Throughout history, real estate has been a tremendous source of wealth for a lot of people. Many family dynasties were created by accumulating property, holding it, and then riding the valuation wave.

Here in Toronto, there was the Reichmann family. At one point they had created the largest real estate company in the world (Olympia & York). But I’m not sure exactly how much of that wealth remains today following the company’s bankruptcy in the early 90s. That was a tough time in Toronto real estate.

In line with this, the NY Times recently published a fascinating account of the Wendel family in New York. In terms of how they conducted themselves, they were the polar opposite of some of today’s real estate families (i.e. Trump), but they certainly built an empire.

Here are two snippets from the NY Times:

In the early 20th century, the Wendels were perhaps the most powerful landlords in New York City, a dynasty with more than 150 properties in Manhattan worth over $1 billion in today’s dollars. The Wendels were the delight of the local papers, for, rich as they were, the family — six sisters and a brother, all unmarried — lived together in a shuttered mansion without electricity on the northwest corner of Fifth Avenue and 39th Street, and dressed in grim Victorian garb that had gone out of style half a century earlier. Tour buses regularly pulled up in front of “the House of Mystery.”

Alongside their austere lives, they also practiced a strict and disciplined approach to investing: 

Never mortgage a property; never sell anything; never pay for repairs; and never forget that Broadway moves uptown at a rate of 10 blocks a decade.

In fact, they were so draconian in their approach, that the sisters were supposedly prohibited from marrying. Unions were not allowed because that, according to the NY Times, “would disperse the accumulated property and put it under other names than Wendel.”

But in the end, this meant that the last Wendel – Ella, who died in 1931 – died alone and with no one to pass along the empire to. So instead it was distributed to various charities and the inevitable “cousins” that come out of the woodwork when a rich person passes.

I guess the moral of the story here is the old saying that you have to “give to receive.” From the sounds of it, the Wendel family didn’t like to do that.

Image from March 15, 1931 obituary

I was recently introduced to the work and writing of Japanese architect Sou Fujimoto. One concept that he writes about that I really like is the idea of nest vs. cave.

The way Fujimoto describes a cave is that it’s a naturally occurring and pre-existing condition. It is exists independent of humans. So if and when a human decides to occupy a cave, he or she must assimilate their lives to that which is already there. They have to deal with the ambiguity of the spaces because it is not clear how everything should be used.

A nest, on the other hand, is something completely created by and for the benefit of a person or animal. It would not exist without someone creating it and so it is prescriptive and functional in a way that a cave is not.

Fujimoto is interested in exploring architecture that is analogous to caves. Which is why he designs houses like this one (House NA) in Tokyo:

In most countries, a house like this would not meet code and would be illegal. But in Tokyo it’s obviously allowed. And his hope is that the owners will discover new and unintended ways to interact with the unusual pairing of levels and platforms.

However, I think about this juxtaposition differently – likely incorrectly in the mind of Fujimoto.

I’m actually more interested in nests. Because in a way, mass produced housing is like a cave. It exists whether or not we decide to occupy it. And it is generally created to appeal to lots of people, rather than to the idiosyncratic tastes of one person. So when someone does occupy it, they invariably end up trying to shape it.

But not to the extent of a nest. A nest is custom. It is what you would build for yourself given the opportunity to do so. And that thought is really appealing to me. Maybe it’s because I don’t like the ambiguity of a cave. That could be a possibility.

I could also be thinking about it differently because I tend to think of Japanese homes as being quite individualistic. Since Japanese people generally don’t care about resale value, they don’t have the same fixation with marketability and future value. That means they’re more likely to just build what they want.

I’d love to have my own nest.

Image: Wall Street Journal

When it comes to a real estate market, there are always the typical metrics: sale prices, rents, vacancy and so on. But I’m always interested when somebody looks at the market in a different way and comes up with other kinds of metrics.

That’s why I was intrigued when I stumbled upon this post by Sam Floy, where he looks at the concentration of coffee shops and friend chicken shops across London in order to determine which neighborhoods are in fact “up and coming.”

To give you a taste, here’s his coffee shop map:

His thinking was that if a neighborhood had a high density of coffee shops, a low density of fried chicken shops, and relatively low house prices, then it could probably be thought of as up and coming. 

Coffee shops are often considered to be leading indicators of urban change (i.e. gentrification), and, well, friend chicken places I guess speak to a different kind of neighborhood.

These sorts of playful studies aren’t going to tell you exactly which numbers you should be plugging into your development pro forma. But I think unconventional analyses can sometimes tell you a bit more of the story behind the numbers.