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I'm a big fan of the period between Christmas and when most of the world gets back to work in the New Year. It's the only time of year that I know of where the email firehose shuts off, the social permission to do "nothing" turns on, and the world generally quiets down.
I know that not everyone gets this time off. We all have different jobs. Earlier in my career, I used to always work these days between Christmas and the New Year because I couldn't spare the vacation days. But if you are fortunate enough to have it off, it's a unique time of the year.
It's a time for family and friends, and a good time for vacations that aren't riddled with email and work anxiety. But it's also a time that creates space for the mind to wander, and for me, it gives me a creative burst of energy.
I've been trying to think of the best way to describe this feeling, and it truly feels like "mental space." When work is "on," it simply crowds out everything else. But a more accurate neuroscientific definition would be that we're simply engaging different parts of our brains.
Supposedly, when the mind is given "space" to wander — which is also referred to as wakeful rest — we engage a system in our brain known as the Default Mode Network. This network is thought to serve several different functions, including forming the basis for the self, thinking about others, remembering past events, and imagining possible future events. Generally, this makes it very good at connecting the dots, so to speak.
The counterpart network is our Executive Control Network. This part of our brain is most active during focused, demanding, and goal-oriented tasks — so work.
These two networks are also thought to be inversely correlated, meaning when one activates, the other often shuts down. But not always and not entirely. A 2018 research article by Roger E. Beaty et al. found that highly creative people have a unique brain "wiring" that allows these different neural networks to work together, rather than in opposition.
What this suggests to me, as a cognitive neuroscience layperson, is that engaging our different brain networks is good for us. Sometimes it's good to turn down executive control and give some space to default mode.
And I find that this time of year is a perfect time to do just that.
Cover photo by Milad Fakurian on Unsplash
Happy new year, everyone! Yesterday we spoke about what actually happened in 2024 (and evaluated my predictions from exactly a year ago). Today, let's prognosticate about what might happen in 2025 (keeping in mind that I'm based in Toronto and so there will naturally be a bias toward this market):
Very broadly speaking, our current commercial real estate downturn started, in my opinion, around the middle of 2022. That's when sentiment started to feel different and the market was starting to respond to increasing interest rates. Over the past few years, I've been overly optimistic in terms of how soon the market would reset. But eventually I'll be right. So I'm going to call 2025 as an important turning point where we see more capitulation, more bankruptcies, and a shedding of legacy assets/deals. For the other side of the market, this will mean more new deals.
This, however, does not mean that we will see a development environment that anywhere resembles what we saw prior to 2022. On the new construction residential side (condominium and multi-family rental specifically), I think it's going to take 2-3 years for us to work through and absorb our current supply pipeline. This will be an obvious headwind for land prices. The successful projects in this environment will be located in core/prime locations, underwritten at more modest scales, and focused largely on end users.
In 2024, we saw the continued rise of more people going back to the office. Here in Toronto, the average weekday figure is approximately 73% of what it was pre-COVID (data from November 2024). This year, I think we'll see this figure get close to 90% and then likely start to level off, some five years after the first lockdowns. I think it makes sense that we'll stabilize at some number
Exactly a year ago, I wrote this post talking about "what might happen in 2024." Now let's see what actually happened and how I did with my predictions.
