Strategic Group, a Calgary-based developer, one of Canada’s largely held real estate companies has applied for a permit to convert a long-held commercial property into a rental apartment building as an office exodus in Edmonton.
“We’ve been studying our office holdings in both Edmonton and Calgary, looking at certain buildings that might present an opportunity for conversion from office to residential,” said Randy Ferguson, chief operating officer of Strategic Group.
There’s several reasons for that”, he further stated, “Firstly, it’s a less costly way of developing residential property markets in Edmonton and Calgary are struggling somewhat.”
With five operating buildings in Edmonton and a 14 per cent vacancy rate – a couple of points below the city average, Mr. Ferguson still doesn’t believe this will be the case long term.
“In Edmonton, we foresee a ‘flight to Quality’ due to the large amount of new office space that’s about to come to market in the Ice District. We have several large tenants preparing to relocate from the CN Tower to the Edmonton Tower for example, one of those being the City of Edmonton. We’re simply trying to stay a step ahead.
It’s been estimated that 1.8 million square feet of office space will this year as projects like the Edmonton Tower and the Stantec Tower open their doors to tenants.
Harley Courts has a total of 156,000 square feet and could accommodate more than 170 one and two-bedroom potential for residential conversion.
“We’ve studied more than a dozen of our commercial properties in Alberta and, of everything we’ve looked at so far, Harley Court is our best option,” says Mr. Ferguson. “It can be [converted] very efficiently because of the way in which residential apartments would lay out on the floor plate. It’s also located in an important employment, education and government district so it will be appealing location-wise to residents.”
“We studied the CN Tower too but it’s just not commercially viable for a conversion because of the layout; its highest and best use is as an office building.” Mr. Ferguson said.
We’re still in discussions with tenants at this stage. Some of them have decided to relocate and others wish to remain. We’ll be honouring our contracts with them. It’s likely that we’ll develop half-a-dozen floors initially so as to minimize disruption.”
The company has not settled on a rental per unit yet, but condos are expected to be affordable for young professionals and students.