From Sprawl to Optimization

In several municipalities within our network, "Category B" commercial real estate (older buildings often less suited to new energy standards) is undergoing a profound mutation.

Current Landscape: Progress and Inventory

While an exhaustive, centralized government list does not yet exist, data from Q4 2025 by CBRE and the CMHC confirms a major trend: over 1.0 million square feet of office space in Quebec have been removed from the market to be repositioned, primarily toward residential use.

In our territories, this movement is reflected in human-scale projects:

• Conversion of clinics and small government buildings: Several former SQI (Société québécoise des infrastructures) offices in regional areas are currently under analysis for affordable housing projects.

• Mixed-use: The 2026 trend is the "hybrid building," where the ground floor retains a service vocation (professional offices or shops) while the upper floors are converted into studios and one-bedroom apartments (3 ½).

Statistics and Economic Impacts

• Inventory Reduction: Since 2021, strategic conversions and demolitions have reduced the office stock by 2.2% provincially.

• Investments: For 2026, municipal budgets allocated to downtown revitalization (via tax credits for conversion) have increased by an average of 15% in municipalities outside the Census Metropolitan Area (CMA).

• Conversion Costs: Transforming an office into a dwelling remains a financial challenge. Costs are estimated between $150 and $250 per square foot to adapt plumbing and ventilation—an investment made viable only by new housing subsidy programs launched in late 2025.

Social Impact: Revitalizing the Local Scene

The social impact is significant. By bringing residents back to the heart of small towns, we directly support local businesses that were previously struggling due to remote work. These conversion projects often target independent seniors or young professionals, two groups seeking to reduce their car dependency.

Office-to-Housing: The Great Downtown Repositioning

With vacancy rates for Category B offices hovering near 18% in certain sectors of the Island, residential transformation is accelerating. Repositioning these buildings maintains active populations in the International District, even on evenings and weekends. For developers, the use of drones has become systematic for inspecting complex structures of old offices before conversion.

The Montreal real estate map is being redrawn within existing structures. In 2026, conversion is no longer an exception but a survival strategy for property owners in the Downtown core and peripheral neighborhoods like Lachine.

Status Report: Flagship Projects

Our analysis identifies several high-activity hubs:

• Ville-Marie Sector: Several buildings on Beaudry Street and Boulevard De Maisonneuve East are undergoing transformation requests for social and affordable housing.

• "Le George" Project (45 floors) and other renovations/transformations in the Faubourgs sector are redefining the boundary between work and life.

• Lachine (Notre-Dame Street): The "Un Village" project, the metropolis's first co-housing development, will be delivered in 2026. With a $29 million investment, it recycles urban space to create 58 sustainable units (water recovery, green roofs, wood structure).

In Lachine, the "Un Village" co-housing project leads the way in gentle densification, while Downtown, commercial assets are mutating into high-end rental units to meet the demand generated by the REM.

Statistics and Economic Impacts

• Market Performance: Condos and apartments in central sectors (Ville-Marie, Plateau) show price growth of 3% to 4% in 2026, outperforming single-family homes due to supply scarcity.

• Municipal Budgets: The City of Montreal’s 2026 budget includes $7.67B in operations, with a clear priority on infrastructure protection and accelerating permits for building transformations (2025-2030 Action Plan).

• Profitability: Multi-family residential offers stability with yields of 5% to 6%, attracting investors moving away from traditional office space.

Montreal’s Periphery (East and West)

Office-to-residential conversion has become a key strategy to revitalize urban sectors while addressing the housing crisis.

1. State of Conversion in Montreal

Unlike downtown, where towers are massive and harder to convert, peripheral boroughs possess more suitable structures (better window access, shallower floor depths).

• Co-living Projects: Transformation of small office buildings into shared living units.

• 600 Peel / Southwest Sector: Requalification of industrial/office zones into mixed-use complexes.

• Public Service Buildings: Former administrative or health centers transformed into social or affordable housing.

2. Impact on Boroughs (Outside Downtown)

• Reducing "Evening Deserts": In sectors like Saint-Laurent or Anjou, conversion brings a residential population that supports local commerce after 5 PM.

• Infrastructure Optimization: Utilizing existing sewer, water, and transport networks, thus avoiding urban sprawl.

• 15-Minute Neighborhoods: Transforming monolithic industrial parks into mixed-use areas where people can live and work in proximity.

3. Focus: West Island and East End

• West Island: Immense potential around REM stations. Many 70s-80s office parks are underutilized. Conversion allows for smart densification without encroaching on green spaces.

• East End: Undergoing major revitalization (soil decontamination, Blue Line extension). Conversion here often targets affordable housing, turning old industrial headquarters into lofts or housing cooperatives.

4. Housing Crisis & Sustainability

• Relative Speed: Transforming an existing structure can be faster than new construction (if the structure is sound).

• Sustainability: The ultimate architectural recycling. Reusing existing concrete and steel massively reduces the project's carbon footprint ($CO_2$ embodied).

5. Support Programs and Incentives

Concrete Examples: East, West, and Periphery

East Island:

• Former Grace Dart Hospital (Mercier-Hochelaga-Maisonneuve): 6085 Sherbrooke St. East. Transformation into ~135 residential units. Delivery scheduled for 2025. A model for institutional heritage reuse.

• 150 Louvain West (Ahuntsic-Cartierville): Part of the "Reinvent Montreal 2025-2026" initiative, transforming industrial/office space into a zero-carbon mixed-use neighborhood.

• Habitations Jean-Brien (Ville-Marie East): Completed in March 2024, providing 20 permanent rooms for those in housing instability.

West Island and Periphery:

• 2600 Cavendish Blvd (NDG): The Citizia project. This is a land-use replacement (commercial/office to residential), creating a modern residential complex with fast-tracked delivery.

• Lachine (Quartier Vert / Gardenia): Developer Claria is building the Gardenia project (~170 units), revitalizing light industrial/office zones along Highway 20.

• Aura sur le Square (Saint-Laurent): Bois-Franc sector. Illustrates the transition of former technical zones into luxury and affordable residential areas.

• SQI Conversion (Pointe-Claire/Dorval area): Developer Immostar announced the conversion of a former SQI office building into 300 apartments for late 2026—a prime example of the "Class B" trend.

Feasibility Indicators:

1. The "1960s Floorplate": 60s and 70s office buildings are easier to convert due to smaller central cores, allowing natural light to reach the center of apartments.

2. Execution Speed: Some developers (e.g., Groupe Mach, Next Arm) are obtaining permits in 6 months for conversions, compared to 18-24 months for new builds.

3. Carbon Cost: Reusing structure saves up to 50% of $CO_2$ emissions compared to demolition and reconstruction.

Conversion is no longer just for downtown skyscrapers. In the East, it is a tool for social justice; in the West, it is the engine of a new urbanity anchored by the REM.