 Eighth Avenue Place is a Calgary, Alberta, Class-AAA office space that, once completed, will stand as the third-tallest building in the city and address the growing need for office space. Calgary’s urban core is rife with new development – particularly in new office construction. As companies in the oil and gas sector expand, office vacancy rates have reached record lows in the past two years. It’s good news for developers entering the market and better news for top businesses looking to secure a location in one of Canada’s fastest-growing cities.
One of the most-anticipated projects popping up in downtown Calgary is Eighth Avenue Place – an office development that, when completed, will stand as the third-tallest building in the city and address the growing need for Class-AAA office space. The project is regarded as Calgary’s premier office development site by the real estate industry.
In December 2007, EllisDon’s Calgary division was awarded the general construction contract on the project, which will be built in two phases. Phase one includes the construction of the 50-story, 1.1 million-square-foot east tower, a connected two-story podium for pedestrian traffic that will eventually connect the two office towers; 58,000 square feet for retail and restaurants; a public atrium; and a level underground parking structure for 1,143 vehicles.
Full Collaboration
The development team is led by real estate developer Hines, which is serving as the development manager.
The project was designed and engineered in full collaboration among the architectural firms of New Haven, Conn.-based Pickard Chilton Architects, Houston-based Kendall Heaton Associates and Gibbs Gage Architects, based in Calgary. 20 VIC Management Inc. is currently serving as the owner’s representative.
With more than 1 million square feet of leasable space in the first phase of the two-phase project, Eighth Avenue Place will provide additional space for commercial office, retail and restaurant space and public parking in downtown Calgary. “Currently, vacancy in the downtown core is extremely low, and although there is 5 million square feet currently under construction, the majority of that is already pre-leased,” 20 VIC Management Vice President John Smith notes.
“With the continued growth of the city,” he says, “we feel that quality office space is needed. Businesses are growing and new business is coming to the city, mainly in oil and gas exploration and processing.”
The second tower will proceed based on market demand.
Phase two will consist of the 39-story, 815,000-square-foot tower on the northwest corner of the site.
A Positive Start
Smith notes Eighth Avenue Place is on an aggressive schedule – one he believes EllisDon can keep pace with as the project moves further into construction. “EllisDon is a large firm that does major office construction in other cities in Canada and the U.S. and [it has] a reputation as a solid builder,” he says. “[The company] certainly [has] the wherewithal and expertise to build this project.”
Founded in 1951, EllisDon has completed construction projects worldwide and specializes in construction and project management, design/build, health and safety consulting, equipment sales, engineering/R&D, interiors and communications infrastructure, and public/private partnerships.
Headquartered in London, Ontario, the firm runs its Canadian operations from seven locations in Alberta, Ontario and Nova Scotia. In addition to Canada, EllisDon has offices located in Atlanta; Orlando, Fla.; Athens, Greece; and Dubai, United Arab Emirates.
EllisDon Construction Manager Martyn Wesley says the site preparation and demolition of several existing retail buildings began in June 2007. In June 2008, excavation was still underway and expected to be completed by early August.
Despite a “less than stellar spring weather-wise,” Wesley says the concrete work on the footings and the columns at the P-5 level had begun.
“It rained for almost two weeks, and the surrounding water table and nearby Bow River came up a bit, so we had to work on an elaborate dewatering system,” he says. “We are trying to get our first raft poured for the east tower by the end of July.”
After the footings and columns are underway, the company will progress on the exterior walls using a combination of shotcrete and poured-in-place concrete systems. Once the parking levels approach grade, the concrete shear wall core will begin to rise well above grade. The company is using a self-climbing core system leased from Peri Formwork Systems Inc.
“It’s been a fairly straightforward project from a construction point of view,” Wesley says. “Nothing has been easy, but as long as [we] apply what [we] know, things will move along as they should. It’s our job to manage the schedule and make sure things arrive when they are supposed to. That’s one of the biggest challenges given the market demands.”
The first occupancy is scheduled for early November 2010, including early use of the parking structure. The project is expected to be completed by late 2011.
Predicting, Overcoming Obstacles
EllisDon’s meticulous preplanning is helping the project progress on schedule and stay within budget, Wesley explains. Foreseen challenges include the staging of materials, work force shortages and material cost inflation.
Because the building’s footprint covers nearly one city block, EllisDon is adhering to a strict material delivery schedule. “We are curb-to-curb, so we’re basically using just-in-time delivery, but the structural steel is being prepurchased and stored off-site [to handle escalation costs],” Wesley notes.
“We have a very experienced site project team who will deal with deliveries on a daily basis,” Wesley says. “We are also working with the city of Calgary on lane closures so that we are able to mitigate traffic interruption and to contain dust and dirt from the site.”
A general superintendent, two senior superintendents, five field engineers, a full-time safety coordinator and several senior-level project managers and office administrators are coordinating EllisDon’s portion of the project.
However, a booming construction market has strained an already-strapped labor market. With the number of projects being built in the western provinces reaching an all-time high, there is intense pressure on the local trades.
A ‘Crazy’ Market
“We have a number of subtrades that will be tendered out as we get closer,” Wesley explains. “The market here is crazy. There is so much work going on that nobody has any people. That’s the same with every business. In other provinces, the biggest issue we have is qualified trades.
“We have been fairly selective with our subcontractors. The message is that Alberta is open for business, and skilled laborers should consider moving here as jobs are plentiful.”
To combat work force shortages, the firm is self-performing the concrete and formwork. It is also holding subtrades responsible for ramping up workers as the building progresses.
