Almost half of the federal government’s office buildings could be converted into apartments, says a Gensler executive.

Up to 45% of the buildings could be shifted to multi-family use, Steven Paynter, Gensler’s global leader of building transformation and adaptive reuse, told the Globe and Mail.

“It’s really the only way forward,” said he told the Globe. “They’re just the least desirable of all office space.”

The estimate applies to both federally owned and leased office buildings. The federal government has pledged to invest $1.1 billion in the conversion of its underused office buildings into housing. Many of the projects are slated to include affordable housing units.

Prime Minister Justin Trudeau’s Liberal government introduced the plan as part of the 2024-25 budget. The goal is to transform 50% of the federal office portfolio into 250,000 new homes by 2031.

The 10-year disposal program is expected to include sales and transfers of office properties and other assets that the government will no longer use. Many of the transactions appear likely to involve long-term leases to other parties rather than outright divestments so that the government can retain ownership without having to shoulder operating costs.

Canadian office markets have been hard hit by the effects of the COVID-19 pandemic and hybrid-work movement. During her conversation with Sutcliffe, Anand defended the federal government’s return-to-office policy, which requires civil servants to be in the office three days per week.

The policy has implications for the disposal program and future federal government investments in office real estate.

The planned disposal program will not will not focus on only one city, Anita Anand, president of the Treasury Board, told the Ottawa Mayor’s Breakfast in May.

Increasing office vacancy in Ottawa has raised the question of whether the disposal program will be skewed towards the nation’s capital, which has a plethora of older federal office assets.

“It really is a cross-country effort,” Anand said.

Public Services and Procurement Canada will lead the disposal program.

Gensler is a leading urban design firm that operates globally. Its Canadian business is headquartered in Vancouver.

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