I was recently talking to my good friend Jeremiah Shamess about the current state of development land sales in Toronto (he does this for a living) and he said something to me that I found really interesting.
He said that because the market is so competitive, you can really only win development sites in one of two ways. Either you’re willing to spend the most money or you see something and have a vision that nobody else sees.
And it was this second piece that really stood out to me because it reminds me of one of my favorite investing frameworks.
Warren Buffet is famous for saying that you should be fearful when others are greedy and you should be greedy when others are fearful. And what I’m about to talk about is really that same core philosophy.
Here’s how venture capitalist Fred Wilson put it (reiterating something that
I was recently talking to my good friend Jeremiah Shamess about the current state of development land sales in Toronto (he does this for a living) and he said something to me that I found really interesting.
He said that because the market is so competitive, you can really only win development sites in one of two ways. Either you’re willing to spend the most money or you see something and have a vision that nobody else sees.
And it was this second piece that really stood out to me because it reminds me of one of my favorite investing frameworks.
Warren Buffet is famous for saying that you should be fearful when others are greedy and you should be greedy when others are fearful. And what I’m about to talk about is really that same core philosophy.
Here’s how venture capitalist Fred Wilson put it (reiterating something that
Bill Gurley
said):
I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. His logic was that you can’t make money by being wrong. And you can’t make money by being right about something everyone else knows. So you have to be right about something that most people think is wrong. I really like that framework.
But this doesn’t just apply to technology companies or stocks. It applies to city building, most industries, and probably most things in life if you think about it.
If all you’re doing are things that everyone else is doing, then how can you expect to outperform? You’re going to revert to the mean.
Take, for example, billionaire Dan Gilbert and Detroit. Not everyone believes that Detroit will come back. In fact, I suspect there are probably more people who think it won’t come back, than people who think it will. Otherwise, it would already be back.
As you’ve likely heard, over the past four years Gilbert has become one of Detroit’s single-largest commercial landowners, renovating the city with the energy and impact of a modern-day Robert Moses, albeit bankrolled with his own money. He’s purchased and updated more than 60 properties downtown, at a total cost of $1.3 billion. He moved his own employees into many of them–12,000 in all, including 6,500 new hires–and cajoled other companies such as Chrysler, Microsoft and Twitter to follow.
If/when Gilbert proves to be right about Detroit, then he will have been right about something that most people thought was wrong. And because of that, he will no doubt make a lot of money.
Last month, Curated Properties submitted a rezoning and site plan application for a 6-storey, 25-unit building at 45 Dovercourt Road in Toronto. The project is known to the market as Cabin and you can
I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. His logic was that you can’t make money by being wrong. And you can’t make money by being right about something everyone else knows. So you have to be right about something that most people think is wrong. I really like that framework.
But this doesn’t just apply to technology companies or stocks. It applies to city building, most industries, and probably most things in life if you think about it.
If all you’re doing are things that everyone else is doing, then how can you expect to outperform? You’re going to revert to the mean.
Take, for example, billionaire Dan Gilbert and Detroit. Not everyone believes that Detroit will come back. In fact, I suspect there are probably more people who think it won’t come back, than people who think it will. Otherwise, it would already be back.
As you’ve likely heard, over the past four years Gilbert has become one of Detroit’s single-largest commercial landowners, renovating the city with the energy and impact of a modern-day Robert Moses, albeit bankrolled with his own money. He’s purchased and updated more than 60 properties downtown, at a total cost of $1.3 billion. He moved his own employees into many of them–12,000 in all, including 6,500 new hires–and cajoled other companies such as Chrysler, Microsoft and Twitter to follow.
If/when Gilbert proves to be right about Detroit, then he will have been right about something that most people thought was wrong. And because of that, he will no doubt make a lot of money.
Last month, Curated Properties submitted a rezoning and site plan application for a 6-storey, 25-unit building at 45 Dovercourt Road in Toronto. The project is known to the market as Cabin and you can
The project immediately caught my attention (because of its design, because of its branding, and because I like the work of Curated), so I decided to dig in further and get a copy of their architectural drawings. Development applications and their supporting documents are all public. Anyone can request a copy. But the city isn’t great at making this known.
