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.
This is an oversimplification that won’t apply to all markets, but typically the decision tree for urban parking looks something like this:
Do I need to build parking?
If no, great. That’s ideal!
If yes, how many levels of below-grade will I need?
If below-grade parking doesn’t work because it’s either too expensive or because the soil is bad, try above-grade parking.
And if above grade, how can I “wrap it” with occupiable space or, at the very least, treat it in such a way that it doesn’t look ugly and the city doesn’t get mad at me?
What I’m getting at with this is that above-grade parking is generally frowned upon. It is done in lots of places, like in Miami where you can’t go underground, but if you ask your average urbanist they will probably tell you that above-grade parking is ugly and that said ugliness should be mitigated to the fullest extent possible.
But here’s a counter argument. Let’s assume that we believe any one of the following:
We should design new buildings to be adaptable (i.e. easily convertible to other uses in the future)
We should design and build in a way that reduces carbon to a minimum
Lower construction costs are good for end-users of space
In the future, people will be less, as opposed to more, reliant on privately owned cars
In this case, the ideal solution is actually “unwrapped” above-grade parking. It’s less intensive to build, and both below-grade parking and wrapped above-grade parking result in large windowless spaces with very little utility other than for storing inanimate objects. Your options are parking, self-storage, and maybe a large gym for people who don’t like natural light.
Judging by the above poll, which was still in progress at the time of writing this post, this is not how most people think about urban parking. But I think it’s time we start changing the discussion.
Previously leased to Macmillan Publishers for the last 60 years, the building has been sitting vacant since 2019 and supposedly needs something like $100 million in CapEx to make it leasable again. Four of the five current owners have wanted to renovate it, but the fifth kept blocking it, and so the other partners sued for a “partition auction.”
That auction happened last week, and even though the four owners were really trying to lock down the 25% share that they didn’t own, the auction was won by an outsider at $190 million. That said, a 10% deposit was to be due the following day and, apparently, that never happened. So maybe it hasn’t sold yet. But whatever, it’s still interesting to think about its purchase price.
According to Wikipedia, the Flatiron Building is 255,000 square feet. So at $190 million, the building was “purchased” for $745 per foot. Assuming that it needs another $100 million, that’s another $392 psf, for a total of $1,137 psf.
What I am curious about now is how this compares to other office buildings in midtown Manhattan. Is there any sort of premium for being the Flatiron Building? And what would space in this building lease for following a renovation? i.e. What cap rate is the market demanding right now for an empty office building needing $100 million in renovations? Or, is the play to convert to residential?
I don’t know enough about the real estate market in midtown Manhattan to answer these questions with any sort of precision, but I’m hoping some of you do and that you’ll leave a comment below.
The most boring part of constructing a high-rise, like One Delisle, has got to be installing the shoring piles. Sure there are big rigs moving about on site but, for the most part, there’s almost no visible progress. That is, until you start excavating. Then you get to see said piles and you also end up with a big hole, which is something.
Thankfully shoring works are now complete at One Delisle and we have started on the big hole part (see above photo from our rooftop cam). The next major milestone will be our “bottoming out,” and that’s when the tower crane will go up and our massive raft slab foundation will get poured. Visible progress is certainly more fun.
We have spoken before about how walkable urban communities punch above their weight. In the US, only about 1.2% of land is, on average, designed and built for walkability. And yet, walkable neighborhoods in the top 35 metro areas account for about 19.1% of total US real GDP.
At the same time, because walkable communities are a rarified commodity, they usually come at a premium. According to some sources, it’s to the tune of 30-40% when you look at home prices and rental rates. This again suggests that humans actually like and want this type of urbanism.
Which is probably why there’s a growing interest in building more of it. Here’s a recent article from Bloomberg CityLab and here’s a photo of Culdesac’s new completely car-free community under construction in Tempe, Arizona (this doesn’t look like the Arizona I know):
But in addition to just giving people more of what they want, there are also real economic benefits to stripping out parking and to overall more compact development. Charlotte-based Space Craft is another developer focused on car-light and transit-oriented apartments, and they have seemingly managed to make their projects more affordable as a result:
“Our product offered lower rents to residents, $100 to $200 below our competitors, and was the best product in the market because we were able to reinvest some of the savings from parking,” said [Harrison] Tucker, who sees walkable urban neighborhoods becoming their own real estate investment class. “The economic case was just very strong.”
This also flies in the face of the common argument that developers will always profit maximize and charge whatever the market will bear for their spaces. So why even bother trying to make it easier and cheaper to build? But this is not true! Lower development costs, as we see here, can and will translate into lower rents and higher quality buildings.
