From New York to Los Angeles to Toronto, surging demand for apartments is encouraging builders across North America to try to put more units into less space. Now, in a booming Toronto apartment market where prices are rising and units are already shrinking, some developers suggest the latest casualty could be the balcony.
At a Queen's University executive seminar in Toronto focused on investing in commercial real estate, a trio of developers said the argument for building balconies is getting weaker. They say it's especially true in northern cities, where a relatively short warm weather season points toward having a tiny balcony and a communal rooftop outdoor space for lounging and grilling.
"In a market like Canada, where it's only nice to be out maybe three months of the year, our view is that by having Juliet balconies and great outdoor amenities like barbecues and outdoor rooftops, we can create a place if you really want to be outside," said Andrew Joyner, a director with Tricon Capital Group. The Toronto-based company has invested in real estate and development projects valued at about $20 billion since forming in 1988.
That said, Joyner said it's not always black and white when it comes to balconies – some luxury projects demand them.
Brad Cutsey, president of Ottawa, Ontario-based Interrent Real Estate Investment Trust, which owns and manages more than 9,000 suites across 15 cities in Ontario and Quebec, said as an operator his REIT doesn't have much use for balconies because they end up used for storage and junk.
"Really depending on the height of your building, how often does someone, especially in Toronto, want to go out on the 35th floor of a little balcony. It's not realistic; people like the thought of it," said Cutsey.
The balcony, part of a panel discussion on multifamily units at the conference, comes as rental rates rise along with prices.
