Alberta real estate developers turn from office space to rental housing
Written by: Tamsin McMahon, The Globe and Mail
Plunging oil prices have dealt a devastating blow to Calgary’s developers as energy companies hemorrhage office space. But where others see pain, Riaz Mamdani sees opportunity.
The head of Strategic Group, a real estate company that has focused mainly on buying and building office space in the Calgary area, is setting his sights on a new market: rental housing.
Mr. Mamdani has five apartment buildings under construction in the region. By June, he hopes to boost that number to nine. Over the next three years he hopes rental housing will grow to make up half his Alberta real estate portfolio, up from about a fifth today.
The shift is a result of what’s been happening in Alberta’s energy sector. Oil prices have continued to slide, killing demand for new office space and making rental housing – a more stable, if less profitable venture – that much more attractive.
“We see an opportunity that we couldn’t have otherwise been pursuing but for the fact that the more lucrative opportunity, which has always been office buildings in our portfolio, doesn’t make sense today,” he says.
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