New Horizons Mall open... and empty

[Wormius]

Originally Posted by Locke

I dont know what else to say.

I've heard more credible Time-Share pitches than 'Business Condos in Balzac that cater to a niche market.'

If these people got all the information and did it anyways, thats perfectly standard Moral Hazard.

All I'm saying is that there is no way I'd buy what they were selling, and I'd imagine most people wouldnt either unless there were ancillary reasons.

It feels like either some pieces are missing here or they just happened to find a collection of people who would be inclined to make a questionable business decision.

I suspect anybody who bought was expecting the same level of consumer traffic as Crossiron Mills was getting, and I suppose it’s kind of odd that it doesn’t; other standalone businesses outside the Crossiron footprint are bustling, so it’s not as if people don’t go out there to Lowes or Costco.

[GirlySports]

I agree it should have been near T&T Pacific mall. The Jollybee and Omomo are doing well there for example.

[Hack&Lube]

Originally Posted by Wormius

I suspect anybody who bought was expecting the same level of consumer traffic as Crossiron Mills was getting, and I suppose it’s kind of odd that it doesn’t; other standalone businesses outside the Crossiron footprint are bustling, so it’s not as if people don’t go out there to Lowes or Costco.

That's because CrossIron actually has stuff you want to buy from big names and luxury outlets. The big name tenants, polished stores, and stable experience drive attraction to the mall.

They sold New Horizons Mall to a bunch of exploited newcomers to Canada who are selling no-name and marked up products that anybody can order online from Amazon and Aliexpress.

[The Yen Man]

The mall desperately needs a solid anchor tenant to bring people to the actual mall. The Best Shop can get pretty busy, but it's too small to be an anchor tenant. They would need something like a Daiso there.

[GirlySports]

Originally Posted by Hack&Lube

That's because CrossIron actually has stuff you want to buy from big names and luxury outlets. The big name tenants, polished stores, and stable experience drive attraction to the mall.

The sold New Horizons Mall to a bunch of exploited newcomers to Canada who are selling no-name and marked up products that anybody can order online from Amazon and Aliexpress.

It would work if it was in Eau Claire for example. Foot traffic from the lunch crowd to go see and pick up interesting products instead of searching online.

[Table 5]

Originally Posted by Hack&Lube

That's because CrossIron actually has stuff you want to buy from big names and luxury outlets. The big name tenants, polished stores, and stable experience drive attraction to the mall.

One thing I've heard is that CrossIron is also really popular with rural folks. Ie., the people who live on farms or in small towns who previously had to come into the city to do certain types of shopping. Now they can have a lot of their needs met in one place without having to go into Calgary.

I don't think an Asian speciality mall is really something that resonates with that demographic.

[tvp2003]

I was curious how much units were initially sold for. Came across a couple of articles:

From 2016: https://globalnews.ca/news/2782635/i.../?sf29518919=1

From 2018: https://calgaryherald.com/business/c...ers-set-up-sho

It sounds like a small unit was in the 180's, whereas a larger unit (350 sqft) was $500k. Unfortunately, I think investors -- some sophisticated and others likely not -- assumed that there would be demand for their unit and they could just sit back and collect the passive income. It obviously hasn't worked out that way.

[Table 5]

Gotta feel for those people in the 2016 article. Call it naive, or just bad business, but a lot of individuals invested a lot of their savings into this thing.

I actually think the concept itself isn't a bad one. It's just a terrible location for it.

[Hack&Lube]

A mall of this type would have worked as a replacement for Franklin Mall in the NE or maybe where Northland Mall is in the NW. It doesn't work outside of city limits where it is more of an inconvenience to get to for the demographic these shops are targetting.

It needed a big anchor tenant like T&T Grocery to drive regular food shopping traffic rather than a retail anchor that would only bring occasional traffic.

[Locke]

Originally Posted by Table 5

Gotta feel for those people in the 2016 article. Call it naive, or just bad business, but a lot of individuals invested a lot of their savings into this thing.

I actually think the concept itself isn't a bad one. It's just a terrible location for it.

I want to be clear. The concept isnt a bad one at all. But its more than just the location that is bad.

The structure of this business was either established by a child or designed to fail. Same difference.

The fact of the matter is that the Developer sold Investors. The Developer gets their money regardless of whether the businesses in their location succeed or fail.

I agree with Hack&Lube. They sold this to some idealistic people who didnt know any better.

Which is why its pretty close to a Scam.

[tvp2003]

Originally Posted by Locke

Which is why its pretty close to a Scam.

Based on one of the interviews in the news videos, I think they definitely created hype and FOMO by releasing units on a limited basis, enticing people to buy-in when they may not have done any or enough research.

I found another article from 2018 which had this interesting quote: https://calgary.ctvnews.ca/first-sto...tion-1.4028013

Natasha Bourdon, marketing manager for New Horizon Mall, says all of the mall’s 500 units and 26 food courts outlets have been purchased. The date for the opening of each store is at the discretion of the individual owners.

“The official grand opening is taking place on Saturday, October 27,” said Bourdon. “We’re hoping that the majority of store owners will be available to open on October 27, although that’s not 100 per cent confirmed, but the majority of stores will be open.”