Since I’m excited to see more of these small scale urban infill projects in the city, today I thought I would highlight some of its key features and some of the things that are being proposed in order to make a project like this work.
The Homes
First of all, 100% of the suites are 2-storey. 76% of the suites are also 2 bedroom or larger.
The result is that the project is essentially a series of townhomes stacked on top of each other. I suspect that this will appeal to more end-users as opposed to investors. Hopefully, it will also attract more families to the area.
Here’s the third floor plan:
You probably can’t see it, but all of the suites are marked as “Level 1”, obviously indicating that there’s more than one level.
Also worth mentioning is the notch or cut out on the north side of the building. This is what makes the 2 suites in the middle of the floor plate possible. In order for them to have windows, they need to be setback from the (north) property line. It also means those suites get terraces.
The Parking
Turning to the ground floor plan, it’s interesting to see that they are proposing 8 triple car stackers that will be accessible off the rear laneway (right side on the plan below). That equates to 24 parking spaces in the building (8 bays x 3 cars per stacker).
On small urban sites like this one, it can be very difficult to accommodate parking. So it’s inevitable that we will see more parking stackers in the city and a continual reduction in parking minimums.
The Construction
Finally, I have been told that this project is expected to be framed in wood, as opposed to reinforced concrete, which is more typical of condominiums in Toronto.
This change was done with the intent of reducing construction costs so that it becomes more feasible to develop smaller infill sites such as this one. So expect to see more of this.
I know that a lot of people would like to remain in the city even when they start having children. But it’s becoming increasingly difficult to find affordable low-rise homes. And not everyone wants to live in a high-rise tower.
That’s why I think we will see more, not less, low-rise and mid-rise infill projects like Cabin. If you’re interested in this topic, also check out a post I wrote called 3 stages of intensification.
One of the most interesting projects being proposed in Toronto right now is 363 Yonge Street, which is located downtown at the southeast corner of Yonge Street and Gerrard Street. See above hero rendering.
The project is a two tower mixed-use development with the following stats (as per their rezoning application dated April 24, 2015):
73 storey tower to the north (inclusive of podium)
62 storey to the south (inclusive of podium)
9 storey podium containing office and retail
887,752 square feet of residential
101,062 square feet of retail
186,977 square feet of office
Site area is 42,248 square feet (proposed density on the site works out to be about 27x)
1,106 residential units – 107 bachelor (9.7%), 648 one-bedroom (58.6%), 241 two-bedroom (21.8%), and 110 three-bedroom (9.9%)
289 parking spaces – 221 spaces for residents, 23 spaces for visitors, 23 spaces for retail, and 22 for office
9,790 square feet of outdoor amenity space and 23,809 square feet of indoor amenity space for the residences (the “skybridge” that connects the two towers at the 51st and 52nd floors is amenity space)
9,809 square feet of outdoor amenity space for the commercial spaces
The site also contains 2 listed heritage buildings. The Gerrard Building and The Richard S. Williams Block. The project proposes to incorporate 3 of their facades (not the entire buildings) into the base of the new development.
Here are a few images of what that might look like at street level (going from north to south along Yonge Street):
I am also delighted to see that they are planning on adding retail to the rear laneway (O’Keefe Lane) that runs behind the site, east of Yonge Street. If you’re a regular reader of this blog you’ll know that I think Toronto’s laneways are a huge missed opportunity. So it’s great to see developers in this city starting to recognize that.
Here’s a photo of what O’Keefe Lane looks like today (courtesy of Google street view):
For those of us in the industry, it’s always valuable to look at other projects and dissect the square footages, unit mix, density, parking ratios, and so on. But I recognize that this is a particular lens.
I’m also trying not to be so Toronto-centric, so it would be great to hear how this project compares to what you’re seeing in your city.
