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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Category: Development

  • Single exit stairs in buildings up to 4 storeys

    Conrad Speckert got in touch with me following yesterday’s post (about single-stair buildings) and he was kind enough to let me know that, this Thursday, Toronto Planning and Housing Committee will be considering this single exit stair item.

    Included in the agenda item is a building code report that was done because City Council wanted to know if it were feasible to design multi-residential buildings up to four storeys that wouldn’t be detrimental to human health.

    Now that the report is done, one of the recommendations being put forward this week is for Toronto to create a guideline that would help people prepare alternative solution proposals under the Ontario Building Code.

    Alternative solutions provide greater design flexibility. We almost always have them come up on our projects. In essence, they are a way of saying, “yeah, I know this design doesn’t precisely meet the code, but it still satisfies its intent, and it works, so please approve it.”

    In this particular instance, the idea is to create a public-facing guideline so that more people will be able to figure out how to build 4-storey buildings with a single means of egress. Again, the current maximum is 2 storeys.

    Four storeys isn’t quite six storeys. But we’re getting there. And it has become increasingly obvious that it is now just a question of when, not if. At some point, we won’t be calling this an alternative solution proposal. It will just be — the way.

  • Building code change request

    Point access blocks (or single-stair buildings) are now an important part of today’s discussions around housing supply in Canada. They are seen as a way to encourage more and different types of housing — something we have been talking about on this blog for years. Here and here are two recent posts.

    This week, I discovered the work of Conrad Speckert, who works at LGA Architectural Partners and has become a leading voice for this movement. Conrad completed his M.Arch at McGill University and, as part of his thesis project, he developed this website called Second Egress.

    Since then it has grown to become a major resource for point access blocks. But most importantly, it has evolved into a catalyst for change. On April 18, 2022, he and David Hine (of David Hine Engineering) submitted this code change request to the Canadian Commission on Building and Fire Codes.

    The ask: Allow a single means of egress for multi-unit residential buildings up to 6 storeys. (The current maximum is 2 storeys.) Well done, Conrad and David. This is a massively important request with far-reaching benefits, and so I would encourage all of you to check out his website and spread the word.

    P.S. My second favorite part of his site is a section called Manual of Illegal Floor Plans. It’s a catalog of highly livable single-stair buildings from around the world; all of which would be currently illegal to build in Canada.

  • So, what is Globizen doing?

    First, the why. The why is to build better cities. And it’s as simple as that. I love cities. The team loves cities. And we all feel a great sense of responsibility when it comes to doing our part to make them more prosperous, more beautiful, and overall better places to live and work.

    It is for this reason that Globizen refers to itself as a city builder. We obviously didn’t invent this moniker, but we do take it seriously. And our specific intent is to be both a city-building company and a city-building community.

    What this means is that we do the things that most companies do, including trying to make money. But in parallel to this, we also aspire to create a community of like-minded city builders.

    City building isn’t just about real estate development. It’s also about the artist that just painted a mural, the local restauranteur that just opened up a new concept, and the individual that just did something, whatever that may be, to improve their community.

    We would like to do our part to celebrate these actions and support more of them. This is how we want to build.

    As for what we actually do, we are developers of creative mixed-use infill projects. Currently, we are developing and managing projects on our own account (we invested our own equity) and on behalf of great partners. But in all cases, we have a consistent investment philosophy and approach to development:

    • Focus on fundamentals
    • Search for overlooked assets and opportunities
    • Embrace non-consensus views
    • Create value by innovating with design, culture, and technology
    • Execute with discipline and passion
    • Think long term

    We are actively looking for new development opportunities. We are also exploring/underwriting a number of income-producing asset strategies. If you’d like to pitch us a site or project, or you just want to grab a coffee somewhere cool, please feel free to send me an email (brandon.donnelly@globizen.com).

  • Buy quality

    When the market is hot, it becomes more difficult to buy real estate. You end up with more buyers than sellers. And because of this, there’s a natural tendency to look further afield for opportunities. You don’t want to overpay for the obvious assets, and so you start to pioneer.

    This can work out just fine, particularly if the market remains strong. But oftentimes, when the market does turn, it is the peripheral stuff that gets hit the hardest. There is a flight to quality and pioneering gets quickly viewed as too risky.

    Here in Toronto, I am consistently being told that there are peripheral development sites that have seen their value drop to 20-25 cents on the dollar compared to the peak, and that’s if you can actually find a buyer. In many cases, the sites are now unsellable.