I don't know if she was completely talking out of her ass, or had no idea that none of these buyers had tenants in place or anyone willing to open an actual store, but either way it looks bad.

Part of me thinks they should turn it into a flea market on weekends and eventually it grows enough foot traffic that it can stay open during the rest of the week.

[Sliver]

Originally Posted by tvp2003

Based on one of the interviews in the news videos, I think they definitely created hype and FOMO by releasing units on a limited basis, enticing people to buy-in when they may not have done any or enough research.

I found another article from 2018 which had this interesting quote: https://calgary.ctvnews.ca/first-sto...tion-1.4028013



I don't know if she was completely talking out of her ass, or had no idea that none of these buyers had tenants in place or anyone willing to open an actual store, but either way it looks bad.

Part of me thinks they should turn it into a flea market on weekends and eventually it grows enough foot traffic that it can stay open during the rest of the week.

Nah, it's done. It's a write-off. Nothing will save it. The investors lost their shirts, but nothing anybody can do about it now. There's no call for another flea market in Calgary and particularly if it is outside of town. Any money going into it now is just a further waste.

[bizaro86]

Originally Posted by tvp2003

Based on one of the interviews in the news videos, I think they definitely created hype and FOMO by releasing units on a limited basis, enticing people to buy-in when they may not have done any or enough research.

I found another article from 2018 which had this interesting quote: https://calgary.ctvnews.ca/first-sto...tion-1.4028013



I don't know if she was completely talking out of her ass, or had no idea that none of these buyers had tenants in place or anyone willing to open an actual store, but either way it looks bad.

Part of me thinks they should turn it into a flea market on weekends and eventually it grows enough foot traffic that it can stay open during the rest of the week.

I think their only hope is actually to go to a mandatory opening for every bay or pay fines. That would probably drop rents for the inline shops negative, but if every bay was open the operation would at least have a chance of getting off the ground.

[tvp2003]

^^ Perhaps, but I could see a lot of “fake” stores opening up just to avoid fines and such.

The building itself is new and modern, so there is surely something that you could do with it. Unfortunately, because ownership is the way it is, you probably won’t get my traction unless someone is willing to buy out everyone’s units and there is no chance of that happening.

I get the sense they’ll be studying this one in University business classes, alongside the failed Target Canada expansion.

[Table 5]

Originally Posted by Locke

I want to be clear. The concept isnt a bad one at all. But its more than just the location that is bad.

The structure of this business was either established by a child or designed to fail. Same difference.

The fact of the matter is that the Developer sold Investors. The Developer gets their money regardless of whether the businesses in their location succeed or fail.

I guess, but is this that different from a residential condo? Developers there raise money, build the thing, and then eventually walk leaving the condo corp/owners to their own devices.

[Northendzone]

out of curiosity i had a look to see how much these "retail condos" sell for and one place i found had 16 or so listing from $100 to $800k.

hard to imagine anyone paying $800k for a store in a somewhat dead mall. i wonder what kind of place and how long you could rent in cross iron for $800k.

it would also be interesting to know how many speculators bought places hoping to flip them.

[Calgary14]

Interesting part of the article from 2016: "Larger stores for anchor tenants–accounting for about 30 per cent of the 320,000 square feet total–are being held by the developer."

Why would they hold those back when they would be instrumental in creating foot traffic?

Article link: https://globalnews.ca/news/2782635/i.../?sf29518919=1

[Hack&Lube]

Originally Posted by Calgary14

Interesting part of the article from 2016: "Larger stores for anchor tenants–accounting for about 30 per cent of the 320,000 square feet total–are being held by the developer."

Why would they hold those back when they would be instrumental in creating foot traffic?

Article link: https://globalnews.ca/news/2782635/i.../?sf29518919=1

Because the small guy won't be able to buy the large spaces and the developer will want to collect rent and control the large anchors - of which none have materialized. You would have to think the developers have been trying to attract anchors for a long time.

I find it hilarious and sad that the only "anchor" they got was the small Best Shop which isn't even on the main retail floor level and has it's own entrance so people can avoid the mall. That's the only store I have ever made an effort to go to and it's only once every 6 months to pick up some random chinese knick knack.

That's why I think a T&T would have been the best option but with the one in Harvest Hills, there's no reason for that to exist either.

I don't know why the developers ever had the idea a copy of Toronto's Pacific Mall would be sustainable outside of city limits in Calgary. Maybe in Richmond or Burnaby Vancouver, but not Balzac!

[boogerz]

Originally Posted by Hack&Lube

You would have to think the developers have been trying to attract anchors for a long time.

I find it hilarious and sad that the only "anchor" they got was the small Best Shop which isn't even on the main retail floor level and has it's own entrance so people can avoid the mall. That's the only store I have ever made an effort to go to and it's only once every 6 months to pick up some random chinese knick knack.

If they were actually trying to get a good anchor tenant, they would have made a serious run at getting H Mart or Oomomo\Daiso's recent new Calgary locations, or gone outside the box to give sweetheart deals to a big fish like Muji or Uniqlo for their first Calgary/Alberta locations.

Putting a Uniqlo in New Horizon could probably save the mall.