Cornerstone, Calgary, a Canadian co-living example. Source: CTV News

Co-living offers new life to office conversions

Converting office buildings to other purposes is not new. Hotels, condo, labs, schools. Making empty space useful and often more useful than the original use.  At a real estate forum this month, we heard the tale of two conversions. On one side, many of the developers worried about the cost, time, and general frustration of converting office to residential space. On the other side, those like us feel there is a better way. Co-living. 

Our current mental model on conversion is about creating one- or two-bedroom suites. Each one needs plumbing. Office buildings don’t have plumbing in every office. There are many challenges to conversions, but that’s a big one. Enter co-living conversions, or what we call a rapid adaptation of office to residential space. Keep the original bathrooms where they are and add showers. Keep as much of the other good, useful stuff where it is. Add drywall for private rooms and build common kitchens. Voilà! Rapid adaptation. Build-times are short. Months, not years. And that saves money. 

Recently, architecture firm Gensler reported that almost half of federal government offices could be converted into housing. Rapid adaptation to co-living could be the solution to unlocking all this potential. Our own architects, Arcade, with their Arcalogix platform and engineering firm TMP saw the opportunity early on with Toboggan Flats.

When working from home is working from the old office

As fewer workers return to the office post-pandemic, building owners and developers are beginning to look for alternative uses of space. 

Aside from the obvious increase in housing stock, conversions offer some big benefits. Reusing the existing structure and materials is much more sustainable than starting from scratch. Builders may be able to take advantage of tax and funding programs designed to incentivize conversions. And of course, filling empty rental units in high-demand areas puts money back in building owners’ pockets.

“[An] analysis has also revealed something surprising: all the features that result in an unpleasant office make for an excellent multifamily product. 

For example, a floor-to-floor height that’s typical of a Class C building is approximately 12 feet. Today, that’s considered oppressively low, as it translates to 8-foot ceilings in the office. With all the office ducts, lights, and ceilings removed, it can create a soaring 11-foot clear height in a residential building, which is considered luxurious.” 

– Steven Paynter, Global Building Transformation & Adaptive Reuse Leader, Gensler

Office-to-residential conversions already in play in Calgary

Calgary is Canada’s most advanced city when it comes to office-to-residential conversions. The city’s office conversion program—which aims to bring life back downtown by converting offices to homes, student housing, hotels and post-secondary academic spaces—has 17 projects in the pipeline. 

The first of these projects, the Cornerstone, recently opened to residents. A former office building that sat empty for eight years, the Cornerstone has 112 units. As of two weeks ago, the building was already nearly 50% full.

Toboggan Flats keeps building owners happy

Our model also reflects how the commercial building industry and its assets are structured. Building owners are in the leasing business; they build buildings and rent units, not build buildings and sell units. Toboggan Flats involves repurposing the floors and leasing them, providing owners ongoing much-needed lease revenue, just like any other commercial tenant. And building owners already shut down floors while tenant improvements take place, so Toboggan Flats will mean more of the same.