I also agree with Tucker that we will see walkable urban neighborhoods, and their associated building typologies, become an important real estate asset class. For all of the reasons that we talk about on this blog, this is where our cities are headed.
However, it’s going to take some time. I like the metaphor (mentioned in the above article) that, right now, we are creating “walkable archipelagos” or walkable islands in seas of cars. With the right connectivity (transit, micromobility, and so on), these islands can do just fine. But over time, I suspect we’ll see a lot more land reclamation. Good.
As I mentioned yesterday, I am not a structural engineer. However, my friend James Cranford is. He is Principal at Stephenson Engineering and he was nice enough to answer a few of my questions about soft story buildings (storey if you’re Canadian).
BD: What is a soft (or weak) storey building? And why is it such an important design challenge, even in a very un-seismic city like Toronto?
JC: A soft storey refers to any level in a building that has LESS capacity than the level above. This means it has both less strength to resist loads and less stiffness so that it will move more than the levels above. Soft stories are one of the most significant challenges that many modern building designers face because they are one of the most likely ways that a building can fail catastrophically if not properly designed. A soft storey failure occurs when the building hinges above the weak level and the columns below can no longer support the load of the building above as they become overstressed and loaded in ways they were never meant to act. This leads to a sudden, often pancake type collapse that is likely to bring down the entire building.
We see potential soft storey issues most commonly in mid to high-rise residential buildings that have either amenity or retail spaces at the ground floor. These are spaces that by nature are large and as open as possible. During design, the structural engineer needs to recognize this and compensate for the lost capacity in other ways. This is usually done through a combination of increasing the capacity of the remaining walls and adding new walls at the weak level that fit with the building layouts.
BD: What does the Ontario Building Code mandate in terms of soft storeys?
JC: The OBC generally does not permit soft stories in any form for buildings where people are likely to live, work or play. In critical infrastructure like hospitals which must remain fully functional in the event of a major earthquake, the OBC goes further and does not permit any ‘lateral force resisting elements’ like shear walls or steel frames to be discontinuous below. This means that if you have a wall on the 5th floor of a hospital, that wall must exist with equal or greater capacity on EVERY level below, without exception.
BD: How much more stringent is British Columbia, where there is greater seismic risk?
JC: The requirements in the British Columbia Building Code (BCBC) are almost identical to those in Ontario in this case. However, the seismic design forces will be much higher based on the potential for much larger earthquakes, so while buildings will generally be designed for a higher seismic capacity, they must be proportioned similarly to prevent soft stories.
BD: Speaking generally, what is usually required structurally in order to retrofit an existing soft storey building so that it can properly withstand things like earthquakes?
JC: The most common way to retrofit a soft-storey is to increase the capacity of the weak level. In smaller buildings this can usually be achieved by adding new ‘lateral-force-resisting elements’ like shear walls or moment/braced frames until the overall storey capacity matches or exceeds the capacity of the levels above. On larger buildings this becomes more complex, as the loads are much higher and simply adding capacity may not be either feasible or practical. Therefore a full structural analysis is usually required to find a solution that can be tailored to the unique structural and architectural conditions. This often involves a combination of increased capacity and the introduction of ductile detailing which will allow the building to dissipate seismic energy. This can be roughly thought of as a ‘bend but don’t break’ approach to surviving an earthquake.
In some jurisdictions, the extreme risk caused by (many) homes built with soft stories has prompted local governments to intervene. The City of San Francisco (as well as many other municipalities in California) have enacted ordinances requiring home owners to assess and upgrade their properties, including single family home with garages a the lowest level, to reduce the risk of soft-storey failure in an earthquake.
BD: Thanks for this, James.
I don’t usually do Q&As on this blog, so let me know in the comment section below if you found this one valuable and if you’d like to see more of them.
I am not a structural engineer (or an architect for that matter). But one of the things that has come to greater light as a result of the devastating earthquake that hit Turkey & Syria last month is the number of “soft story buildings” throughout these countries.
Technically, a “soft story building” is exactly what the name suggests. It is a building where one floor is less than 70% as stiff as the floor above it, or less than 80% as stiff as the average of the three floors above it (source).
The typical application of this is a ground floor that has less structure (missing shear walls for example) and is more open. And it is usually done to accommodate things like parking and retail uses, and to, of course, build more cheaply.
However, there is a massive problem in that they are often structurally suboptimal! (Again, not a structural engineer.) This is why we saw so many of the buildings in Turkey “pancake” during its earthquake. The ground floor failed and then it brought down the rest of the building.
I can appreciate that retrofitting older buildings is both difficult and expensive; but it is inexcusable to not work toward that and it is certainly inexcusable to not mandate that every new building meet whatever building codes are required to save lives.
