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One Thousand Museum, Miami

Candace Taylor published an article today in the WSJ about the late Zaha Hadid’s One Thousand Museum tower in downtown Miami. The title: “Zaha Hadid’s Miami Tower Is an Architectural Feat. Is It Designed to Sell?”

It’s an interesting case study, particularly for those of us in the industry. With only 84 units across 62 storeys, it is certainly “ultraluxury.” There’s also a helipad on the roof. Here is an excerpt from the article to give you a sense of the unit sizes:

Louis Birdman, one of the project’s developers, said prices, which range from just under $5 million to $25 million, are negotiable. Each floor has only one or two units, ranging in size from about 4,600 square feet to 10,400 square feet and each has at least four bedrooms. “Given what’s going on in the market now, I think all of us developers are competing for a similar buyer, so there’s obviously flexibility on price,” he said.

As you can probably glean from the above, the ultraluxury market has softened in Miami. But Candace is right: One Thousand Museum is an architectural masterpiece. If you’re in the market for a new four bedroom home in downtown Miami, now may be right time.

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Toronto is on pace to have more skyscrapers than Chicago — so?

I received a call from a reporter at the CBC today. She was working on a piece about the recent stat that Toronto is on pace to surpass Chicago for the most number of skyscrapers (150m or higher). The above chart is from Bloomberg.

In particular, she wanted to know (1) what this means for Toronto and (2) if Toronto has been focusing enough on design and architecture during this period of expansion. Can and will it be as beautiful as Chicago?

Here are the stats I was given (taken from the Council on Tall Buildings and Urban Habitat):

Toronto skyscrapers (150m or more)

67 done
32 under construction
59 proposed to be completed by 2023 latest

= 158

Chicago skyscrapers (150m or more)

126 done
8 under construction
11 proposed to be completed by 2024 latest

= 145

And here is more or less what I said and what I was thinking:

Toronto and Chicago are both important global cities. We (Slate) operate and have offices in both cities. The number of tall buildings is just one metric. Look at how few Los Angeles has. At the same time, I get what this signals. It’s noteworthy. Chicago invented the skyscraper.

Chicago has a wonderful architectural history. (Raise your hand if you’ve been on that architectural boat cruise). But people often forget the fact that when most buildings are built there’s an economic imperative and a private client. This includes back in the day in Chicago.

So the economic environment we have here in Toronto — where people do work to, you know, get paid and companies think about things like profit margin — isn’t necessarily all that different from the one that birthed architecture that is now widely admired (oftentimes from a boat).

Toronto has some spectacular buildings and some shit ones. I’ll let you all decide which ones are which. But I do think that Toronto is seeing a greater commitment to design. We recognize the value. But here’s the thing: part of what makes this possible actually runs counter to what most cities want.

Housing has become more expensive and that makes it possible to spend more money on architecture. It’s one of the great tensions of city building. We want developers to build more affordable housing, but we also want high quality building materials and “Capital A” architecture. Which is more important?

Finally, I do think that architectural styles need time to settle in, sometimes before we can fully appreciate them. We are seeing that start to happen with Brutalist architecture. And let’s not forget about all of the Victorian homes that we tore down in Toronto. They weren’t fashionable at that time.

It’s easy to romanticize about the way things used to be done. It’s harder, sometimes, to appreciate the now. But sometimes all it takes is a bit of time.

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Number of condo units built in New York City between 2009 and 2019

A decade of ultra luxury condos. The New York Times published this story over the weekend talking about how the luxury condo boom of the 2010s transformed New York City, and in particular Brooklyn.

Below are two tables from the article: (1) The number of units built between 2009 and 2019 across the five boroughs and the city’s top neighborhoods, and (2) the neighborhoods with the highest median sale price increase.

The overarching theme is that New York built too many “super-high-end condos” geared toward global capital flows. According to one developer interviewed for the article (Gary Barnett of Extell Development), it was unprecedented.

Apparently, the problem segment remains the $5 million to $10 million market. There’s simply too much inventory, and that has developers both delaying launches and going with much smaller (and hence more affordable) unit mixes.

One stat that stood out for me was the new condo premium over resales. In 2011, the average sale price of a new condo in the city was about $1.15 million, which represented about a 9% premium over resale pricing.

While it is typical to see a premium over resales (the same is true in Toronto), the average price of a new condo in 2019 rose to $3.77 million, representing a 118% premium over resales.

For the rest of the article, click here.

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The world's first programmable city — Woven City

Last week was CES in Las Vegas. Some or many of you were probably there. One of the things that was announced at the show was a project by Bjarke Ingels Group for Toyota called the Woven City. Situated at the base of Mount Fuji in Japan, the development sits on a 70 hectare site and will eventually house some 2,000 people.

The objective is for it to act as a living laboratory for a number of new city building initiatives, ranging from autonomy and mobility as a service to multi-generational living and hydrogen-powered infrastructure. Woven City is intended to house not only residents, but also researchers who can test out and learn from these new ideas.

Below is a short video from Dezeen. It’s entirely visual. No words. There’s also an official website, but not much is up there yet. Hopefully there will be more soon. Construction is set to start next year (2021) and it’ll be BIG’s first project in Japan.

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Berlin apartment rent freeze has frozen capital expenditures

Last year, the city of Berlin agreed to a five year rent freeze for some 1.5 million flats constructed before 2014. The way it was initially approved is that it would freeze rents at mid-2019 levels and allow for only 1.3% inflationary increases. All of this is being challenged in the courts, but the Financial Times is suggesting that it could still come into force by March 2020. Here is an excerpt from a recent article. (Guy Chazan isn’t holding back about the kind of people that he believes Berlin attracts.)

