Strategic Group plans to convert the former Chevron office tower in downtown Calgary into a multi-family project, according to a published report.

The local developer purchased the class-A property for $17 million from the global oil and gas firm, the report states. The tower is not being redeveloped under the city’s Downtown Development Incentive Program (DIP), which provides $75 per square foot for office-to-residential conversions, because the company believes that the project works mathematically on its own, the report states.

Chevron listed the 25-storey tower for sale earlier this year, with JLL serving as the listing agent. The energy company relocated its Calgary-based Canadian headquarters to another nearby downtown tower.

According to the report, Strategic plans to install 332 residential units in the building, which is connected to the Plus 15 walkway network.

The report states that the building has 380,000 sf of gross buildable area, but the JLL listing said the property comprised 261,500 sf.

The tower is known as 500 Fifth and located at 500 Fifth Avenue S.W., between Fourth and Fifth streets. The fully built-out office tower is in excellent condition and offered a value-add investment opportunity, including potential for office repositioning or residential conversion, JLL said in the listing.

“The property has an efficient floorplate and offers no tenant risk, should conversion be desired,” said JLL on the listing’s webpage.

Many office conversions are difficult due to floorplate sizes and configurations, along with other technical complications, according to investors, developers and brokers.

The tower sits two blocks north of the downtown portion of the C-train rapid-transit line. Built by Chevron in 1982 for its own purposes, the site has been renovated in recent years.

Chevron is among a number of energy firms that have relocated and downsized their office spaces. Many companies moved to new office towers that were in the pipeline before the global oil and gas sector’s latest downturn and the COVID-19 pandemic.

Many of the new office towers have since changed ownership.

JLL marketed the property without a list price. Brokers Ryan Murphy and Casey Stuart are co-ordinated the marketing and sale process for Chevron.

Pictured: 500 Fifth office tower in downtown Calgary.

Photo: Courtesy of JLL