{"id":437132,"date":"2026-01-27T20:16:08","date_gmt":"2026-01-27T20:16:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/437132\/"},"modified":"2026-01-27T20:16:08","modified_gmt":"2026-01-27T20:16:08","slug":"developers-transform-vacant-offices-into-medical-facilities","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/437132\/","title":{"rendered":"Developers transform vacant offices into medical facilities"},"content":{"rendered":"

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With Canada\u2019s health care system overburdened and its office vacancy rate higher than pre-pandemic levels, developers are transforming empty and underused space into medical research labs, doctor and dental offices, and outpatient surgery centres. One example is the Cit\u00e9 de la Biotech in Qu\u00e9bec (pictured), which converted office buildings into life sciences labs.Supplied\/HarveyCorp<\/p>\n

High office vacancy rates and an overburdened health care system are driving the conversion of Canadian offices into medical infrastructure \u2013 primarily physician and dental facilities, but also outpatient surgery centres and life-sciences research labs.<\/p>\n

Developers\u2019 efforts to repurpose office space comes amid increasing demand for new health care centres driven by Canada\u2019s aging population and an increased focus on preventative, convenient walk-in care.<\/p>\n

\u201cThere is more support than there\u2019s ever been to see the private sector deliver environments that would traditionally be found on hospital campuses,\u201d says Matthew Johnson, Colliers Canada\u2019s senior vice-president and Canadian lead of the firm\u2019s North American Life Sciences Practice Group that helps clients find lab and manufacturing facilities. <\/p>\n

\u201cYou\u2019re seeing the start of a trend and it\u2019s going to continue.\u201d <\/p>\n

Policy makers support health care property<\/p>\n

To account for rising health care demands, policy makers are responding with regulatory reforms and new funding.<\/p>\n

For example, Toronto\u2019s City Council is working toward changing its<\/a> office-conversion rules to allow makeovers for uses beyond residential, including medical. <\/p>\n

The federal government also announced in its 2025 budget a $5-billion, 10-year fund for health care infrastructure, although a fund spokesperson says decisions have yet to be made on what spaces will be eligible for support. <\/p>\n

Overall, health care spending in Canada, mostly from governments, has been projected to rise 4.2 per cent to $399-billion in 2025, according to the Canadian Institute for Health Information<\/a>, with the increase driven by inflation and population growth. <\/p>\n

But while governments are committing billions to relieve pressure on hospitals, Mr. Johnson says the funding will be disbursed over a decade even though the need is immediate. He suggests that moving non-essential health care services away from hospitals can free up space for more urgent needs.<\/p>\n

Challenges for health care real estate<\/p>\n

An office-to-medical conversion is not a panacea for overcrowded hospitals or lowering national office vacancy rates, which are above pre-pandemic levels at more than 16 per cent thanks to the rise of remote work, according to real estate firm Altus Group<\/a>. <\/p>\n

This is largely because medical-conversion projects can face costly and challenging infrastructure, operational and regulatory requirements that are unique to health care, although research shows<\/a> medical tenants pay higher rents and sign longer-term leases than typical occupants. <\/p>\n

The high rents result from building upgrades that range from simple to complex. For instance, a simple change may consist of installing plumbing for sinks in general practitioners\u2019 offices, while more complex renovations for ambulatory surgery centres require widening corridors and elevators for gurneys, as well as heavy load-bearing floors to support medical equipment such as CT scanners. <\/p>\n

Sean Bahmani, director at Toronto-based construction company Shamaim Building Group, also notes that conversions require compliance with health care-specific codes and rezoning from local municipalities with permits often taking twice as long as approvals for a standard office.<\/p>\n

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In Ontario\u2019s York Region, a former office building has been transformed into the Uxbridge Medical Centre, featuring offices on the main floor that can be customized to practitioners\u2019 requirements and a second-floor dental clinic. The repurposed structure also includes several upgrades such as special medical waste and HVAC air filtration systems.Supplied\/Shamaim Building Group<\/p>\n

Rising appetite for office-to-medical conversions<\/p>\n

The potential to boost office occupancy after pandemic restrictions ended with premium medical tenants, while relieving cost pressures on overcrowded hospitals, is driving interest among health authorities, insurers and investors.<\/p>\n

