Oil Woes Have Calgary Landlords Turning Empty Offices Into Apartments
- Developers focus on residences amid record office vacancies
- Calgary may need 16 years to absorb its empty office space
Photographer: Todd Korol/Bloomberg
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When the lease on an Alberta Health Services office in Calgary came due for renegotiation two years ago, the rental market was so bad that trying to keep the tenants wasn’t worth it.
Instead, landlord Strategic Group took the unconventional step of letting the government agency leave and spent C$24.5 million ($18 million) to convert the seven-story building into an apartment complex. Aside from the renovation cost, the building sat vacant for almost a year. But those were risks the company had to take to cope with a market that’s been gutted by an exodus of oil-industry jobs.