    This, to me, is our periodic reminder that while it’s important to search for overlooked opportunities and buy cheap, you can’t forget to also buy quality.

  • B.C. wants to permit single-stair buildings

    Point access blocks, which are also known as single-stair buildings, are getting a lot more attention here in Canada. And B.C. looks like it might be one of the first provinces to relax its building code. Here’s an excerpt from a recent Globe and Mail article:

    Canada’s building code, which provinces have generally gone along with, has required two staircases per apartment building since 1941. But B.C.’s Ministry of Housing last week published a research report outlining the optimal conditions for single staircases.

    “We are definitely moving forward with this,” said Ravi Kahlon, the Housing Minister, who hopes to introduce the legislation allowing the change in the fall.

    Mr. Kahlon said that the option of “single-egress” buildings, as they’re also called, will be confined to areas where there is professional fire services (as opposed to rural-style volunteer departments) and good water supply, as is the case in Seattle. That city has allowed single-stair buildings since 1974.

    In this case, the proposed change is expected to be limited to six storey buildings that have no more than four apartments per floor. That still feels fairly limiting, but it’s at least a step in the right direction.

    I have been spending some time looking at the feasibility of small six-storey apartments (here in Toronto), and I can tell you that it’s not easy to make the math work. You need to optimize, everything. Minor assumption changes can really blow up the model.

    I don’t think that this change will magically fix that. But it’s still meaningful progress. And if we keep chipping away at this housing problem, we might actually get there.

  • My last day at Slate

    As some of you may have gleaned from this recent RENX article, I have moved on from my development position at Slate Asset Management to focus exclusively on Globizen. After 8 very productive and exciting years at the company, it was time.

    I joined Slate in 2016 to help start the development group. Here is the post that I wrote back then. And it all came about because of a coffee meeting at Starbucks at the corner of Yonge & King.

    At the time, Lucas Manuel was looking to hire someone, and so our mutual friend, Kieran Boyd, connected us with the expectation that I would make some industry introductions. But at the end of our meeting, Lucas was quick to say, “actually, I think you should come join Slate.”

    And obviously, that’s what I did.

    Fast forward to today, and Slate has grown into a global investment and asset management company with $13 billion of assets under management across Canada, the US, and Europe. And within this platform is a supremely talented development group with an awesome portfolio of sites and projects.

    Thankfully though, this is not a goodbye. Myself and the Globizen team will still be working very closely with Slate on a handful of development projects, including One Delisle and Corktown. And the intent is that we will continue to work on new projects together in the future.

    I learned a lot during my time at Slate, and I have so much respect for Blair and Brady Welch and the rest of the partners. They have built an incredible global company and assembled some of the most creative, entrepreneurial, and smartest people I have ever worked with.

    Thank you for everything over the last 8 years.

    So what’s the plan for Globizen? This will be the topic of a follow-up post.

  • Where 3+ bedroom homes are getting built in Ontario (Hint: It’s not Toronto)

    Here’s an interesting, though not shocking, chart from a recent Globe and Mail article talking about “Canada’s dysfunctional housing market.” What is noteworthy is that Toronto is dead last when it comes to the number of new 3+ bedroom homes built between 2016 and 2011.

    Peterborough, for example, is a census metropolitan area with somewhere around 130,000 people. And yet, based on this data, it is building more family-sized homes than Toronto.

    Why this is not surprising is that the vast majority of new homes now built in Toronto are high-density and built out of reinforced concrete. This means that they are relatively expensive on a per square foot basis.

    In fact, you could argue that mid-rise housing — the exact high-density type that is supposed to be most attractive to families — is the most expensive to build. What this means is that if you’re building a 3+ bedroom home in this way, it’s not going to be affordable to most.

    It also means that people are going to go shopping elsewhere: Ottawa, York, Simcoe, Durham, and so on. The expected market outcome is decentralization. But in my mind, this raises an important question: Is this what people really want?

    This is a great debate. And many will argue that grade-related suburban housing is exactly what people want. What we are seeing is a result of raw consumer preference.

    However, the costs are so skewed in favor of low-rise housing, that I think it’s hard to say with absolute certainty the degree in which this is true. What if higher-density 3+ bedroom homes were the cheaper option? My bet is that we would see a lot more centralization.

