As a record amount of office space sits vacant in Ottawa’s downtown core, a new study says the capital is well-positioned to turn some of its empty towers into residences.
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As a record amount of office space sits vacant in Ottawa’s downtown core, a new study says the capital is well-positioned to turn some of its empty towers into residences.
The report from the Canadian Urban Institute released Tuesday looked at 30 buildings in six Canadian cities that were identified as potential office-to-residential conversion candidates based on location, size and vacancy rate.
Ottawa is home to 11 of the buildings, which were selected by architecture and planning firm Gensler. No other city in the study – which also included Winnipeg, Halifax, Victoria, Regina and Moncton – had more than five.
The report said Ottawa “has the most potential for conversions” among the six urban areas it looked at. That’s partly because the city has the largest inventory of vacant office space, but the study also noted that the capital has “a significant number of high- and low-rise, mid-century buildings considered feasible for conversion.”
With the downtown office vacancy rate at an all-time of 13.2 per cent in the first quarter of 2023 and a rental vacancy rate of 2.2 per cent in 2022, Ottawa has both high office supply and high housing demand, the report added.
Meanwhile, the federal government’s much-anticipated plan to sell off and vacate large swaths of downtown real estate could provide additional incentive for developers to repurpose empty federal office highrises as residences, the study said.
“The presence of federal buildings and anticipated office consolidation and disposal by the federal government gives Ottawa a unique position to address housing need, bring more residents to downtown, and address explicit climate goals including (greenhouse gas) reduction through building retrofits,” it said.
Gensler’s formula for assessing whether an office building can be turned into residential space includes factors like how close a building is to transit hubs, if its floor plan lends itself to apartments or condo units, the size and number of windows, as well as features like parking and mechanical components.
Four of the 11 buildings in Ottawa scored higher than 80 out of a possible 100 points, meaning they are “likely to succeed” as conversions.
Another four earned tallies of between 73 and 78, suggesting they “can succeed but compromises will be required,” according to the study. Three buildings scored lower than 70, making them “unlikely to be feasible.”
The study did not specify which buildings Gensler assessed. Four of the structures were characterized as “brutalist concrete,” five were low-rise concrete and two were steel-frame buildings.
The study said anywhere from 1.15 million to 2.6 million square feet of downtown Ottawa’s office space has “conversion potential,” with enough real estate for 1,500 to 4,200 residential units.
But it noted that the high-end figure includes several buildings that were identified by stakeholders but not “modelled for feasibility.” The 2.6-million number also exceeds the total amount of vacant downtown office space recorded in the first quarter – 2.55 million square feet, according to real estate firm CBRE.
Ottawa developer Neil Malhotra, the co-chair of a task force that is currently examining ways to revitalize the city’s downtown, said he’s happy the Canadian Urban Institute has “identified some opportunities” for conversions in the downtown core.
But he said a “host of other factors” beyond the things Gensler assessed ultimately determine whether a conversion is economically viable.
“It’s a more complex issue than just naming 11 buildings,” said Malhotra, the chief financial officer of Claridge Homes. “Building conversions are very, very complicated.”
Malhotra also noted that even if conversions resulted in the maximum 4,200 housing units the study projected, it would still represent only about a 10 per cent increase in Centretown’s total population.
“It sounds like a good number, but it’s a drop in the bucket (compared) with what needs to happen,” he said. “There are tens of thousands of bodies that need to be replaced every day in downtown Ottawa if we’re going to have a sustainable downtown core. This is a great step. This ain’t the magic bullet, either, though.”
Sparks Street BIA executive director Kevin McHale, who’s also a member of the downtown revitalization task force, said conversions have been a regular topic of conversation “for some time” among Ottawa’s business leaders.
But just because everybody’s talking about something doesn’t mean it’s going to happen, he added.
“It’s great to say that a building can be converted, but then the next discussion is who’s going to convert it, who owns the building, do they want to convert it,” McHale said.
“Whatever buildings are down there, we just want to see them maximized. I’m interested in making sure that the conversations don’t just stay conversations – that we start putting effort into these conversations to make them a reality.”
