Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Howard Chai recently reported in the Globe and Mail on the number of "distressed" commercial real estate transactions that Canada has seen over the last few years:
2023: 119 transactions totalling $767 million
2024: 191 transactions totalling more than $1.5 billion
2025: 252 transactions totalling more than $1.42 billion
These numbers are from Altus Group and they, importantly, only include sales involving a court proceeding. They do not include properties sold at a loss because of financial distress or any other such scenarios. This means that the actual amount of "distress" in the market is certainly greater. We're all just holding on.
The hardest-hit asset class is, not surprisingly, development land. This makes sense because the value of development land is mostly binary right now. Either you can do something productive with it (in which case there's value) or you can't, and it's illiquid. Land is risky. It just doesn't seem that way when the market is hot.
The theme of the article is that the situation is likely to get worse before it gets better. Jeremiah Shamess of Colliers is cited as saying he thinks we will see the "emergence of a bottom" late this year or early into 2027. He must have read my annual predictions post in January, where I argued the same.
These periods of time always suck for everyone involved. But as is always the case in markets, the faster we deal with the pain, the faster we'll get to the other side. Failure is an essential part of capitalism. As many have said: "Capitalism without bankruptcy is like Christianity without hell."
Cover photo by Damian Kravchuk on Unsplash

I saw Paul Graham write this week that "Cities inhale and exhale each generation. People move to cities in their 20s in search of colleagues and mates, move back out to raise their kids, and then when their kids are in their 20s, they return."
I don't like it being presented in such a single-minded way, but there is, of course, a lot of truth to this remark, particularly for North American cities. It's basically the "dumbbell" housing demand profile that we in the industry often talk about.
Whether you believe this is an innate housing preference, a deeply-rooted cultural bias, a fundamental truth about the optimal way to raise children, or the result of poor land-use decisions, it is a common housing outcome and, in some cities, the de facto housing outcome. But again, it is not universally the case.
This is a semi-regular topic on this blog, but I've been thinking about it more now that Bianca and I are about to graduate to being urban parents. In fact, now that it has become known, we've started getting some questions: "So, do you think you will move to a house?" (We live in an apartment condominium.) And sometimes it's not even a question; it's a flat-out assumption: "Once you move to a house..."
I wasn't aware that this was a prerequisite. Little do they know that I spend my free time fantasizing about apartment renovations in Paris, Tokyo, and Rio de Janeiro.
I'm sure that our thinking will evolve over time, but to a meaningful extent, I would classify us as being typologically agnostic, and instead resolute on a particular kind of urban context. What matters most to us is that we remain in a city where we can walk or bike to things, where a car is not an absolute necessity, and where exciting and cultured things take place from time to time.
I'm not sure what definition of "city" Paul had in mind when he was talking about people leaving it. Did he mean downtowns? Are the inner suburbs within a city an acceptable geography? I don't know, but I can confidently say that leaving the city is the last thing on our minds right now.
Maybe that will change. Or maybe it won't.
Cover photo by

If you have a long, painful, soul-crushing commute, Tesla has a solution for you: Full Self-Driving (their autonomous, but still supervised, self-driving technology). And it makes sense that Tesla would position its product in this way. A great deal of our built environment (the vast majority of it in some geographies) has been designed around the car. We are dependent. And this is an obvious solution to its negatives.
To be clear, I'm excited about autonomy, which is why it's a frequent topic on this blog. But the urbanist in me can't help but think that positioning it in this way is in some ways a solution to the wrong problem. Here's an alternative solution: live and work in a walkable, transit-oriented community.
Imagine, for instance, pitching this Tesla positioning to a Tokyoite. Tokyo is reported to have the highest railway modal split in the world. According to some measurements, only something like 12% of trips in the city are done by car. So if you said, "FSD is the solution to your long and boring commute. Now you can just sit, relax, read a book, do work, or play on your phone!" it wouldn't be a stretch to imagine Tokyoites saying that they already do this on a train.
