Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Author: Brandon Donnelly

  • Hamilton’s Pier 8

    In December of last year, the City of Hamilton launched an RFP process to find a team (from the list of prequalified bidders) to develop a new urban community at Pier 8 along the waterfront. The ambition is somewhere around 1,500 new residential units and approximately 13,000 square meters of commercial and institutional space.

    That process has narrowed the pool to 4 teams and 1 will ultimately win the exclusive right to develop the new community. Here are the teams, along with a link to their submission materials, including a short video that I understand was a requirement of the RFP.

    – GulfDream (link)

    – Tridel (link)

    – Urban Capital / Core Urban / Milborne Group (link)

    – Waterfront Shores (link)

    This is a super exciting project for Hamilton. So I would encourage you to take a look at the presentation materials. At this point, you only have until Tuesday, April 17, 2018 to provide any comments to the City’s evaluators. If you’d like to view the boards in person, you can do that this Monday and Tuesday in the main lobby of City Hall.

  • Going down east

    I live in Toronto. 

    When I am headed north to cottage country, I say that I am going up north.

    When the Florida snowbirds talk about escaping the winter, they usually say that they are headed down south.

    These geographic references are fairly straightforward.

    If a friend were to move to Vancouver, I might say that she or he moved out west. This one starts to get a bit more interesting because it speaks to a location that is out, or away, from the center. Toronto is the center and that person has moved out from it.

    But the one that really made me think was down east. My mother was born in the Canadian Maritimes and when she references this part of the country she calls it down east. 

    I used to ask her: “Why is it called down east? Geographically, it is actually up east.”

    Turns out that down east is (probably) a nautical reference. It is used to identify parts of the east coast in both New England and Canada. The prevailing winds in these parts blow from the southwest. So when sailors traveled from the west to east they were going downwind.

    So there you have it. Do you have any peculiar geographic references in your part of the world?

    UPDATE: I should have also mentioned that the St. Lawrence River generally flows north-easterly and that there’s an elevational difference between what was formerly known as Upper Canada and Lower Canada.

    Photo by Matthias Jordan on Unsplash

  • How elevation impacts risk taking

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    There’s an old saying that we shape our buildings and environments and then they in turn shape us. 

    Here is a fascinating research report about “the influence of physical elevation in buildings on risk preferences.” I discovered it through this MarketWatch article, which my friend John forwarded me this afternoon. 

    Here is a quote from the article:

    We then examined the correlation between hedge-fund volatility and office location in terms of number of stories above ground. We found that as the elevation of hedge-fund managers’ offices increased, they were more willing to take risks that resulted in more volatility. This was true even when statistically controlling for factors such as total assets, fund strategy and several other variables that could have led more resourceful hedge funds to occupy expensive offices that are often found on higher levels of buildings.

    Does this mean taller cities are also more volatile cities? Assuming this is all true, it once again proves that we are maybe not the rational decision makers that many us probably think we are.

    Photo by Hala AlGhanim on Unsplash

  • Regional accents and “da Bulls”

    I find regional accents fascinating. 

    I generally think that Toronto has a fairly neutral accent. But then again, when I lived in Philadelphia, I used to notice the accident every time I came home. Maybe it is because I had adopted a bit of the Philly accent. For the record, I never picked up “youse.”

    According to some classifications, most of Western and Central Canada would fall under “General Canadian.” But I find that there are noticeable differences between the accents in Toronto and, say, Calgary. Really there are differences even within the Greater Toronto Area.

    CityLab has a recent article up about why city accents are fading in the US midwest. They chalk it up to two main factors: education and geographic mobility. But I also wonder if today’s online connectivity isn’t muting some of the local varietals.

    That’s the interesting thing about accents, they – much like the language itself – are constantly changing and evolving. On that note, I’ll end with this classic parody of the Chicago accent: Da Bulls!

  • New York City’s retail vacancy problem

    The New York Post has some interesting articles, here and here, on the growing retail vacancy problem in NYC. (Thank you Michael for the link in the comments this week.)

    The vacancy rate on Amsterdam Avenue in the Upper West Side is said to be around 27% and it is said to be around 20% on a stretch of Broadway in Soho. It has become such a problem that Mayor Bill de Blasio wants to implement some sort of retail vacancy tax:

    “I am very interested in fighting for a vacancy fee or a vacancy tax that would penalize landlords who leave their storefronts vacant for long periods of time in neighborhoods because they are looking for some top-dollar rent but they blight neighborhoods by doing it,” he said on WNYC. “That is something we could get done through Albany.”

    But this is based on the assumption that greedy landlords are simply holding out for exorbitant rents. It doesn’t consider the fact that, maybe, there is simply too much retail space:

    Only a few grasp the true scope of the problem. Vornado Realty Trust titan Steven Roth said we can only cure the national plague through “the closing and evaporation” of up to 30 percent of the weakest space — which would take five years.

    All of this, of course, has me thinking about the future of ground floor main street retail. What are your thoughts?