And while more than 70 per cent of office conversions are residential, alternative uses, particularly medical, are gaining ground in a Canadian-medical-office-buildings market expected to post a compound annual growth rate of 12.4 per cent through 2030, according to market research<\/a>.<\/p>\n

\u201cWhether it\u2019s dental, medical, cosmetic or everything in between, there\u2019s so much opportunity,\u201d Mr. Bahmani says. <\/p>\n

His firm specializes in managing complex commercial projects, including one that saw a new medical facility built over the strengthened foundations of a 1960s office building. <\/p>\n

The two-storey, roughly 4,000-square-foot Uxbridge Medical Centre in York Region features offices on the main floor that can be customized to practitioners\u2019 requirements and a second-floor dental clinic. <\/p>\n

The repurposed building includes upgraded plumbing, specialized medical waste and HVAC air filtration systems, as well as higher electrical load capacity and backup generators to support imaging and other medical equipment.<\/p>\n

The structure meets the Ontario Building Code, Ontario Ministry of Health rules and medical facilities\u2019 municipal zoning standards, which include achieving sustainability targets, adding parking and ensuring accessibility compliance. <\/p>\n

While the Uxbridge project had its complexities, they did not compare to the work in 2020-2021 that went into the conversion of a 40,000-square-foot space in a Toronto Bay Street office tower to a biotechnology laboratory now being leased by the University of Toronto near its Temerty Faculty of Medicine. <\/p>\n

Jay Deshmukh, principal at Arcadis, the firm that led the specialized design for the conversion, says the devil was in the details.<\/p>\n

\u201cJurisdiction and technical requirements need to align to make such projects feasible,\u201d she says. <\/p>\n

The Bay Street project made sense for U of T, which needed off-campus space to build new laboratories, because the conversion was less expensive than purchasing or constructing a new building.<\/p>\n

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Despite demand, one expert says investors\u2019 \u2018risk aversion\u2019 has prevented more projects from moving forward – primarily due to the strict requirements for wet lab research facilities that conduct experiments with liquids, chemicals and biological materials.Supplied\/Arcadis<\/p>\n

How labs space fits in<\/p>\n

Despite high demand, Ms. Deshmukh says investors\u2019 \u201crisk aversion\u201d has prevented more projects from going ahead in Toronto. This is because of the stringent requirements for wet lab research facilities that conduct experiments with liquids, chemicals and biological materials. <\/p>\n

\u201cWe\u2019re waiting for the starting gun,\u201d she says.<\/p>\n

Requirements include floor-to-floor heights that can exceed 16 feet for ductwork above ceilings, vibration isolation for sensitive instruments, strict infection controls and security measures, as well as vacuum systems and hazardous waste drains.<\/p>\n

In Qu\u00e9bec, where the Coalition Avenir Qu\u00e9bec government has committed to help the province become a life science hub, Longueuil-based HarveyCorp specializes in the construction and conversion of office and industrial buildings into biotech laboratories including at the Cit\u00e9 de la Biotech in Laval.<\/p>\n

But even with high lease rates for wet lab space, the company\u2019s president, Hugues Harvey, says office-to-medical conversion costs are daunting, reaching $900 a square foot compared to the $225 to $300<\/a> a square foot to convert a standard office into a basic medical space. <\/p>\n

\u201cA very small percentage of vacant office space is suitable for labs unless you want to put in major investment,\u201d Ms. Deshmukh adds.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: With Canada\u2019s health care system overburdened and its office vacancy rate higher than…\n","protected":false},"author":2,"featured_media":437133,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[1401,13754,181465,49,48,181460,181464,181458,181457,181461,181462,84,392,2922,181463,181459,13753],"class_list":["post-437132","post","type-post","status-publish","format-standard","has-post-thumbnail","category-healthcare","tag-adveditorial","tag-advpropertyreport","tag-arcadis","tag-ca","tag-canada","tag-canada-health-care","tag-canada-office-to-medical","tag-canada-office-vacancy","tag-canada-office-vacancy-rates","tag-colliers-canada","tag-hamaim-building-group","tag-health","tag-healthcare","tag-noastack","tag-office-to-health-care","tag-office-to-medical-conversions","tag-property-report"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/437132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=437132"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/437132\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/437133"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=437132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=437132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=437132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}