I was speaking with our lawyer in Park City this week, and he commented to me that he wouldn't be going into the office next week because Old Town would be too hectic with the Sundance Film Festival going on. His office is right on Main Street.
When small mountain towns host major international events, there are going to be spillover effects. This is true of Sundance in Park City (population ~8,500) and it is true of the World Economic Forum, which was hosted in Davos (population ~10,000) this past week.
Perhaps the most obvious impact is that people can rent out their homes for large sums of money. And so lots of people both do that and try to profit maximize while doing it. Here are some anecdotes from Davos (via NZZ):
Ten days before the WEF, there are still 25 listings on the Airbnb internet platform. The prices here range from 8,000 to 56,000 Swiss francs. The son of an apartment owner says that his family receives 12,000 francs a week for their three-room apartment, which is quite close to the convention center. However, he says he assumes that they could achieve significantly more. The family rents out the apartment through an intermediary.
I was speaking with our lawyer in Park City this week, and he commented to me that he wouldn't be going into the office next week because Old Town would be too hectic with the Sundance Film Festival going on. His office is right on Main Street.
When small mountain towns host major international events, there are going to be spillover effects. This is true of Sundance in Park City (population ~8,500) and it is true of the World Economic Forum, which was hosted in Davos (population ~10,000) this past week.
Perhaps the most obvious impact is that people can rent out their homes for large sums of money. And so lots of people both do that and try to profit maximize while doing it. Here are some anecdotes from Davos (via NZZ):
Ten days before the WEF, there are still 25 listings on the Airbnb internet platform. The prices here range from 8,000 to 56,000 Swiss francs. The son of an apartment owner says that his family receives 12,000 francs a week for their three-room apartment, which is quite close to the convention center. However, he says he assumes that they could achieve significantly more. The family rents out the apartment through an intermediary.
Another interesting impact in Davos happens on the retail side (also via NZZ):
According to expert Robert Weinert, the average rent per square meter of retail space in Davos is 248 Swiss francs. A businessperson renting a storefront of 80 square meters must therefore pay almost 20,000 francs in rent per year. However, if that business vacates the store during the WEF, it can earn 60,000 francs – three times the annual rent for the facilities.
What this means is that some retail spaces remain vacant all year, just so that they can be available for when the WEF arrives and people need temporary commercial spaces. And why wouldn't this be the case: 20,000 francs for the year or 60,000 francs for a week. If I'm the landlord, I'll take the additional 40,000 francs and not think about the property for the rest of the year.
Of course, if you're trying to create a vibrant community with things, like, occupied retail spaces, then this isn't ideal.
Let's resume looking at sidewalks and public spaces.
If you look in the City of Toronto's Official Plan for the stretch of Dundas Street West that runs between Dupont Street and Bloor Street West, you'll find a map that looks like this:
I am not a lawyer. Nothing I write on this blog should be construed as legal advice. In fact, it is highly questionable whether anything I write here should be construed as any sort of advice. Still, Trump's fraud trial is an interesting one for us to discuss. The case, as I crudely understand it, accuses him of "inflating his net worth to dupe banks" and "issuing false financial statements every year between 2011 and 2021." And possibly some other things, too.
Now there are some people who are saying that there's nothing actually wrong with the way Trump conducts his real estate practice. Kevin O'Leary, for instance, was just on CNN saying, "every real estate developer everywhere does this." His position was that if you're going to fault Trump, then you need to go after every developer out there. Here's the video interview where he says this:
https://youtu.be/80RZs9Fhz3Y?si=DSuCa0PwVWx_wbVe
Let's break this down. Kevin is right in that people who own real estate ordinarily want it to be worth as much as possible. This is true for individual homeowners and it's true for large real estate companies. And there are various reasons for this. One reason is that it maximizes your debt proceeds. For example, if you buy a building for $100 and the banks are willing to give you a loan based on a LTV (loan-to-value) of 70%, then you will get $70 in debt proceeds and you will need to put in $30 of your own cash equity.
