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.
And it retracts/opens up like this (the glass panels stack neatly to one side when you want to create a traditional balcony and guard condition):
Obviously the idea here is to create outdoor spaces that can be enjoyed for more months of the year. In the summer it opens up so you get a typical balcony condition. And then in the cooler months or on a windy or rainy day, you get a solarium. Maybe it even works in the winter with the right sun exposure.
But obviously there is a cost to adding something like this to new projects. So my development question to all of you today is: Would you be willing to pay a premium for a balcony glazing system like the one shown here? And if so, how important would you rank a feature like this for multifamily buildings?
If you have a few minutes, please let me know in the comment section below.
The typical way to do it looks something like this:
Hire a creative agency
Come up with a new name and brand identity that speaks to your target market
Create a new website and new social media accounts
Start marketing the project with this new single-purpose brand and identity in the forefront (the developer’s brand is usually far less prominent)
Of course, this is the typical way and things do vary. What I would like to discuss today is this last point: the interrelationship between new project-specific brands and developer brands. Because in most other industries, the brand of the company is paramount. It is everything. When BMW releases a new car model, it is BMW and then the something. It is not the something, with BMW hidden at the bottom of the page.
So why is real estate any different?
One possible explanation is the entrepreneurial and opportunistic nature of development. New projects are often the result of people and groups coming together to make a specific “deal” happen. And unless you’re an established player with a long history, you may not have a consumer-facing brand with much equity in it. So you rely on a new single-purpose one instead.
But perhaps the main reason is that, as an industry, we have never really succeeded at making buildings a product (architects sometimes despise when you call buildings this). It is for this reason that every building can feel like a prototype and that prefabrication remains this dream that never seems to become a reality. A product implies something repeatable and producible at scale. And buildings are generally not that. Every market and site are unique.
All of this said, there are ways that developers are building meaningful brands for themselves.
The first way is to obviously focus on building your own brand alongside or in lieu of strong project brands. One example of this is Toronto-based Urban Capital. They build a specific kind of condominium building/product and, to the extent that it’s possible, it doesn’t change whether they’re building in Saskatoon or in Halifax. David Wex, one of the partners, describes this as branded vs. opportunistic real estate development.
Another example is Toronto-based Fitzrovia (which I wrote about, here). They are one of if not the most active rental developers in the city. And if you go into one of their apartment buildings, you’ll find the same No. 10 Dean coffee shop and bar in the lobby; the same rooftop pool (called LIDO); the same gym (called The Temple); and the list goes on. Their goal is to build a consistent and hospitality-like experience for apartments.
The second way to go about building a brand is to make it so attractive that other developers will pay you to use it. The best example that I can think of is London-based YOO. A partnership between John Hitchcox (a developer) and famed designer Philippe Starck, they have built a business out of creating branded residences for third-party developer clients. And this is in some ways the holy grail of development: you get paid without taking on the risk of building.
Of course, this same licensing model is also used with hotels. And hotel brands are globally the most common kind of branded residence. What this obviously tells us is that brands matter a great deal in real estate. They matter so much that developers will pay to use the right one, because it will likely command a premium and it will likely increase sales/leasing velocity.
It is for this reason that I’ve always felt it important to grow the parent brand alongside any project-level brands. And it’s why we never bother creating new social accounts for our individual development projects. Brand building takes time. If you’re going to invest time and money into one, why not take advantage of the compounding at the very top of the house.
We have spoken about this topic — of larger family-sized suites — many times before on the blog. And my argument then, as it is now, is that the largest barrier is cost. We can talk about cultural biases (which I do think exist in North America) and, sure, we can talk about how to better design for families. But until we solve the problem of costs or until low-rise housing gets so prohibitively expensive that it tips the scales in favor of multi-family buildings, I’m not sure we’re going to see a meaningful shift.
To be fair, it does appear that the number of families living in apartments and condominiums is increasing here in Toronto. My neighbor is one data point. However, broadly speaking, I don’t think it’s happening with the “larger family-sized suites” that most people imagine in their minds when they talk about this opportunity.
