Metcalfe Realty is considering a plan to convert a 16-storey office tower at 85 Albert St. to a residential complex, the company’s president says. In a site plan application recently filed with the city, the Ottawa-based property management firm says it would retain the building’s “primary structural framework” while replacing the existing commercial suites with […]
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Metcalfe Realty is considering a plan to convert a 16-storey office tower at 85 Albert St. to a residential complex, the company’s president says.
In a site plan application recently filed with the city, the Ottawa-based property management firm says it would retain the building’s “primary structural framework” while replacing the existing commercial suites with 107 residential units in a mix of “studio, one-bedroom, two-bedroom, and large two-bedroom units.”
Metcalfe Realty president Jen Arbuckle told OBJ Monday the company is looking at various ways of “repositioning” the 50-year-old office tower and another Metcalfe property at nearby 116 Albert St., which was built in 1960.
Turning 85 Albert St. into a multi-residential development is “a thought we are very seriously pursuing,” she said. “We’re still operating it as a full office building. We’re just exploring all of our options.”
Metcalfe Realty is one of several Ottawa landlords that are eyeing office-to-residential conversions as a means of breathing new life into aging buildings that have struggled to retain tenants in the wake of the pandemic.
Both 85 and 116 Albert St. have vacancy rates of around 50 per cent and have not been upgraded for nearly two decades. Metcalfe Realty is no longer signing any new tenants to the buildings and has stopped renewing existing leases as they expire, instead moving occupants to other buildings in its portfolio.
Arbuckle said the firm’s decision to explore a conversion at 85 Albert was spurred in part by recent city initiatives to help streamline the approval process for such projects and reduce costs for developers.
Last fall, for example, council approved a plan to waive cash-in-lieu of parkland fees for all conversion projects in Ottawa for 18 months while city staff conducted a “comprehensive review” of the policy.
Cash-in-lieu of parkland fees are paid by developers to the city as an alternative to dedicating a portion of land on the property for greenspace. For office buildings, the rate is two per cent of the land’s value, while rates for residential developments range between five and 10 per cent.
Before the recent fee freeze, developers working on office-to-residential conversions were required to pay 10 per cent cash-in-lieu of parkland fees in most parts of the city.
“There are some pretty good incentives (for conversions), and they're on timelines,” said Arbuckle, who was part of a recent city task force that recommended measures to encourage more housing construction in Ottawa.
'Nothing is set in stone'
Still, she said that while conversion is “on the consideration list” for 85 Albert, “nothing is set in stone” and the building could be renovated with the aim of attracting new office tenants.
Built in 1976, 85 Albert St. last underwent a major renovation in 2007. Current occupants of the 89,000-square-foot tower, which is located between Metcalfe and Elgin streets, include law firms, a fitness facility and the Haitian embassy.
Ottawa-based architectural firm Linebox Studio is working with Metcalfe Realty on its plan to potentially repurpose the property. Linebox founder and principal architect Andrew Reeves said the rectangular building is the right shape for a residential complex and has the advantage of being located next to another Metcalfe-owned office building at 75 Albert St., meaning the two properties could potentially share amenities and ground-floor retail spaces.
Metcalfe has owned the building since its construction, Reeves added, so there shouldn’t be any surprises when it comes time to gut the interior.
“They know every little bit of this building because they literally were there on site when they built it,” he explained.
Several commercial real estate brokers said Monday it makes sense for Metcalfe to consider other uses for 85 and 116 Albert.
“Those buildings are at the end of their life cycle, in my opinion,” Capworth Commercial Realty president Denis Shank said, adding the properties are “well-located” for residents who want to live in the downtown core. “I think it’s the right move.”
Warren Wilkinson, senior managing director of Colliers’s Ottawa office, said he’s not surprised Metcalfe Realty is looking at repurposing the buildings.
At the same time, he said there is “no rush” for the company to relocate existing tenants, meaning Metcalfe can take its time and see if the commercial leasing market rebounds enough for the buildings to remain viable as office spaces.
“That’s kind of the stage I suspect Metcalfe is in right now,” Wilkinson said. “Obviously, (an office-to-residential conversion) is not a cheap thing to do.”
Shawn Hamilton, a principal at Proveras Commercial Realty, said he believes Metcalfe is being prudent as it navigates a rocky commercial real estate landscape.
“Certainly, as a residential (building), it might have some legs,” he said of 85 Albert. “I think they’re just positioning themselves to keep as many lanes open as possible, which is smart.”
