Interest in vacant office spaces in Downtown Edmonton is steady with more interest from investors and stakeholders to convert buildings, according to a new report.
Edmonton’s overall Downtown office vacancy rate is the third highest in Canada, sitting at 24.2 per cent in the third quarter, according to a report by real estate service and investment firm CBRE Limited. The national vacancy rate is 18.1 per cent.
Dave Young, executive vice president and managing director of CBRE Canada, said the leasing market for office spaces in Edmonton has been stable during the quarter. Young said his company has been working with the city to take “functionally obsolete” buildings and convert them into residential units or vibrant spaces.
“We have to look at adaptive reuse for some of these older office buildings that may not compete as office buildings anymore. Not every building that has vacancy can be converted. The conversion opportunity in the Downtown is quite exciting to look at, there’s a number of buildings that sort of physically can work in terms of floor size, depth, etc.,” said Young.
At the end of October, the city’s urban planning committee will see a report detailing office tower conversions and incentives for developers to convert vacant office spaces.
Young said several offices provide an opportunity to create a residential environment that is “dearly needed” in Downtown. Several buildings are accessible to public transit or parking, making them viable options for Edmontonians.
Paul Morasutti, the chairman of CBRE Canada, said in a news release that businesses are prioritizing “high-quality” buildings that minimize commute times for their workers. He added that while there is a lot of budding interest in converting office spaces to residential use, it is not the only solution to curb the high percentage of vacant office space.
“Converting office buildings to other uses has become an increasingly attractive option for landlords with older, less competitive buildings. However, while there is a lot of hype around conversions to residential uses, the economic viability of conversions is still challenging absent incentives and conversions will not be a silver bullet to solving elevated office vacancy,” said Morasutti.
In Edmonton, demand for “high-quality” office space is on the rise, not only for companies to welcome back workers but for developers who are looking at converting office spaces. High-quality buildings with amenities like lounges and fitness areas are extremely attractive right now, said Young.
Young said the conversion option in major cities like Edmonton and Calgary has the potential to bring more people into the Downtown core by focusing on both the public and private sectors to make sure investments are being made into assets to draw more people in.
“If we can create an environment where we are bringing those people back into our Downtown core to potentially live in some of these converted assets. I think that does a great service for everybody around, the small business, the restaurant to the dry cleaner,” said Young.
“The other thing I think it does is when there’s more people here there’s a sense and a perception of safety.”
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