May 20, 2024 | Office Conversion Case Study
How is Calgary planning to fill 6 million square feet of vacant office space? - An Ivory Innovations Case Study
Greyson Rynders
Calgary’s Vacancy Problem
Calgary, with a population of over 1.3 million in 2021, is the third largest city in Canada behind Toronto and Montreal. Over the latter half of the 2010s, Calgary experienced gradual economic downturns that caused office vacancies to rise in the downtown area. This was further exacerbated with the onset of the COVID-19 pandemic in 2020 that led to nearly ⅓ of offices in the downtown area becoming vacant. With a mounting reduction in property tax income and a stagnated, ghostly downtown scene, the City Council of Calgary implemented the “Downtown Office Conversion Program” to revitalize downtown.
The Downtown Office Conversion Program
Introduced in 2021, the Downtown Office Conversion Program launched a decade-long adaptive reuse project aiming to convert offices to residential spaces. The City of Calgary announced a goal of transforming 6 million square feet of vacant office space into residences and increasing the downtown population by 20%, all by a 2031 deadline. The program offers a $75 per square foot subsidy to conversion projects upon their completion ($10 million project cap). $200 million has been invested in the initialization of the program with a total of $567 million in partner investment to date. The City of Calgary plans to have $1 billion invested over the lifetime of the program.
As offices are converted into residential spaces, the downtown area will transition from a business-oriented design to a more accessible, and livable community layout. Through the Greater Downtown Plan, the City of Calgary hopes to implement more public spaces and venues alongside potential changes to road traffic rules.
Moving Forward & High Demand
The Downtown Office Conversion Program currently has 17 projects in its pipeline (~2.3 million square feet of office space). The program is experiencing high demand among developers alongside funding constraints, which has necessitated a project application pause in late 2023 that remains in place for the foreseeable future.
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