Toronto's Housing Bubble Is Crushing The Strip Club Industry
Content adapted from this Zerohedge.com article : Source
Until now, Canada's soaring housing prices were just another innocent asset bubble spawned by low interest rates and an endless supply of Chinese cash that needed to get laundered. That said, massive bubbles are almost always followed by severe unintended consequences that can have a crippling impact on society as a whole...and in Toronto those unintended consequences are now manifesting themselves in the form of a rapidly deteriorating supply of strip clubs.
As Bloomberg points out today, the soaring value of Toronto real estate has made it all but impossible for strip club owners to turn down multi-million offers from condo developers leaving only a dozen strip clubs in a city whose purple neon lights used to be easily visible from the distant fringes of our solar system.
Condos are killing the Toronto strip club. In a city that once had more than 60 bars with nude dancers, only a dozen remain, the rest replaced by condominiums, restaurants, and housewares stores. Demand for homes downtown and for the retailers that serve them is driving land prices to records, tempting owners of the clubs, most of which are family-run, to sell at a time when business is slowing.
"Sometimes I feel like the last living dinosaur along Yonge Street," says Allen Cooper, the second-generation owner of the famous—or infamous—Zanzibar Tavern. The former divorce lawyer says he has been approached by at least 30 suitors for his property in the past few years but is holding out for a "blow my socks off" offer. "I don't know how many condos we're going to get, but it seems like just a wall" of them, Cooper says.
Of course, with ~1-acre plots of land selling for C$225 million, it's not difficult to understand why strip club owners are increasingly choosing to shut off their neon signs for good...even with the consolidation of market share it's nearly impossible to make that lap dance math pencil out.
Remington's Men of Steel, a male dance club behind a heavy door, sold to KingSett Capital Inc., which last year flipped it to Cresford Developments as part of a bigger portfolio on that block that went for about C$160 million ($125 million), according to real estate data supplier Altus Group. That club is closing next year, to be replaced by a 98-story condo.
The fading of the strip-club era can be seen in a five-block area along Yonge Street, near Toronto's counterpart to Times Square, Yonge-Dundas Square. It was once dubbed Sin Strip for its neon-clad bars, sex shops, and movie theaters. Today there are about 20 development applications for condos and commercial buildings on the stretch.
Farther north, an entire city block is a construction site as two condo towers and some retail space replace a strip of colorful and creaky buildings that once offered body piercing and pole-dancing shoes. "We target a very specific market, mostly men. We're not a shopping destination, so more people doesn't mean a lot more business," says Bill Greer, general manager and three-decade veteran of the Brass Rail Tavern, a two-story club in the area. "I don't think we'll be around in 10 years' time." Just outside the Brass Rail's doors, a 75-story residential tower opened this year on a piece of land that cost C$53 million. An 80-story luxury tower is under construction following a C$225 million deal for less than 1 acre, according to data from Altus.
But at least one Toronto strip club owner, Spiro Koumoudouros of the House of Lancaster, has drawn a line in the sand saying he's not going anywhere..."What am I going to do, sit at home and die?"...if only we could all exhibit such courage in times of extreme crisis.**
Finally, since we know your interest in this story was only prompted by your desire to see a larger version of the teaser pic...here you go:
Introducing a land value tax would combat the land price bubble so that residents can afford to buy property instead of having to rent from absentee landlords.
Weird world we live in. You would think in a cash flush city the strip clubs would be packed!
When you factor in the opportunity cost, it makes a lot of economic sense. If you sell your place, you can always open somethign else with the money :)
They will reopen in a side street and pocket the difference
If the Hebrews build a strip club on the Temple Mount, that would be a sign of the apocalypse. This is just stupid shit.
You know your city is going to hell when the strip clubs are closing down.
Seriously, it does remind me of what happened an hour from me...during the US housing bubble many of the citrus owners were offered deals by developers that were just too good to pass up. Instead of making $1500 an acre producing citrus, they were being handed $15,0000$30,000 an acre to sell.
How can you turn down 10-20 years revenue in one fell swoop?
They couldnt.
thank you for your article.
Thanks for the posted on economic post @zer0hedge ☝👍
Seriously??
Bizarre world we live in. You would think in a money flush city the strip clubs would be pressed!
hmm