Vacant lots and buildings are an issue across Canada. Businesses close up shop, or they move locations, and then the building designed specifically for that business sits vacant without a business to take its place. The No Frills Plaza on the corner of Yonge Street and North Lake Road is experiencing the loss of a popular restaurant chain leaving the area. The McDonald’s in the plaza closed, leading to a vacant spot built specifically for a restaurant. With Starbucks announcing that it is releasing the space, one can’t help but think that there is a buzz back in the plaza.
With over 24,000 locations worldwide, the vacant spot in No Frills Plaza was the perfect location for Starbucks to set up shop. Known as the “third wave” of coffee, there was an increase in the number of local, independent, and corporate-owned coffee shops popping up in local communities.
One of the most important advantages of any business opening is that the local economy is going to see a boost in employment in that region. Employment influences the range of standard-of-living metrics such as disposable income, foreclosure rates, small business startups, and housing prices. Local employment also helps cultivate a sense of community and helps individuals enhance the brand of a new business in the area.
Another major factor in large businesses like Starbucks opening up in places like Richmond Hill is the effect it has on the real estate industry, specifically housing prices. A recent study done by the Harvard School of Business showed that opening Starbucks increased housing prices in some U.S. cities by 0.5%. The study found a distinct correlation between the opening of a new coffee chain location and the home prices in the surrounding area.
Even though housing prices rise slightly, it does not mean that coffee chains like Starbucks are attracting more affluent residents to the area, it just means that the chain is responding to exogenous changes in neighborhood compositions and is leading to gentrification in these areas.
While the study was U.S. based, that does not mean that the opening of the Starbucks at the No Frills Plaza will not have a slight effect on real estate prices in Oak Ridges. The Harvard Business School study can give real estate agents and investors clues as to what might happen in the community.
For more information on Richmond Hill, please contact Mehran Redjvani. Or for more information on Oak Ridges, Richmond Hill, and the surrounding areas, please visit Mehran’s RE/MAX West Brokage page.