When I was in graduate school, my plan was to create a vertically integrated design and development company. I loved designing things and wanted to remain close to those sorts of details, but I had already decided that I wasn't going to be an architect in the traditional sense and that I was going to be a developer. And so my objective was to figure out a way to combine everything under one roof. How could we be designers, but also be the entrepreneurs that make buildings happen?
In some ways, Mackay Laneway House is a manifestation of that model. Through a partnership with Gabriel Fain Architects, we (Globizen Studio) have been heavily involved on the design side. Gabriel did all of the drawings and the overall architecture, but we weighed in (more than your typical client), selected most of the FF&E, and even designed things like the kitchen (with Scavolini) and the exterior signage. I wouldn't call it true vertical integration, but we did start to blur the lines between architect/designer and developer.
One of the interesting things about this approach is that it begins to create some consistency and a bit of a branded product. The hope is that when Mackay Laneway House is fully complete, it will read as a Globizen project, which is not that dissimilar from what David Wex of Urban Capital was talking about in
When I was in graduate school, my plan was to create a vertically integrated design and development company. I loved designing things and wanted to remain close to those sorts of details, but I had already decided that I wasn't going to be an architect in the traditional sense and that I was going to be a developer. And so my objective was to figure out a way to combine everything under one roof. How could we be designers, but also be the entrepreneurs that make buildings happen?
In some ways, Mackay Laneway House is a manifestation of that model. Through a partnership with Gabriel Fain Architects, we (Globizen Studio) have been heavily involved on the design side. Gabriel did all of the drawings and the overall architecture, but we weighed in (more than your typical client), selected most of the FF&E, and even designed things like the kitchen (with Scavolini) and the exterior signage. I wouldn't call it true vertical integration, but we did start to blur the lines between architect/designer and developer.
One of the interesting things about this approach is that it begins to create some consistency and a bit of a branded product. The hope is that when Mackay Laneway House is fully complete, it will read as a Globizen project, which is not that dissimilar from what David Wex of Urban Capital was talking about in
. Their projects are a specific kind of product. They generally repeat it, and if that's not what you're interested in, then you don't buy an Urban Capital home.
But this also raises an important question: what is the role of architects and architecture in the case of buildings as very specific products? (This is something that we have discussed before on the blog.) Is the job of the architect to create an interesting exterior shell that then gets populated on the inside by a specific product offering? Or is it even worse, is architecture sometimes just an "empty vessel" that gets interior design and a brand slapped onto it? In some cases and with some projects, it does feel this way.
I am a firm believer in the value of architecture and design. An "empty vessel" is not architecture. It is, well, an empty vessel. And that is not what I aim for in any of the projects that I'm involved in. Creativity, function, thoughtfulness and, yes, beauty, are all important. At the same time, I think this is a valuable debate. These sorts of questions are helpful in dissecting the architecture/development value chain. And so I would be interested in hearing your thoughts in the comment section below.
My friend David Wex of Urban Capital Property Group -- who I featured in my "BARED" blog series back in 2016 -- was recently interviewed by architect Vincent Van den Brink (of Breakhouse) for the firm's podcast called, Design Makes Everything Better. It's a great listen and I particularly like the bit around branded vs. opportunistic real estate development. In the case of Urban Capital, David would describe his firm as being a branded developer. They build a specific product and it doesn't really change when they build across Toronto and in other markets. Expect exposed concrete ceilings and exposed ducts, among other things. If you can't see the embedded podcast above, you can have a listen over here.
Every year my friends at Urban Capital publish an annual magazine called Site. And every year it contains some great articles about the real estate development industry across Canada. (Some of you may also remember that I've written a few articles for it in previous years.)
Well this year's issue is out and there are a few featured articles that I'd like to draw your attention to:
What happens when 175 (mostly) women get together to design a condominium?Link
Why have Toronto condos become so %@$#$! expensive?Link
This last one is a topic that we have talked about many times before on the blog. But here, UC has provided a quantitative comparison between a project they did in 2005 and a project that they're doing today in 2020. Here's what they found:
. Their projects are a specific kind of product. They generally repeat it, and if that's not what you're interested in, then you don't buy an Urban Capital home.
