Calgary’s Downtown Conversion Program Milestone: First Office-to-Hotel Project Completed, Offering Key Insights for Future Redevelopment

Calgary’s Downtown Development Incentive Program has taken a step forward with the opening of the Element Calgary Downtown hotel, as the city’s first completed office-to-hotel conversion under the incentive program. This project is part of a broader municipal effort to rebalance the downtown core and spark reinvestment. 

Downtown Calgary Development Incentive

Launched in 2021, Calgary’s incentive program aimed to address the high downtown office vacancy rate, which had reached nearly 30% in the wake of a prolonged downturn in the energy sector. The City committed public funds to remove up to 6 million square feet of unused or underused office space from the market. The goal was to transform these properties into needed spaces, particularly residential, hotel, cultural, educational, or mixed-use properties.

Under the most recent terms of the program, updated and approved by Council in 2023, property owners and developers can apply for grants ranging from $50 to $75 per square foot, depending on end use, with the $75 cap reserved for residential conversions. 

Office-to-residential conversions are eligible for the highest level of support, while hotel and co-living projects may receive up to $60 per square foot, capped at $15 million per property unless otherwise approved by Council.

Applications are accepted during specific intake windows. The most recent ran from September 19 to October 31, 2024. Projects needed to be within the Downtown Incentive Program Area and demonstrate feasibility, permit readiness, and a strong contribution to the downtown vision as outlined in Calgary’s Greater Downtown Plan. Preference was given to projects that include active street-level uses.

As of mid-2025, the City has conditionally approved 21 conversion projects totalling over 2.7 million square feet, with a mix of residential, hotel, and institutional uses. Over 2,600 new homes are in the pipeline alongside Calgary’s first converted hotel. 

The program funds a range of outcomes including post-secondary institutions (e.g., a recent University of Calgary campus expansion downtown), residential units, co-living, and mixed-use cultural spaces.

Calgary’s First Hotel Conversion: Element by Westin

The Element Calgary Downtown, located at 833 4th Avenue SW, officially opened in June 2025 as a 226-suite extended-stay hotel. Formerly an aging 12-storey office building, the 170,000 square foot property was transformed by local developer PBA Group of Companies in partnership with Concord Hospitality. The hotel now features amenities such as in-room kitchenettes, EV charging, bike-share services, and a rooftop restaurant and lounge named Bow and Bend.

PBA received approximately $9.9 million in city incentives, based on the program’s $60/ft² maximum for hotel use. The total project cost has not been disclosed, but city funding was a material factor in feasibility.

Proof-of-Concept with Insights 

The Element project provides important proof-of-concept for the incentive model, as well as some insights into conversion challenges and solutions. For example, since the office building did not have balconies, often expected with residential apartments, a conversion to a hotel instead was chosen.

Calgary Tourism anticipates a record summer in 2025, bolstered by a $500 million expansion of the BMO Centre nearby. The Element brand’s model suits this environment and may be replicated elsewhere in the core.

While 2.68 million ft² has been conditionally approved, the original program target is 6 million ft². More conversions are expected to be supported, especially in underutilized Class B/C buildings within the designated downtown zone.

Future of the Program

The program is administered through a competitive application process by building owners. The city has stated that project pipelines are still open, and another round of applications may be forthcoming if funding remains available. Currently, the city is finalizing legal agreements with the most recent intake’s approved projects.