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This article was published 30/10/2017 (1058 days ago), so information in it may no longer be current.

Opinion

The former Polo Park Target store, sitting empty since the U.S. retail chain left Canada in 2015, is getting some work done as efforts continue to find a replacement tenant, or tenants.

A spokesman for one of the co-developers of the Plaza at Polo Park retail/office/restaurant development, where the former Target store was the anchor tenant, said the support pillars are being strengthened to make the 120,000-square-foot building suitable for a wider variety of tenants.

"Floor load is really the issue," said Sandy Shindleman, president and CEO of Shindico Realty, noting some retail tenants require a building with a higher floor-load capacity than others.

He said the building presents its own set of challenges because the single-storey structure sits one storey above ground level, with open-air parking underneath it.

Although the support pillars were strong enough for Target’s needs, they aren’t strong enough to support the needs of other types of retailers.

"Gun safes weigh more than hoodies, so we have to make sure it (the support structure) is robust and strong enough" to support a variety of different types of retail operations, he said.

Shindleman said he isn’t sure how long it will take to complete the reinforcement work, or what it will cost.

"It is a work in progress."

It’s been nearly three years since Target abruptly announced it was shutting down its retail operations in Canada, which included four big-box stores in Winnipeg.

Although replacement tenants have been found for the other three, finding a replacement for the Polo Park store has been a challenge because of its unconventional design.

The property is owned by Cadillac Fairview, which is Shindico’s development partner on the Plaza at Polo Park project. Cadillac Fairview also owns the nearby CF Polo Park shopping centre.

Shindleman said both of them are involved in the search for a tenant for the former Target space.

"We haven’t got anything signed, but we’ve been talking to people on a daily or weekly basis for three years. We hope they’re interested in (leasing) the space, but who knows."

He said there is interest because "people view Polo Park as our downtown shopping district. It’s close to the downtown and... (it’s) is a magnet for retail customers."

He said their preference would be to lease the space to a single retail tenant because fewer renovations would be required.

But tenants that size are tough to come by, so it looks like they’ll have to subdivide the space to accommodate two or more tenants.

While retail tenants would be preferred, redeveloping it as office space is an option.

"We should be able to do office there. An office brings office workers, and it would be nice to have a daytime population on the site as well."

He noted landing a suitable retail tenant won’t get any easier with the closure later this year of the Sears store in the CF Polo Park mall.

"Obviously, there is a lot of competition in the neighbourhood," he said.

Shindleman said development of the remainder of the Plaza at Polo Park site has been put on the back burner.

"We have to have the Target store figured out before we would be starting any other building."

Recent interest rate hikes by the Bank of Canada haven’t dampened the demand for investment properties in Winnipeg, according to a new commercial investor report from Re/Max Canada.

"The high demand for commercial properties in the city has been primarily fuelled by low interest rates, with the Bank of Canada’s recent interest increases having little impact on the Winnipeg market," the report states.

It said with interest rates still relatively low and a limited supply of available properties, some sellers have received multiple offers and some properties have been selling for more than the listed price.

"The commercial market in Winnipeg is also seeing an increase in unsolicited offers as more buyers look for ways to enter this taut market," it adds.

Mark Thiessen, a veteran commercial real estate agent with Winnipeg’s Re/Max Realty Professionals, said prospective buyers include local investors, investors from other parts of Canada, and immigrant investors who arrive here through the provincial nominee program and are eager to enter the commercial real estate market and build their investment portfolios.

"They (out-of-province investors) are always eyeing the safe haven... and it (Winnipeg) looks like a foolproof market (because) we don’t have the big ups and downs that Calgary or Vancouver have," Thiessen said.

He said the demand for investment properties continues to outpace the supply, and he doesn’t see that changing until interest rates climb at least one full percentage point higher than they were before the Bank of Canada raised its rate by half a percentage point.

Thiessen said an increase of more than one percentage point could prompt some property owners to sell because property values tend to fall as interest rates rise, so some might want to sell before that happens.

Investment properties in demand include office buildings, retail strip malls and apartment buildings on major thoroughfares. Interest in industrial properties remains limited, he said.

Know of any newsworthy developments in the local office, retail, industrial or multi-family residential sectors? Let real estate reporter Murray McNeill know at the email address below, or at 204-697-7254.

murray.mcneill@freepress.mb.ca