Of course, Tokyo is a unique place, and there are lots of car-dependent cities where there is simply no other practical option. I also recognize that housing attainability is a major driver of sprawl. In these cases, FSD represents a meaningful quality-of-life upgrade.
Again, I support this happening, but at the same time, I worry about it placating us into thinking that we've solved one of the major negatives of urban sprawl. Yes, you have to sit in a car for two hours each day, but now you're not actually driving. Isn't that, like, so much better? In a best-case scenario, we maintain the status quo when it comes to our built environment. And in the worst-case scenario, it leads to even more sprawl.
This is an open question that we have on this blog: To what extent will self-driving cars increase our willingness to commute? Historically, new mobility technologies have promoted urban sprawl because they allowed us to travel greater distances in the
Howard Chai recently reported in the Globe and Mail on the number of "distressed" commercial real estate transactions that Canada has seen over the last few years:
2023: 119 transactions totalling $767 million
2024: 191 transactions totalling more than $1.5 billion
2025: 252 transactions totalling more than $1.42 billion
These numbers are from Altus Group and they, importantly, only include sales involving a court proceeding. They do not include properties sold at a loss because of financial distress or any other such scenarios. This means that the actual amount of "distress" in the market is certainly greater. We're all just holding on.
The hardest-hit asset class is, not surprisingly, development land. This makes sense because the value of development land is mostly binary right now. Either you can do something productive with it (in which case there's value) or you can't, and it's illiquid. Land is risky. It just doesn't seem that way when the market is hot.
The theme of the article is that the situation is likely to get worse before it gets better. Jeremiah Shamess of Colliers is cited as saying he thinks we will see the "emergence of a bottom" late this year or early into 2027. He must have read my annual predictions post in January, where I argued the same.
These periods of time always suck for everyone involved. But as is always the case in markets, the faster we deal with the pain, the faster we'll get to the other side. Failure is an essential part of capitalism. As many have said: "Capitalism without bankruptcy is like Christianity without hell."
Cover photo by Damian Kravchuk on Unsplash

I saw Paul Graham write this week that "Cities inhale and exhale each generation. People move to cities in their 20s in search of colleagues and mates, move back out to raise their kids, and then when their kids are in their 20s, they return."
I don't like it being presented in such a single-minded way, but there is, of course, a lot of truth to this remark, particularly for North American cities. It's basically the "dumbbell" housing demand profile that we in the industry often talk about.
Whether you believe this is an innate housing preference, a deeply-rooted cultural bias, a fundamental truth about the optimal way to raise children, or the result of poor land-use decisions, it is a common housing outcome and, in some cities, the de facto housing outcome. But again, it is not universally the case.
This is a semi-regular topic on this blog, but I've been thinking about it more now that Bianca and I are about to graduate to being urban parents. In fact, now that it has become known, we've started getting some questions: "So, do you think you will move to a house?" (We live in an apartment condominium.) And sometimes it's not even a question; it's a flat-out assumption: "Once you move to a house..."
I wasn't aware that this was a prerequisite. Little do they know that I spend my free time fantasizing about apartment renovations in Paris, Tokyo, and Rio de Janeiro.
I'm sure that our thinking will evolve over time, but to a meaningful extent, I would classify us as being typologically agnostic, and instead resolute on a particular kind of urban context. What matters most to us is that we remain in a city where we can walk or bike to things, where a car is not an absolute necessity, and where exciting and cultured things take place from time to time.
I'm not sure what definition of "city" Paul had in mind when he was talking about people leaving it. Did he mean downtowns? Are the inner suburbs within a city an acceptable geography? I don't know, but I can confidently say that leaving the city is the last thing on our minds right now.
Maybe that will change. Or maybe it won't.
Cover photo by

If you have a long, painful, soul-crushing commute, Tesla has a solution for you: Full Self-Driving (their autonomous, but still supervised, self-driving technology). And it makes sense that Tesla would position its product in this way. A great deal of our built environment (the vast majority of it in some geographies) has been designed around the car. We are dependent. And this is an obvious solution to its negatives.
