Commercial retail pricing compared too local demgraphic

[Crush]

Hi,

What I'm about to talk about isn't really discussed in academia and is a relatively new phenomena in the last 10-15 years.

Basically, there is small business retail space, and then of course there are big box retail like Bust Buy and Home Depot. The vast majority is small business lease space.

What traditionally determines small business retail rates is amount of traffic, neighborhoods, household incomes of the area etc. You know the stuff.

But that measure just isn't working anymore from what I am seeing around where I live (Mississauga). We have 'insanely high' retail spacing rates. Yet, a 50% immigrant population who will never spend into these small businesses. For instance, we have had 2 Mexicali Rosa's close in Mississauga. However, the one in Milton had a line up out the door last Friday. Full house. This is because there is a supporting demographic in Milton. The restaurants here did moderate business, but it wasn't enough to pay the rent.

Let me explain. If I decided to open up a fish and chip place, I will be told that the rate is so high because it's in x neighborhood and located off x street. But, what if half of the whole demographic in the area do not eat fish and chip in their diets, never have, and never will eat at my restaurant?

Well I would say the price should be about twice as less in that case.

If half of the population in my city is born in another country, then you would imagine that half of all the small business retail is owned by immigrants. This is not happening. The participation into small business is very small here from the immigrant groups so we still have the people born inside the country trying to peruse their dreams and folding very quickly. Many of the immigrant oriented businesses (meant to serve their 'own') also fold very quickly and have trouble so that isn't the issue either.

A friend who is an economist grad told me over and over that immigrant populations simply do not spend into the economy. They have spending habits of putting most their eggs in 1 basket (Wal-Mart, Home Depot, Grocery). And that's it. Full Stop. No other spending. Yet the majority of business is small business. However, the pricing is considering the people who I know will never set foot in my store.

What is happening is that the traditional ways of pricing commercial real estate are beginning to fail. I can honestly say that my city is an economic dead zone due to overly inflated retail lease space (not the immigrants per say) - they don't put me out of business. I go out of business because I cannot pay the over inflated rent price. If you know that x demographic never have, and never will spend into private small business, then why do the prices affect the retail rates?

Is there anyone who has noticed this phenomena and what is being done about it or any recommendations. How would you recommend to correct the pricing of these small commercial spaces? How can I go into business and ensure that I'm paying a fair price.