! CREF FALL 2017.qxp 2017-11-29 12:36 PM Page 46
FROM BEER KEGS TO DOG PARKS: ASPEN PROPERTIES REIMAGINES OFFICE SPACE
Scott Hutcheson Executive Chairman Aspen Properties
“We rolled out all the creative things – making the building dog-friendly, putting a golfing range on the top floor. These are all fun, friendly concepts that are not corporate, but targeted towards the future of what we think the office will look like, which is more playful. “We need new ways of thinking to get ahead of the changing demographics and the desires of the millennial workforce.” The good news for Calgary, says Hutcheson, is that it is finally at the bottom of the business cycle in the market. “Most of the big layoffs are behind us, and consumer confidence and spending have started to rise. “From a real estate standpoint, there are still some supply side additions coming to market so we expect vacancy rates to continue to go up, but the business cycle won’t erode any more than it has. Housing stock seems to be picking up in terms of absorption. “Overall, we can see a more stable 12 month ahead.”
While granite towers filled with cubicles will do little to lure the next generation of office workers, a lounge filled with beer kegs can go a long way. So, too, can basketball courts, golf simulators and an outdoor dog park – all features of the former Encana Place Tower, acquired by Aspen Properties. “We tried to be innovative, possibly even disruptive, in the things we’re doing to change office space, and it really paid off,” says Executive Chairman Scott Hutcheson. Their tenants range from law firms to a San Francisco-based accelerator called Rocket Space. 46
Calgary is among a handful of Canadian cities that has submitted a bid for consideration as the host of Amazon’s second headquarters. The Seattle-based e-commerce giant will pick the location for its home away from home by next year. “If Calgary could attract Amazon to this market, it would replace the 50,000 jobs we’ve lost in the oil business with jobs in a future growth sector with one of the best organizations in the world. That would be a once in a generation opportunity in this community,” says Hutcheson. “The odds are quite slim because we’re competing against 51 cities across North America, but we’re putting together the best possible package to get Amazon’s attention. “Amazon would be well served to look to Canada. We’re a friendly nation to the very people US public policy on minorities and international employees discriminates against and is turning away, located two hours away from Seattle. We have lots of available office space, highly educated
“We need new ways of thinking to get ahead of the changing demographics and the desires of the millennial workforce.” engineers and other labour, and available housing stock that is really not expensive relative to other cities in major markets.” While Calgary is on the rise again, Hutcheson cautions some challenges lie ahead with regards to the erosion of valuation of office buildings and the subsequent renewals of debt that need to occur. “My concern is where the debt market is going. The list of lenders is getting shorter and shorter over time– what will be the effect on our community? We’ve renewed three pieces of debt and were lucky to get it done because there’s not a long list of lenders giving us debt exposure in Calgary. “It continues to be relationship-driven and not everyone has those relationships with the lending market or institutional partnerships. So that is certainly one of the biggest challenge will see in the next 18 months.” ■ Barbara Balfour Canadian Real Estate Forum / FALL 2017