I thought I would add something to my comment about the downtown office vacancy rate that didn't dawn on me until now. I was in Edmonton last weekend, as I was meeting with some of their planning staff (we're both doing a similar project and since I was going up anyway, I figured might be a good idea to exchange info).
One thing I noticed that Edmonton seems to be really good at; is having old office buildings convert to residential development. The building next to the hotel I stayed at is a great example.
This clearly was an old office building, but it's now apartments. So is
this. I did a quick count and saw about 8 or 9 examples of this all through the downtown. It's very similar in thought to what happened to the Raddison on Hollis - it was a former office building.
By converting these buildings, you get rid of older buildings from the mix and reuse them for other purposes. I have friends who live in the second example I gave - it's pretty swanky. But that also drives up rents, because the cheap space disappears and decreases vacancy rates too. I wonder if we'll see that happen over the next few years if a few new buildings (like Nova Centre, Twisted or International Place) are built? Would be interesting...