One can be forgiven for presuming that, in light of the COVID-19 pandemic, restaurateurs, bar and nightclub owners would happily break their leases to stop hemorrhaging money.
Turns out, not only are they bravely prepared to wait out the pandemic, hordes of business people are trying to find venues to open up their own nightspots and eateries. Tel Aviv-native Tomer Markovitz is exploring venues in Toronto’s downtown and central midtown to open a restaurant that will serve what he calls Israeli street food, mostly of a vegetarian variety.
“I have a very specific type of venue that I’m looking for. I’ve seen a lot of places in the past year. People are stealing locations,” said Markovitz. “I’ve started a few conversations with landlords but I’m still waiting for the right price. Before the pandemic you could easily do 300 to 500 customers in a day in the downtown core, but in the middle of the pandemic no money comes in, and if you’re a new business you don’t get a government subsidy.”
However, despite razor thin margins in the best of times, many restaurateurs are willing to wait out the pandemic because they’re collecting subsidies, and while indoor dining isn’t an option, food delivery services like Uber Eats are helping keep them afloat.
Chi Real Estate Group, a hospitality-oriented real estate firm, has a stable of prospective restaurateurs looking for venues in Toronto, but according to Ori Grad, Chi’s broker and managing director, finding availabilities is harder than one would think in the midst of a pandemic.
“Inventory is low. There’s huge demand right now of people looking to buy buildings with restaurants in them, and one thing we’re seeing with COVID is it’s creating opportunity that would never have existed without a pandemic,” said Grad. “There are old operators looking to retire and certain newcomers getting into the market that never would have.”
That wasn’t always the case, he added. Tom Jones Steak House, one of the oldest establishments of its kind in Toronto, is on the market for a reported $5 million. Additionally, the famed Rivoli on Queen St. W. hit the market during the first couple of months of the pandemic.
“At the beginning, we had more people trying to get out of the business. We were getting calls from restaurants every day talking about how they needed to stop the bleeding,” said Grad. “But people always have wanted to hold on. This is their livelihood and most restaurants don’t have six months’ rainy day funds.”
At the moment, there’s demand for cheap kitchens, “ghost” kitchens, and outdoor patio space. Grad also notes that Queen St. E. is receiving a lot of interest—not hard to believe considering that it’s on the verge of a condo boom.
One thing appears apparent: given how much demand and how little inventory Chi Real Estate Group has, Toronto could very well be on the cusp of its own version of the Roaring Twenties when the pandemic is over. Unlike Montreal and New York, cities that are renowned for their food and nightlife, Toronto has traditionally been a more subdued counterpart, but that could soon change.
“We have a couple of guys aggressively looking for nightclubs, and they were outbid by another group,” said Grad. “When the pandemic’s behind us, we’re going to have the Roaring Twenties here.”