The project immediately caught my attention (because of its design, because of its branding, and because I like the work of Curated), so I decided to dig in further and get a copy of their architectural drawings. Development applications and their supporting documents are all public. Anyone can request a copy. But the city isn’t great at making this known.
Since I’m excited to see more of these small scale urban infill projects in the city, today I thought I would highlight some of its key features and some of the things that are being proposed in order to make a project like this work.
The Homes
First of all, 100% of the suites are 2-storey. 76% of the suites are also 2 bedroom or larger.
The result is that the project is essentially a series of townhomes stacked on top of each other. I suspect that this will appeal to more end-users as opposed to investors. Hopefully, it will also attract more families to the area.
Here’s the third floor plan:
You probably can’t see it, but all of the suites are marked as “Level 1”, obviously indicating that there’s more than one level.
Also worth mentioning is the notch or cut out on the north side of the building. This is what makes the 2 suites in the middle of the floor plate possible. In order for them to have windows, they need to be setback from the (north) property line. It also means those suites get terraces.
The Parking
Turning to the ground floor plan, it’s interesting to see that they are proposing 8 triple car stackers that will be accessible off the rear laneway (right side on the plan below). That equates to 24 parking spaces in the building (8 bays x 3 cars per stacker).
On small urban sites like this one, it can be very difficult to accommodate parking. So it’s inevitable that we will see more parking stackers in the city and a continual reduction in parking minimums.
The Construction
Finally, I have been told that this project is expected to be framed in wood, as opposed to reinforced concrete, which is more typical of condominiums in Toronto.
This change was done with the intent of reducing construction costs so that it becomes more feasible to develop smaller infill sites such as this one. So expect to see more of this.
I know that a lot of people would like to remain in the city even when they start having children. But it’s becoming increasingly difficult to find affordable low-rise homes. And not everyone wants to live in a high-rise tower.
That’s why I think we will see more, not less, low-rise and mid-rise infill projects like Cabin. If you’re interested in this topic, also check out a post I wrote called 3 stages of intensification.
One of the most interesting projects being proposed in Toronto right now is 363 Yonge Street, which is located downtown at the southeast corner of Yonge Street and Gerrard Street. See above hero rendering.
The project is a two tower mixed-use development with the following stats (as per their rezoning application dated April 24, 2015):
73 storey tower to the north (inclusive of podium)
62 storey to the south (inclusive of podium)
9 storey podium containing office and retail
887,752 square feet of residential
101,062 square feet of retail
186,977 square feet of office
Site area is 42,248 square feet (proposed density on the site works out to be about 27x)
1,106 residential units – 107 bachelor (9.7%), 648 one-bedroom (58.6%), 241 two-bedroom (21.8%), and 110 three-bedroom (9.9%)
289 parking spaces – 221 spaces for residents, 23 spaces for visitors, 23 spaces for retail, and 22 for office
9,790 square feet of outdoor amenity space and 23,809 square feet of indoor amenity space for the residences (the “skybridge” that connects the two towers at the 51st and 52nd floors is amenity space)
9,809 square feet of outdoor amenity space for the commercial spaces
The site also contains 2 listed heritage buildings. The Gerrard Building and The Richard S. Williams Block. The project proposes to incorporate 3 of their facades (not the entire buildings) into the base of the new development.
Here are a few images of what that might look like at street level (going from north to south along Yonge Street):
I am also delighted to see that they are planning on adding retail to the rear laneway (O’Keefe Lane) that runs behind the site, east of Yonge Street. If you’re a regular reader of this blog you’ll know that I think Toronto’s laneways are a huge missed opportunity. So it’s great to see developers in this city starting to recognize that.
Here’s a photo of what O’Keefe Lane looks like today (courtesy of Google street view):
For those of us in the industry, it’s always valuable to look at other projects and dissect the square footages, unit mix, density, parking ratios, and so on. But I recognize that this is a particular lens.
I’m also trying not to be so Toronto-centric, so it would be great to hear how this project compares to what you’re seeing in your city.
