To its landlord, the office complex on the western fringe of downtown Toronto was a “broken building.”
While it was in good shape physically, the eight-storey, glass-clad building at 901 King St. West had become a cavernous empty shell.
“This building was broken because it had a lease expiry and it was almost completely vacant because tenants’ [20-year] leases were expiring,” explained Les Miller, president and chief operating officer of Crown Property Management Inc.
But for Crown Property, “broken” buildings like this create an opportunity.
“Part of Crown’s strategy is to buy older buildings with expired leases and put money into refurbishing them to refresh the tenant base,” Mr. Miller said. “You have to ask: If you were to build a building like this today, would it be the same? If not, what changes would you make?”
It’s a calculation that will be made with increasing frequency, said Ross Moore, Vancouver-based director of research for commercial real estate service CB Richard Ellis Ltd.
“In downtowns across the country, you have a good number of buildings that were built during a commercial property boom in the late 1980s and early 1990s. The tenants have been in spaces for 20 years and there’s nothing wrong with the buildings, but they think it’s time for a change to reinvigorate the company,” Mr. Moore said.
“A big new crop of commercial spaces are due to be completed in 2014 and 2015. So lots of companies will be looking to move, rather than put a big renovation in their existing space,” Mr. Moore predicted.
That presents a challenge to the owners of the older buildings. Employee expectations of workplaces have changed. “They’re expecting better air quality, more consistent temperature control and more natural lighting, rather than fluorescents,” Mr. Moore says. Younger employees also want their work space to be carbon-neutral and sustainable.
It’s a challenge that Crown and the first new tenant in 901 King West have taken seriously. Crown is aiming to attract young, creative businesses that are drawn to the surrounding Liberty Village neighbourhood.
That required a “de-instiutitionalizing” of the building, which was built in 1992 for a bank and provincial offices with a marble lobby and lots of concrete and hard surfaces. The lobby is getting wood finishes to give it a softer look, Mr. Miller said.
For a new crop of tenants, there will be new services such as free Wi-Fi and expanded parking for bicycles, with shower facilities, so people who bike or walk to work can shower and change. The availability of street car transit on King Street is an attraction and Crown has also arranged bus service to shuttle commuters five kilometres from Union Station to the front door of the building during rush hours.
Crown is also working to attract restaurant and coffee-shop tenants to the building and neighbourhood.
The building’s first new tenant is Quadrangle Architects Ltd. Ted Shore, a principal with the firm, and the management team decided to create a new office for the company to demonstrate how to re-energize tired older buildings to meet the expectations of a new generation of employees.
“There was nothing particularly wrong with the building, but it felt oppressive,” Mr. Shore recalled of his first walk a year ago through the building’s empty fluorescent-lit floors, with their low ceilings and acres of dirty beige carpet.
“The building was really designed for machinery rather than people,” he said. “It was built at a time when it was assumed that computers would always take up huge amounts of space and everything would be hard wired through conduits in acoustic-tiled drop ceilings. And it was a time when energy efficiency wasn’t the primary consideration it is today.”
But it had the makings of an appealing work space, said Quadrangle principal Caroline Robbie.
“A building has to have good bones to be right for retrofitting. It should be solidly built, have good natural light and it should also have few interior walls or columns, which become barriers in open-concept offices.”
Once the oppressive drop ceilings were removed, 901 King West had all the elements.
“There was plenty of natural light, thanks to windows all around and a large central atrium. It had unobstructed space, because it was built using post-tension concrete beams. It just needed a rethink to make it seem lighter and more energy efficient and inspire people to do their best work,” Ms. Robbie said.
On the energy front, Crown Properties is upgrading all of the two dozen buildings it manages to achieve BOMA building environmental standards certifications. At 901 King West it has also started the process to get the building a LEED Silver certification.
“The mechanical systems can’t all be brought up to the level of modern buildings, but there are other things we can do to get the points we need to score the rating,” Mr. Miller said. One important element is lighting. The old fluorescent ceiling lights that were on continuously are being stripped out and offices will use task lighting.
The transformation of the building has captured the imagination of other tenants. Among them is film postproduction company Deluxe Toronto Ltd., which is in the process of renovating two floors and plans to build a studio space on the building’s upper floor, Mr. Miller said. In 12 months, half of the building’s 250,000 square feet have been leased and Crown expects it will be fully occupied by the end of the year.
He believes all the improvements will mean the building, which was rated Class B, can compete with other older Class A buildings in Toronto.
Mr. Shore sees the building as a showcase of what’s possible with older office buildings. “It wasn’t that the building was broken, it just needed to be adapted to modern work. That’s not that difficult, once you see what can be done.”