Office Space Conversion

[Surrealplaces]

List of Office to Residential or other use projects, both in progress and completed.

Name	Status	# Units/Rooms	Opened/Opening	Notes
Cube	Completed	65	2020
Sierra Place	Completed	108	2022
Cornerstone	Completed	112	2024	Including below-market and accessible
The Hat Eau Claire	Completed	87	2025
Teck Place	In Progress	108	2025
The Loft	In Progress	56	2025
Dominion Centre	In Progress	122	2025	Including below-market
Place 800	In Progress	204	2026	Including below-market
Taylor Building	In Progress	83	2026
The Barron	In Progress	94	No posted date
Petro Fina	In Progress	103	2025	Including below-market
Eau Claire Place II	In Progress	195	2025
Palliser One	In Progress	418	2027	Including below-market
Hannover Building	In Progress	264	No posted date
708 11th Ave	In Progress	119	2026
Element Hotel	In Progress	226	2025	Hotel
University of Calgary ( former Nexen bldg)	Planning			Campus for 1,200 students.
606 4th Street	Planning

 

[Zoom]

Calgary has so much office space for a city this size that I can see someday there will be a large inventory of extra space. In my mind it's very possible to some of the older office buildings, converted to office space for maybe recreational or some other type of use .

 

[BKha]

Time to convert some of those older office buildings into residential.

 

[Always_Biking]

I don't think we are under-demolished?? The mentality in this city is sometimes mind boggling. Don't tear down an older building, instead re-use it!

More of the same....

http://www.calgaryherald.com/landlo...s+dotting+calgary+skyline/12058561/story.html

 

[Zoom]

There are a few older buildings that arent terribly nice, but yes I know what you mean, why not just keep them? Especially when you have empty parking lots here and there, does need to be developed first.

 

[Surrealplaces]

Exactly, alternate uses like Dance Studio, Day Care or preschool, art studio, gym, maybe a small college, maybe a youth hostel? I know there use to be some small colleges downtown, but I suspect most have moved out of the core. Residential space would be very cool.

Many buildings downtown are offering almost free subleasing if tenants take over maintenance payments......I know of one particular building where the tenant can have 4,500 sq ft of space for $2k/month. Fairly old building, but still a very reasonable deal for a business out there. Effectively leasing for about $6.00/sq ft.

 

[RyLucky]

^With a deal like that, it's tempting not to start a "company" (tax-write off), and move in a few beds and furniture. Claim a parent of relatives' address as your official place of residence. What the heck, maybe even turn it into a profitable company eventually.

 

[Surrealplaces]

I was thinking the same thing.....it's cheaper than an apartment. I don't know what the regulations are or how that would work, but it could be pretty cool. IIRC there are about a dozen offices and a boardroom.

 

[Momin]

SRC Article: Will Calgary Begin Converting Office Space to Residential?

 

[Always_Biking]

SRC Article: Will Calgary Begin Converting Office Space to Residential?

Nice article. I wonder what some of those older buildings will be worth a couple of years if the vacancy rate stays high.

 

[Surrealplaces]

That's the million dollar question (no pun intended) Right now the class C vacancy is surprisingly low, but should change as the leases come up. How much of that Class C space is actually occupied is anyone's guess. I bet the older buildings will see some major vacancy in the next couple of years....even if the economy picks up I'm not sure those buildings will get tenants.

 

[Always_Biking]

I wonder if it's all a pipedream. In the article it shows the Pittsburgh building being sold for $18.00 per sq ft, which is far cheaper than those Calgary buildings sold for.

 

[Surrealplaces]

Pittsburgh's situation is a bit different in that the buildings were older and more in need of repair than the older calgary buildings. Oddly enough their vacancy rate overall is much lower than Calgary's but they are seeing the same situation as Boston and Chicago where new buildings are getting built, and taking the tenant from older buildings and becuse there are no oil booms happening there, landlords feel the buildings may never get new tenants.

Calgary's never had that problem before as landlords have been used to constant demand.....it might be different going forward. Right now all buildings are owned by REITs and pension funds, and all sales have been from one fund owner to another fund owner becuse they have believed the market for that old space is viable. I'm not sure that will be the case in the future.

 

[maestro]

It's not just occupancy. Conversion are typical when older buildings revenues are less than capital costs. There have been residential and commercial buildings with good occupancy that have converted from rental to residential condominiums because of a cap on how much they could charge for low quality space.

Calgary buildings are in great shape partly because rents were high enough to continually upgrade older buildings and partly because the inventory isn't that old. I believe office buildings owners will hold out for some time. The high rise residential market is in better shape but, it isn't red hot either.

 

[Surrealplaces]

I don't disagree about the owners holding out for a while yet. I guess the question is how long. In the past Calgary's office space market has rebounded fairly quickly and has gotten to really low vacancy rates allowing the older buildings to get the good revenues. I feel like this downturn will be different, that owners might have to sit for a while and that the rates will drop significantly. Even if the economy picks up, will it just spur on more development of new buildings? You're right about the older buildings being in good shape compared to other buildings that have been converted, and that may keep some life as an office building going a bit longer.