Roughly 30 subtrades are expected on-site at the project’s peak. “We hold our trades responsible for getting the right people,” Wesley says.
The structure is being built with a concrete core, a structural steel and metal deck and concrete composite frame. Eighth Avenue Place is the first high-rise building in Calgary to use this method since the PetroCanada Centre was built in 1984, and largely because of the favorable combination of a shorter erection schedule when compared to the more common all-concrete structure, Wesley says. “We notified our subtrades when they bid the job that we expect them to estimate their escalation costs,” he notes. “Nobody can really predict what that might be, but things like steel reinforcing has been particularly volatile lately.”
Rocky Mountain Inspiration
Although Smith says it is a bit early to pre-lease space, he admits that the firm is currently in negotiations with several companies. “We don’t open until late 2010, and we are comfortable with where we are at today,” he says. “It will be the highest-end building in Canada when it’s complete.”
Situated in Calgary’s financial core on Eighth Avenue – hence the name – Eighth Avenue Place will receive direct exposure to pedestrian traffic on this well-traveled street.
Smith says the view lines from within the building are both “impressive and unobstructed.”
The architects and development manager designed the building with a steep, slanted roof to mimic the nearby mountains.
“From Calgary, you can see the magnificent Rocky Mountains and the owners wanted to reflect that in the design, rather than build just a more typical flat-top building,” Smith says.
Smith describes the building as “a tower that looks almost like a block of ice that’s been chiseled to replicate the Rocky Mountains. The roofline follows the form of the mountains.”
LEED Milestone
Eighth Avenue Place is also notable for its sustainable features. Although several buildings in Calgary’s urban core have green elements, Eighth Avenue Place is the first high-rise office building in Canada to be pre-certified Gold in the LEED core and shell program.
Core and shell construction involves all of the base building elements such as the structure, building envelope and HVAC systems, but excludes tenant improvements.
“Sustainability is becoming a common requirement in the Calgary market and in all of Canada,” Smith notes.
Hines, in collaboration with the design team, presented the design drawings and a checklist of building features such as the mechanical/electrical/plumbing systems and the building envelope materials to the U.S. and Canadian Green Building Councils. Based on the submittal of these plans, the project has achieved pre-certification. “We’re very excited to be a part of Canada’s first LEED pre-certified [high-rise] office project,” says John Frank, vice president of construction for Hines, “especially in keeping with Hines’ initiatives in the states for participating in LEED [jobs].”
The process of building to LEED standards started the day the former buildings on-site were being demolished. Hazardous material abatement and aggressive demolition material recycling were the main focus during the demolishing phase.
More than 50 percent of the construction debris that was removed from the demolition site was recycled. “Material recycling is ongoing off-site,” Wesley says. “We have two bins on site that are taken off-site and sorted by the waste disposal company.”
To ensure all subcontractors comply with the LEED standards, Wesley says the contractor has an on-site LEED coordinator who tracks and submits the appropriate documentation monthly.
The design aspects of the project were anticipated to be submitted to the USGBC for final certification in late July, according to EllisDon.
Once the building construction has been completed, this, too, will be submitted for evaluation by the USGBC to confirm the final Gold certification. Sidebar: A City in Demand In Canada and parts of the United States, construction spending has leveled off significantly, but in Calgary – Alberta’s urban hot spot – a booming economy is fueling construction in many sectors. The major elements contributing to the strength of Calgary are a strong energy sector, robust consumer spending and a booming financial services sector, says Bruce Irvine, vice president for business development and retention at Calgary Economic Development, an economic development agency. “Growth has been in the top 5 percent for Canadian regions every year for the past 10 years,” Irvine says.
In fact, he says, more than 25 percent of all capital construction in Canada is taking place in Calgary. “We have come out of a phenomenal period of growth, going from 2.5 billion per year in building permits to 5.5 billion in permits within two years,” he notes. “The foot has come off the gas pedal a bit, but that's mitigated by the strength in the oil and gas centers.”
With one look at the city's long list of new office projects in the pipeline, one can see developers are rather ambitious to capitalize on the growing energy-related and financial services sectors.
Downtown office construction in particular has been a boon to contractors. As the energy sector fuels additional growth in the financial services sector, supply has outpaced the demand, leading to a shortage of Class A-and AA product.
Irvine predicts office vacancy will rise by 3.5 to 4 percent this year as larger projects come onto the market. “In the downtown core, we have about 5 million square feet underway and we expect to see the healthier vacancy rates come in by 2009,” he notes. “The supply has to catch up to demand. We have several million square feet in the proposal side and some even in approvals.”
Despite the many opportunities to develop commercial property, Irvine says projects are being built at a controlled pace. “While industry here is robust in responding to the fast pace of growth, no one is racing to over-develop,” he explains. “We see product come out and we see the market settle.”
Although Irvine touts the city's pro-business climate, the imbalance between supply and demand has put pressure on the price of office product. “Given the nature of the demand that is here, we have strength in numerous sectors: energy, financial and government, and they are all office-orientated and downtown-orientated,” Irvine says. “We are still in the midst of an undersupply in Class-A and AA product, and the issue is you need the right land, you need those prime spots and you need the right end-user.
“Our growth has outpaced the ability to bring office product to the market fast enough and it's created upward pressure on rents,” Irvine notes. “Where we see relief coming is on the supply side. We will see more diverse growth in the suburban market. We have more than 5 million square feet [of office construction] underway downtown and 4 million square feet of office construction in the suburban market, and it's all expected to come on the market in 2011. That new construction will help us catch up. “If [you] put more supply on the market and if you do it right, you will create your own demand,” he asserts. |