But this also raises an important question: what is the role of architects and architecture in the case of buildings as very specific products? (This is something that we have discussed before on the blog.) Is the job of the architect to create an interesting exterior shell that then gets populated on the inside by a specific product offering? Or is it even worse, is architecture sometimes just an "empty vessel" that gets interior design and a brand slapped onto it? In some cases and with some projects, it does feel this way.
I am a firm believer in the value of architecture and design. An "empty vessel" is not architecture. It is, well, an empty vessel. And that is not what I aim for in any of the projects that I'm involved in. Creativity, function, thoughtfulness and, yes, beauty, are all important. At the same time, I think this is a valuable debate. These sorts of questions are helpful in dissecting the architecture/development value chain. And so I would be interested in hearing your thoughts in the comment section below.
My friend David Wex of Urban Capital Property Group -- who I featured in my "BARED" blog series back in 2016 -- was recently interviewed by architect Vincent Van den Brink (of Breakhouse) for the firm's podcast called, Design Makes Everything Better. It's a great listen and I particularly like the bit around branded vs. opportunistic real estate development. In the case of Urban Capital, David would describe his firm as being a branded developer. They build a specific product and it doesn't really change when they build across Toronto and in other markets. Expect exposed concrete ceilings and exposed ducts, among other things. If you can't see the embedded podcast above, you can have a listen over here.
Every year my friends at Urban Capital publish an annual magazine called Site. And every year it contains some great articles about the real estate development industry across Canada. (Some of you may also remember that I've written a few articles for it in previous years.)
Well this year's issue is out and there are a few featured articles that I'd like to draw your attention to:
What happens when 175 (mostly) women get together to design a condominium?Link
Why have Toronto condos become so %@$#$! expensive?Link
This last one is a topic that we have talked about many times before on the blog. But here, UC has provided a quantitative comparison between a project they did in 2005 and a project that they're doing today in 2020. Here's what they found:
Average condo prices in the City of Toronto are up about 150%. But...
Land costs are up 160%.
Soft costs are up 118%.
Construction and related costs are up 91%.
Financing costs are up 93%.
Government fees, charges, and taxes are up 413%.
And development charges (a subset of the above) are up 3,244%!
At the same time, the profit margin over costs is down about 45%.
(As a point of comparison, CPI only increased by about 26.5% during this same time period.)
The point here is that condos are so %@$#$! expensive largely because of cost-plus pricing. Government fee increases are also outpacing every other cost bucket.
If you're developing new housing in Toronto, you have no choice but to accept these rising costs. You have to pay development charges and you have to pay them when you're told, even if that means swallowing some new massive increase.
So by necessity, end prices get continually pushed as a way to try and absorb these costs. You figure out what your costs are going to be and then you price accordingly. But of course, you also have to ask yourself: Can people actually afford this kind of pricing and can this neighborhood support it?
Sometimes the answer is yes, which is why development continues. But sometimes the answer is no. In this case, the next step is simple: you don't build.
Average condo prices in the City of Toronto are up about 150%. But...
Land costs are up 160%.
Soft costs are up 118%.
Construction and related costs are up 91%.
Financing costs are up 93%.
Government fees, charges, and taxes are up 413%.
And development charges (a subset of the above) are up 3,244%!
At the same time, the profit margin over costs is down about 45%.
(As a point of comparison, CPI only increased by about 26.5% during this same time period.)
The point here is that condos are so %@$#$! expensive largely because of cost-plus pricing. Government fee increases are also outpacing every other cost bucket.
If you're developing new housing in Toronto, you have no choice but to accept these rising costs. You have to pay development charges and you have to pay them when you're told, even if that means swallowing some new massive increase.
So by necessity, end prices get continually pushed as a way to try and absorb these costs. You figure out what your costs are going to be and then you price accordingly. But of course, you also have to ask yourself: Can people actually afford this kind of pricing and can this neighborhood support it?
Sometimes the answer is yes, which is why development continues. But sometimes the answer is no. In this case, the next step is simple: you don't build.
