of retail consulting at Colliers International’s Vancouver office. “We will see lots of transition of low-intensity commercial in this city.”
Industry watchdogs say that gas stations have been disappearing steadily across North America in the past quarter century, as companies funnel customers toward fewer but higher-volume, multipump stations. They say that, although customers complain occasionally, there is no sign that drivers are unhappy in large enough numbers to stop the trend. Vancouver’s business-licence database lists 70 active retail gas stations, along with three others listed as pending. Chevron, which has the largest market share of all the gas companies in the city, says even when the ones up for sale are gone, it will still have 19 other locations.
Mr. Smerdon said another sign of the transformation has been the grocery stores in Vancouver.
Some shut down entirely in recent years and were redeveloped into condos, such as the Safeway at Kingsway and Knight Street. Others have redeveloped their property into condo developments, but with the grocery store tucked in at the ground level, such as the Safeway at Robson and Denman Streets in the West End and on Granville Street near 70th Avenue in Marpole.
Mehdi Shokri, a principal at commercial brokerage Avison Young, also pointed to neighbourhood bank branches as another retail use that is shrinking, as banks see they can make more money from selling their property than running a business.
“The condo sales are creating such a crazy environment.”
A couple of mall owners in the Lower Mainland have also opted to take advantage of the demand for housing by redeveloping. The Brentwood mall parking lot in Burnaby is currently a hive of construction activity as new towers go up.
Part of the shift is being driven by zoning changes that entice landowners to sell. Even where there hasn’t been a rezoning, some owners – and buyers – see that the possibility of the city approving a rezoning on a commercial strip is high.
The transformations aren’t necessarily wiping out retail in the region, since many municipalities require that developments retain some retail at the street level if they are on major streets or in large, complex developments.
“So there will be some retail retained,” Mr. Shokri said.
Chevron’s site on Georgia Street, near several new towers that are being proposed, hasn’t been rezoned yet, but the possibility exists in the new West End plan.
The site’s assessed value went to $32.8-million this year from $10.2-million last year, with almost all of the value, except for a minuscule $16,000, being assigned to the land.
The Chevron sites that are being put on the block are those at Broadway and Alma Street, Fourth Avenue and MacDonald Street, 16th Avenue and Cambie Street, 59th Avenue, and Cambie Street and 41st Avenue and Oak Street.
The site at 41st and Oak, currently valued at $7.96-million, sits kitty corner from the nine-block former bus-depot site that TransLink just sold for $440-million.