The City of Calgary is having to pause new applications for the Downtown Calgary Development Incentive Program as high demand exceeded the available funds.
So far, 13 projects have been approved and four more are in the pipeline for office-to-residential, hotel, school and performing arts centre conversions. The city said those projects will create approximately 2,300 homes and remove around 2.3 million square feet of otherwise vacant office space from the city’s downtown.
To date, the city has committed $153 million to the program, leveraging more than $567 million in private investment, a 4:1 ratio.
“We plan on using this time to better align the program with the city’s commitment to accelerate the development of more student, market and non-market housing, while also encouraging further private investment in Calgary’s downtown,” Sheryl McMullen, manager of investment and marketing for downtown strategy, said in a statement. “We have 17 projects in the program pipeline and are pursuing additional funding to support many more strong projects in the near future.”
In November 2022, city council made a request to the Alberta government to match the city’s $100 million in the incentive program. The request was not fulfilled.
On Oct. 3, CBRE said overall downtown vacancy in Calgary fell to 30.9 per cent in the third quarter of 2023, from its Q2 2022 peak of 33.7 per cent. CBRE said Class A vacancies were down to 25.4 per cent vacancy, as the local market continues its flight to quality. The commercial real estate firm said a “growing number” of underutilized Class B and C buildings were being converted to other uses.
CBRE said in Q3, 475,000 square feet of office space was removed from the market through conversion projects.
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