So how do we address this? There are a number of interesting ideas in the above Twitter thread that I would encourage you to check out. Ratcheting down or eliminating development charges (and other government levies) on larger suites is one of them. But what is obvious is that this is a challenging problem to solve. So the brutally honest answer is that I don’t really know what will be most effective. But here are three potential places to start.
As-of-right mid-rise buildings
Remove the barriers to building more mid-rise. One irony of mid-rise buildings is that they are probably the most desirable form of multi-family housing and yet they’re the most expensive to build. A lot of this has to do with construction costs and other unavoidable diseconomies of scale, but there are other things we can do. In my view, we should target to make all mid-rise buildings fully as-of-right. This means no rezoning costs, no community meetings, and overall simpler designs. Instead, the rough process should be: buy site, work on permit drawings, and start marketing new homes.
“Growth Pays For Growth” is one of the big lies at the root of Canada’s housing crisis. https://t.co/IW5LMr5tns
— your local self-inflicted housing crisis ouroboros (@itsahousingtrap) June 3, 2023
This is also something that we talk a lot about on this blog. But most people outside of the industry don’t think of it in this way, or they don’t care. The mantra is that “growth pays for growth”, which obviously sounds good. Tax new housing based on its impacts. But in reality this is not what’s happening. What is happening is that “growth pays for as much as possible as long as new home prices keep rising.” And it persists partially because nobody except evil developers see these large bills. But if we really want to make new housing more affordable and if we really want to encourage more families in new multi-family buildings, then we need a more equitable solution.
Financing new family-sized homes
The way we finance new homes impacts the kind of housing that gets built. Here in Toronto, new condominium projects generally require a certain percentage of pre-sales, because construction lenders want as much certainty as possible that they will get their money back upon completion. In theory, it also reduces the chance of overbuilding because you’ve pre-sold most/all of the homes. So there are obvious benefits to this approach. However, the problem is that you need people to now buy in advance. And oftentimes, the people buying early aren’t families who expect to need 3 bedrooms in 5.2 years. Should there be another financing solution for larger homes?
Once again, these are just three potential places to start. But I think they’re all critically important. If you have any other suggestions or ideas, please leave them in comment section below.
The winners of this year’s Architizer A+ Awards are out.
Now in its 11th year, the A+ Awards are intended to “honor the world’s best architecture and spaces.” And supposedly, it is also the world’s largest (119 categories) and most democratic architectural awards program. I don’t know, I read that here.
I went through the list of winners this evening (okay, I skimmed this Urban Toronto article), and I’m now excited to report that 13 Canadian projects/firms won an award — either a Jury Award, a Popular Choice Award, or a Special Mention.
I’m also excited to announce that one of the winners is our One Delisle project. It is the Jury Winner for best unbuilt multi-unit housing project (over 10 floors). Awesome!
If you’d like to see the full list of winners, click here.
I am really drawn to live/work spaces like these ones here in Oklahoma City’s new Wheeler District. (Additional project info can be found over here.) We have some examples of this in Toronto, but I wouldn’t say it’s commonly done. And oftentimes they don’t work at all. More often than not, these spaces seem to just get used as strictly residential (which is okay).
But there are some arguably successful examples that we can point to. CityPlace is maybe one. When the area was first getting developed, retail would have been an extremely difficult use to underwrite. It was a development island. And so live/work suites were introduced at grade along much of the area’s main artery.
The area did eventually get new dedicated retail, but its live/work suites also started taking on more “work” as demand in the area grew. Today, nobody is going to confuse it with Bloor Street, but importantly, the ground floor was able to change and adapt. And this is one of the great benefits, or at least promises, of live/work: you get additional flexibility.
Personally, I would love to have a live/work space. I’d use it to incubate new ideas and sell random stuff. And I have a feeling that, given the opportunity, many others would do the same. So I plan to spend some more time thinking and writing about this topic. If any of you have shining examples of live/work successes, please share them in the comment section below.
Back in 2020/2021 when we were getting ready to launch sales for One Delisle, the team came up with the idea of pill-shaped kitchen islands for our residences.