Interest rate cuts: This was perhaps an easy one as there was already a market consensus that rates would start to come down in 2024. The Bank of Canada cut its policy interest rate by 175 bps (target of 3.25%), and the US cut its federal funds rate by 100 bps (target of 4.5%). [1 point]
Impact of higher rates: I predicted that things would get worse in 2024 before they started to get better (maybe toward the end of 2024 or perhaps in 2025). In some ways, I think I was right. But I'm not sure we've returned to a "risk-on" approach in commercial real estate, like I suggested. Toward the end of the year, my American friends were telling me that things were suddenly feeling a lot more optimistic and that more deals were being done. But I still feel like we've been kicking the can down the road here in Canada. The public markets certainly did very well, but I think the private markets are still hiding some underwater real estate investments. [0.5 point]
Balanced residential resale market: I thought that we would return to a more balanced resale market in 2024, certainly for the most-in demand cities and submarkets. Here in Toronto, it remains a buyer's market on the condominium side, but the freehold market in Central Toronto has shown signs of improvement over the last few months. Detached house values are up 4.6% year-over-year, despite listing supply also being up 29%. The resilience of core submarkets is what you would expect to see right now during this part of the cycle. (If you're interested in Toronto real estate, my friend Christopher Bibby has a great newsletter that he publishes periodically.) At the same time, I thought that the Bank of Canada would be more resistant to lowering rates compared to other central banks, and that this would be good for the Canadian dollar. I was wrong. [0 points]
Finding good real estate deals in 2024: I argued that this year would be a pivotal year for finding new opportunities. Maybe that was the case for some of you, but as I said above, I think that here in Canada we're still kicking the can down the road. So this one is hard to say. 2025 may end up being more pivotal for many real estate developers and investors. [0 points]
Declining hard costs: Like many of my other predictions, this is market specific. But this absolutely happened here in Toronto. For some trades and divisions, costs are down in the range of 25-30%. And I can tell you that over this past year I received many phone calls from construction executives that sounded something like this, "Hey, I'm about to lay off a bunch of people, so I just wanted to call and see if you might have any new projects starting up in the near future." [1 point]
Total score: 6/11 (~55%). Not bad.
I like this score because it means I'm not being too consensus. What fun would that be? That said, I do think some of my predictions were a little obvious. I don't want to be just extrapolating existing data forward; I want to be thinking critically. I also try not to stray too far into topics that I'm not well versed on, like shopping on TikTok. But it's a fine line given my strong interest in tech and crypto. I'll see what I can do to tighten things up and be a little more non-consensus with my predictions this year.
Stay tuned.
I'm a big fan of the period between Christmas and when most of the world gets back to work in the New Year. It's the only time of year that I know of where the email firehose shuts off, the social permission to do "nothing" turns on, and the world generally quiets down.
I know that not everyone gets this time off. We all have different jobs. Earlier in my career, I used to always work these days between Christmas and the New Year because I couldn't spare the vacation days. But if you are fortunate enough to have it off, it's a unique time of the year.
It's a time for family and friends, and a good time for vacations that aren't riddled with email and work anxiety. But it's also a time that creates space for the mind to wander, and for me, it gives me a creative burst of energy.
I've been trying to think of the best way to describe this feeling, and it truly feels like "mental space." When work is "on," it simply crowds out everything else. But a more accurate neuroscientific definition would be that we're simply engaging different parts of our brains.
Supposedly, when the mind is given "space" to wander — which is also referred to as wakeful rest — we engage a system in our brain known as the Default Mode Network. This network is thought to serve several different functions, including forming the basis for the self, thinking about others, remembering past events, and imagining possible future events. Generally, this makes it very good at connecting the dots, so to speak.
The counterpart network is our Executive Control Network. This part of our brain is most active during focused, demanding, and goal-oriented tasks — so work.
These two networks are also thought to be inversely correlated, meaning when one activates, the other often shuts down. But not always and not entirely. A 2018 research article by Roger E. Beaty et al. found that highly creative people have a unique brain "wiring" that allows these different neural networks to work together, rather than in opposition.
What this suggests to me, as a cognitive neuroscience layperson, is that engaging our different brain networks is good for us. Sometimes it's good to turn down executive control and give some space to default mode.
And I find that this time of year is a perfect time to do just that.
Cover photo by Milad Fakurian on Unsplash
Happy new year, everyone! Yesterday we spoke about what actually happened in 2024 (and evaluated my predictions from exactly a year ago). Today, let's prognosticate about what might happen in 2025 (keeping in mind that I'm based in Toronto and so there will naturally be a bias toward this market):
Very broadly speaking, our current commercial real estate downturn started, in my opinion, around the middle of 2022. That's when sentiment started to feel different and the market was starting to respond to increasing interest rates. Over the past few years, I've been overly optimistic in terms of how soon the market would reset. But eventually I'll be right. So I'm going to call 2025 as an important turning point where we see more capitulation, more bankruptcies, and a shedding of legacy assets/deals. For the other side of the market, this will mean more new deals.
