OFFICE TO HOTEL: Calgary office building transformed into Element Hotel by Westin to address vacancy and boost local market

PBA Group of Companies, along with Concord Hospitality, has begun work to transform a downtown Calgary office building into the Element Hotel by Westin, aiming to address high office vacancy rates and add new accommodation options in the city’s core.

PBA Group of Companies is taking steps to address Calgary’s downtown office vacancy problem with a new project that will convert an underused office building into a hotel. The 12-storey building, previously known as the Canadian Centre at 833 4th Ave SW, is being redeveloped into the Element Hotel by Westin, a 226-suite facility with extended-stay rooms, communal spaces, and various modern amenities. This conversion is part of Calgary’s broader strategy to rejuvenate its downtown, which has been dealing with high office vacancy rates and economic shifts.

James Scott, senior vice president of planning and development at PBA Group, describes the project as a significant step in creating a more mixed-use downtown: “We’re honoured to help take one of the first steps in transforming our downtown into a differentiated residential and recreational district that serves as a symbol of progressive inner-city planning with this conversion.”

Calgary’s office market has faced challenges in recent years due to fluctuating demand and changes in the local economy. The Element Hotel project removes 170,000 square feet of vacant office space from the market, reflecting a growing trend where developers repurpose commercial properties into residential or hospitality uses. This is the first hotel project to be part of Calgary’s Downtown Development Incentive Program, which aims to reduce office vacancies and drive investment into the core.

The Element Hotel will offer extended-stay units with fully equipped kitchens, spa-inspired bathrooms, and other amenities to attract both business and leisure travellers. The project aims to cater to a diverse mix of visitors and provide more flexible accommodation options downtown.

The hotel is designed with features aimed to set it apart from traditional accommodations. The “Studio Commons” concept will offer a set of four guest rooms grouped around a shared kitchen and living area, allowing groups of travellers to stay together more easily and enjoy communal spaces. Other amenities include an elevated lobby lounge and café, an upscale casual dining restaurant on the top floor, and meeting rooms that cater to business needs. The rooftop restaurant, located just blocks from the Bow River, will feature views of the city and a menu focused on local ingredients.

The hotel’s design is focused on sustainability and aims to appeal to Calgary’s active lifestyle. It will feature a fitness centre equipped with modern exercise equipment, bike borrowing services, and environmentally friendly elements like low-flow fixtures and electric vehicle charging stations. The project has already diverted 572,000 kilograms of waste from landfills, about 65 per cent of the project’s total waste.

The development comes as Calgary prepares for a rise in tourism. According to Tourism Calgary, the city expects 8.7 million visitors in 2024, bringing in an estimated $3.2 billion in tourism revenue. Comparatively, Calgary saw approximately 7.7 million visitors in 2019. The economic impact of these visitors was about $2 billion, according to Tourism Calgary’s 2019 annual report.

The Element Hotel by Westin will add much-needed capacity to Calgary’s hospitality market and provide options for different types of travellers, especially those looking for longer stays or a more flexible experience.

Calgary’s downtown has struggled with office vacancies for years. According to Colliers and CBRE, as of Q2 2024, Calgary’s downtown office vacancy rate was approximately 24.1 per cent, down from the previous year’s rate of 25.4 per cent. The downtown market has seen some positive absorption and leasing activity, particularly in Class AA office spaces, which has helped reduce the vacancy rate slightly. However, challenges remain due to mergers and consolidations in the energy sector, impacting overall office occupancy in Calgary’s downtown core.

Repurposing buildings like the Canadian Centre is seen as one way to address the issue. By converting office space into a hotel, the project aims to make downtown more vibrant and appealing, not just for visitors but also for residents and businesses.

The Element Hotel will be located on the west side of Calgary’s downtown core, an area that city planners have identified as a potential growth spot. The location provides convenient access to transit, major roadways, and walking and biking paths along the Bow River. Nearby amenities, including the West Eau Claire Park, the 8th Street urban improvement corridor, and views of the Louise Bridge and Kensington Village, make the site well-suited for a hotel that serves both tourists and business travellers.

PBA’s decision to redevelop this site follows its recent success with The Dorian, a dual-brand Marriott hotel that opened in Calgary in 2021. The Dorian, a $110 million project, was well-received for its design and quality, setting a precedent for PBA’s entry into the hospitality market. The Element Hotel will be the company’s second hotel development and is part of its broader strategy to diversify its portfolio and contribute to the local economy.

The conversion of the Canadian Centre into the Element Hotel by Westin is currently in the construction phase, with completion expected in the summer of 2025. As Calgary’s downtown continues to evolve, projects like this one are being closely watched as potential models for revitalization efforts in other North American cities facing similar economic challenges.

By repurposing existing buildings and investing in sustainable development, Calgary is looking to redefine its downtown core as a more attractive destination for residents, visitors, and investors. The success of the Element Hotel by Westin will be an important test of how effectively office-to-hotel conversions can contribute to these goals.