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Edmonton real estate industry pushes for incentives for office conversions – Edmonton | Globalnews.ca

Edmonton’s downtown offices are lacking tenants, leading the city and developers to look at ways unused office space can be converted to something more in demand, like living space.

Edmonton’s office vacancy rate has risen to nearly 25 per cent, above the national average, and the development industry is trying to find a way to turn that unused office space into places to live.

Dave Young, executive vice president and managing director of CBRE, said converting offices to residential space can help address the wasted space, increase the city’s tax base and even make the downtown core feel safer and more vibrant.

“About 15 per cent of our tax base is in the downtown core and with eroding office values, we have to do something,” Young said.


Click to play video: 'Turning Calgary’s office space into affordable housing'


Turning Calgary’s office space into affordable housing


“If we continue down the road that we are on right now in the core where building values are plummeting, given the vacancy rates, we have to be creative in thinking of a way to enhance our tax base or solidify our tax base.”

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“It’s a great opportunity — the thing we need most is density, is people,” said Ward O-day’min Coun. Anne Stevenson.

Young would like to see an incentive or grant program that would encourage developers to take on conversion projects. The City of Calgary has one — developers get $75 for every square foot of office space that is turned into residential.

The city said there is an oversupply of office space in downtown Calgary and its goal is to remove six million square feet of it by 2031. About 150 units have already been built in commercial buildings this way, and about 800 more are on the way in Calgary, Young said.


Click to play video: 'Five more downtown Calgary office towers to be converted to residential homes'


Five more downtown Calgary office towers to be converted to residential homes


It’s happening in Edmonton already, too — Westcorp is planning to turn a 12-storey office building near 104th Street and Jasper Avenue into a residential building. The iconic Enbridge tower two blocks east is also set for conversion to apartments.

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“We’ve had a history of conversion of some of these office buildings, and they have been successful, so I think with the right people, the right incentive, the right buildings, I think we’ve got an opportunity now,” said Young.

CBRE has targeted six additional buildings that it believes could be turned into residential space.

“That idea of adaptive reuse has been around in our city for many years and I think the need for it is more urgent than ever given the change in work patterns and the smaller footprint that most businesses need to operate,” said Stevenson.


Click to play video: 'Converting empty office space in downtown Edmonton to residential units'


Converting empty office space in downtown Edmonton to residential units


The best options for office-to-residential conversions are buildings that would require a lot of investment to attract businesses and would struggle to be profitable in their current states, according to Young.

“(A conversion) gives that building some new life, because as an office building, it’s functionally obsolete,” said Young.

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Young said having more people living, working and hanging out downtown can help with public safety.

“We need more people downtown. Anything we can do to create activity in the core — be it through residential or office or retail — is hugely important. Without it, we’ll still face the challenges of safety that we have today,” he said.

There are challenges in converting these buildings — experts told Global News buildings need to be fully gutted to their concrete structures and fitted with new electrical wiring and plumbing fixtures to make them livable.

An Avison Young study found that only about 34 per cent of office buildings in major cities across North America could be good candidates for conversion.

Soon, city council will be able to debate the types of incentives it wants to offer to developers, as city staff will present options to councillors at a meeting in September.

&copy 2023 Global News, a division of Corus Entertainment Inc.




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