At least 6 million sq. ft. of vacant space in Calgary's core ripe for residential conversion, consultants say

City council has just approved a massive downtown redevelopment plan for Calgary's downtown, and one of the biggest initiatives in the $1 billion plan is converting office buildings into housing.

Of the 12 million sq. ft. of unleased office space downtown, roughly half could be converted, architects say

Calgary’s downtown office building vacancy is at 32 per cent. City council has approved a plan to turn the downtown into a mixed-use, livable neighbourhood with more arts and entertainment amenities. (Leslie Kramer)

City council has just approved a massive downtown redevelopment plan for Calgary's downtown, and one of the biggest initiatives in the $1-billion plan is converting office buildings into housing.

Calgary's downtown office building vacancy is at 32 per cent. The plan envisions transforming at least parts of downtown into a mixed-use, liveable neighbourhood with more arts and entertainment amenities.

To help make that happen, the city will offer $45 million in financial incentives for building owners to convert unused space for new purposes. 

But just how feasible is it to convert Calgary's vacant office buildings into condos or apartments? 

Architect Steven Paynter, whose firm Gensler has studied the issue for Calgary Economic Development, says it depends partly on the type of building. Some buildings are better candidates than others, he told CBC Calgary's The Homestretch.

"The main thing that we've come to realize  … is actually the worse the office building is [as an office], the better candidate it makes for conversion," Paynter said. 

"If you think of an office building with a relatively small floor plate ... doesn't have enough elevators or it doesn't have high enough ceiling heights, once you strip all of that away, you've got the bones of a really great residential building."

It's really about being able to create residences that are not too long, not too narrow, and have access to natural lighting. That can be difficult if the building is too large and has vast interior spaces with no windows.

"If you've got 30 feet from the window to the elevators, for example, then you can start to develop that into units that are nice, 20 feet deep, very broad, very spacious and very well-lit residential suites."

Of the more than 12 million square feet of empty office space in Calgary's core, Paynter's firm identified roughly six million square feet that could be converted.

Paynter said his firm is working with Calgary Economic Development to target not just specific buildings, but areas of downtown that could thrive if there was a more vibrant mix of residential, commercial and entertainment.

"We really think that's what we need to do to reinvigorate the downtown, but also to even out the market and get that vacancy rate down, hopefully into single figures," Paynter said.

"Obviously, it's going to be done over a number of years, but the buildings we've looked at so far — and we took the 30 worst performing buildings in the city — within those 30 buildings, there's about three and a half million square feet, which makes great candidates for conversion at the moment." 

Some of the benefits of conversion include loft-style ceilings, sweeping views and a central location. 

"A couple of buildings that we looked at have about 11 feet floor to floor," Paynter said. 

So if you converted that office … all of a sudden you have huge ceilings and, you know, a real nice loft feel."

Vibrant mix is key

Paynter said studies in other cities with successful downtown redevelopment have shown that it's really about achieving a vibrant mix in the location.

"Most condo buildings have a pretty vibrant ground floor and they'll be a mix of doing the condo and rental conversion on the top, making sure we really plan for a vibrant ground floor with lots of businesses in there, lots of retail, restaurants and so on," he said.

"And then as that starts to kick off the redevelopment of the city, I think we'll see more users come in, be that higher education, health care, and they'll start to relocate to the downtown."

Detroit and Kansas City have both successfully redeveloped parts of their downtowns by focusing the development in a few concentrated areas — and that's what Paynter hopes to see happen in Calgary.

"When Detroit declared bankruptcy in 2014, they actually had a vacancy rate in their office buildings of only 14 per cent. Now, Calgary's more than double that at the moment. But they had a real lack of people downtown," he said. "And what they did … was concentrate their energy and the money on a small kind of location for everything ... and start to encourage development around that."

Calgary city council has committed an initial investment of $200 million for the redevelopment plan, with the expectation that it will take $1 billion over the next decade, and $45 million of that will be incentives for existing office space to convert to residential, redevelop or look at "adaptive use."

Money spent effectively

Paynter said the success of the initiative will depend on how the funds are spent. 

"If we can see that put into a few projects and a really dense area, it could be enough to kick start the redevelopment of the city," he said.

"You're not going to have to pay for the whole building to be completed. You're going to basically pay to take the risk off of the table for the developer. So I think you could easily see about two million square feet of development done per year with that $45 million, which over the next five years, you'd see a real change."

Paynter said the cost of refurbishing a building is roughly half the cost of rebuilding.

"If we put aside the kind of sustainability disaster of putting six million square feet of office towers into landfill, the actual costs don't really stack up either. It costs about $100-$150 a square foot to demolish a building, and then you have to build back with new," he said.

"The conversion projects that we've costed out are looking at about $200 a square foot, so literally half the price of tearing it down and starting again."

With files from The Homestretch