The Stantec Tower in downtown Edmonton on September 25, 2018 is the tallest building in Canada, west of Toronto.
Larry Wong / POSTMEDIA NETWORK
Edmonton’s downtown is defying gloomier trends in the rest of the Alberta.Major construction projects are still underway here. Major businesses are moving into the city’s impressive new office towers, which in turn are pushing lesser and older office towers to renovate if they hope to stay in the leasing game.“People can now see the transformational change that’s happening in the city and they want to be part of it,” says Chad Brennand, real estate broker with JLL.“It takes 20 years to make this happen, but it’s happening now.”“There’s been a definite positive vibe and in my opinion we’ve seen some positive momentum,” says Ken Dixon, vice-president of real estate management for Epic Realty.Four new office towers are driving the market in office space leasing — the Stantec Tower and the Edmonton Tower in the Ice District, the Enbridge Center on Rice-Howard Way and the ongoing HSBC Bank Place renovation on 101 Street, which will see tenants going in this fall.The overall vacancy rate for office space in the downtown is between 14 and 16 per cent, so it’s a good market for tenants, but at these new top-drawer skyscrapers the vacancy rate is only five per cent.“There is a flight to quality,” says Ian O’Donnell, executive director of the Downtown Business Association. “There’s a pent-up demand for institutional quality, world-class quality office space.”The new buildings are attractive because their mechanical systems are more efficient and their floor plates are much larger, Brennand says. With companies also going to more open-concept offices, they can fit far more workers in the same amount of leased space. Companies can take the square footage per employee down from 220 sq. feet to 150 sq. feet.To meet the competition posed by these top-end towers, Edmonton’s second- and third-rung towers are also changing, some moving to rental units, others upgrading lobbies, elevators, exercise and meeting room amenities and mechanical systems, Brennand says.“All of a sudden everybody is saying, ‘OK, what am I going to do with mine? How do I differentiate my building from the building across the street?’ Because if you remain stagnant and don’t do anything, then you’re going to fall further behind.”Epic Realty and AIMCo decided to redo the HSBC building to compete with the other highest-end towers. “It was an old building, it had significant vacancy, it was tired, it was dated,” Brennand says “They’re taking that building right down to the superstructure and they’re going to reposition the asset as one of the best buildings in town, comparable to such buildings as Stantec Tower … When you walk into the building it’s going to feel like a very special place to work as an employee and to visit as a guest.”“We chose to elevate the building,” says Dixon of Epic. “We want to make it a part of the Ice District and to create a truly first-class asset.AIMCo will move from the outskirts of downtown into the new HSBC tower. And an older skyscraper, the 103rd Street Centre, will also be getting two major tenants, with Jobber and Aurora Cannabis each leasing major space. “It’s great to see them both finding success and choosing not only to remain downtown but to expand and grow downtown,” O’Donnell says.Brennand credits the multi-billion dollar investment in the downtown arena and surrounding Ice District with being a major catalyst, as well as residential growth in new downtown condo towers. “All of it is just adding to the buzz, adding to the momentum.”The arena district is winning over Edmontonians as it’s being built out, Brennand says. “Edmontonians need to look, feel, touch and see how it’s going to impact the community. I think we’re finally there.“It really is beautiful. We’ve got state-of-the-art buildings. We’ve got beautiful architecture and from all angles as you enter the downtown core.”Companies also want to be downtown because that’s what their staff now prefers, Brennand says.In the past, corporate workers and head office executives were attracted to building in the suburbs, as there was all kinds of free parking to be had there, Brennand says. But with more and more young professionals choosing to live downtown, and wanting to walk, take transit or bicycle to work, companies are realizing the advantages of a downtown location.Bottom line? When the disruption of massive construction downtown slows down in about two years, we’re going to be left with a better downtown than even its most optimistic boosters imagined.It’s the new place to be in Alberta.