Passer au contenu principal Passer au pied de page

Three signals that will reveal Calgary is on the path towards downtown rejuvenation

Hero Image Calgarys Downtown Rejuvenation
Calgary's development and planning community seems to have figured that there is no silver bullet that's going to shoot down the office glut problem and ignite a major downtown rejuvenation.

That’s a good thing.

Instead, stakeholders are starting to identify and deploy various other methods and strategies that, altogether, will put Calgary on the path to downtown commercial and residential diversification, revitalization and success.

This is the second article of a two-part series focused on downtown vibrancy in which Thompson reviews the conditions, challenges and opportunities in Vancouver and Calgary — both cities in which she has lived and worked as a researcher in the commercial real estate industry.

Part 1: Vancouver’s office challenges require a little perspective

For years, the City of Calgary has been dealing with office vacancy consistently around 30 per cent, caused mostly by the downturn in the province's oil and gas sector. Calgary was one of the few markets that didn't see a rapid increase in vacancy in 2020, as the city had already seen companies cut excess space in years prior due to the prolonged economic downturn. That said, the pandemic certainly did not help the situation, and Calgary did see vacancy rise; just not as fast as many other markets.

Office vacancy is a persistent challenge, although Calgary’s downtown vacancy actually ticked down to 29.61 per cent in the third quarter of this year amid modest absorption of 300,000 square feet, according to Colliers’ latest Calgary Downtown Office Market Report.

Calgary planners and developers are now wisely tackling this issue on a number of fronts that provide more hope and certainty rather than sitting and waiting for the oil and gas industry to single-handedly return downtown Calgary to glory.

Here are three signs that will eventually show that Calgary is on the path to downtown revitalization.

  1. Office rebound is boosted by cleantech and other forms of commerce

    Forever, Calgary’s downtown office market has been seemingly boom or bust, in lockstep with the province’s oil and gas industry. Indeed, 81 of the 102 corporate head offices in Calgary in 2021 were oil and gas companies, engineering firms, or oil- and gas-related businesses, according to Calgary Economic Development.

    Expectations — and reality — are starting to change, mostly out of necessity. Calgary Mayor Jyoti Gondek wrote in an op-ed in The Globe and Mail this summer that setting a net-zero pathway aligned with global climate targets could help Alberta generate almost 170,000 jobs in cleantech and contribute $61 billion to provincial GDP by 2050, if done properly. Gondek wrote that 66 per cent of cleantech companies target customers in oil and gas, and more than half of the 945 clean tech companies in Alberta call Calgary home.

    We’ve also started to see more capital and effort spent by city and provincial officials to attract more people and businesses to Calgary from other parts of Canada. Their message, through the Alberta is Calling ad campaign, is simple and clear: Alberta’s cities are more affordable than other Canadian cities, and the province has a great lifestyle and plenty of well-paying jobs.

    As the national tech industry recovers, we’ll start to see more companies establishing themselves in Calgary as talent gets pushed out of Vancouver and Toronto amid high housing costs and urban space crunches.

  2. The Calgary Events Centre project helps knit together entertainment, housing and business, bringing much-needed activation to the urban core

    In October, after much disagreement and handwringing, the City of Calgary finally reached an agreement with the Alberta government and Calgary Sports and Entertainment Corporation (the owner of the Calgary Flames) to finance and construct a new stadium to replace the 40-year-old Saddledome.

    The $1.22-billion project will include an event centre, community rink, enclosed plaza, improvements to public spaces around the centre in the Rivers District, as well as enhancements to area transportation and infrastructure.

    While it’s important to debate whether so much public money should be invested in a private sports franchise, the new centre was definitely much-needed in Calgary with the Saddledome well beyond its functional life.

    We’ll know this project is successful, firstly, if it gets completed on budget and on time, but also if it is well-integrated into the edge of downtown Calgary in a way that actually provides an improved public realm and helps to catalyze a blend of commercial and residential real estate development that brings more people and more commerce to the area and nearby neighbourhoods.

  3. The conversion of office to residential continues, and includes a diversified set of housing types to help “residential-ize” the downtown core

    Calgary's office conversion incentive program has seen substantial engagement. The financial incentives are now maxed out due to uptake, and the city expects to see 17 office-residential conversations take place through the program.

    For the program, or future versions of it, to be truly meaningful, it's essential to see a diversity of homes emerge from the conversions including affordable housing, rental apartments, market housing, seniors housing, student housing and maybe even hotel rooms.

    The program must be part of a broader strategy that finds ways to attract different kinds of commerce, retail, residents and entertainment to downtown Calgary. It needs to give rise to a complete community.

    Calgary has been at the forefront of conversions because of the city’s extremely high office vacancy. But other cities in Canada have similar challenges and should be watching and learning. Calgary is roughly seven years ahead of everyone else on this issue and can help generate the playbook for downtown rejuvenation.

    Taken together, the onset of commercial diversity, the redevelopment of the Saddledome and continued conversions of office to different types of housing will signal that Calgary's downtown core is on the right path.

    Balanced commercial vacancy and lease rates across the commercial and residential spectrum will tell us that success is being achieved.

Pour plus d’informations, veuillez contacter:

Susan Thompson

Associate Director, Research

Vancouver - Rogers Tower

Susan is a long-standing analyst and commentator on the commercial real estate market.  Her continuing work with local, national, and international media as a commentator for the commercial real estate sector has given her recognition within the industry as one of the preeminent sources of information and knowledge for leasing and transaction analysis and market trends.

Susan was previously with Avison Young working as their Research and Insight Manager over the course of nine years  (a boomerang employee: with them for four years, away for five years, then back for five years). She was responsible for dozens of reports on the Calgary commercial real estate market, covering office, retail and industrial leasing as well as business condominium properties and commercial property sales. More recently she focused on data-driven storytelling through reports, media work, and client engagement utilizing techology and analytics to help make better-informed decisions. 

In between periods with Avison Young, she spent over five years with Calgary Economic Development; first as their Business Development Manager specializing in Real Estate, helping companies bringing their business to Calgary navigate the local commercial real estate market, then as their overall Research Manager providing economic analysis and commentary on the Calgary market.

In prior years, after starting her career in assessment, Susan spent over seven years with RealNet Canada, the leading provider of third-party commercial real estate sales information. Working her way up from Research Analyst to Manager for the Calgary office, Susan analyzed thousands of commercial real estate transactions and is extremely knowledgeable about the commercial real estate market in Calgary. 

Susan has a Bachelor of Commerce degree, with a major in Management Science from the University of Alberta. Well recognized in the industry, Susan’s name is often seen in the media as she provides commentary and insight on current commercial real estate topics. Susan's breadth of knowledge across the commercial real estate market and in data analytics is an asset across the industry.

Voir l'expert