City looking at ways to reduce Edmonton’s high downtown office vacancy rates

Gordon KentGORDON KENT
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Published on: July 3, 2017 | Last Updated: July 3, 2017 8:00 AM MDT

 

New towers going up around the Ice District are helping boost Edmonton’s downtown office vacancy rate.
Photo Courtesy/Edmonton Arena
New towers going up around the Ice District are helping boost Edmonton’s downtown office vacancy rate. Photo Courtesy/Edmonton Arena

The city is looking at taking steps to help reduce an 18 per cent downtown Edmonton office vacancy rate that might not return to a balanced level until at least 2030.

Vacancies have grown for more than two years and could reach 30 per cent by 2020, partly because the towers going up near Rogers Place will create far more space than downtown typically absorbs, according to material scheduled to be discussed Tuesday by city council’s executive committee.

Significant vacancies include the Bank of Montreal building at 10199 101 St., virtually empty aside from bank operations, and HSBC Bank Place a block north, listed as two-thirds unoccupied.

“Edmonton’s industry structure is changing, where traditional energy service-based businesses will not be the growth engine of the economy,” said a report by the Edmonton Economic Development Corp., adding that, without action, reaching a “healthy” 10 per cent overall vacancy rate will take more than 15 years.

“Technology-based companies, and companies innovating with new technologies, will create much of the demand for office space in the coming years.”

City officials recommend helping Edmonton’s Building Owners and Managers Association (BOMA) set up a task force to examine the value of converting office buildings to housing or education, and supporting a website matching short-term tenants and landlords.

They’ll also consider the effects of directing that future city office space which isn’t required for a specific area be located downtown.

BOMA president Percy Woods said Friday the vacancies at the Bank of Montreal and HSBC buildings aren’t as dire as they appear because both were sold this year to owners planning major changes.

He took a positive approach to the vacancy rate, saying it will allow landlords to modernize older towers and tenants to find better offices or reduce the amount of space they need.

There are also two or three companies in the suburbs that have outgrown their locations and are looking at moving downtown, he said.

“We can either pull our heads in and say ‘This is the worst thing that has happened to us since the 1980s’, or say ‘How can we deal with this?’ ” he said.

“In the 1990s we had a lot of buildings that came down, which was positive rather than having them boarded up … When you get to 17-18 per cent (vacancy), the last thing you want to see is boards going up on buildings.”

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