With a downtown office vacancy rate over 27 per cent, developers in Calgary are rethinking the best way out of a crisis.
Where others see obstacles, Strategic Group sees opportunity by converting office space into new homes.
After being vacant for years, the Art Deco classic Barron building on 8 Avenue S.W. between 5 and 6 streets will have 94 new rental apartments when it comes online in 2020.
Strategic Group bought the Barron and its famous uptown theatre over a decade ago with a $100-million plan to turn the mid-century building into a commercial mixed-use complex. But the energy crisis, followed by skyrocketing downtown vacancy, changed that.
Ken Toews is vice-president of development with Strategic Group and said the Barron building was originally going to be solely an office building.
“We were going to expand the Barron add a new wing to it and have a pretty cool office building, but with the changes in the office market with high vacancy, we had to take a look and see what we really wanted to do with the Barron,” Toews said. “And when we looked at the other options, residential was really the right option.”
Toews believes it’s a move that will help get people to live downtown.
“That is really important,” he said. “We need that vibrancy–when somebody comes into this city looking at relocating in Calgary, they can see we have some life downtown.”
Strategic has another conversion project coming online in March. The Cube, in the Beltline community, is another 65,000 square feet of office space being turned into rental apartments.
Strategic said development on that building started in spring 2018 as the company’s first office-to-residential conversion project. When finished, there will be 65 one- and two-bedroom units along with parking stalls, retail spaces at street level and a rooftop patio for tenants, according to Strategic.