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It's been almost six months since our previous article discussing the possibility of office space in Calgary being converted into residential space. Since that time the office space vacancy rate in downtown Calgary has not gone down, but instead is still hovering around 24 percent, and some estimate the vacancy rate will climb as high as 27 percent by the end of the year. With most of the office buildings in the downtown core owned by large pension funds and REITs, it has become a numbers game and a waiting game — wait out the downturn and see if the office space market picks up, or cut losses by repurposing the space now.
Winnipeg-based Artis REIT has become the first of the REITs to propose the reuse of office space here in Calgary. Zeidler BKDI Architects recently submitted a development permit on their behalf which proposes to convert the ten-storey, 92,000-square-foot Sierra Place office building into a 72-suite residential building.
The Sierra Place office building may be the first building in Calgary officially proposed for conversion, but it may not be the last. Recently we caught up with Randy Ferguson, Chief Operating Officer at Calgary-based Strategic Group to discuss the possibility of converting space in the city. According to Ferguson, Strategic is currently evaluating their Calgary properties, and actively looking at ways to change the use or alter the style of the use. For example, Strategic is working on plans to transform some of their office space from traditional workspaces into modern, open-plan, loft-style configurations.
One building that has already been earmarked for conversion is Harley Court in Edmonton. Strategic is planning a $40 million conversion that will see the 15-storey building converted from office space to 177 one- and two-bedroom units. The project will be phased with some floors staying as office space and others converted to residential as they become vacant.
While Strategic is still looking at opportunities to convert space to residential, Ferguson admits that there are challenges. To convert a building to residential, the floor plan is something that needs consideration, as office building floor plates are much larger than typical dimensions of a residential building, and designing units so that everyone has an outside view can make for spaces that are more difficult to configure. The location of the building's elevator core also comes into play — if the core isn't located in the centre of the building, it makes the conversion process even more difficult.
Infrastructure such as plumbing and HVAC are key considerations. Most buildings have HVAC units that are much larger and less efficient than what is needed for residential. This usually means replacing the building's main units.
Then there are building codes and regulations. The regulations for office space are substantially different than those in place for residential, and require not just physical changes, such as fire protection and sprinkler systems, but also a considerable amount of administrative paperwork.
Despite some challenges, having at least one office building in both Calgary and Edmonton slated for conversion to residential space demonstrates that it is indeed feasible, and the success of these projects could very well determine a new direction for Calgary's downtown business district.
Check in with us regularly, as SkyriseCalgary will continue to follow these projects and the topic of office space repurposing in general. For discussion on this topic, you can also check out our Forum thread.
