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SOMBA K'E/YELLOWKNIFE
Yellowknife's downtown may have a lot of problems but high rent isn't one, according to city councillor and Century 21 realtor Adrian Bell.

Yellowknife's commercial rent market is known for its steady, predictable growth and a commercial leasing manager suggests that downtown rent costs are on par with those charged in some cities in the south. - NNSL file photo

"Without a doubt rent in this town is not the barrier to revitalizing the downtown," said Bell. "It is low."

Bell, who has held three leases in the downtown in the past, said when he and his brother, Brendan Bell, first set up a coffee shop in the downtown core, their rent was $52 per square foot. Ten years later it had dropped to $32 per square foot.

Now that rent is even on the high-end of the scale, he said.

In Adrian Bell's opinion, the loitering problems in downtown malls meant tenants have been able to negotiate rent down over the years.

"Retail shopping is all about atmosphere," he said. "A sense of security if absolutely critical for impulse buying."

Yellowknifers also seem to be doing well when it comes to leasing office space, since the city's steady market doesn't climb or drop as dramatically as other markets in the country, said Sidney Waskiewich, director of leasing for the western region at Dundee Realty Management Corp.

"Maybe when you have a downturn in the economy, Yellowknife trends a little bit higher while other markets dip. But the flip side is when there are other markets like Calgary and Edmonton, when they were super hot and guys were doing $38 (per square foot) net rents here in Edmonton, Yellowknife wasn't," Waskiewich said. "Yellowknife was doing mid to upper 20s. That's kind of the trade-off. Yes, maybe on a downturn you may pay a little bit more but you're not subject to these big spikes or declines that other markets may be."

Currently, Edmonton, Toronto, and Saskatoon are on par with Yellowknife's rates but are expected to rise at a greater rate than Yellowknife, said Waskiewich.

He added that Vancouver net rate averages about $10 per square foot more than Yellowknife.

All of the comparisons were between Class "A" buildings, which in Yellowknife includes such buildings as the YK Centre, Scotia Centre, Northwestel Tower, Bellanca Building, Greenstone Building and the Precambrian Building.

Waskiewich said operating costs in Yellowknife tend be about $20 per square foot.

"The operating costs between Edmonton and Yellowknife I would say are very similar," he said.

While Yellowknife's utility costs are higher than that in the south, Bell said he doesn't expect that to keep business owners from success because they can make up that extra cost in the prices they set for their products or services.

"Consumers understand that," said Bell. "If you charge 10 per cent more for a product here than you do in Edmonton, consumers completely understand. So you are able to pass on those higher utility costs so that is absolutely not a factor in my opinion."

Waskiewich said where Yellowknife office tenants may see a higher cost is when it comes to tenant improvements, which refers to alterations to the space that are required before the tenant moves in.

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