However, if you buy a building for $100 and it ends up being worth ~$143, then this same 70% LTV will result in $100 of debt proceeds. This means that you won't need to put in any of your own cash and that, for all intents and purposes, you just got a building for "free." By most metrics, this would be considered a good real estate deal. (Of course, you could also buy a building for $100 and have it be worth only $50. And this would be much less fun than getting free real estate.)
One important question, though, is how does the building end up "being worth $143?" Well, one scenario could be that you just bought really well. It was an off-market transaction (i.e. it wasn't formally listed), the seller was highly motivated, and so you negotiated a below-market purchase price. You then went out and hired a reputable third-party appraiser who did a bunch of rigorous research and issued you a report that said, "your building is worth $143." And this would be perfectly fine.
But one can also imagine ways in which someone could lie and do nefarious things to try and convince people that their building is worth $143, even if it clearly isn't. Now, at the end of the day, I don't know the facts of this case. So I can't comment directly. But I did want to use this as an opportunity to add some nuance to Kevin's claim that "every real estate developer everywhere does this." Ultimately, that depends on what "this" is. Are we talking about doing customary things to maximize value creation? Or are we talking about fraud?
Another interesting impact in Davos happens on the retail side (also via NZZ):
According to expert Robert Weinert, the average rent per square meter of retail space in Davos is 248 Swiss francs. A businessperson renting a storefront of 80 square meters must therefore pay almost 20,000 francs in rent per year. However, if that business vacates the store during the WEF, it can earn 60,000 francs – three times the annual rent for the facilities.
What this means is that some retail spaces remain vacant all year, just so that they can be available for when the WEF arrives and people need temporary commercial spaces. And why wouldn't this be the case: 20,000 francs for the year or 60,000 francs for a week. If I'm the landlord, I'll take the additional 40,000 francs and not think about the property for the rest of the year.
Of course, if you're trying to create a vibrant community with things, like, occupied retail spaces, then this isn't ideal.
Let's resume looking at sidewalks and public spaces.
If you look in the City of Toronto's Official Plan for the stretch of Dundas Street West that runs between Dupont Street and Bloor Street West, you'll find a map that looks like this:
I am not a lawyer. Nothing I write on this blog should be construed as legal advice. In fact, it is highly questionable whether anything I write here should be construed as any sort of advice. Still, Trump's fraud trial is an interesting one for us to discuss. The case, as I crudely understand it, accuses him of "inflating his net worth to dupe banks" and "issuing false financial statements every year between 2011 and 2021." And possibly some other things, too.
Now there are some people who are saying that there's nothing actually wrong with the way Trump conducts his real estate practice. Kevin O'Leary, for instance, was just on CNN saying, "every real estate developer everywhere does this." His position was that if you're going to fault Trump, then you need to go after every developer out there. Here's the video interview where he says this:
https://youtu.be/80RZs9Fhz3Y?si=DSuCa0PwVWx_wbVe
Let's break this down. Kevin is right in that people who own real estate ordinarily want it to be worth as much as possible. This is true for individual homeowners and it's true for large real estate companies. And there are various reasons for this. One reason is that it maximizes your debt proceeds. For example, if you buy a building for $100 and the banks are willing to give you a loan based on a LTV (loan-to-value) of 70%, then you will get $70 in debt proceeds and you will need to put in $30 of your own cash equity.
However, if you buy a building for $100 and it ends up being worth ~$143, then this same 70% LTV will result in $100 of debt proceeds. This means that you won't need to put in any of your own cash and that, for all intents and purposes, you just got a building for "free." By most metrics, this would be considered a good real estate deal. (Of course, you could also buy a building for $100 and have it be worth only $50. And this would be much less fun than getting free real estate.)
One important question, though, is how does the building end up "being worth $143?" Well, one scenario could be that you just bought really well. It was an off-market transaction (i.e. it wasn't formally listed), the seller was highly motivated, and so you negotiated a below-market purchase price. You then went out and hired a reputable third-party appraiser who did a bunch of rigorous research and issued you a report that said, "your building is worth $143." And this would be perfectly fine.
