The City of Calgary unveiled the next round of projects under the office conversion program, with nine new conversion projects that will add nearly a thousand new homes to the Downtown Core, West End, and Beltline in the coming years.

The nine conversions are being led by seven different developers, some with familiar names from previous successful conversions, as well as new entrants into Calgary’s property development scene.

Among those developers who were both new to the redevelopment of office properties, but not new to Calgary, was Crestpoint Real Estate Investments, which unveiled its plans for a redevelopment of the Transalta office tower on 12 Avenue SW in the Beltline.

That project was set to be a dual set of constructions with work to turn the aging office tower into rental housing, while building a new purpose-built residential building on the same site.

Ian Pinchin, director of development for Crestpoint Real Estate Investments, said the city’s incentive program effectively de-risked the conversion project, making it possible from a business sense.

“There’s risk in doing rental housing in general, just because in the condo sector, you’ve pre-sold units. You sort of understand what the market is. You’re able to move forward. When you’re building a new rental housing, it’s built calling spec, so entirely speculative,” he said.

“Conversions offer the opportunity to have some cost savings, because you’ve already gotten structure, to say nothing of the carbon savings by not having to tear down and simply waste all the energy that went into building this. But it’s easier to go from the ground up,” he said.

He said working in a pre-existing building meant unexpected challenges when walls were opened and work really began to understand the shape that a building is in.

“When you’re thinking about the trade-offs about the site in general, you can design from scratch,” Pinchin said.

“Whereas the conversion, you always are going to find some things that it’s not going to be perfect, but the opportunity there to realize cost savings and to have a building that’s also completed much faster.”

That conversion project is expected to add 153 new homes by the summer of 2027, with a larger purpose-built tower to follow by the end of 2028 with 353 homes. A total of 73 of the homes will be affordable rental units.

Incentive provides big ROI for Calgarians

Council is set to discuss a $40 million boost to the incentive program, which has seen close to $200 million already invested into conversion projects.

Mayor Jeromy Farkas said that Calgarians should consider that investment by the city has drawn over $800 million in private investment, resulting in a 7:1 return on investment.

“[It is] the best possible investment that this type of council could make in the future. So, I’ll be strongly advocating for continued support of this program. We’ve made it halfway to our goal, and we’re well on our way to be able to fully realize the ambitions of this program,” he said.

Farkas said the additional $40 million would be debated in council as part of the overall discussions, as the value for money that Calgarians receive. Some councillors have seen it as an area that could be cut in upcoming budget discussions.

“When we look at the results, $7 in total economic impact for every dollar invested here, there is bar none no better economic opportunity for us as a council to continue to continue to invest capital funding,” he said.

Ward 8 Councillor Nathaniel Schmidt said that further investments would see a strong ROI, and a more stabilized tax base that is ultimately also providing affordability to Calgarians.

“That means that our downtown needs to be the leader in that, and so by adding more buildings like this, we only make the downtown more productive, and then we ultimately make life affordable for all Calgarians,” he said.

Support welcomed for the Beltline

Schmidt said the addition of conversion projects to the Beltline would provide the much-needed support the community has been asking for.

“By adding more people here, we’re justifying also adding more services, more infrastructure improvements, and that will bring in the opportunity to revitalize some of the businesses,” he said.

“We’ve taken a problem here and turned it into an opportunity. So, any time that we can use existing infrastructure to create more homes, more tax productivity and more vibrancy, then I think we should take that opportunity, because we’ve shown that we can do it.”

Alecia Peters with the City of Calgary said that so far, the conversion program has been the gold standard in North America, but that there were other incentives being offered to further move towards the goal of reducing the vacancy rate.

“We’ve got other streams of programs like the plus 15 offset, the demolition program. We’re removing kind of the denominator of office space, certainly through the conversion program, and then, you know, enabling development downtown through friendly policy,” she said.

Once the goal of removing 6 million sq. ft. of office space is met, vacancy rates in the downtown would be reduced by 10 per cent by 2031, leading to approximately 20 per cent overall.

From when the downtown conversion incentive began in 2021, the vacancy rate has dropped from 34 per cent to 27 per cent, according to reports by Avison Young.