One of Alberta's oldest companies has seen the future. And it's bright, member-owned and poised for growth in a 200,000-sq.-ft. building that's part of a brand-new suburban office park marketed as the only one of its kind in Calgary.

UFA Cooperative Ltd. has signed a 15-year lease deal for Phase II of Westmount Corporate Campus, a 26-acre development off Richard Way and 50 Avenue S.W. The company plans to occupy four floors of the building, scheduled for completion next fall. It also has an option on a fifth floor, says Richard Peter of UFA corporate communications.

The deal means UFA will sell its current home of 30 years. That property, located on 68 Avenue S.W., covers 60,000 sq. ft. of office space and will be sold along with a nearby parking lot.

Recognized as one of Canada's most successful co-operatives, UFA operates 35 farm and ranch stores and more than 120 petroleum outlets, the vast majority of which are in Alberta, including stores in all of the province's major cities.

Illustration courtesy of Cohos Evamy
A rendering of the UFA Cooperative Ltd.'s new building on the Westmount Corporate Campus in Calgary's southwest.

Recent stats put UFA's annual revenue at $1.4 billion in 2005, up from $1 billion the previous year, says Peter.

The new building, which is 95-per-cent leased, gives UFA access to 60 per cent of its available space. Like its current location, the new site is within a 10- to 30-minute commute for the majority of the 330 employees who work at UFA's headquarters in Calgary.

Expansion plans mean "we need more space and we have outgrown this building," notes Peter. He says the company also expects its new location next to Mount Royal College (MRC) to yield several key benefits, including access to meeting and convention space.

In a business market characterized by labour shortages, however, UFA is especially excited about the potential to tap into MRC resources that could help the company attract and retain quality employees.

He expects that relationship to include opportunities for employee development, improved employee wellness programs and access to students in the college's workplace co-op programs.

Jeff Hyde, vice-president of development for GWL Realty Advisors, echoes Peter's enthusiasm. GWL manages the Westmount Corporate Campus on behalf of Westmount's owner, British Columbia Investment Management Corp. (bcIMC).

Based in Victoria, bcIMC has more than $76 billion in assets under administration.

It bought the Westmount property three years ago.

The Westmount site, which will eventually include five Class A office buildings, an above-grade parkade and nearby retail space, is one of the first in Calgary to use comprehensive landscaping, signage, street furniture and architectural detail to create a unified suburban office space on such a large piece of land.

"When you drive into Westmount Corporate Campus, you will know that you are driving into a comprehensively designed business park," says Hyde.

"The overall master plan that we've set out for the buildings is attractive to tenants," adds Bill Richards, director of leasing for GWL Realty Advisors.

A final decision on whether the UFA building will be formally certified under the leadership in energy and environmental design (LEED) program has not yet been made, but Hyde expects construction will incorporate those standards.

Environmental considerations worked into the site design include a landscape plan based on xeriscape (low water) principles and stormwater retention ponds that offer practical and esthetic value. The UFA building may also incorporate a rainwater collection system for landscape irrigation.

Choices like these "may have a higher up-front capital cost, but will translate into lower operating costs in the future," explains Hyde.

The UFA building is the second in the multi-phase development to come onstream.

Stuart Olson Construction and two real estate organizations, the Alberta Real Estate Association and the Real Estate Council of Alberta, are anchor tenants in the Phase I building. It is nearing completion and spans 80,000 sq. ft.

Phase III, approved on a speculative basis, delivers another 60,000 sq. ft., says Richards.

He and Hyde say the new interchange on 50 Avenue and quick proximity to Crowchild Trail are an added bonus to Westmount tenants and their clients, providing quick access to the downtown core and the rest of the city.

Westmount is the only business node of this size "that's roughly five minutes to downtown Calgary," adds Richards.

While the first two buildings hit the office market "before we had this severe tightening of the market (for the downtown core), now there's virtually no space.

"So for a tenant needing 100,000 sq. ft., their options are pretty limited," says Richards.

Supply-and-demand issues aside, the search for lead tenants in suburban office buildings coming online in today's heated market is complicated by construction cost uncertainty and time overruns forced by labour shortages. Whereas construction companies typically build in basic contingency costs ranging from five to 10 per cent, today's estimators also employ what Hyde calls an "inflation contingency" that can run 1.5 per cent a month. "That adds a lot of cost to a project."

It also makes it difficult to price space for the lead tenants you need before each phase proceeds, concedes Hyde.

Even so, he and Richards say they've got a winner with Westmount Corporate Campus.

And the folks at UFA seem to agree. "When you look at all the criteria, it's a win right across the board," says Peter. "This is about as good as it gets."

(Joy Gregory can be reached at joy@businessedge.ca)