This, however, does not mean that we will see a development environment that anywhere resembles what we saw prior to 2022. On the new construction residential side (condominium and multi-family rental specifically), I think it's going to take 2-3 years for us to work through and absorb our current supply pipeline. This will be an obvious headwind for land prices. The successful projects in this environment will be located in core/prime locations, underwritten at more modest scales, and focused largely on end users.
In 2024, we saw the continued rise of more people going back to the office. Here in Toronto, the average weekday figure is approximately 73% of what it was pre-COVID (data from November 2024). This year, I think we'll see this figure get close to 90% and then likely start to level off, some five years after the first lockdowns. I think it makes sense that we'll stabilize at some number
Exactly a year ago, I wrote this post talking about "what might happen in 2024." Now let's see what actually happened and how I did with my predictions.
Interest rate cuts: This was perhaps an easy one as there was already a market consensus that rates would start to come down in 2024. The Bank of Canada cut its policy interest rate by 175 bps (target of 3.25%), and the US cut its federal funds rate by 100 bps (target of 4.5%). [1 point]
Impact of higher rates: I predicted that things would get worse in 2024 before they started to get better (maybe toward the end of 2024 or perhaps in 2025). In some ways, I think I was right. But I'm not sure we've returned to a "risk-on" approach in commercial real estate, like I suggested. Toward the end of the year, my American friends were telling me that things were suddenly feeling a lot more optimistic and that more deals were being done. But I still feel like we've been kicking the can down the road here in Canada. The public markets certainly did very well, but I think the private markets are still hiding some underwater real estate investments. [0.5 point]
Balanced residential resale market: I thought that we would return to a more balanced resale market in 2024, certainly for the most-in demand cities and submarkets. Here in Toronto, it remains a buyer's market on the condominium side, but the freehold market in Central Toronto has shown signs of improvement over the last few months. Detached house values are up 4.6% year-over-year, despite listing supply also being up 29%. The resilience of core submarkets is what you would expect to see right now during this part of the cycle. (If you're interested in Toronto real estate, my friend Christopher Bibby has a great newsletter that he publishes periodically.) At the same time, I thought that the Bank of Canada would be more resistant to lowering rates compared to other central banks, and that this would be good for the Canadian dollar. I was wrong. [0 points]
Finding good real estate deals in 2024: I argued that this year would be a pivotal year for finding new opportunities. Maybe that was the case for some of you, but as I said above, I think that here in Canada we're still kicking the can down the road. So this one is hard to say. 2025 may end up being more pivotal for many real estate developers and investors. [0 points]
Declining hard costs: Like many of my other predictions, this is market specific. But this absolutely happened here in Toronto. For some trades and divisions, costs are down in the range of 25-30%. And I can tell you that over this past year I received many phone calls from construction executives that sounded something like this, "Hey, I'm about to lay off a bunch of people, so I just wanted to call and see if you might have any new projects starting up in the near future." [1 point]
Total score: 6/11 (~55%). Not bad.
I like this score because it means I'm not being too consensus. What fun would that be? That said, I do think some of my predictions were a little obvious. I don't want to be just extrapolating existing data forward; I want to be thinking critically. I also try not to stray too far into topics that I'm not well versed on, like shopping on TikTok. But it's a fine line given my strong interest in tech and crypto. I'll see what I can do to tighten things up and be a little more non-consensus with my predictions this year.
Stay tuned.
I am reversing my position on autonomous vehicles (relative to last year). I believe we're much further along -- specifically Waymo is -- than most people think right now. Autonomous vehicles are happening and, in 2025, I think we'll see a significant expansion of coverage across the US led by Waymo + Uber. I don't think we'll see anything earth shattering from Tesla in regards to FSD, but who knows, Elon is good at making things happen. The big test will be cities with snow. This will likely take longer.
At the time of writing this post, the price of EU carbon permits is approximately €71.98 per tonne of carbon dioxide. It's all-time high was €105.73 in February of 2023, but some/many believe that it will need to be closer to €150 by 2030 if the world hopes to reach net zero by 2050. So for this reason, I'm going to say that its price rebounds to between €90-100 this year. This is largely a guess, but I'm including it in my predictions (at least partially) because it's quantifiable and easy to score later.
