Co-Living With Pub Crawls, Rooftop Yoga, Spreads to Canada
(Bloomberg) -- Canada is getting its first big taste of co-living rentals -- the housing trend that’s spreading amid the global affordability crunch.
Dream Unlimited Corp. is developing a 24-story tower in Ottawa that will have communal apartments alongside regular rentals. Common Living Inc., which bills itself as the largest co-living operator in the U.S., will manage the building and offer perks such as rooftop yoga and comedy shows.
The apartments -- likely two or three bedrooms -- will be fully furnished, come with cleaning services and share common areas such as kitchens. Monthly rents will start at about C$1,225 ($927), about 30% less than similar one-bedrooms in the area. Regular units in Dream’s building will start at about C$2,065 per month.
“We’re doing a number of things where we are trying to provide affordable housing,” Michael Cooper, president of Toronto-based Dream, said by phone. “It’s a big issue.”
The tower, slated to be completed in 2022, is part of a 34-acre C$1.8 billion project that Dream is developing in Canada’s capital, Cooper said. About 25% of the tower will be communal units.
Communal living has been growing in Europe and the U.S., with firms like Germany’s Medici Living Group investing more than 1 billion euros to fuel expansion. The living arrangements, which resemble upscale student residences, are gaining traction among mobile millennials who don’t want to accumulate belongings, can’t afford the soaring rents of many cities and like the instant communities they create.
Another co-living firm, Node Living UK Ltd., also announced its first Canadian location on Monday in tech hub Kitchener-Waterloo, Ontario. London-based Node said it will provide housing for about 50 people in 38 apartments where rents will start at about C$1,000 per month.
Cooper said its project is a win-win for renters and developers: cheaper for those who can’t cover the cost of an entire apartment, and more rent per square foot for property owners.
“If people have all of these activities right within their building, they’re going to be much happier,” Cooper said. “We’ll be able to drive better returns in this model than we would with a traditional apartment.”
Co-living units have provided between 20% to 30% premiums in Common Living’s other projects in the U.S., said Jake Chai, director of international real estate at the New York-based firm. It’s especially attractive to developers in a market like Canada, where yields have been tight as property values, land prices and construction costs have soared, he said.
While Canada has seen smaller startups and operators experiment with co-living concepts, Dream says it’s the first big developer to delve into the space in the country. It’s looking at opportunities to expand its co-living portfolio.
New York-based Common announced a $300 million-plus expansion in April to Philadelphia, Pittsburgh, Atlanta and San Diego. The shift to Canada will be Common’s first foray outside of the U.S. It’s currently negotiating a pipeline of more than 500 bedrooms with developers in Toronto.
©2019 Bloomberg L.P.