But one can also imagine ways in which someone could lie and do nefarious things to try and convince people that their building is worth $143, even if it clearly isn't. Now, at the end of the day, I don't know the facts of this case. So I can't comment directly. But I did want to use this as an opportunity to add some nuance to Kevin's claim that "every real estate developer everywhere does this." Ultimately, that depends on what "this" is. Are we talking about doing customary things to maximize value creation? Or are we talking about fraud?
Red signifies "Mixed Use." And so if you were to just look at this map, you might naturally assume that, in the real world, this is a continuous main street that connects The Junction neighborhood down to Bloor. But that's not actually the case. Instead, it looks like this:
Because of the rail corridor on the east side, it is a single-sided street. And generally speaking, these don't make for the best retail streets. But it also has narrow sidewalks and a compromised public realm. If you go back to the map I shared yesterday, you get this:
I don't think 30cm is entirely accurate here, but that's beside the point. What matters is that this is just one of many examples in the city of a discontinuous public realm. (Here's another, undignified example, from Parkside Drive.)
Over the years, there have been a number of design concepts proposed. Below is one by Brown + Storey Architects that was done I don't know how many years ago. Their proposal widened the sidewalks along this stretch, and added bike lanes. They also proposed a roundabout at the intersection of Dundas, Dupont, and Annette, which is another matter that needs addressing.
But none of this has been implemented and I don't know of any plans to do it. When we were going through the rezoning process for Junction House, we were made aware of some transportation studies that had been done for the above intersection. But that's about it. There wasn't an actual ETA.
However, now that my commute consists of walking up and down this part of Dundas, I've been thinking more about how it could be improved.
I think there's no question that the sidewalks need to be widened. It would also be helpful if there were crosswalks to facilitate getting off the south end of this exotic island:
But equally important, I think that something should be done about the single-sided nature of the street. Given that there's limited width, my mind immediately goes to shipping containers, or something similar, to start activating the east side of the street.
This has already been done further south on Dundas (east of Bathurst):
And it could work here too. Already there's a Blondie's Pizza anchoring the south end of this stretch (really fantastic pizza, by the way):
But I would love to hear your ideas, as I'm currently in the market. I also don't think that you necessarily need to be from Toronto in order to comment. Great streets are great streets. So if it were up to you, what would you change, if anything, about this part of Dundas Street West? Let me know in the comment section below.
Red signifies "Mixed Use." And so if you were to just look at this map, you might naturally assume that, in the real world, this is a continuous main street that connects The Junction neighborhood down to Bloor. But that's not actually the case. Instead, it looks like this:
Because of the rail corridor on the east side, it is a single-sided street. And generally speaking, these don't make for the best retail streets. But it also has narrow sidewalks and a compromised public realm. If you go back to the map I shared yesterday, you get this:
I don't think 30cm is entirely accurate here, but that's beside the point. What matters is that this is just one of many examples in the city of a discontinuous public realm. (Here's another, undignified example, from Parkside Drive.)
Over the years, there have been a number of design concepts proposed. Below is one by Brown + Storey Architects that was done I don't know how many years ago. Their proposal widened the sidewalks along this stretch, and added bike lanes. They also proposed a roundabout at the intersection of Dundas, Dupont, and Annette, which is another matter that needs addressing.
But none of this has been implemented and I don't know of any plans to do it. When we were going through the rezoning process for Junction House, we were made aware of some transportation studies that had been done for the above intersection. But that's about it. There wasn't an actual ETA.
However, now that my commute consists of walking up and down this part of Dundas, I've been thinking more about how it could be improved.
I think there's no question that the sidewalks need to be widened. It would also be helpful if there were crosswalks to facilitate getting off the south end of this exotic island:
But equally important, I think that something should be done about the single-sided nature of the street. Given that there's limited width, my mind immediately goes to shipping containers, or something similar, to start activating the east side of the street.
This has already been done further south on Dundas (east of Bathurst):
And it could work here too. Already there's a Blondie's Pizza anchoring the south end of this stretch (really fantastic pizza, by the way):
But I would love to hear your ideas, as I'm currently in the market. I also don't think that you necessarily need to be from Toronto in order to comment. Great streets are great streets. So if it were up to you, what would you change, if anything, about this part of Dundas Street West? Let me know in the comment section below.
