A living space inside Agency Art Lofts in Halifax, which was completed this spring, shows how offices can be converted into residential units.Cooked Photography
For decades, Halifax’s Centennial Building, with its façade of vertical precast concrete strips and modernist stylings, anchored half a downtown block facing Sackville Street, about a third of the way up the steep hill between the harbour and the park surrounding the city’s historic Citadel.
During COVID-19, with so many people working from home, the Centennial’s tenants vanished and in 2021, the 200,000-square-foot building was sold to Sidewalk, a Dartmouth developer/builder that wanted to convert it into rental apartments. The first phase opened last year; the rest of the 173-unit project, known as the Agency Art Lofts, was completed this spring.
The building’s developer, Dartmouth-based Sidewalk, says the conversion has reduced the operational carbon emissions from the building by about 60 per cent.Julian Parkinson/The Globe and Mail
It’s fitted out with one- and two-bedroom loft-style units with 12- to 16-foot ceilings and good views. “We just very much like the design of those old factory loft conversions,” says Joe Nickerson, Sidewalk vice-president and partner. “The bones of the building were great.”
Yet the conversion has delivered more than just new downtown housing. By “upcycling” an existing building and then refitting it with state-of-the-art HVAC systems, adding new insulation and replacing about 40 per cent of the windows, Mr. Nickerson says the conversion has reduced the operational carbon emissions from the building by about 60 per cent and avoided 8,000 tonnes of greenhouse gases that would have been released by constructing a new cement foundation.
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The project to give the Centennial a second life, moreover, qualified for funding from the Canada Infrastructure Bank’s (CIB) deep retrofit program, with financing and loans delivered by the Bank of Montreal. “Ultimately,” says Mr. Nickerson, “we’ve fully repositioned that building for a new useful life.”
For years, some architects and climate non-profits argued that older apartment buildings with outdated heating systems, single-pane windows and leaky exteriors could be refurbished, with the energy savings offsetting the renovation costs. However, the math didn’t quite work. And these deep retrofit projects often entailed displacing residents during construction.
Calgary has become a national leader in creating friendly zoning rules for office-to-residential conversions, including the old PetroFina building.Astra Group & Peoplefirst Developments
Separately, during the pandemic, some municipalities, led by the City of Calgary, decided to overhaul downtown zoning rules, allowing developers to convert mostly empty class B and C office buildings into apartments as a means of providing new housing while finding a second (and property-tax generating) life for those vacant structures.
Now, as the Agency Lofts project and a growing roster of similar ventures have shown, the office-to-residential conversion trend may also be delivering an unanticipated climate dividend, of the sort originally envisioned by deep retrofit advocates.
The units at Halifax’s Agency Art Lofts include features such as 12- to 16-foot ceilings.Astra Group & Peoplefirst Developments
“Can [conversions] be part of a broader strategy for reducing emissions and addressing climate goals?” asks Jeffrey Biggar, an associate professor at Dalhousie University’s School of Planning and co-author of a recent paper looking at how the two goals fit together. “We’re wondering if planners [and] developers are thinking in those terms.”
Funders certainly are. “Not having to build a new building [creates] a lot of carbon savings,” observes Mike Mellross, vice-president of the Alberta Ecotrust Foundation, which has helped finance two such conversions in Calgary, completed by the Astra Group. “On top of that, what we are able to do with our involvement is really push the envelope in terms of the operational emissions as well.”
“All these fantastic co-benefits are why we’ve really leaned into the space, and our clients have been fantastically receptive to that,” adds James Burrow, head of BMO’s enterprise sustainable finance solutions, which has deployed CIB’s capital to underwrite loans for a portfolio of office-to-residential conversion projects that now consists of about 500 new apartment units in total. “We see a very strong demand.”
Following the success of Agency, shown here, Sidewalk has another conversion on the go in Dartmouth, N.S.Astra Group & Peoplefirst Developments
The payback period, he says, is 10 to 12 years, but the climate benefits extend much further. “When I toured [the Centennial project] a year ago, you look at these windows that are going in. They’re triple glazed. They’re built to last. They’ll be around for another 50 years.”
In a market where most condo projects are on life-support, the firms doing such conversions tend to be working on more than one. Sidewalk’s got another conversion going in Dartmouth. A dozen have been finished in Calgary. “Currently,” says Astra CEO Maxim Olshevsky, “we have two complete conversions, with a third one that should be done by October, and two more that will be completed next year.” Astra acquired four of the five buildings at deep discounts, through foreclosures.
