The City of Edmonton plans to sell two downtown office buildings and relocate hundreds of staff as part of a $22.7-million workplace optimization project, CBC reported.

City officials told CBC that the sale of Chancery Hall and Century Place is intended to reduce operating costs, improve efficiency, and better utilize underused properties in the Alberta capital’s downtown core.

“By moving, we can save on those future expenses,” Pascale Ladouceur, the city’s branch manager of infrastructure planning and design, told CBC. “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 project includes renovations to city-owned and leased spaces to accommodate the 1,350 staff members being relocated from the two buildings, according to CBC. New furnishings and logistics to transfer employees and technology infrastructure will also be required.

Century Place, which is just steps away from Edmonton’s city hall, is considered too costly to retain. Instead, the city plans to consolidate its operations into existing owned or leased spaces and prepare the properties for sale, CBC reported.

If approved by council, the project will be funded through the interim financing reserve, with the expectation that the reserve will be repaid using proceeds from the sales and savings from reduced operating costs.

“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,” Ladouceur said to CBC.

Edmonton’s downtown office market has faced significant difficulties in recent years, including high vacancy rates exacerbated by the pandemic’s impact on commercial real estate and the ongoing transition to hybrid work.

Cory Wosnack, managing director of Avison Young’s Edmonton office, told CBC that the city’s decision could benefit downtown revitalization.

“Buildings that aren’t well used are not a positive contributor to their neighbourhoods,” Wosnack said.

Ladouceur indicated that the decision to sell the towers did not come easily.

“These buildings are not something we want to get rid of,” she told CBC. “They’re assets, and we really believe that they have value and that a private investor will see the opportunity to envision the space.”

The city hopes to begin staff relocations by the end of 2025, according to CBC. A final timeline for the move and listing the properties for sale is slated to be discussed next week as part of Edmonton’s broader budget plan.

Local investors appear to be the most likely purchasers. Wosnack previously told Connect Canada CRE that local investors are dominating Edmonton’s office sector as institutions shy away from it while showing a preference for other major Canadian markets.

Pictured: Century Place office building in Edmonton

Photo: Mario Glass