Downtown Calgary office building owners get creative to fill floors

Click to play video: 'Downtown Calgary office building owners get creative to fill floors' Downtown Calgary office building owners get creative to fill floors
WATCH: As Tony Tighe reports, the traditional office design may be a thing of the past in Calgary – Oct 27, 2017

With a high office vacancy rate in downtown Calgary, office tower property owners are trying to attract tenants with new building designs and uses.

Sierra Place was built at the corner of 7 Avenue and 7 Street S.W. in 1958.

READ MORE: Layoff protection offered by Alberta condo project to increase sales

It’s always been an office building, but the property owner is changing it into residential apartments.

Greg Moore with Artis Real Estate Investment Trust says the building is 50 per cent vacant and it’s been tough to find and keep tenants.

“We looked at how long the recovery is going to be in Calgary and how long it’s going to take to get a normalized market downtown,” Moore said. “We’re about five to 10 years from that happening, so we looked at what the highest and best use of the property is going forward.

Story continues below advertisement

“We can get more cash flow from the property as a multi residential building than as an office building.”

READ MORE: Dream Office REIT slashes value of Alberta assets due to economic downturn

The slumping economy has forced many companies to leave downtown office buildings.

The vacancy rate in the core is 27 per cent, so building owners are getting creative to fill floors.

READ MORE: Nearly one third of Calgary’s office space could be empty by 2018: real estate firm

Aspen Properties owns the old Encana Place at 9 Avenue and 1 Street S.W.

When the company was redeveloping the newly named “Edison,” they used office design ideas from Silicon Valley.

Executive chairman of the board Scott Hutcheson said they’re focusing on amenities and lifestyle perks to attract companies who employ millennials.

“We’ve got some really cool amenities that have been developed into that building in order to react to the type of tenant that will be occupying those buildings in the future,” Hutcheson said.

“Fifty per cent of those in our offices in the downtown in Calgary are going to be millennials by 2020.”

Story continues below advertisement

“So that type of product is different than the traditional office product and the millennials are asking for it.”

READ MORE: Job-hopping and standing desks: Millennials shaping modern work environments

The amenities include a basketball court, golf simulator and putting green. The whole building is dog friendly, with a dog spa and outdoor dog park.

Since the redevelopment started 12 months ago, The Edison is 55 per cent leased.

Greg Kwong with CBRE commercial real estate said between July and October this year, more new offices were leased in the core than vacated for the first time in three years.

“I don’t know if it’s a trend at this point,” he said. “It’s too early to tell but certainly any type of ‘green-shoot’ positive news is good news at this point.”

READ MORE: Canadian millennials just aren’t that into the jobs that robots could take away: study

Those are encouraging numbers for Moore and Sierra Place.

Construction to convert his office building to residential space starts in early 2018.

“You want to see more people living downtown, some more densification. Work, live, play. I think this site here is great for that.”


Sponsored content