Last week, Sierra Communities (developer) and my friend Gabriel Fain (architect of Mackay Laneway House fame) submitted the above development proposal for 2760 Dundas Street West in the Junction. It is a beautiful proposal. So not surprisingly, the response has been overwhelmingly positive. Here are the first batch of comments from Urban Toronto:
It also happens to be one block west of our Junction House project, so I definitely would have been annoyed if somebody proposed something ugly here. I am 99.9% biased, but I think the Junction has some of the best new mid-rise buildings in the city. Presumably, this is what “Mrgeosim” was getting at with their comment about “the number of good proposals for this neighbourhood.”
But here’s the thing. This is a relatively small proposal. It’s a 6-storey mid-rise building with 28 new homes on top of a tiny 482 square meter site (16m frontage). This makes it a challenging new development to execute on. So the fact that this is required to go through the typical rezoning and site plan processes is, in my opinion, a painful problem.
We should be doing everything we can to encourage these kinds of new housing developments all across the city. And that necessarily means removing as many barriers as possible. A pair of development applications and a few community meetings may seem benign, but they’re not. They add time and real costs that then need to be passed onto future residents.
There is also a very valid question around what kind of development charges (or impact fees) we should be levying on projects of this scale. If you want to build a laneway suite in the City of Toronto, you can have the development charges deferred and eventually forgiven. Why? Because we want more rental housing and we have arguably recognized that it’s important for project feasibility.
Should the same apply if you’re building 2 new homes, or perhaps 28 new homes? At what point should the “impacts” kick in and the fees be levied? And might there be an argument that adding many new homes on top of small 482 square meter parcels is actually an incredibly efficient way of using existing public infrastructure? I think so.
Congratulations to the team on a beautiful proposal! I’m looking forward to this being our neighbor.
We were having pizza at Davanza’s the other night and I started flipping through one of those real estate magazines that you find scattered around places like Park City.
Now, more often than not, when I come across a house listed for tens of millions of dollars, I usually look at it and think to myself, “okay, I know this is a really expensive home and it is likely that someone will want to buy it, but I objectively don’t like it.”
However, as I was flipping through the magazine, I came across this listing and instead thought, “hey, this is actually a really cool house.”
Designed by Wallace Cunningham, the 8,000 sf home features a cascading roof line that looks like an “S” in plan. (It also seems like all of the interior spaces were laid out in service of this plan design, which, depending on your own architectural proclivities, could be considered either a perfectly fine thing or an arbitrary thing.)
We have been speaking about Nabr and the productization of housing for the last year (and, more broadly, about prefabricated housing for probably as long as this blog has existed). And now it is possible to go on to Nabr’s website and reserve a new home in their San Jose project. Here’s what that looks like:
What is immediately clear is that this is an obvious improvement over the way that new homes are typically purchased. The pricing is transparent. You can easily see the floor plan and features of each home. And if you’d like to reserve one, you can go ahead and do that right away for $1,000:
You can also specify whether or not you’re interested in Nabr’s lease-to-purchase program (known as LEAP). More information on that can be found, over here.
But the exciting question remains whether thinking about and executing on this new housing as a product, rather than as an individual project, will ultimately bring greater cost efficiencies and savings. In other words: can it make housing more affordable?
Today, the base pricing for SoFA One looks something like this:
Home 1002: $1,415,000, ~1080 sf (excluding exterior space), $1,310 psf
Home 1003: $2,144,000, ~1547 sf (excluding exterior space), $1,386 psf
Home 1108: $938,000, ~795 sf (excluding exterior space), $1,180 psf
These are just the first 3 homes that showed up for me when I opened the website. And while I’m not intimately familiar with the San Jose housing market, Realtor tells me that the median sold price is $1.2 million and that the median list price per square foot is about $766.
Though not really an apples-to-apples comparison, this suggests to me that the above pricing may not be as affordable as some people were hoping for. However, it is more or less where I figured pricing would need to be in order to make a high-rise project like this pencil.
Does this change over time with more product scale? I think it could.
You can tell a lot about a place by the quality of its public toilets. I don’t know about you, but if I’m at a restaurant and the toilets are filthy, I automatically assume that the kitchen is at least as filthy.
And so what does it say about Japan that it decided to hire the country’s leading architects to design 17 new public toilets in Tokyo?
I first wrote about “The Tokyo Toilet” back in the summer of 2021. But now that the majority of them have been constructed, I figured it was time to revisit the project.
The two toilets designed by Shigeru Ban are particularly noteworthy in that they are clear glass boxes that become automatically opaque when in use. This was done so you can see if there’s anyone lurking inside.
But of course, all of them are remarkable and all of them are probably better than the general level of public architecture that you’ll find in most other cities.
