An interior of an apartment at The Cube is shown during a media event in Calgary on Friday, July 26, 2019. Strategic Group at Calgary’s first office-to-residential repurposing project.
Jim Wells / Postmedia
An office-to-residential conversion in Calgary’s Beltline neighbourhood is being praised as a creative response to the city’s economic downturn.The seven-storey, 62,000-square-foot building on the corner of 11th Avenue and 11th Street S.W. was an aging office complex about to be vacated by its last tenant when its owner, real estate developer Strategic Group, decided to give it new life. Strategic spent $25 million renovating what was once called the Stephenson Building and repurposing it as “Cube” — a residential rental apartment building with 65 one- and two-bedroom units, starting at $1,600 a month. The first tenants moved in May 1.Strategic Group CEO Riaz Mamdani said the company took the significant step with the understanding that Calgary’s downtown office vacancy rate is not going to return to normal levels for at least a decade.
Riaz Mamdani, CEO, Strategic Group speaks at a media event in Calgary on Friday, July 26, 2019. Strategic Group at Calgary’s first office-to-residential repurposing project.
Jim Wells /
“Is it better to have residential income in the next 10 months and spend $25 million doing it, or wait it out and hope for something different to happen? That’s the decision we had to make and that was the tough decision,” Mamdani said.Although Calgary’s downtown office vacancy rate has declined slightly in the past 12 months, it still hovered at close to 25 per cent in the second quarter of 2019, according to commercial real estate services firm Avison Young.At the same time, apartment vacancy rates have been declining. Overall vacancy rates in the primary rental market fell from 6.3 per cent in October 2017 to 3.9 per cent in October 2018, according to the Canada Mortgage and Housing Corp. This occurred even with a significant increase in new purpose-built rental apartments coming onto the market.For years, the idea of converting surplus office space into residential units has been talked about by city officials as one possible solution to the downtown vacancy rate problem. The Cube project is the first to come to fruition, though Strategic Group is also working to convert the historic Barron Building on 8th Avenue S.W. (The company has also converted other office buildings into non-residential uses, including a self-storage facility and the new Avenida Food Hall.)
An interior of an apartment at Cube.
Jim Wells /
Leslie Shier of Calgary Economic Development said creating a better balance between commercial and residential in the city’s core enhances the vibrancy of the community. While CED continues to work to attract new companies to Calgary’s downtown, she said Strategic Group’s projects have taken a total of 500,000 square feet of excess office space off the market.“I can assure you it takes a lot of time and a lot of effort to recruit enough companies to absorb this much space, and it doesn’t happen all at once,” Shier said.While Mamdani said there are many factors at play when it comes to making an office-to-residential conversion attractive to a developer — including the building’s proximity to amenities and restaurants as well as its floor plan and overall design — Mayor Naheed Nenshi said he hopes there will be more of these projects in Calgary’s future.
Calgary Mayor Naheed Nenshi speaks at a media event for The Cube in Calgary on Friday, July 26, 2019. Jim Wells/Postmedia
“This (Cube) is a really important test concept,” Nenshi said. “I suspect you’re going to see a flood of people coming forward and saying all right, ‘Strategic did it, we’re going to move forward with some of our buildings too.’ ”email@example.comOn Twitter: @AmandaMsteph