In the 40 years Bill Partridge has lived in Calgary, he’s never seen anything like last week’s floods. Authorities were literally closing down the highway behind him as he drove to the city’s airport to fly to a conference Friday morning. “I’ve seen high water, but I’ve never seen floods like that,” he said.
Speaking by phone from The Every Building Conference & Expo in San Diego, Mr. Partridge, president of Calgary’s Building Owners and Management Association, said while there were lessons to be learned from the disaster, commercial real estate owners reacted to the flooding swiftly and efficiently.
“Every single building has an emergency response plan,” he said. BOMA Calgary worked with the city’s emergency measures organization and other agencies, manning a dedicated desk at the emergency operations centre to advise its member landlords across the city of proper measures to prepare for evacuations.
What’s uncertain for building owners, though, is exactly how much damage the floods have done to the city’s growing skyline of office towers, home to some of Canada’s largest energy companies. Many still have scant access to their properties in the downtown core. While fears of structural damage to downtown buildings appear to be low, underground parking lot water damage – and subsequent trouble from its partner in crime, mould – and power restoration remains on many commercial property owners’ minds.
David Routledge, Oxford Properties’ vice-president of real estate management in Calgary, spent some time visiting Oxford’s five major downtown projects over the weekend, and said while there are no fears of structural damage “at this time,” his biggest concern was getting power back to the buildings, two of which were running on emergency backup power on Monday. “It’s not ideal for us,” he said.
The city is working methodically, grid by grid, to restore power to the city’s core, but the process requires assessing each of the thousands of affected buildings.
When flooding became a threat, Oxford set up an “incident command centre” and contacted all its tenants immediately to make them aware of the situation. In some cases, it shut down power in certain parts of its buildings for safety purposes. The company is now monitoring its properties to make sure they remain secure.
The lower portions of Oxford’s buildings, Mr. Routledge said, are almost exclusively used for parking and tenant storage. The company has been working with its tenants, some of whom needed to enter their offices to get computers and other supplies to run their businesses off site. The landlord can’t promise when tenants can return.
“We won’t know, honestly, for a few days when our customers will be allowed back,” Mr. Routledge said Monday.
Cadillac Fairview’s office towers, including Encor Place, weren’t affected by flooding or power outages, and remained open Monday, media spokesman Tom Poldre said, but tenants “were only sending in essential staff.” At the excavation site for the company’s major City Centre development in the Eau Claire Market near the Bow River, there was some “water accumulation,” he said, which is being “actively managed” by the site contractor.
Calgary’s rapidly gentrifying East Village along the Bow River “is holding up remarkably well,” says Susan Veres, vice-president of marketing and communications with Calgary Municipal Land Corp., an urban renewal organization.
The infrastructure and streetscaping CMLC worked to install along the RiverWalk in the village has not washed away, she said, and while there are several developments being built in the area hit by floods, “none of them are so far along that they were heavily compromised.”
Ms. Veres said the site of the Embassy Bosa Evolution condominium development had filled with water, but “the good news is that there was only concrete in the hole,” with no electrical or communications servicing installed. While the hole needs to be pumped, she said it should be relatively undamaged.
Mr. Partridge said many of Calgary’s major office structures likely experienced minor flooding. “It’s going to take some time” for the total damage from water and mould to be assessed. But, he said, “people are starting to get back into the buildings. That’s one of the first signs of recovery.”
Dundee Real Estate Investment Trust said Monday that 25 of its properties in Calgary were open, and while six were still without power, “there has been little or no flood damage sustained” across most of its portfolio. Two of its properties’ parking garages had experienced flooding, but one had already been cleared and the other was being pumped.
Winnipeg-based Artis REIT said that several of its underground parking garages had flooded in its Calgary properties, but none as high as the lobby; the company expected that the water would be pumped out and electricity restored by Wednesday.
Both companies said their insurance would protect them against unexpected costs from the damages.
The flood last week is already believed to be more severe than one in 2005, which caused more than $300-million in insured losses across Alberta, according to the Insurance Bureau of Canada. Steve Kee, the bureau’s director of media relations, said that “it’s too early” to estimate the total amount of damage from this flood, but it’s definitely worse than in 2005. “There will certainly be larger damage.”
BMO Nesbitt Burns analyst Tom MacKinnon said in a research note Monday that losses from the floods could reach as high as $3-billion to $5-billion. Both he and Mr. Kee pointed out that while insurance will often cover damaged personal goods from sewer-backup-related water damage, it does not usually cover flood-related water damage unless a customer specifically purchases that option – meaning that the total cost of the flood could be much larger than the damage claimed under insurance.
“We estimate total insured losses conservatively will be 75 per cent of total losses,” Mr. MacKinnon said.
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