Allen Square office building in Waterloo could be converted into 129 apartment units

Another underutilized office building in Ontario's Waterloo region could be converted into apartment units — this one near the uptown core in Waterloo.

During an informal public meeting last week, city councillors heard details from developers about the proposed conversion of the Allen Square building.

For the project, developers are asking for a zoning bylaw change to build an additional three storeys to the existing 40-year-old building. 

The conversion would add changes to the exterior of the building and renovate the interior to create roughly 129 units. It would also have 152 parking spaces, 112 bicycle parking spaces and the building's ground floor would be dedicated for commercial use.

The conversion of the office building would meet the city's official plan on intensification in the area as it's close to the LRT and the uptown core, said Jenn Gaudet, a senior planner with MHBC Planning in Kitchener.

The conversion would also minimize construction impacts to the nearby neighbourhood and businesses, she said.

Gaudet also noted the conversion of Allen Square wouldn't go without its challenges, like the lack of windows and light, as well as the additional expenses to modernize the building.

"There's quite a bit of expensive modification that's required to convert to residential, so that's an additional constraint. We have to meet a new building code when we go residential," Gaudet said.

Max Kerrigan, senior planner for the City of Waterloo, said staff will take Monday's feedback and information into consideration to draft a staff report for council to consider recommendations at a later date.

"We will hold a formal public meeting at a future date, to be determined, at which point council will make a final decision on the proposed bylaw amendment."

Office conversion on the rise 

The Allen Square project is one of several office buildings in the region that are being repurposed for residential purposes. It's a trend that is starting to take pace in Waterloo region and across Canada as more people are working remotely.

"All major cities are struggling with this surplus of vacant office space and it's not ideal if we want to create vibrant neighbourhoods," Carol Wiebe, a partner with MHBC, told council last week.

"This building in particular has struggled with leasing over the last number of years, which is probably one of the main reasons why the previous owners sold it."

Wiebe added that Allen Square had struggled to retain tenants in the past, mainly because the building was outdated and doesn't meet the need of today's workplace. 

"Now post-pandemic, when there's a real competition for office space, the new office buildings that are highly tech oriented, new and inviting, those are where the new businesses are going to go," she said.

Karl Innanen, executive vice-president with Colliers Canada in Kitchener, said that pre-pandemic, organizations like his were already seeing office tenants move to more suburban locations outside the core. The pandemic accelerated that move.

"[A suburban office] seems to be where people want to go because they can get in and out easily, there's free parking available, they're not high rises so people don't have to spend a lot of time in an elevator and it's also closer to where people are commuting from," he told CBC News.

Innanen said there are benefits to the community in converting underutilized or vacant office buildings because it fills a gap in the affordability and housing shortage, but it also benefits the building owners.

"It's not only that no one is paying rent, but the landlords are paying for the operating costs. They have to keep the lights and heat on to a certain extent, but they also have to pay property tax on that," he said.

"If vacancy rates are over 28 per cent and yet residential vacancies are under two per cent, it makes sense to go to residential and to help bring more residential units to the market, be they rental or condominium."