In a city with so many vacant storefronts, why is it so difficult for small businesses to find retail space?

Ashley Spier wants to open a boutique fitness studio in Toronto. And on paper, she’s an ideal commercial tenant. Spier, who requested anonymity, is an entrepreneur with a successful track record, a viable concept, and perhaps most importantly, enough cash to rent the right space—if only she could find one. “It’s been really difficult,” she says of her tireless six-month search. “There’s just a real lack of inventory and a really low vacancy rate.” That may be true of the affluent midtown neighbourhoods Spier is searching in. But just a 15-minute drive west or south of Summerhill, prime stretches of the city are dotted with storefronts collecting dust. Why can’t small business owners find a space in a city where so many storefronts sit empty?

Citywide data don’t clearly capture this tension. It’s true that Toronto is one of the tightest commercial real estate markets in North America with historically low availability in downtown thoroughfares like Queen Street West and Yonge Street. And, according to a 2025 report, commercial rents (which include retail) have skyrocketed 142% between 2019 and 2024. Meanwhile, between 2011 and 2025, the number of retail businesses in the city dipped 10.5%, with some areas seeing triple the decline. But the Toronto market is bifurcated and vacancy rates vary by neighbourhood, even by landlord. “The top is doing very well. The most sought-after class AAA stock is in demand, and the rents are fairly robust,” says Dr. David Scofield, a professor at Toronto Metropolitan University who studies liquidity and commercial real estate markets. But, he adds, “when you hit B and C [buildings] it just drops off a cliff, and vacancies are a lot, lot higher.” This partially explains why a clutch of new stores are opening in swanky Summerhill while commercial strips of Davenport Road or Queen Street West sit suspended in retail purgatory.