  • The golden era of Canadian graphic design

    Over a year ago I wrote about a Kickstarter campaign that wanted to make a documentary to celebrate “the golden era of Canadian graphic design.” 

    And after I wrote about it, my friend Dave Wex – who, like me, is a lover of all things Canada – backed the project. Yesterday he flipped me the latest update. 

    The trailer is out and the world premiere of Design Canada is scheduled for Wednesday, June 13, 2018 at the Hot Docs Cinema here in Toronto. After that, it will move to Montreal and Vancouver. 

    If you can’t see the trailer below, click here.

    [vimeo 263571655 w=640 h=280]

    Tickets available, here.

  • 11 Hoyt, Brooklyn

    Tishman Speyer just unveiled a new condo project in Brooklyn called 11 Hoyt. And it just so happens to be Studio Gang’s first residential project in New York City. Preview above. More renderings over here.

    It’s a 51 storey condominium with 480 residences and 55,000 square feet of indoor and outdoor amenities. The unit mix ranges from studios to four-bedroom residences, and prices range from $600,000 to over $4 million (USDs, of course).

    If you’re from Toronto, you’re probably looking at the renderings and thinking to yourself: “There are no balconies or outdoor spaces.” But that’s fairly typical in the NYC market, as I understand it.

  • Income sorting by city

    This is a fascinating study by Issi Romem about the characteristics of cross-metropolitan migration in the United States. The key findings are that in-migrants to expensive coastal cities tend to have higher incomes and more education than the out-migrants, and that the opposite is true for the less expensive cities in the US. “Expensive” means expensive housing.

    Here is the income chart:

    Let’s use San Francisco as the example since it’s the most expensive metro (all the way to the right on the x-axis). The way to read this is that on average, from 2005 to 2016, in-migrants to the San Francisco metro area earned $12,640 a year more per household (y-axis) after they arrived compared to out-migrants before they left. This chart shows the difference between in and out incomes.

    Take note of Miami which is sitting at a similar place to New York and Los Angeles on the horizontal income line, but has home values similar to Phoenix, Chicago, and Philadelphia.

    Now here’s the education chart:

    Similarly, it is showing the difference in educational attainment between in and out migrants.

    So what does all of this tell us? 

    Well, it tells us, among other things, that US metros are continuing to sort based on income and that this process of polarization is probably contributing to home price appreciation. Because even if the incomes of current residents aren’t growing, these “expensive cities” are effectively swapping out poorer residents for richer ones. That, alone, would mean more money for expensive homes.

    For Issi Romem’s full article, click here.

  • Meet Replica

    Sidewalk Labs is currently building out a platform called Replica that will support them in their development plans here in Toronto. Replica is: 

    “a user-friendly modeling tool that uses anonymized mobile location data to give planning agencies a comprehensive portrait of how, when, and why people travel in urban areas.”

    Here is a preview of the Replica dashboard showing a section of Main Street in Kansas City. I hope the animated GIF shows up for you.

    The platform uses a combination of mobile location data (~5% of the population) and on-the-ground checks, typical stuff like manual traffic counts and transit boardings.

    The goal is to understand in real-time who is using a street, as well as how (driving? cycling?) and why (going to work?).

    Their introductory blog post obviously stresses the importance of personal privacy, but I am curious how they determine where people are going.

    I suppose if they pair journeys with destinations (and the durations at those destinations) they can make reasonable assumptions around the why.

    I think the benefits to all of this are clear. But does any or all of this worry you from a privacy standpoint?

  • Half of Toronto condos completed last year became new rental housing

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    Shaun Hildebrand (Urbanation) and Benjamin Tal (CIBC) published a report today called, “A Window Into the World of Condo Investors.” In it they revealed that last year (2017 data) no less than 48% of the Greater Toronto Area’s newly completed condo units were closed on by “rental investors.” In other words, almost half of the units became new rental supply.

    This stat was not surprisingly turned into clickbait-y type headlines like, “Half of Toronto condos bought last year were by investors”; whereas an alternate headline might read: “Half of Toronto condos completed last year became new rental housing.” Not as jarring, I know.

    In any event, there are a bunch of other interesting stats in the reports. Here are a few of them:

    – 80% of all new home sales in the GTA last year were condo.

    – Average resale condo prices (per square foot) increased by 26% last year and rents grew by 9%.

    – Over 20% of condo investors purchased their property with no mortgage.

    – Average down payment made by investors was 20%; non-investors were closer to 15%, likely because of mortgage insurance and other factors.

    – Out of the condo investors who took possession in 2017 with a mortgage, no less than 44% are in a negative cash flow position – meaning their rental income isn’t covering their carrying costs. 

    – The returns, which the report calls exceptional, have been coming in the form of price appreciation.

    – As a stress test for the market – what if all these negative cash flow investors suddenly sold their condos? – the report also estimates that if you took all of the rental investors who closed in 2017 with a mortgage and who are in a negative cash flow position greater than $500 per month, it would represent only 3.4% of the total annual supply of condos (both new and resale product).

    If you would like to check out the full report, you can do that over here.

    Photo by Scott Webb on Unsplash