News   Apr 03, 2020
 2.6K     1 
News   Apr 02, 2020
 4.6K     3 
News   Apr 02, 2020
 2.3K     0 

Office space development

Daveography

Administrator
Staff member
Member Bio
Joined
Sep 22, 2015
Messages
10,155
Reaction score
22,501
Location
Edmonton, Alberta, Canada
@Surrealplaces Yikes! It's getting pretty high in Edmonton, too; 12% was the last number I saw, and we're about to see Kelly Ramsey and Edmonton Tower come online in the next few months. I'm sure we'll recover sooner rather than later, though; oil and markets have shot up like gangbusters this week.
 

Surrealplaces

Administrator
Staff member
Member Bio
Joined
Sep 24, 2015
Messages
10,478
Reaction score
44,222
Location
Calgary
20% and climbing. Once BP, 707-5th and Telus Sky come on board, it will be even more.

I found some of the comments in the article interesting.

Ideas include getting out-of-town businesses to set up satellite shops in the core and having building owners look at repurposing under-utilized buildings. Some could become business incubators; others might be converted into residential real estate.

“And then frankly in some cases, should we blow up the buildings? We have had people in the development community say we’re not over-built, we are under-demolished.”

Experts say that’s likely a last-ditch decision facing only a few owners of older, lower-level properties that face big retrofit bills.

I've al;ways been a fan of turning some of the older office buildings into residential or re-purposing them for educational/art facilities.
 

Surrealplaces

Administrator
Staff member
Member Bio
Joined
Sep 24, 2015
Messages
10,478
Reaction score
44,222
Location
Calgary
@Daveography 100% agreed! Residential conversion would be awesome.

The low vacancy rate and high lease rates have been good for office tower development, but bad for finding alternate uses for older office buildings. My company's office building downtown is an older building, but we pay $30.00 a sq ft.....considering the building, it should be more like $10 or $15. It'll be interesting to see where lease rates go on older buildings if the downturn lasts a while.
 

Surrealplaces

Administrator
Staff member
Member Bio
Joined
Sep 24, 2015
Messages
10,478
Reaction score
44,222
Location
Calgary
I think the raging office space boom over the last 15 or 20 years has kept a number of older buildings very profitable as office buildings over the years. I wonder if now is the time we finally see some change? I recall reading somewhere that lease rates for a building would have to be less than $10/sq ft to make it feasible to turn into residential. If the vacancy rate stays high for an extended period, then that is something that might be possible.
 

Surrealplaces

Administrator
Staff member
Member Bio
Joined
Sep 24, 2015
Messages
10,478
Reaction score
44,222
Location
Calgary
Unless a building is in bad shape and needs repair it doesn't make sense to bulldoze and re-build, but it's the unfortunate effect of a booming office market with high lease rates. We'll see what a high vacancy rate for a period of time does. Hopefully it forces landlords of older buildings to drop the lease rates and think outside the box when it comes to getting tenants.
 

RyLucky

Active Member
Member Bio
Joined
Apr 16, 2016
Messages
288
Reaction score
387
It's almost like how some cities in the eastern half of the continent call themselves "post-industrial", are we becoming "post-office"? (applause please)

I don't know what the costs are to keep an empty building, but it seems extremely wasteful to blow something up when there might be start-ups and other groups who need space but can't compete with big O&G. I expect multifamily residential demand will stay relatively high with demographics what they are these days (later starts, smaller families, more living alone, work/life balance, etc). I suspect there may be issues with office towers being wider than residential towers and having a core of unusable space towards the centre of the building, but maybe that would be a good place for storage, gym, laundry, etc.

Let me know when I can get 1000sqft with a kitchen and a bathroom for $2000/mo in the Bow!
 

Always_Biking

Senior Member
Member Bio
Joined
Nov 4, 2015
Messages
1,381
Reaction score
2,080
It would be a great spot for a downtown daycare. Seriously, I know a lot of parents who work downtown and would love to be able to go see their kids from time to time, or maybe have lunch with them sometimes.
 

Surrealplaces

Administrator
Staff member
Member Bio
Joined
Sep 24, 2015
Messages
10,478
Reaction score
44,222
Location
Calgary
I imagine the pessimistic view is what we will see for a while. I saw some discussion on Twitter about converting offices to to other uses, but too many people continue to think inside the box and say that nothing can be done. In New Westminster the city is trying to curb office space to residential conversions as there are lots happening. Real estate is more expensive there, but it still doesn't mean the conversions can't happen here.

http://www.bclocalnews.com/news/136742093.html?mobile=true
 

Surrealplaces

Administrator
Staff member
Member Bio
Joined
Sep 24, 2015
Messages
10,478
Reaction score
44,222
Location
Calgary

BKha

Active Member
Member Bio
Joined
Mar 25, 2016
Messages
814
Reaction score
1,279
Good news indeed. I hope the vacancy rate goes down, but not too fast and not too low. It's in the city's best interest to have a lease rates at a reasonable level, so as to allow different companies to be able to operate downtown. Low but, high enough to encourage development of new office buildings.
 

Always_Biking

Senior Member
Member Bio
Joined
Nov 4, 2015
Messages
1,381
Reaction score
2,080
I think it's great that non O&G companies are taking advantage of the cheaper lease rates, but I hope we don't see rates skyrocket quickly and these companies having to leave the core again.
 

Top