To be clear, I'm excited about autonomy, which is why it's a frequent topic on this blog. But the urbanist in me can't help but think that positioning it in this way is in some ways a solution to the wrong problem. Here's an alternative solution: live and work in a walkable, transit-oriented community.
Imagine, for instance, pitching this Tesla positioning to a Tokyoite. Tokyo is reported to have the highest railway modal split in the world. According to some measurements, only something like 12% of trips in the city are done by car. So if you said, "FSD is the solution to your long and boring commute. Now you can just sit, relax, read a book, do work, or play on your phone!" it wouldn't be a stretch to imagine Tokyoites saying that they already do this on a train.
Of course, Tokyo is a unique place, and there are lots of car-dependent cities where there is simply no other practical option. I also recognize that housing attainability is a major driver of sprawl. In these cases, FSD represents a meaningful quality-of-life upgrade.
Again, I support this happening, but at the same time, I worry about it placating us into thinking that we've solved one of the major negatives of urban sprawl. Yes, you have to sit in a car for two hours each day, but now you're not actually driving. Isn't that, like, so much better? In a best-case scenario, we maintain the status quo when it comes to our built environment. And in the worst-case scenario, it leads to even more sprawl.
This is an open question that we have on this blog: To what extent will self-driving cars increase our willingness to commute? Historically, new mobility technologies have promoted urban sprawl because they allowed us to travel greater distances in the
A big part of the AV argument is not that they will solve traffic congestion (they won't); it's that they will make your commute suck a lot less, and in an even rosier scenario, become a kind of "third space" where people work, relax, or whatever. This, in turn, will make sprawl more widely palatable.
But the more I think about this, the less I believe it. Marchetti's Constant tells us that humans have generally maintained a consistent "time budget" for commuting irrespective of the technology being used. Will this time really be different?
On the flip side, there are many who would argue that urban sprawl is a natural market outcome. Not everyone wants the "utopian, socially-engineered dream" that urbanists and YIMBYs like me want. And this is a fair response. I believe in individual freedoms. Give people housing options (we're very bad at this) and let them choose where they want to live.
But we should acknowledge the tradeoffs. Traffic congestion is a clear byproduct of urban sprawl and land-use patterns that leave no other practical option for getting around. Complaining about traffic is complaining about sprawl. One more lane or cars that drive themselves have not been shown to change this relationship.
Sprawl also contributes to greater loneliness and declines in happiness. In 2000, Robert Putnam argued in his book, Bowling Alone: The Collapse and Revival of American Community, that, roughly speaking, every 10 minutes of additional travel time leads to a 10% reduction in social connections. We spend less time with our families, friends, and communities.
There's little doubt that self-driving cars will make commutes more tolerable. But perhaps that's not ambitious enough.
A big part of the AV argument is not that they will solve traffic congestion (they won't); it's that they will make your commute suck a lot less, and in an even rosier scenario, become a kind of "third space" where people work, relax, or whatever. This, in turn, will make sprawl more widely palatable.
But the more I think about this, the less I believe it. Marchetti's Constant tells us that humans have generally maintained a consistent "time budget" for commuting irrespective of the technology being used. Will this time really be different?
On the flip side, there are many who would argue that urban sprawl is a natural market outcome. Not everyone wants the "utopian, socially-engineered dream" that urbanists and YIMBYs like me want. And this is a fair response. I believe in individual freedoms. Give people housing options (we're very bad at this) and let them choose where they want to live.
But we should acknowledge the tradeoffs. Traffic congestion is a clear byproduct of urban sprawl and land-use patterns that leave no other practical option for getting around. Complaining about traffic is complaining about sprawl. One more lane or cars that drive themselves have not been shown to change this relationship.
Sprawl also contributes to greater loneliness and declines in happiness. In 2000, Robert Putnam argued in his book, Bowling Alone: The Collapse and Revival of American Community, that, roughly speaking, every 10 minutes of additional travel time leads to a 10% reduction in social connections. We spend less time with our families, friends, and communities.
There's little doubt that self-driving cars will make commutes more tolerable. But perhaps that's not ambitious enough.
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