The Popular Idea to Turn Office Buildings into Residential Spaces
According to the CBC, turning office buildings into residential spaces is becoming a popular trend in North America.
Calgary vacancy rate for office buildings is around 30%, far higher than the expected 8-10%. The initiative to convert these buildings, when possible, just makes sense.
Converting even 20% of these vacant buildings amounts to billions of square feet that can be otherwise used.
Calgary Leading the Charge
Estimates indicating that Calgary’s vacant office buildings account for about 30% of total office buildings, Calgary has committed over $100 million in incentives to encourage developers to consider conversions.
Some developers estimate that downtown office conversions may ultimately generate an additional 3500 1000sq.ft. apartments. This could add some amazing life and atmosphere to an already great downtown.
So far Calgary has approved 5 buildings for this conversion which will add 650,000 sq.ft. of livable space.
Current Calgary Downtown Office Stats:
- Current Vacancy is at 32.6%
- 130K square feet Net Absorption*
- There is 0 square feet under construction
- $12.55 is the net asking rent per square feet
- While there may be positive developments in the near future, a longer-term look reveals a continuous upward trend in vacancy rates and a concurrent decrease in net absorption, suggesting potential challenges for the real estate market in the future.
*Net absorption refers to the net change in the amount of leased real estate space in a particular market over a given period of time. It is calculated by subtracting the amount of commercial real estate space vacated by tenants during the period from the amount of space leased by tenants during the same period. Positive net absorption is a good sign for the market as more space is being leased than is being vacated.
Sources: Calgary Development Incentive Program
Calgary Downtown Office Figures Q4 2022