Edmonton’s downtown undergoing transformation with ‘flight to quality,’ revitalization investments

Click to play video: 'Downtown Edmonton undergoing major transformation'
Downtown Edmonton undergoing major transformation
WATCH ABOVE: Downtown Edmonton is undergoing a major transformation. As Sarah Ryan explains, businesses are looking for the best of the best for employees returning from pandemic work arrangements and that is pushing property owners to modernize. – Feb 28, 2022

Canadian Western Bank has been on Jasper Avenue since 1995, when it occupied just two floors in an office tower.

But on Monday, the bank announced it’s moving to the Ice District, taking its 1,200 employees with it.

“You’re going to be overlooking the square. You can go across to the hotel, right next door will be the grocery and food fair, and Stantec will be kitty corner on the square,” explained president and CEO Chris Fowler.

He said CWB wants to be in the middle of the action, in a location with amenities that will entice employees back to an office designed for a modern work environment.

Eighty-five per cent of their workforce has been working at home through the pandemic.

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“We’ll have a branch on the main floor, a big lobby on the second floor, and then the office tower,” Fowler said.

Click to play video: 'A look at how Edmonton’s Ice District has progressed over last 5 years'
A look at how Edmonton’s Ice District has progressed over last 5 years

The tower will be one of the final buildings added to the Ice District, he explained, adding construction is just starting now.

The company expects to move in January 2026.

CWB’s departure is another in a long line of vacancies along Edmonton’s historic Jasper Avenue.

“There is a lot of vacant space, a lot of empty buildings,” said Cory Wosnack, Avison Young Commercial Real Estate’s managing director.

Avison Young puts Edmonton’s office vacancy at 17 per cent, a far cry from the 8 per cent Wosnack said is ideal for a balanced market.

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“Ice District has been getting most of the attention for where development has been taking place, but there’s been a lot of renovations and redevelopment of older buildings, 1980’s buildings, along Jasper Avenue,” Wosnack explained.

Click to play video: 'New opening date for long-awaited downtown Edmonton grocery store'
New opening date for long-awaited downtown Edmonton grocery store

Avison Young is seeing what they call a “flight to quality,” where companies seek out modern, efficient buildings stocked with amenities.

“Right now, property owners need to think of their ground level space as a loss leader: an opportunity to create the right programming that, even at a lower rental rate, is an attraction for the building.”

He said that could include things like restaurants, but also fitness centres, meeting rooms and gathering spaces.

“We’re seeing this blend of office space that are becoming more like luxury hotels,” he said.

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Puneeta McBryan, the Downtown Business Association’s executive director, said the vacancies and boarded-up buildings along Jasper Avenue are just temporary in this transition period.

“It’s often more affordable, in times like this, to move into a brand new building than what you were paying in an older building if you signed a lease 5 to 10 years ago.”

Click to play video: '2022 Alberta budget breakdown with Calgary economist, Edmonton business community'
2022 Alberta budget breakdown with Calgary economist, Edmonton business community

And Wosnack was quick to point out that some of the older offices are simply becoming obsolete and need to be repurposed into something entirely different.

“Forty-eight per cent of all the vacant office space downtown is in just 10 buildings.”

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Some companies are already investing in the revitalization of Jasper Avenue, including Bitcoin Well and Innovate Edmonton.

“Edmonton is leading all the other major cities in Canada in terms of the return to downtown activity,” Wosnack said.

McBryan added the pandemic has slowed down re-development plans, but said she expects things to turn around quickly as more companies bring people back downtown.

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“In the next six to 12 months, a lot of those vacant or boarded up buildings that we’ve been seeing in the last little while will already be under construction or opening as something else,” she said.

“I think by this time next year, it’ll already feel like a bit of a different story on Jasper Ave.”

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