Target Not Going Anywhere

Can one of North America's biggest retailers also be the comeback kid? Target is still focused on expansion, with plans to open nine stores this year (three arrived in March) and a new store in downtown Toronto in 2016.

The company has been beat up for an aggressive Canadian launch that lost nearly a $1B in 2013 and a data breach that affected millions. Target Canada's Lisa Gibson tells us the company is “laser focused” on improving business operations to drive better guest experience: “We have made significant progress in our in-stock levels." Target Canada pres Tony Fisher is with actress Blake Lively at a store launch event.

We shouldn't be so fast to start the funeral for Target in Canada, says 360Consulting's David Ian Gray, a retail advisor. The “unreal” scale of zero-to-124 stores in one year was “risky” David says, and its performance to date is a major concern at HQ, “but the immediate focus will be on improvement, not on retreat.” Some stores may be closed, but new ones may be built. (The only victim there are ribbons... if they don't' like to be cut.)

Cushman & Wakefield's senior managing director, retail services, John Crombie says in terms of real estate, Target needs to continue to grow, especially in Ontario, which has the largest population base and low store count. Greenfield development has been a strong focus over the past year for Target, especially in urban locations in Ontario. “If the new CEO immediately stops new store development, then that will likely be a sign that they may be having second thoughts,” he says.

GTA's Industrial Balancing Act

With 2.6M SF of new spec industrial coming onto the market in 2014, we dug into Q1 research from Avison Young. VP Bill Argeropoulos says the GTA's construction pipeline is ninth among North American markets it tracks. (Tops in Canada.) But focus more on the details, Bill says—that new space represents less than 0.5% of the existing inventory, and combined with the low vacancy rates (3.9%), that suggests a healthy balance between new supply and demand for space. (Good. Empty warehouses remind us of horror movies.)

Good Hotel Times Roll in 2014

The hotel investment market is transitioning off one of the busiest years ever, according to CBRE Hotels EVP Bill Stone—and all signs for 2014 are positive. The company's 2014 Canadian Hotel Review reveals private investors are expected to remain active, and we should see an uptick in US investment. It's hard to imagine the market meeting the same volume of deal activity as 2013, and while the overall investment volume might decline, "pricing of quality assets will remain at comparable levels to the ones recorded over the past year."

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