San Francisco-based Speer Street Capital is investing more than $10 million into the renovation of Calgary’s District office and retail centre (formerly the IBM buildings), a 360,000-square-foot complex in the Beltline neighbourhood.
The District improvements are expected to bring the occupancy level in the three-building project to around 80 per cent, including retail space that fronts the complex, up from the current 75 per cent occupancy.
“We have already had two new major architectural firms take two full floors,” Speer Street president Adam Ballew told Western Investor.
Ballew said the ground-floor areas now contain 4,100 square feet of vacant retail space. That will be expanded to 25,500 square feet to include 18,200 square feet of new retail converted from office space, and 3,200 square feet of newly constructed storefronts and restaurants.
The makeover was needed, Ballew said in an interview from his San Francisco office, because the current five and six-storey buildings are “suburban bland and do not fit the dynamic Beltline neighbourhood.”
Spear Street improvements concentrate on the street-level retail, with a new food hall at the base of the westernmost building, along with new restaurants, including a brew-pub, and retail space. A glassed-in plaza and ‘market shed’ in the centre of the courtyard will be climate-controlled, 365 days a year.
“There will be a ton of glass on the exterior so it will feel like you’re outside as much as possible while still working with Calgary’s weather,” Ballew explained.
An alley between the two main office buildings will be enlivened with a glass ceiling, huge wall murals and a cobblestone walkway.
“The goal is that this can truly become a focal point for the Beltline neighbourhood,” Ballew said.
Spear Street bought the District property, in the 200 block of 11th Avenue S.W., in August 2018 from Dream Office Real Estate Investment Trust for $98 million.
“At the time we thought a rising tide would lift all boats,” Ballew said. “But that was not the case.”
Instead, Calgary’s office vacancies have remained the highest in Canada at around the 28 per cent, retail has been hammered during the pandemic, and overall lease rates have fallen.
Ballew believes, however, the upgrades to the District will attract progressive retailers and employers eager to return to working in a contemporary space.
The plan appears to be on track. Recently, major architectural and engineering firm IBI Group leased space in the District. This August, S2 Architecture will move three blocks from TransAtla Place to the District, also taking an entire 17,000-square-foot floor.
Spear Street Capital began operations in 2001 and has invested in more than 70 properties in various markets in the United States, Canada and Europe, representing over $9 billion in total value. It has offices in San Francisco and New York City.