A Vancouver restaurant facing a $65,000 monthly rent increase says it’s forced to relocate amid skyrocketing rent, as industry insiders fear the booming real estate market is having a negative impact on local eateries.
Italian Kitchen has been serving pasta on Alberni Street in the downtown core for a decade, but is moving locations because its monthly rent of $35,000 will soon be increased to nearly $100,000.
“It is impossible for any restaurant, anywhere -- and I guarantee you this because I’ve been in this business for so many years -- any restaurant anywhere on the planet to be able to survive with this number,” said Emad Yacoub, president of Glowbal Restaurant Group.
But while Italian Kitchen has the resources to relocate to a space with a lower monthly rent, many smaller family-run restaurants don't.
The Foundation, an iconic vegetarian restaurant on Main Street open for 15 years, shut its doors earlier this year because of spiraling rents. The Dover Arms Pub on Denman Street, which opened in 1974, also just closed its doors.
Vancouver restaurant broker Shane Morck told CTV Vancouver there are few restaurants that can afford to shell out more in the face of steeply increasing leases, except for chain eateries.
“The Cactus Clubs are paying big rents, Earls is paying big rents, JOEY are paying big rents. The mom and pops can't do it,” he said.
Ian Tostenson, president of the B.C. Restaurant and Food Services Association, says you’ll inevitably see bigger restaurants survive and smaller ones relocate – or simply shut down.
“You're gonna lose that side of Vancouver because of the cost,” he said.
Rent isn’t the only high cost of business. Restaurateurs are also forced to pay property taxes on rented or leased property, not the landlord.
The Italian Kitchen on Alberni Street was paying about $150,000 per year in taxes, Yacoub estimates.
Tostenson said he knows of one large restaurant on West Broadway that’s saddled with paying $1,000 a day in property taxes.
Those extra costs are inevitably passed on to customers, with eateries charging more for their dishes.
“You’re going to start seeing it like Sydney,” said Morck. “Everyone’s gonna have to have $40 plates – they gotta make money.”
With a report from CTV Vancouver’s Shannon Paterson