Millennials are breathing new life into Calgary’s empty office towers, industry insiders say. But it’s not a return to business as usual.

“We’re battling the storm,” says developer Riaz Mamdani, who has successfully repurposed several empty office buildings into hip new rentals and self-storage space targeting those who can’t or no longer wish to own.

“The market is changing,” says Mr. Mamdani, chief executive officer of Strategic Group, one of Canada’s largest privately held real-estate companies. “Millennials are more interested in renting than owning. We’re creating a lot more purpose-built rentals than ever existed before.”

Office conversions are the hallmark of Strategic Group’s business plan. By the end of 2020, the company expects to have reduced its Alberta office space by 18 per cent and increased its residential units by 53 per cent.

It’s a business strategy necessitated out of “desperation,” says Mr. Mamdani, because the company invested in commercial real estate prior to the collapse of the energy industry that devastated Alberta and Calgary, the headquarter capital of the oil sector.

According to commercial real-estate services firm Avison Young (Canada) Inc., Calgary’s downtown office vacancy rate was 24.4 per cent in the second quarter of 2019, down from 25.3 per cent in the first quarter and 26 per cent 12 months earlier.

Mr. Mamdani says that equates to about 11.6 million square feet. Put another way, that’s nearly seven Bow buildings of empty offices – the iconic 1.7-million-square-foot tower that represents the highs and lows of Calgary’s energy economy; the highs as it was built for Encana Corp. at the height of the boom; and the lows, as it emptied out entire floors during the bust. Encana’s recent decision to relocate its headquarters has been another blow.

Keep reading in The Globe and Mail