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Calgary's Downtown Dilemma

UrbanRED said:
So last I read, there was ~13M sqft of empty office space a few months ago (it may be slowly filling up now with oil recovering).

The first 3 projects took 414K of sqft off the market; these two are another 251K of sqft. The estimates from the city is that 6 million square feet need to be taken off the market to balance it.

So in total it's cost ~73M to take 665K sqft off the market, so if we're going to keep funding these this is going to take something like ~$600-$700M, unless the economics change.

Hopefully it's enough to kickstart a cycle where conversions happen without city support but this is looking like an expensive endeavour long term
Click to expand...

The municipal investment cost is more like $50M for the 665k sqft. Safe to assume the municipal cost will be $75/sqft based on what has been approved so far. Summary below.

www.calgary.ca

Downtown office conversion programs

www.calgary.ca www.calgary.ca

Total
~$49,975,000
~665,000 ($75/sqft)
707 units ($70,700/unit)

Cornerstone

$7,800,000
~104,000 sqft ($75/sqft)
112 units ($69,650/unit)

Palliser One

~$15,000,000
~200,000 sqft ($75/sqft)
176 units ($85,250/unit)

Teck Place

$8,200,000
~110,000 sqft ($75/sqft)
113 units ($72,575/unit)

Canadian Centre

$12,375,000
~163,000 sqft ($76/sqft)
225 units ($55,000/unit)

United Place

$6,600,000
~88,000 sqft ($75/sqft)
81 units ($81,500/unit)
 
adamyyc said:
The municipal investment cost is more like $50M for the 665k sqft. Safe to assume the municipal cost will be $75/sqft based on what has been approved so far. Summary below.

www.calgary.ca

Downtown office conversion programs

www.calgary.ca www.calgary.ca

Total
~$49,975,000
~665,000 ($75/sqft)
707 units ($70,700/unit)

Cornerstone

$7,800,000
~104,000 sqft ($75/sqft)
112 units ($69,650/unit)

Palliser One

~$15,000,000
~200,000 sqft ($75/sqft)
176 units ($85,250/unit)

Teck Place

$8,200,000
~110,000 sqft ($75/sqft)
113 units ($72,575/unit)

Canadian Centre

$12,375,000
~163,000 sqft ($76/sqft)
225 units ($55,000/unit)

United Place

$6,600,000
~88,000 sqft ($75/sqft)
81 units ($81,500/unit)
Click to expand...
Gotcha, thanks. I only did the back of the envelope estimate of $100M minus the $27M remaining. $50M makes it more reasonable, although still relatively expensive
 
UrbanRED said:
Gotcha, thanks. I only did the back of the envelope estimate of $100M minus the $27M remaining. $50M makes it more reasonable, although still relatively expensive
Click to expand...

Going for 6M sqft of resi conversions alone probably doesn’t make sense, there will be diminishing returns as the most logical candidates are converted. Seems like say 3M sqft conversions for $225M - about double what has been committed and 4x what has been announced - would be about as far as this should be pushed.

I’d like to see a provincial initiative to convert another 3M sqft for a downtown post-secondary campus. Seems like a good plank for a political party trying to win ridings in Calgary.

Those two things should be more than enough to get the market close enough to balanced that the private sector will find solutions for the rest.

Oh yeah, and don’t approve any more f**king office buildings downtown!
 
zagox said:
Going for 6M sqft of resi conversions alone probably doesn’t make sense, there will be diminishing returns as the most logical candidates are converted. Seems like say 3M sqft conversions for $225M - about double what has been committed and 4x what has been announced - would be about as far as this should be pushed.

I’d like to see a provincial initiative to convert another 3M sqft for a downtown post-secondary campus. Seems like a good plank for a political party trying to win ridings in Calgary.

Those two things should be more than enough to get the market close enough to balanced that the private sector will find solutions for the rest.

Oh yeah, and don’t approve any more f**king office buildings downtown!
Click to expand...
3 million square feet is a lot to convert for PSE. I think all of UAlberta is 9 ish and UCalgary 6 ish. If I remember a document read 5 years ago correctly.

One objective is train people for companies that need more people to grow to fill the office space. It isn’t just about first order effects.
 
darwink said:
3 million square feet is a lot to convert for PSE. I think all of UAlberta is 9 ish and UCalgary 6 ish. If I remember a document read 5 years ago correctly.

One objective is train people for companies that need more people to grow to fill the office space. It isn’t just about first order effects.
Click to expand...

https://www.ucalgary.ca/facilities says they have 10.5 M sqft total - my back-of-the-envelope math was 10 years of growth at 2% per year.
 
darwink said:
3 million square feet is a lot to convert for PSE. I think all of UAlberta is 9 ish and UCalgary 6 ish. If I remember a document read 5 years ago correctly.

One objective is train people for companies that need more people to grow to fill the office space. It isn’t just about first order effects.
Click to expand...
I'd be all for expanding either the UofA campus or UofC campus in downtown. Students activate downtowns like no one else can
 
darwink said:
3 million square feet is a lot to convert for PSE. I think all of UAlberta is 9 ish and UCalgary 6 ish. If I remember a document read 5 years ago correctly.

One objective is train people for companies that need more people to grow to fill the office space. It isn’t just about first order effects.
Click to expand...
Keep in mind, part of that 3 million SF would be student residence, not just teaching/research spaces.
 
UrbanWarrior said:
Keep in mind, part of that 3 million SF would be student residence, not just teaching/research spaces.
Click to expand...
Sure. Just have to keep in mind PSE requires on-going operational support and someone has to pay for it. In some preliminary modelling last year for a Mayoral campaign, ended up with being able to support $30 million a year in operations with a CRL downtown, which at a stretch would support 4000 students, 500 staff in about a million square feet. Gotta take into account though, can't just double those numbers up--when you expand it isn't doubling what you have, it is expanding in breadth, and different areas of study require more $ per student (we focused on relatively cheap to provide computer science and math in the model).
 
My understanding is that the U of C is internally resistant to the idea of increasing the scope of its' satellite campuses, which makes sense given that part of the point of a university is to leverage the power of a bunch of academics working in proximity. SAIT is a no go, I'm sure; Mount Royal gave up their downtown campus 20 years ago or so.

The one that I'd think makes the most sense is AUArts (formerly ACAD). It's smaller, 1500 students or so, and 300k sq ft, so the whole institution could move in a stroke. They're colocated with SAIT, but in aging facilities. SAIT's long-term campus plans involve taking back AUArts' space. They're the only arts university between Emily Carr in Vancouver and OCAD in Toronto, so I'm assuming they draw a higher proportion of out-of-town students; more demand per capita for near-school residential space. A decent proportion of the arts "industry" is based downtown or in the surrounding communities (esp Inglewood/Ramsay).

Although AUArts would also make a great anchor for redevelopment along with the Green Line either in the Vic Park bus barns site or a large site in Ramsay.
 
I was hearing on the news last night when they announced these recent residential conversions, that the downtown vacancy rate is at a new high of 33%. So even with all these new tech companies coming on board and occupying some of the space, it has not made any difference. Office space is emptying faster than it can be reoccupied.
Apparently the city's objective with more conversions and other business migration, is to reduce the vacancy rate to under 20% .... but that is in 10 years time!!!
Wow ... anything close to 20% vacancy is still a big problem in the year 2032.
 
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