Empty offices are becoming clinics, dental suites and labs — what that means for neighbourhoods
Rising office vacancies and strained hospitals have pushed developers to convert empty commercial space into medical clinics, outpatient surgery centres and life-sciences labs.
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By Torontoer Staff
Developers are repurposing vacant office buildings across Canada into medical clinics, dental suites, outpatient surgery centres and life-sciences laboratories. The shift responds to high office vacancy rates and growing demand for accessible, outpatient health care as the population ages.
Conversions range from modest clinic fit-outs to complex wet labs, and they are appearing in suburban and downtown locations alike. For residents this could mean more walk-in care options close to home, shorter waits for routine procedures and new neighbours in formerly empty towers.
Why office space is attractive to health care providers
Municipalities and the private sector see an opportunity to address pressure on hospitals by moving non-emergency services into commercial buildings. Developers also view medical tenants as financially stable, because clinics and labs often pay higher rents and commit to longer leases than typical office tenants.
“You are seeing the start of a trend and it is going to continue,” says Matthew Johnson, senior vice-president at Colliers Canada, who leads the firm’s North American life sciences practice. He notes there is more support now for private-sector delivery of services that used to be concentrated on hospital campuses.
What converting an office into health care space actually costs
Not all offices are suitable for medical use. Basic clinic conversions might require installing sinks, strengthening electrical capacity and improving ventilation. More complex projects, such as ambulatory surgery centres, need wider corridors and elevators for gurneys and heavier floor loads for imaging equipment.
Wet labs present the most demanding requirements. They can require floor-to-floor heights above 16 feet, specialised ductwork, vibration isolation, hazardous waste systems and stringent infection control measures. These technical demands raise conversion costs substantially.
A very small percentage of vacant office space is suitable for labs unless you want to put in major investment.
Jay Deshmukh, principal, Arcadis
Examples from Ontario and Québec
In York Region a former office was reborn as the Uxbridge Medical Centre, with adjustable clinic suites on the main floor and a dental clinic above. The project included upgraded plumbing, specialised medical waste handling and improved HVAC filtration, plus higher electrical capacity and backup generators to support imaging machines.
On Bay Street in Toronto, a 40,000-square-foot office conversion created biotechnology laboratories leased by the University of Toronto. The university found conversion less expensive than building new off-campus facilities, but the process involved extensive technical and regulatory coordination.
In Québec, developments such as the Cité de la Biotech in Laval show how office and industrial stock can be transformed into life-sciences clusters. HarveyCorp, which specialises in biotech conversions, says even with high lease rates for lab space, costs can reach around $900 per square foot for full wet-lab build-outs.
Policy and funding are shifting, but timelines differ
Cities are updating zoning and conversion rules to allow medical uses in office buildings, and the federal budget included a $5-billion, 10-year fund for health infrastructure. That funding will be distributed over a decade, however, while demand for capacity is immediate.
“Moving non-essential services away from hospitals can free up space for more urgent needs,” Johnson says. Still, approvals for medical conversions can take longer than standard office renovations because of health-specific codes, municipal rezoning and permitting.
Who benefits and who should be cautious
Patients and neighbourhoods may gain easier access to primary care, dental services and outpatient procedures. Health providers can find modern, well-located space without the costs of new construction. Investors and building owners can reduce vacancy and attract stable tenants.
At the same time investors remain cautious, particularly for wet labs, due to the high technical and capital requirements. Absent substantial upgrades, only a fraction of the available office stock will be fit for conversion into advanced research facilities.
There is so much opportunity in dental, medical, cosmetic and everything in between, but projects can be complex and costly.
Sean Bahmani, director, Shamaim Building Group
What to watch as conversions increase
- Municipal policy changes that make medical uses easier to approve
- Funding programs that prioritise retrofit projects over new builds
- How developers balance retrofit costs with long-term leases from medical tenants
- Whether conversions improve local access to primary care and reduce hospital pressure
Converting offices into medical facilities is not a quick fix, but it offers a practical way to repurpose empty buildings while expanding outpatient and research capacity. For residents, the most tangible change will be more health services in familiar neighbourhood locations.
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