    The development charge rate for a 2+ bedroom apartment in the City of Toronto is currently $80,690 per unit (effective June 6, 2024). As development charges work, this is supposed to pay for the growth-related impacts of adding a 2+ bedroom apartment in the city.

    However, the above chart suggests that there are also impacts to not building that 2 or 3 bedroom apartment in an already developed area next to existing infrastructure. It means the home goes somewhere else (further away) or doesn’t get built at all.

    Both of these outcomes also have costs.

  • Community open house for Project Bench

    This afternoon, the team, including the Town of Lincoln, hosted a community open house for Project Bench. This is our upcoming development project in the Niagara Benchlands.

    This was a follow-up to the pre-application community meeting that we held last November, and it is a precursor to the statutory public meeting that will be held in two weeks on July 8th at 6 PM.

    If any of you would like to attend, this upcoming meeting will be held in the Council Chambers of the Town of Lincoln at 4800 South Service Road in Beamsville, Ontario.

    Overall, the team feels that today went very well. We’re looking forward to continuing the dialogue with the community and further refining our development application.

    Community meetings are a critical part of the development process and, over the years, I have come to learn the following:

    • Open houses, like the one that was held today, are a good format for encouraging dialogue. The typical setup includes presentation boards, representatives walking the floor, and some sort of mechanism for people to provide feedback (post-it notes on a site plan can work well).
    • Part of why this is a good format (compared to a straight presentation followed by a Q&A) is that it humanizes the team and it gives the community an opportunity to ask all of their questions. A lot of concerns can be addressed through clear explanations.
    • The most common concerns are usually (1) height, (2) density, and (3) traffic. There are obviously others, but this is a good high-level list.
    • Many/most people tend to conflate height and density. But as we have talked about many times before on this blog, they are not one and the same. Density tends to be harder to grasp, which is why you’ll often hear people criticize tall buildings, but not cities like Paris and Barcelona, despite being two of the densest cities in the world.
    • A developer’s job is to be creative. You have to manage a myriad of competing interests and then thread the needle as best you can. Community meetings are about listening, learning, and then trying to figure out where the needle might go.
    • The objective should be to make as many people as possible excited about the development. In other words, do great work.

    What else would you add to this list?

  • Approved but unbuilt

    Recent data from the City of Toronto indicates that there were approximately 106,000 new residential units completed between 2019 and 2023. That averages to about 26,500 homes per year.

    At the same time, Toronto is reporting that 258,397 units are currently approved for development and that 436,421 units are currently under review. The former means that the projects have been approved and that a building permit has been applied for or has been issued. And the latter means that the units are still under review or under appeal.

    These feel like staggering numbers. If we were to use the same completion rate as 2019-2023, it would take over 26 years to build these 694,818 new units (homes approved + under review).

    However, I think it’s safe to assume that not all of these homes will be built; at least not in the short term. Many (perhaps most) of these projects are simply going to evaporate in the current market environment. They’re unfinanceable.

    Because that’s the thing, zoning approved does not necessarily equal built and occupied. And right now, in this market, these two things feel like they’re diverging. Toronto grew by about 207,000 people between 2019 and 2023. And it built about half of this number in new homes.

    When we look back at the next four years, I suspect that this housing supply number will be noticeably lower. This is despite the staggering headline numbers.

  • Infinity and beyond

    Earlier this week, Oklahoma City Council approved plans for the 1,907-foot-tall Legends Tower. If built according to these plans, it would become the 5th tallest building in the world and the tallest building in the Western Hemisphere.

    Currently, the tallest building in the US is One World Trade Center at 1,776 feet (581 meters). This is a symbolic height meant to reference the date of the Declaration of Independence.

    To be even more specific, though, the Legends Tower wasn’t approved at 1,907 feet. As I understand it, it was approved with with an unlimited height. Meaning, if the developers wanted to go even taller in the future, they could.

    This is sort of unique. Usually when a new by-law/ordinance is passed, it includes a maximum height in feet/meters. In this case, I guess they’ll just use an infinity symbol and call it a day.

    Here are some quotes from Dezeen:

    “AO is delighted that the Oklahoma City Council has approved the development team’s request for unlimited height for the Boardwalk at Bricktown,” said AO.

    “We are grateful that the City Council has embraced the vision of Matteson Capital and the entire design team to transform the city into a global destination.”

    The obvious question is “will this get built?” And I don’t know the answer to that. But I do think that infinity is just as symbolic as 1,776 feet.