The legislation, which should come into force by March this year, is City Hall’s response to a lingering housing crisis that shows no sign of easing. Packed out with Brexit refugees, international party people and wannabe tech entrepreneurs, Berlin is in expansion mode, its population growing by 40,000 a year. Yet affordable housing remains scarce. Rents have doubled over the past decade, as new residential construction fails to keep up with soaring demand.

As I mentioned before on the blog, these policies are not intended to apply to new buildings. That would surely choke off new construction, which would only exacerbate the underlying supply issue that Berlin is facing. But not surprisingly, this move has also put a freeze on capital expenditures, according to the same FT article. Local trades are complaining that, “It’s as if someone’s just turned out the lights.”

Photo by Gilly on Unsplash

Two-up, two-down

Feargus O’Sullivan is doing a series in CityLab right now on the “home designs” that define four European cities: London, Berlin, Amsterdam, and Paris. The first one is on London’s classic “two-up, two-down” design, which refers to a two storey home with a living room and kitchen on the ground floor and two bedrooms on the second. It’s a simple design, but one that has supposedly endured.

O’Sullivan argues that for many, or perhaps most in Britain, this is what a “home” feels like. It’s grade-related and there are two floors. Indeed, only 14% of British people live in an apartment, compared to 57% in Germany (a majority). This percentage is much higher in London, with about 43% of people living in an apartment. But about 25% of the population still lives in some sort of attached house.

Home equals house. And for us North Americans, this is of course relatable. But the Germany example is a reminder that this is not necessarily universal. Attitudes toward housing are cultural. And cultures can and do change. I am seeing that happen right now in Toronto. Some of us are becoming less like the British and more like the Germans.

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Toronto's tech cluster(s)

A recent study by the City of Toronto has looked at why tech firms cluster (agglomeration economies) and where they cluster in the city. Here are maps of what they found:

Downtown captured almost half (49.2%) of all tech employment in the city with some 29,701 jobs. The South Employment Monitoring Area, which is the area outlined above in blue, captured 63.4% of the city’s tech base.

I usually shy away from headlines touting some total number of tech jobs because I feel that it can become a bit of a vanity metric. What about the quality of those jobs? How much venture capital have the companies raised?

But this report is different and it is interesting to see the extent in which tech has concentrated itself in the core of the city. As of 2019, jobs in tech establishments represented about 4% of all jobs in Toronto.

To download a copy of the report, click here.

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Hotels are here to stay

I have a copy of Monocle’s Guide to Hotels, Inns and Hideaways sitting on my desk and I love flipping through it. There’s something magical about a great hotel. Part of that magic is intrinsic — it’s just a good hotel. And part of it is the fact that we’re probably all a bit more open to new experiences when we travel. Our mindset changes.

On the first of January, I wrote (briefly) about two recent experiences where I was no longer required to interact with a person in order to check into a hotel. It was all done electronically. Some of you followed up and asked: “Do you think this is a good thing? Don’t you miss the human connection?”

My response was that I think it is inevitable. There is a long history of technology/automation replacing human jobs. We used to have elevator operators. Now we don’t. We used to have people shoveling coal into furnaces. Now we don’t. And I think that’s okay. We created different jobs. The same is likely to happen with Uber/Lyft drivers.

At the same time, our need for human connections isn’t going away. One of the best features of a great hotel is the bar. Whether it’s sitting at the bar and talking with the bartender or meeting someone new, those moments of interaction will always remain precious.

And it’s one of the reasons why, I think, platforms such as Airbnb haven’t meant the demise of hotels. Part of it has to do with the service offerings and consistency of a good hotel. But part of it also has to do with our desire to be around other humans. In the words of Monocle: “There’s something about a hotel bar that captures our collective imagination.”

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A transactional real estate marketplace

I would like to revisit the post that I wrote last week about the Brazil-based real estate startup, Loft. In it, I said that they are doing in Brazil what Opendoor, and others, are doing in the US. They are buying and flipping homes using algorithms. This has become known as “iBuying” and we’ve talked about it a lot here on the blog.

But we have also talked about how this is probably not the end game. These companies are seeding a marketplace, because in every new two-sided marketplace you are always faced with a chicken-and-egg problem. You can’t attract supply if you don’t have demand. And you can’t attract demand if you don’t have supply.

In reading the investment announcement by a16z, this larger vision is pretty clear:

They [Loft] are building a transactional marketplace for the biggest asset class in the world, starting in the biggest market in Latin America, on a time horizon that makes it hard to believe it’s been less than a year since the PowerPoint. They buy homes, fix them (often according to formulaic specifications provided by active buyers), and sell them — what is now known as “i-buying,” with the vision of turning this into a transactional marketplace.

If successful, these companies will transform from just “iBuyers” to fully fledged marketplaces for the buying and selling of homes. And when that happens (I believe it’s a when), it is likely to mean dramatic changes to the commissions landscape. Today, over $100 billion in residential real estate commissions are paid out across the United States each year.

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Superkül wins Designer of the Year for 2020

Designlines Magazine is out with its annual “Designer of the Year” issue and this year’s winner for best overall designer is Superkül — the award-winning architecture firm behind Junction House. Pictured above are Andrea D’Elia, Meg Graham and the team. (The JH project team spends a lot of time in the boardroom that you see in this picture.)

Other winners for this year include Omar Gandhi, Paolo Ferrari, and LGA Architectural Partners. They were awarded best restaurant, best product, and best public space, respectively. If you aren’t familiar with the work of these four firms, I would encourage you to check them all out. They are truly some of the best in the city. Congrats everyone.

If you’d like to buy a copy of Designlines, you can do that here. We will also make copies available at our temporary Junction House showroom, which is located at 2843 Dundas St W.