What that means is we wanted to use perfect semi-circles on both ends. We didn’t want oval islands. We didn’t want distorted semi-circles. We wanted islands shaped like pills!
We felt these opened up the kitchens and also looked really unique. So with Studio Gang and the rest of the team, we proceeded to design a few different types.
We needed ones that would work for smaller suites, we needed ones that would work for larger suites, and we needed to accommodate breakfast bars/seating.
When we approached Scavolini Toronto about this idea their first response was, “we’ve never done this before. It would be a first.”
However, their second response was, “but we’ll figure it out with you.” And based on this response, we built (by hand) a pill-shaped island for our condominium sales gallery, and then included them as part of One Delisle.
Fast forward to 2023 and we are now in the “let’s figure it out phase”. This week we reviewed the very first production prototypes in Scavolini’s factory in Pesaro.
They are everything we could have hoped for, and we are thrilled that Scavolini was a willing partner in this endeavor.
It’s not easy doing new things in construction. The smallest things can (usually?) end up being a lot more work. But it all feels worth it when you get to see the results.
Both are located in the Porto Nuova district of Milan.
And from what I could tell when I walked by them yesterday, they’re pretty comparable. They have similarly deep balconies. And they even appear to have the exact same exterior cladding.
Of course, the big difference is that the former — the celebrated Bosco Verticale — has about 800 trees, 4,500 shrubs, and 15,000 plants sitting on its 3.3m cantilevered balcony slabs. It also has an elaborate irrigation system that services said greenery.
Okay, so which is more “sustainable”?
First impressions would suggest that it’s the former. Trees and green things are good for the environment. So putting trees on a tall residential building must also be good, right? Maybe.
The main counterargument is that it requires a lot of additional work to get trees, shrubs, and plants onto a tall building. You need more concrete, more structural reinforcing, an irrigation system (maybe not always?), and a way to maintain everything going forward.
In this case, all of the greenery is a common element, and so it’s maintained by the building and not by any of the individual residents. Among other things, this preserves a uniform aesthetic.
But all of these additional materials increase the building’s embodied carbon. And so there’s an important question to consider: Do the benefits of putting trees up in the sky outweigh the impacts of actually doing it?
This is one of the great debates surrounding this project, and it’s a good reminder that being more sustainable isn’t so simple. There’s a lot to balance, and there are countless details to figure out.
However, innovation does require iteration. And already there are new iterations of the Bosco Verticale, such as this one in Paris, that plan to swap concrete for mass timber construction.
So even more trees in the sky. That’s probably a good thing.
Today is a travel day, so I don’t have a whole lot to say. But BlogTO did just publish a story about our Junction placemaking sign: “This intersection is set to become Toronto’s next best photo-op.” I am also happy to report that the sign’s timer has now been installed, which means that, starting today, it will get illuminated each night from sunset to 11PM. (We’re required to shut it off at this time because, you know.)
So far the response has been overwhelmingly positive. And I truly hope that this installation will become a symbol for the Junction neighborhood. This was our sole purpose for pursuing it. It would also be ironic if something that was so difficult to get approval for ends up being loved by city. Perhaps it’s a lesson that stubbornness can be a good thing when you believe in something.
Today was the official launch of Corktown Condos. (In case you missed it, I wrote about Corktown last month, over here.) So what does this actually mean? What it means is that we got a small group of 500+ agents and brokers together to tell them about the project. We talked about our love of Hamilton and provided an overview of the project’s amenities, suite pricing, deposit structures, and so on. Everyone who attended now also has access to our broker portal, where all of this information is stored.
However, no actual purchase agreements were signed today. That’s for later. The first signing event will take place on Saturday, May 27th starting at 12PM, at 30 St. Clair Avenue West, Suite 103, in Toronto. So if you’re interested in Corktown, I would encourage you to attend on this date. Feel free to also reach out to our sales team if you have any questions (sales@corktown.condos). The people you want to connect with are Shannon Glas, Daniella Commisso, and/or Hansen Chu. Hopefully I’ll see you there next weekend!
