Calgary’s TELUS Sky downtown skyscraper, which is nearing completion, might be the last major office building to be constructed in the heart of the city for perhaps a decade.
The 60-storey, 750,000-square-foot building, at 7th Avenue S.W. and Centre Street, is a partnership between Westbank, TELUS and Allied Properties REIT. Its managers are aggressively seeking tenants to fill its 29 floors of office space in a tough commercial real estate market, with vacancy in the downtown still hovering in the 25 per cent range.
The 30 additional floors of residential rental units above the office space are gearing up for occupancy soon.
Rhiannon Mabberley, the owners’ representative for the project who oversees the development, said the building is expected to be completed within the next six to eight weeks with an opening in the third quarter of this year.
Office space in the TELUS Sky is about 350,000 square feet.
TELUS to be anchor tenant
She said TELUS will move its head office into the building, taking up seven floors and about 130,000 square feet.
“We have an additional deal with a shared office space who are taking two floors and we currently have two other floors under negotiations that I am not at liberty to say which tenants those are,” added Mabberley. “Those are two floors each and those are in the 40,000-square-foot range.”
She could not disclose any additional details about the other committed or potential tenants.
“At the end of the day when those tenants are fully vetted, we’ll probably have around 10 floors left in the building for lease. Ten to 12 floors depending on how things hash out,” Mabberley explained.
“It is a tough market but to be honest TELUS Sky is a very unique offering and certainly in the last six to eight months we’ve seen a huge uptick in interest in the building.
“I think that’s due to the fact that TELUS Sky is highly differentiated by its competitors and really offers something pretty unique to the Calgary market that doesn’t currently exist. It’s a LEED Platinum building with many features that are not present in the Calgary market today.
“And we’ve certainly seen that, through the tech industry and through companies that have a market offering or a market focus that is different than your typical Calgary large tenants. We’re certainly seeing a very strong interest in those groups as we move towards completion.”
Other features of the building
She said the possibility of having a fitness centre on the third level is unique to the Calgary market. The TELUS Sky lobby is also designed to be an extension of a person’s office space, a collaborative work space environment. The lobby space includes a piano and is programmed for entertainment use as well.
“(TELUS Sky) is like the last-date-to-the-party kind of thing. They’re just wallowing in the 26 per cent vacancy rate that everybody else is,” said Greg Kwong, executive VP & regional managing director for commercial real estate firm CBRE in Calgary.
“I think they are gaining some momentum on the leasing front.
“I don’t see anything new being built in the downtown core for at least another 10 years – office building. But I do see a number of older office buildings perhaps being converted to residential. Definitely the last building for a long time.”
Mabberley said TELUS Sky will open with Deville Coffee on the street-front level. There is also retail space on the third level, which will likely be utilized by a fitness centre.
“We’re currently out looking for tenants and we have offers on the table. We have not yet selected a tenant for that space. It’s roughly 15,000 square feet. There will be one tenant,” she said.
326 rental residential units
The residential component of the tower will have 326 rental units.
“That space is currently being marketed for a November 1 move-in. The majority of it is furnished rentals,” said Mabberley. “The offering on the residential side really spans across the entire spectrum of what you might need for an extended stay.
“There’s a very unique set of units that are available for short-term rentals and then there are more units that are available for long-term rentals. We envision those for 30 days or longer.
“And then there’s a set of units that can be rented as typical or traditional apartment units. So those units are unfurnished. So across the offering there’s really a variety of residential units that you can use for a variety of reasons.”
Mabberley said prices vary quite substantially depending on length of stay and term but are competitive to the market. She said the project is working through the final numbers for rental rates.
Interest in the residential component of the building has been quite strong.
“When we think about the offering(s) in downtown Calgary for residential stays, you’re looking at something that is very narrow in what you’re providing,” Mabberley said..
“You can either go stay in a hotel like the Palliser or maybe the Sheraton Suites, or you can get an airbnb perhaps in the Beltline outside of the downtown.
“But, in terms of having a residential offering in the dense, urban core in a mixed-use building, that’s just not something that is currently offered in the Calgary market.”