City of Edmonton planning to sell 2 downtown office buildings, relocate hundreds of staff

The City of Edmonton is working on plans to sell two downtown office buildings and relocate hundreds of staff as part of a $22.7 million downtown workplace optimization project. 

Chancery Hall and Century Place are just steps away from Edmonton's city hall, but city officials think they are too expensive to hold onto. 

The city is aiming to consolidate operations into existing owned or leased spaces and prepare the two properties for sale. 

City officials say the move is intended to cut operating costs, streamline efficiency, and make better use of underutilized properties in the city's downtown core. 

"By moving, we can save on those future expenses," said Pascale Ladouceur, branch manager of infrastructure planning and design for the city.

"It really allows us to optimize our workspaces in downtown, bring more people together and create more vibrant and connected office spaces as well." 

The plan involves renovating city-owned and leased spaces to accommodate 1,350 staff being relocated from the two office buildings.

It will require buying new furnishings and managing the logistics of moving employees and technology infrastructure currently housed at Century Place. 

If approved by council, the city says that funding for the project will come from the  interim financing reserve and be repaid through proceeds from the sales of the buildings and savings from reduced costs. 

But the plan does come with risks.

"Our biggest risk is how we're going to be able to sell and when we're going to be able to sell the buildings and get that investment going." said Ladouceur. 

In recent years, Edmonton's downtown office market has faced some challenges with high vacancy rates, partially driven by the pandemic's impact on commercial real estate and the ongoing shift to hybrid work.  

In commercial real estate company CBRE's 2024 quarterly report, the data shows that the overall Edmonton market vacancy rate was 20.1 per cent, while the vacancy rate across the downtown submarkets was at 21.4 per cent. 

One commercial real estate expert says the move could be a good thing for the downtown.

"Buildings that aren't well used are not a positive contributor to their neighbourhoods," said Cory Wosnack, managing director at Avison Young real estate agency.

"But those buildings are contenders for a conversion to another use that would then activate that neighbourhood in a different way."

City officials outlined strategies to mitigate the risks in private reports to council, framing the project as a potential opportunity, if the buildings are repurposed for residential or mixed-use developments. 

"These buildings are not something we want to get rid of. They're assets and we really believe that they have value and that a private investor will see the opportunity to envision the space." said Ladouceur. 

The city hopes to start the move by the end of 2025, but a final timeline for relocating staff and listing the properties for sale will be discussed next week as part of the overall budget plan.