Crypto and technology more broadly are going to have an awesome year in 2025. As Fred Wilson wrote on his blog yesterday, one of the things we saw in 2024 was "Silicon Valley's hostile takeover of the federal government, via an infiltration of Donald Trump's MAGA movement." The "establishment government" was seen as being antagonistic toward tech and innovation, and so the industry jumped teams. One would expect that to pay dividends this year.
More specifically, I think we're going to see a web3 consumer application that finally breaks into the mainstream. Already, I've been impressed by NFT marketplaces like Rodeo. Many people won't appreciate that it's powered by some blockchain, but that's exactly what we want. We want the underlying technology to recede into the background and for the experience/utility to come into the foreground.
And with that, I will end and leave you all with this recent tweet from Chris Dixon. It's worth clicking through and reading the entire thing.
A big thank you to everyone who continues to read this blog. We're now into year 12 of this daily writing practice (my first post was in August 2013), and I'm still feeling more inspired than ever. It truly feels like we're at the dawn of so many new and exciting things: a new real estate cycle, an unprecedented innovation environment, and the list goes on. Next up, I'm going to write specifically about what we at Globizen are focused on for this upcoming year.
Cover photo by Tyler Rooney on Unsplash
Return to office: A year ago, I wrote that return to office seemed to have stalled out at around 50% utilization. But I argued that this wouldn't hold and that, of the people who work in offices, most would go back to spending > 50% of their week in it. Looking at the latest data for Toronto's CBD (from November 15, 2024), the average weekly utilization figure is now up to 73%. And the peak day figure (Wednesday) is now 84%. (Both of these are relative to pre-COVID.) This is up meaningfully compared to last year. I don't know at what point we reach an equilibrium, but for now, we seem to be still heading up and to the right. [1 point]
Augmented reality: 2023 was the year of AI. I argued that this year would be the year of augmented reality and that this would represent a further blurring of our offline and online worlds. This was, I think, coming from the fact that Apple Vision Pro was set to be released. But if this happened at all, it happened only incrementally and it certainly wasn't a mainstream phenomenon. Most people I talk to haven't even tried Apple Vision Pro, though I remain blown away by the technology. If you haven't yet tried it, do yourself a favor and book a demo at your local Apple Store. That said, I'm not going to give myself any points for this one. [0 points]
Autonomous vehicles: I was somewhat bearish on this a year ago. I said that it feels as if we're in the trough of disillusionment (within the hype cycle), even if I was optimistic long term. So this year was a pleasant surprise and I was thoroughly impressed by the progress that Waymo, in particular, made. As of June of this year, they had already logged over 22 million rider-only miles. They are the company to beat right now. [0 points]
Impact of automation: This was a weak prediction because it wasn't particularly precise. I said that our shift toward greater automation would feel more insidious than immediate (certainly in 2024). I guess this is true. Elon Musk unveiled dancing bartender robots this year, but they weren't exactly ready to take all of our jobs. Reluctantly, I'll give myself a half point. [0.5 point]
Growth of TikTok Shop: This is where I argued that we should be looking for the future of shopping. And the data certainly supports this. According to recent research from The New Consumer, over 60% of Gen Z's report using TikTok every day. And half of all monthly active users report having already made a purchase through the platform. For those that use it every day, this figure increases to 57%. I don't use TikTok very often -- if at all -- but I know it's extremely popular. I'm also not an expert on e-commerce, but I have a belief that TikTok (and the likes), augmented reality, and crypto are going to give birth to some interesting new ways of buying things. [1 point]
Return of crypto: When I wrote last year's post, the total crypto market capitalization was approximately $1.74 trillion. This was down from almost $3 trillion at the peak of the market in 2021. I argued that the "crypto winter" would end this year and that its total market cap would exceed its previous peak by the end of this year. Today, it's about $3.45 trillion. If only I bought more. But to be honest, this was a total guess. [1 point]
I am reversing my position on autonomous vehicles (relative to last year). I believe we're much further along -- specifically Waymo is -- than most people think right now. Autonomous vehicles are happening and, in 2025, I think we'll see a significant expansion of coverage across the US led by Waymo + Uber. I don't think we'll see anything earth shattering from Tesla in regards to FSD, but who knows, Elon is good at making things happen. The big test will be cities with snow. This will likely take longer.
