Faced with commercial vacancy, developer converting Montreal offices into apartments

One real estate company is looking into converting some of its vacant buildings from commercial to residential in an attempt to alleviate the housing crisis.

As people debate back to the office, there are still many offices sitting vacant in Montreal.

One real estate company is looking into converting some of its buildings from commercial to residential.

On the Lachine Canal in Pointe-St-Charles, a vacant office building is being converted to brand new residential apartments.

“You don’t have to do any foundations, no brickwork, no ventilation systems, because it was a new building. It was easy to transform,” explained Vincent Chiara, president and founder of Groupe Mach.

Groupe Mach owns the building constructed in 2019. It was supposed to be Airbnb’s head office but when the pandemic hit the short-term rental company kept its workers at home. In the end, the company never moved in and paid to cancel its lease.

“We quickly found out that this was going to become a new way of working — working from home was a new normal,” Chiara said.

The shift in work culture affected property values. According to the city’s most recent property assessment roll, the value of downtown office buildings has declined by 8.2 per cent. The office vacancy rate is close to 20 per cent.

Groupe Mach decided to look into alternatives and soon the building along the canal will have nearly 200 units, from studios to three-bedroom apartments with rent ranging from $1,500 to $3,500 a month.

“It’s on the canal and on the bike path on Saint Patrick Street. So of course, it’s a really sexy building,” Chiara said.

He says it cost around $50 million to build it and about the same amount to convert it. The company is considering even more conversions.

But Chiara adds not all office buildings have the right configuration for residential use. With older buildings, he says sometimes demolition makes more sense.

“They were built at a time when we didn’t know what it was to be, ecologically friendly. And the new product, although we are demolishing, the new product will be greener than what we had, even if we had kept it.”

A project like this is unlikely to solve Montreal’s housing crisis but Chiara thinks these conversions could help.

“Adding more inventory on the residential side may put some pressure — downward pressure — on pricing and will obviously put in the inventory required for people to live and or move downtown,” he said.

He expects tenants to move in by the end of the year.