City's retail rent, reno costs push some new businesses to set up shop in the county

Buying a commercial property, outside of Windsor was never the plan for business owner Alexandrea Anber.

But after touring about two dozen rental spaces in the southwestern Ontario city, Anber said it made the most sense.

Anber, owner of Auntie Aldoo's Kitchen, has been renting kitchens in the city for the last three and a half years. At the start of October, she got her first storefront in Cottam — 35 kilometres outside of the city where she built her business and her clientele.

"I really thought I'd do well in Windsor ... but things change," she said.

And while moving out of the city worries her when it comes to returning customers, she said Windsor was too pricey for her to grow in.

"It was about $14 to $16 [a square foot], it was pretty high anywhere I went that I knew would benefit me ... even in developing places like Ford City and downtown, the rent prices are pretty nuts," she said.

Though Windsorites have seen the housing market hit all-time highs, commercial properties haven't seen the same dramatic increase, but they've still gone up, according to president of the Windsor-Essex Association of Realtors Damon Winney.

While the expectation was that the pandemic might have increased commercial and retail vacancy rates, it didn't actually change all that much. Instead, Winney said demand has stayed high for small to medium sized retail spots.

All of this means the market has continued to be competitive.

"Within Windsor we've seen maybe not what we might have expected," Winney said.

"I think early on in the pandemic we expected a lot of vacancies due to a lot of businesses exiting the process, exiting leases ... but we haven't seen the business failures to date in the numbers that we might have expected."

He continued to say that low borrowing rates and a heightened interest in property ownership during the pandemic, increased prices. This, in turn, causes the landlord to raise the rent in an effort to recover their investment.

For businesses that can't afford the monthly price tag, Winney suggested they revisit their business model.

Building renovations drive up cost

Though Anber said she did find some spots that were reasonably priced, many needed renovations, which forced her to cross them off her list.

"I think every single place I went into needed significant work ...out of 25 [spots] maybe I looked at, all of them needed something, there was electrical that needed updating or this or that," she said.

"I don't want to pay $1,500 [a month] for 800 square feet and have to put thousands into electrical work, it just doesn't make sense to me, it wouldn't make sense to a lot of small businesses starting up."

But when she looked into buying it was even worse.

She said she lucked out in finding her spot in the county, which was going for less than half what it would have cost her in the city.

Other new businesses that started at the Downtown Windsor Farmers' market but have set up shop outside of the city include, Rasoi in Tecumseh and Christine's Bake Shop in Leamington.

Owner of Christine's Bake Shop Christine Dundas said she briefly looked into Windsor storefronts and knew she couldn't make it work.

"I did have customers say 'oh you need to open in Windsor'... it's too expensive, I couldn't do it," said Dundas.

"I found a lot of [the rental prices] were because of who the landlord was, they're not owned by local people .. they're owned by people from Toronto-area, big cities and that's the rent that they want and down here that's not going to fly in order to cater to the clientele here in a small town."

Businesses look to BIA for supports

Dundas secured her spot by winning a contest, Reinvent This Space, through the municipality of Leamington early last year. She said that gave her a $15,000 cushion for rent, which got her through the months-long renovations needed before she moved in.

Without it, she's not sure how she would have gotten through.

Anber said she wishes commercial spaces in Windsor were more up to date. Though she added that ones in the county aren't that much better, the rent makes it more feasible.

She said it would be helpful if more Business Improvement Areas (BIAs) offered financial support — similar to Downtown Windsor BIA's Business Incentive program — or if BIAs helped with building repairs and renovations.

Debi Crawford, executive director of the Downtown Windsor BIA, said since the pandemic began three of more than 30 new businesses that opened in the core have applied to get some sort of rental assistance.