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Multi-use commercial spaces: The future of success in hospitality and retail

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While the hospitality and retail sectors have faced some challenges in recent years, multi-use commercial spaces are helping to create a new model of success. Businesses in these sectors are offering an array of diverse services under one roof and utilizing every inch of their square footage to maximum potential. 

“It’s hard to measure but based on what I’ve seen, it’s a growing trend,” says Jason Kleyn, a broker at Hospitality Real Estate in Toronto. 

Ali Baker, principal of Retail Sales and Leasing at Avison Young in Toronto, notes, “While we don’t have any specific data on this, anecdotally, it’s increasing in popularity. Retailers are getting more and more creative to increase dwell time and spend in their stores.”

 

Many great things under one roof

 

“Businesses are asking themselves what else they can add to their brand to encourage people to come — and to stay,” Kleyn notes, pointing to Now & Later as a prime example of a property getting the most under one roof.

The Bloor Street West business is not your ordinary café. Patrons can enjoy everything from coffee, Belgian waffles and French toast in the daytime and then wine, beer, oysters and beef bourguignon in the evening. The Toronto establishment also features a bottle shop, live music and community events like pop-up photo exhibits and book exchanges. 

“Running a shop in the modern economic climate is a challenge as everything is constantly changing and the cost of doing business is less static than ever, so setting up the vintage racks in the shop and doing pop-ups felt like a great way to keep people interested,” says Chris Novakoski of Now & Later. “Recently, we started doing dinner five nights a week and that’s been really well-received.”

 

Adapting and innovating 

 

COVID-19’s impact on the hospitality and retail real estate industries was far-reaching. Nowadays, inflation and rising interest rates have meant that consumers are more discriminating when it comes to how and where they spend their money. But all of these challenges have roused the hospitality and retail markets to adapt and innovate. 

“It’s harder to please people,” says Kleyn. “People are spending a bit less but want experiences that are more elevated. The hospitality real estate sector is trying to get consumers excited about something new. The opportunities are endless.”

Kleyn points to GameTime Social in Burlington as a hospitality space that has adapted and innovated. The company combines dining and entertainment, so after dinner, patrons can venture to the venue’s entertainment section, which features arcade games, bowling and billiards, among other activities. The entertainment encourages consumers to prolong their stay after food and drinks, explains Kleyn. 

And in the competitive restaurant business, entrepreneurs are discovering it’s essential to stand out from the crowd. 

He cites Electric Diner, located in Hamilton, Ontario, as representative of this philosophy. The restaurant, which pays tribute to the ’80s both in terms of its décor and menu items, caters to consumers nostalgic for that bygone era and also to those interested in experiencing something diverse. At Electric Diner, the food experience is complemented by other activities to retain foot traffic, such as trivia night, movie showings and karaoke. 

“It’s about creating an immersive engagement with your customers that separates you from the rest,” explains Kleyn. 

Baker concurs. “Consumers are expecting experiences,” she says. “And if you can offer something versatile and different from your typical shopping experience and/or restaurant visit, you’ll draw loyal, repeat visitors from far and wide.”

 

One stop for all activities

 

Baker says that Sweat and Tonic is one property that takes full advantage of space for maximum profitability. 

They are a ‘gym first’ concept; however, they have other components to the business that give customers a reason to stick around and increase their spend,” she says. Along with fitness classes, Sweat and Tonic features a lounge, workspace and even an event venue. 

“Plus, they find ways to embrace non-gym members,” adds Baker. “For example, Tonic Bar is positioned at the front of their premises. This café is also open to the public and not only their gym members, providing an easy spot to grab a coffee, snack or smoothie for a passer-by or for gym-goers post-workout.”

Altea Active is another business getting the most out of square footage. “Altea Active is a gym, social club and fitness centre all in one,” notes Baker. “Members have access to a large gym, fitness classes, spa, food concepts/restaurants, bowling alleys, golf simulators and more. (The business) provides one stop for all activities.”

 

Photo credits: Instagram.com/nowandlaterto , Instagram.com/electricdinerhamont

 


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