Inside a unit of the PetroFina office building conversion in Calgary.Astra Group & Peoplefirst Developments
The City of Calgary has been offering a $75-per-square-foot incentive for conversions. “People all across the world are still looking at Calgary as having the best incentive policy to actually get projects built, and therefore they’re saving the most embodied carbon out of anyone,” says architect Steven Paynter, a principal at Gensler, which specializes in such projects and is currently working on one of the rare Toronto conversions, a Slate Asset Management-owned former office building at Yonge Street and St. Clair Avenue.
In such projects, the existing foundations, with their underground parking garages, Mr. Paynter continues, can be left pretty much as is. “It is such an easy win from a sustainability point of view. Concrete takes up about 8 per cent of all of the global carbon emissions – four times more than the airline industry. Just keeping concrete there and reusing it is a huge win.”
On the down side, sometimes converted buildings perform best from an energy-efficiency perspective if the windows don’t open and fresh, conditioned air is pumped in instead.Astra Group & Peoplefirst Developments
Some developers have figured out how to double down on those benefits. “We’ve installed 52 car chargers in 105 stall parkades, which we strategically located between two stalls, so I would argue we have 100 per cent coverage in the building,” says Robert Sipka, president of Kanas Corp., a Calgary developer converting a 1979 office tower. “Our goal is to implement a car share for the tenants of the building, so that it goes to a higher utilization of EVs.”
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Still, the emission reduction benefits aren’t automatic. Some of these conversions can be finicky from an architectural perspective, and builders can erode the financial dividend by making ill-considered design choices, such as replacing the entire exterior, a costly undertaking, instead of targeting those sections of the cladding that are leaky.
Mr. Paynter points out that reclad and airtight buildings perform best from an energy-efficiency perspective if the windows don’t open and fresh, conditioned air is pumped in instead. “Most people still want [operable windows], but from an energy and fresh air point of view, they are not actually really beneficial to your unit.”
Nor do these projects necessarily provide great housing. Dalhousie’s Jeffrey Biggar says he’s seen hotel conversions in the Halifax region that yield 350-sq.-ft microunits. “For all the planning incentives that were put in place around amenity space requirements or the dwelling unit mixes, when you actually stand in those units, they feel quite small,” he says.
An underrated perk: Former office towers often have plenty of elevators, unlike some purpose-built residential buildings.Cooked Photography
But for those office-to-residential projects with adequately sized units, the locational benefits – which also yield emission reductions in terms of reduced car use – are certainly a draw, as are the quirks of living in a former office building, says Astra’s Mr. Olshevsky. “You can go live in a 20-storey tower with two elevators and wait half an hour to get home at 5 o’clock, or you can be in a 10-storey [former] office tower that has four elevator banks.”
What all the firms in this space point out, perhaps not surprisingly, is that conversion projects absent public sector programs, such as those offered by the CIB or the City of Calgary, would likely not achieve the kinds of emissions reductions being realized in the current crop.
“It’s possible, but your end result isn’t really going to be very good in our opinion,” says Mr. Olshevsky. The deep retrofits conversions, he adds, result from the combination of market demand, the availability of older office buildings and targeted financial incentives provided by governments or non-profits. “At the end of the day, you want to provide a comfortable space.”
Agency Art Lofts in Halifax.Cooked Photography
Conversions across Canada
Canadian municipalities aren’t all singing from the same hymn book when it comes to office-to-residential conversions. Here’s a sampling of prevailing policies:
Vancouver: Allowed in a few designated pockets of the downtown including Yaletown, but subject, under a 17-year-old policy, to council’s assessment of whether any proposed conversion is in the public interest. Projects also need special seismic reinforcement, which drives up cost.
Calgary: The national leader, thanks to a cash incentive program that has yielded 21 conversion projects with almost 2,700 units. Developers can qualify for $60- to $75-per-sq.-ft cash incentives.
Toronto: City officials have not been receptive to conversions, cautioning council about the potential impact on the local economy and jobs. Planners have been studying office needs for three years, and downtown office occupancy rates have been rising.
Ottawa: City council in 2023 voted unanimously to adopt an office-to-residential conversion policy of streamlining approvals and reducing or eliminating fees and property taxes.
Montreal: The city exempted office-to-residential conversions from a new bylaw mandating nonmarket and family housing in projects over 18,000 square metres.
Halifax: Existing zoning bylaws downtown allowed office-to-residential conversions to occur as of right, according to a March, 2024, Canadian Urban Institute evaluation of such projects and related policies.
John Lorinc