Back to Blog November 24, 2023

Adaptive Reuse Of Office Space In Toronto

Barbara Lawlor

If we have learned anything about real estate over the past few years, it’s that efficient and cost-effective space usage is critical to the health of our industry. Even before the pandemic, increasing costs drove new condominium developers to design more compact suites for affordability, and they rose to the challenge by coming up with clever designs that utilize every square foot to the maximum. Then, COVID forced most office workers to work from home, and they found that they liked eliminating a commute from their days. As a result, the office market in Toronto is flagging.

There is, however, good news on the horizon, as the concept of adaptive reuse (reusing an existing building for a purpose other than what it was originally designed for) catches on. Sometimes, it requires little or no alterations. For example, in Toronto, colleges and universities are leasing and buying up extra office space for classroom use. This innovative approach to filling a void is encouraging. With the deluge of international students coming to Canada for our excellent educational opportunities, it just makes sense.

As the trend continues, we will likely see some office spaces converted into student housing or affordable rental and market-priced residences as well, although that would require more complex design. We have seen examples of adaptive reuse already that have added new residential in Toronto. The historic Maclean Publishing Company/Maclean-Hunter building will become The United Bldg., Davpart’s mixed-use vertical community with retail and offices at the base and new residences above. In addition, Davpart is seeking approvals to adapt the aging Malvern Town Centre property in Scarborough into a mixed-use community with residential options, as well as new parks and amenities.

The major reason why this trend hasn’t caught on more quickly is the amount of municipal and provincial red tape involved, which of course, adds to the financial feasibility of projects. In downtown Calgary, where the office vacancy rate is even more significant than Toronto’s, developers are receiving a $75 per square foot subsidy to convert offices to residential. At least 10 buildings have been approved for this so far. In Toronto, talks are ongoing with City Council to make adaptive reuse of office buildings more attainable for developers, so with our housing shortage, we can hope. It is fascinating to watch this evolution involving innovative thinking and creative design that leaves less of a carbon footprint on the environment.

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