At the time of writing this post, the price of EU carbon permits is approximately €71.98 per tonne of carbon dioxide. It's all-time high was €105.73 in February of 2023, but some/many believe that it will need to be closer to €150 by 2030 if the world hopes to reach net zero by 2050. So for this reason, I'm going to say that its price rebounds to between €90-100 this year. This is largely a guess, but I'm including it in my predictions (at least partially) because it's quantifiable and easy to score later.
Crypto and technology more broadly are going to have an awesome year in 2025. As Fred Wilson wrote on his blog yesterday, one of the things we saw in 2024 was "Silicon Valley's hostile takeover of the federal government, via an infiltration of Donald Trump's MAGA movement." The "establishment government" was seen as being antagonistic toward tech and innovation, and so the industry jumped teams. One would expect that to pay dividends this year.
More specifically, I think we're going to see a web3 consumer application that finally breaks into the mainstream. Already, I've been impressed by NFT marketplaces like Rodeo. Many people won't appreciate that it's powered by some blockchain, but that's exactly what we want. We want the underlying technology to recede into the background and for the experience/utility to come into the foreground.
And with that, I will end and leave you all with this recent tweet from Chris Dixon. It's worth clicking through and reading the entire thing.
A big thank you to everyone who continues to read this blog. We're now into year 12 of this daily writing practice (my first post was in August 2013), and I'm still feeling more inspired than ever. It truly feels like we're at the dawn of so many new and exciting things: a new real estate cycle, an unprecedented innovation environment, and the list goes on. Next up, I'm going to write specifically about what we at Globizen are focused on for this upcoming year.
Cover photo by Tyler Rooney on Unsplash
Return to office: A year ago, I wrote that return to office seemed to have stalled out at around 50% utilization. But I argued that this wouldn't hold and that, of the people who work in offices, most would go back to spending > 50% of their week in it. Looking at the latest data for Toronto's CBD (from November 15, 2024), the average weekly utilization figure is now up to 73%. And the peak day figure (Wednesday) is now 84%. (Both of these are relative to pre-COVID.) This is up meaningfully compared to last year. I don't know at what point we reach an equilibrium, but for now, we seem to be still heading up and to the right. [1 point]
Augmented reality: 2023 was the year of AI. I argued that this year would be the year of augmented reality and that this would represent a further blurring of our offline and online worlds. This was, I think, coming from the fact that Apple Vision Pro was set to be released. But if this happened at all, it happened only incrementally and it certainly wasn't a mainstream phenomenon. Most people I talk to haven't even tried Apple Vision Pro, though I remain blown away by the technology. If you haven't yet tried it, do yourself a favor and book a demo at your local Apple Store. That said, I'm not going to give myself any points for this one. [0 points]
Autonomous vehicles: I was somewhat bearish on this a year ago. I said that it feels as if we're in the trough of disillusionment (within the hype cycle), even if I was optimistic long term. So this year was a pleasant surprise and I was thoroughly impressed by the progress that Waymo, in particular, made. As of June of this year, they had already logged over 22 million rider-only miles. They are the company to beat right now. [0 points]
Impact of automation: This was a weak prediction because it wasn't particularly precise. I said that our shift toward greater automation would feel more insidious than immediate (certainly in 2024). I guess this is true. Elon Musk unveiled dancing bartender robots this year, but they weren't exactly ready to take all of our jobs. Reluctantly, I'll give myself a half point. [0.5 point]
Growth of TikTok Shop: This is where I argued that we should be looking for the future of shopping. And the data certainly supports this. According to recent research from The New Consumer, over 60% of Gen Z's report using TikTok every day. And half of all monthly active users report having already made a purchase through the platform. For those that use it every day, this figure increases to 57%. I don't use TikTok very often -- if at all -- but I know it's extremely popular. I'm also not an expert on e-commerce, but I have a belief that TikTok (and the likes), augmented reality, and crypto are going to give birth to some interesting new ways of buying things. [1 point]
Return of crypto: When I wrote last year's post, the total crypto market capitalization was approximately $1.74 trillion. This was down from almost $3 trillion at the peak of the market in 2021. I argued that the "crypto winter" would end this year and that its total market cap would exceed its previous peak by the end of this year. Today, it's about $3.45 trillion. If only I bought more. But to be honest, this was a total guess. [1 point]
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