In Surrey, B.C., development company Tien Sher is creating a four-storey condo building home to 56 “micro suites.”
Touted as Canada’s smallest condos, “Balance” units are 290 square feet. But with a price tag of just $109,900 and a prime location in a quiet neighborhood just a few minutes’ walk from public transit, there may be some benefits to investing in smaller space.
Why big investors love small spaces
- Prime locations that stoke tenant demand
- Lower purchase costs
- Higher rent per square foot
- Smaller units in larger buildings often mean lower condo fees
- High resale demand driven by investors and end-users
Developer/owner Charan Sethi says the idea stemmed from current market conditions. “This whole project began about a year ago when we had numerous people coming to us wanting to buy, but the mortgage rules and escalating prices shut them out of the market. We wanted to find out what these people are willing to live in, what are their lifestyles, and what are they looking for?”
Finding that prospective buyers and tenants typically don’t own a car, used public transit and would be OK living in a smaller space if it were in the right location, the idea for Balance came about. Sethi is already fighting off investor interest, (“I have someone who wants to buy the entire building already,” he says), but wants to try the project on the open market first. That said, Sethi has nothing against investors purchasing single units; in fact, he fully expects it.
"Investors, in most of my projects, are about 60% of my market. Because investors will make a decision very quickly when there’s pre-sales happening, where an end-user does not,” he says.
And as for the small physicality of the units themselves, Sethi believes there will be no shortage of people willing to make use of them. “These suites have everything these people need – a bedroom area, a kitchen, and laundry facilities. If they use the space properly, they can live very comfortably.”
He points to the Burns Block building in downtown Vancouver as an example. It underwent renovations to spruce up the suites, which are 226 and 291 square feet. They’re now currently being rented out for $850 a month.
“When they first came out, people were complaining they were too small, but in less than a month the whole building was occupied,” says Sethi. Sales are projected to begin in early 2013.