Calgary's downtown office-to-residential conversion program is showing signs of broader economic impact, with new business licence activity near conversion projects more than tripling since 2021 as vacant office space is transformed into housing, hotels and other uses.

In an interview with RENX following his panel discussion at the recent Calgary Real Estate Forum, director of downtown strategy and deputy general manager of planning and development services for the City of Calgary Thom Mahler said “business growth and development momentum around conversion projects demonstrates growing confidence in Calgary's downtown.”

“New business licence activity within 200 metres of downtown conversion projects has more than tripled since 2021, rising from 78 licences to a peak of 259 licences in 2025,” he said. 

“Nine completed projects have transformed 925,000 square feet of vacant office space into nearly 800 new homes, 226 hotel rooms and a hostel.”

Mahler said the office conversions were previously empty buildings or had very low utilization rates. Since the buildings were redeveloped, more residents are in the downtown area. That has led to the uptick in new business licences. 

“Retail, food and beverage are probably the biggest," Mahler said of the new businesses springing up around conversions.

21 projects approved for funding

Mahler said 21 projects have been approved for funding, transforming over 2.68 million square feet of office space. Total residential will be more than 2,600 homes when all the projects are completed. 

“The balance of those buildings are currently under construction," he said. Once these are completed "we're getting close to about 3,000 residents that we would anticipate with this pipeline.

“And now, with the money that we have, we think we can approve another three to five projects, depending on how our evaluation goes. That will add to that total. We're seeing interest in a mix of hotel and residential as well, so we'll probably see some more hotels and some more residential units adding on to what I just described.”

The conversion program

The Downtown Office Conversion program in Calgary is intended to transform underutilized offices into “vibrant, purposeful” space. The goal of the program initially was to remove six million square feet of vacant space.

The city offers grants up to $75 per square foot of office space converted.

Eligible uses include multi-residential, hotel, student and senior housing, life sciences, self-storage, education, performing arts, cultural and other innovative commercial uses.

Mahler said, at one time, the downtown core paid over 30 per cent of the city’s overall total tax revenue. It’s now down to the 14 to 15 per cent range.

He said there is another $25 million available through the program with 14 applicants currently under consideration by the city.

“With the revision to our terms of reference, and the way we've increased the incentive for hotels, I think we are seeing a lot more interest in the potential for hotel conversions, which is tied to the fact that we have a shortage of hotel rooms," Mahler said. "The convention centre has drawn significantly larger conventions. So, we do have a need.

“That market opportunity is now being represented in these existing buildings, and our incentive is seemingly well-priced to be able to convert office into hotel. That's probably the biggest change.

"But the other thing we're starting to see is some interest in uses like data centres or mixed use - kind of this idea of having some residential, some hotel, some office, some retail.”

He said that some of the buildings left in the pipeline downtown now are much larger, so it's harder to do an all-residential conversion offering.

The former Hudson's Bay Company building

One building of note is the vacant downtown Bay in the heart of the city.

Maxim Olshevsky, CEO of Astra Group and Peoplefirst Developments, which purchased the iconic 448,834-square-foot, six-storey building, earlier this year, told RENX there is nothing to announce right now about plans for the building but an announcement could come as early as January.

During a panel discussion at the Real Estate Forum, he said the company, in recent years, has converted about 500,000 square feet of office space with another 700,000 square feet in the pipeline.

“One policy, one incentive, created a gateway for us and for other companies to invest in the city,” said Olshevsky.

Mahler said the city is interested in the future of the Bay property.

“Things are still in flight on that," he said. "I guess, what I would say, is the city is very interested in finding a way forward for what the city could do to support the heritage building and make sure that jewel of a building has a future life in our downtown."

Mahler said the building still has an "intangible" value to the city. "It's also one of the most beautiful buildings in Western Canada, in Canada," he said.

“And imagine that restored, well-lit. It would be a landmark for our city.”