Feb 23, 2010 - For nearly two decades, big box retail has seemed an unstoppable force, swallowing up and pricing out the smaller local stores. Nearly every community has seen its share of this as Wal-Marts and Costcos move in.

But in 2010 for Canadian investors, it may be streetfront retail that holds some of best promise as focus returns to those areas. Big box is no longer the only option for the lowest priced goods - the Internet is often a more convenient and sometimes cheaper choice. And many consumers are finding they still want that local neighbourhood touch when they go out. They want a friendly connection with their local stores.

"You frankly don't get that in most big box stores, and you don't get it when you're shopping on-line," says Mary Mowbray, manager of the retail group in Toronto at real estate brokerage Colliers International.

Big boxes in Canada have also been hurt by the fact many American-owned companies have pulled back due to their own economic issues. Arlyn Stoik, principal with Edmonton-based Avis and Young's retail division, says the large box retail formats (10,000 square feet and up) have started to show some increasing vacancies in Western Canada.

"We're having a tougher time filling those vacancies just because the larger-scale tenants, especially those tied to the United States, are slowing down," he says. "We don't really see them coming back to the marketplace probably until 2011."

Where there's strength is in the smaller service industry shops such as fast food, where there's very little vacancy and little turnover, says Stoik. And often, that's in streetfront - defined commonly as a retail fronting to a street, parking in front and rear, and usually separately owned. There's a financial advantage in streetfront in that you aren't dealing so much with new construction as you would with box stores.

For the full article, including tips on how and where to buy streetfront property, pick up a copy of the March issue of CRE, on newsstands March 1