This has happened to us on more than a few occasions this year. Development sites that we offered on years ago have come back around to us at significantly lower prices. The obvious first thought is, "Shit, good thing we didn't buy!" At the same time, there's a reason we didn't. Typically, it's because we were trying to make the deal work with a delayed close upon construction commencement, a VTB, or some other form of structure. We didn't budge on what we needed, and so we didn't get to a deal.

When a deal does come back around, it's interesting to revisit our original pro forma assumptions to see how we did and how our thinking may have evolved. In today's market, it's not uncommon for our base rental rates to be even lower than what we were assuming a few years ago. Are we now at the bottom? Only time will tell.

The paradox of today's market is that land prices are the lowest they have been since I started in development, but it's exceptionally difficult to make new projects work. Of course, as soon as it becomes easier to make projects work, land prices will once again reflect that. So if you are looking for opportunities, today's market is about finding ways to capitalize on cheaper land while protecting for the risks inherent in the current market.

In other words, you need to be a contrarian. And as we know, if you're a contrarian and you're right, there's a huge upside. But if you're a contrarian and you get it wrong, well, then at least you went for it! The ideal scenario is that you simply get the timing right, but that involves luck. The things you can directly control are looking at a lot of opportunities, being disciplined in your underwriting, manufacturing structures that reduce risk, and generally being creative.

Cover photo by Teuku Fadhil

Since about the mid-2000s, planning policies in the Greater Toronto and Hamilton Area have favoured higher-density development in already built-up areas, instead of on greenfield lands. The objective was to curb urban sprawl, use our already developed lands more efficiently, minimize our environmental footprint, and encourage a built form that is conducive to non-car forms of mobility.

As an urbanist and promoter of walkable, transit-oriented communities, I applaud this approach. Toronto is far from full. But I also recognize that this has restricted housing supply and shifted the market toward housing types that cost more to deliver for homebuyers and tenants. Reinforced-concrete buildings are more expensive to construct than wood-framed houses in the suburbs. The most affordable housing markets tend to have highly elastic supply.

A recent report by Frank Clayton for the C.D. Howe Institute agrees. Planning policies in the Greater Toronto and Hamilton Area have become disconnected from consumer preferences, limiting the kind of housing supply that people want the most: grade-related housing. The proposed solution is to increase the supply of serviced greenfield land, reduce the barriers to development, and diversify the housing types built in our traditional suburban subdivisions.

I think this is an important topic, and I have two immediate thoughts.

Firstly, is it really true that Canadians and residents in the GTHA have an overwhelming preference for grade-related housing? The 50 people who responded to my Twitter poll seem to generally think so, but as I have argued many times before on this blog, I think it's hard to know exactly right now. There could be a large segment of households who might prefer to live in a mid-rise courtyard building with a large private green space in the middle and lots of ground-floor amenities. Until this becomes an available housing option, we won't really know.

Secondly, unlocking additional greenfield land does very little to change the market forces playing out within our existing urban areas. The Toronto CMA lost about 77,500 people last year to domestic outmigration, presumably because they found greater economic opportunity and/or more affordable housing elsewhere. At the same time, 92% of the housing starts in the City of Toronto in 2025 were apartments. This is not because we're holding back greenfield land within the city proper boundaries, it's because intensification is the only option left.

The broader CMA is a different story. Only about a third of its land area is physically urbanized. The remaining two-thirds is heavily restricted by environmental protections, which is precisely where Clayton sees opportunity for more grade-related housing. “Housing policy cannot succeed if it ignores consumer demand,” says Clayton. “Canadians continue to aspire to ground-related homes. Planning for the housing people want, rather than simply counting units, is key to restoring affordability.”

I'm all for giving housing consumers as much choice as possible. Not everyone would prefer a Parisian apartment to a house in the suburbs (which is what the algorithms will tell you about me). But let's not forget that we have yet to solve this problem: How do we create attainable family-friendly housing at scale in our existing urban areas and reorient the city toward a post-car future? Toronto is now an apartment city and this is only going to become even truer, regardless of what happens on the periphery.

Change is starting to happen with our new major street and multiplex policies, which can be a form of grade-related housing. This typology is just denser, often has no parking, and is delivered in an urban, transit-supportive format rather than a car-dependent subdivision. To argue that "planning policies have missed the mark" is not wrong, but we've also been missing the mark by not building enough of what people may want within our urban areas.

Cover photo by Dillon Kydd

Real estate development is cyclical. Supply adjusts slowly to demand, and so it's common for developers to get ahead of their skis and build too much space. This is what happened in the 1980s when American developers built more office space than in all previous years of the republic's history (yes, it's true), and then nationwide vacancy rates went from 4.6% to 16.9%. And it's what happened following the dot-com crash when office vacancy in Silicon Valley went from almost 0% to over 20%.

Today, things feel kind of similar.

According to Cushman & Wakefield, nearly 37% of the office space in downtown Seattle is now vacant. Since 2020, it is estimated that these office properties have in aggregate lost about $15 billion, or almost half, of their value. This has people repeating the regular refrain that "this time is different" and that "the office market may never come back." And indeed, the commonly held belief is that this time isn't just cyclical, it's also structural. How and where we work has changed.

But unless you believe that offices as a spatial construct will fully cease to exist at some indeterminate point in the future, then the reality is that the demand curve has simply shifted. We may not need office space in quite the same way, but we will still need some office space. This means that, at some point, we will find a new supply-and-demand equilibrium and, at some point, developers will get back to building, and overbuilding, office buildings. It's just impossible to determine when that might be.

Cover photo by Zhifei Zhou