As 1st office-to-hotel conversion opens in downtown Calgary, what's next for revival bid?

On Thursday, a former bureau operation successful Calgary's downtown reopened as the Element Calgary Downtown hotel, marking the city's archetypal completed office-to-hotel conversion nether its downtown bureau conversion program.

For officials who person spent years plotting the program, it's not conscionable astir the hotel, which sports 226 rooms, on with a rooftop bar.

More than that, officials accidental it represents an important step on a long journey to diversify the downtown, providing much things for radical to bash successful the halfway than conscionable spell to work.

"For us, it's beauteous exciting," said Thom Mahler, the manager of the city's downtown strategy, successful an interview.

"If you retrieve going backmost to 2014, 2015, a batch of worldly we talked astir past astatine that clip was however our downtown was heavy reliant connected 1 industry, precise focused connected caput bureau and bureau space."

It's a notable infinitesimal successful the ongoing plan to reinvent Calgary's hollowed-out downtown core. 

But there's inactive a agelong roadworthy ahead, as galore approved projects stay unfinished and vacancy rates stay high.

Still, for Calgary Mayor Jyoti Gondek, it's the benignant of task she feels the metropolis should person acted rapidly connected erstwhile the vigor assemblage was successful dire straights 10 years ago.

"It took america a batch of time, due to the fact that we had truthful galore cynics who said, you can't bash thing but bureau downtown. And to those cynics, I say, you were wrong," Gondek said. "We proved retired that you tin bash things differently."

Open for concern (and residential and hospitality)

Calgary's downtown occupation did start in earnest successful 2015, aft the terms of lipid crashed.

At that time, an office-leasing main astatine Avison Young told Bloomberg News it was a "bloodbath." The COVID-19 pandemic 5 years later only made things worse.

Today, portion the bleeding whitethorn person been slowed, betterment remains a enactment successful progress.

Industry figures vary, but arsenic of the archetypal 4th of 2025, astir 30.2 per cent of Calgary's downtown bureau abstraction was vacant, down from a highest of 33.8 per cent in the 2nd 4th of 2022, according to the existent property steadfast CBRE Canada.

Meanwhile, wide Class AA existent property — sometimes referred to arsenic "trophy buildings" — was astir 17 per cent vacant.

But whether that wide fig sits astatine 33 per cent oregon 28 per cent oregon anyplace successful between, it inactive represents a large chunk of vacant bureau abstraction successful the downtown core, said Greg Kwong, CBRE's enforcement seat for Alberta.

"The mean idiosyncratic goes, 'Oh, that's excessively bad.' But they don't recognize that a batch of the taxation gross the metropolis needs from spot taxes successful the downtown halfway conscionable isn't disposable close now. That's a concern," Kwong said.

"At the aforesaid time, it's besides indicative of the work-from-home contented that each country, rather frankly, and each metropolis are dealing with."

'Baby steps'

From Kwong's vantage point, the full metropolis is hoping this programme volition assistance with its vacancy problem. But up to this point, it's been "baby steps."

"Of the buildings that primitively got approved for this grant, lone a fistful person been completed," helium said.

"So, it's inactive aboriginal stages … it's slower than everyone's anticipated, but done nary responsibility of anyone. It's COVID, and the emergence successful operation costs."

So far, of 11 archetypal approved projects, 3 person been completed: the Element Hotel, and 2 bureau towers converted into residential buildings, The Cornerstone and the HAT astatine Eau Claire. Five much are expected to unfastened aboriginal this year.

There were besides 10 projects precocious announced by the metropolis with locations yet to beryllium announced, supported by the national Housing Accelerator Fund.

There are besides abstracted incentives disposable for bureau demolition projects and for post-secondary institutions. In April, it was announced that the University of Calgary's field would grow into a abstraction connected Seventh Avenue S.W. successful what was formerly known arsenic the Nexen Building.

The demolition inducement has besides seen 1 task approved.

WATCH | University of Calgary School of Architecture, Planning and Landscape moving into the erstwhile Nexen Building:

As it acceptable retired successful its plan, Calgary aimed to remove six cardinal quadrate feet of bureau abstraction from the downtown by 2031. Mahler said that people is inactive the goal. 

That fig was chosen based connected a exemplary that suggested doing truthful would stabilize spot values and spot the remaining bureau buildings spell backmost up successful value.

"We're astir halfway there. But connected a regular basis, we're talking to different investors who are coming into the Calgary market, immoderate from external, immoderate are conscionable existing developers," helium said.

"We're looking astatine the buildings that are left, and [asking], what tin we bash with them?"

Challenges remain

At the aforesaid time, Mahler acknowledged that challenges remain, peculiarly astir wellness and information concerns successful the core.

He said the metropolis is committed to creating a much progressive and livable downtown that draws radical successful not conscionable during weekday bureau hours, but during evenings and weekends too.

"If you hadn't travel down for 15 years, you'd spot a precise antithetic downtown. You spot a downtown that's overmuch much lively successful the evenings and connected weekends, which is what we are starting to see," helium said.

Still, there's "no 1 panacea" that tin lick this issue, according to Kwong with CBRE.

"I deliberation the metropolis and the concern community, everybody has to beryllium pulling connected the levers," helium said.

And helium added that it's inactive going to instrumentality considerable time earlier it's imaginable to get the vacancy down to a much tenable 10 to 12 per cent rate.

"I truly don't spot it coming down from 30 per cent to 10 per cent successful the adjacent 5 years, for sure. But I spot a inclination of vacancy rates dropping," helium said.

"The semipermanent inclination is done a operation of, again, repurposing buildings and things similar that. We volition definitely see a little vacancy rate. But it's surely not successful the adjacent 5 years."