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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  • A visit to BMW World

    Today we visited BMW Welt (World) and the BMW Museum in Munich.

    BMW Welt was designed by COOP HIMMELB(L)AU out of Vienna. It is the result of a design competition that the BMW Group held in 2001. Construction of the ~73,000 square meter facility was completed in 2007.

    The project is centered around a great hall and an elevated vehicle delivery area known as Premiere. It was designed — and this includes the HVAC system — to handle 40 car deliveries per hour, or 250 per day. I guess they don’t work a full 8 hours.

    Below are two photos that I took of the delivery area. The circles you see on the floor in the second picture are rotating platforms. This is where you want to pick up your new car.

    And here is a plan of the entire Welt space via COOP HIMMELB(L)AU:

    I also really enjoyed the BMW Museum, which is housed in a separate building adjacent to the BMW Tower (the one that looks like engine cylinders).

    The “art cars” were a lot of fun. I’m sure that many of you will be able to guess the artist behind this one:

    But what I enjoyed most were the classics like this one here:

    The least interesting cars for me were the ones that weren’t old enough to be “classic”, but also weren’t new and shiny. This can happen with architectural styles as well. Designs sometime need time to settle in.

    For more photos of BMW Welt and the BMW Museum, follow me on Instagram.

    Drawings/Isometrics: COOP HIMMELB(L)AU

  • 10th annual

    It is that time of year again.

    For those of you who are regular readers of this blog, you’ll know that every year around this time I go on a snowboarding/ski trip with groups of friends that I went to grad school with and/or grew up with.

    We have been doing this for a decade now. Last year we were in Jackson, Wyoming (my favorite place so far). And this year we are in Austria.

    Here is a photo that I took — of paradise — this afternoon:

    I’m not sure there’s anything to say after a photo like this. So I’ll leave it at that. See you tomorrow.

  • Algorithmic home buying — what’s the end game?

    Bloomberg recently published a good summary of Zillow’s business and their move into algorithm home buying and flipping. (They are trying to avoid the “flipping” moniker because of the negative connotations associated with it.)

    Zillow started buying homes directly from owners last spring. They charge the seller between 6-9%, so more than using a typical agent, but inline with their competitors. There’s clearly a segment of the market willing to pay a premium for the added convenience.

    The thinking used to be that discount brokerages were the way to disrupt the housing market. This is the opposite strategy.

    Interestingly enough, Zillow felt that they needed to make this pivot with their business model. It used to be about selling ads. They were definitive in that they were not a disruptor of real estate agents.

    But now:

    If getting an offer from an iBuyer became a crucial step in the selling process, they worried, Zillow could lose its audience and its advertising base. What’s more, market researchers kept finding that consumers said they’d pay a modest premium to get a cash offer. “People expect to press a button and have magic happen,” says Rascoff, a 43-year-old former Expedia executive who’d earlier started the travel search engine Hotwire, which he sold to Expedia for $700 million. Getting into the business of buying homes directly, Rascoff says, was “the only way to remain in a leadership position.”

    Here is a map of the companies in this particular space and the cities in which they operate:

    Some investors aren’t sold on this strategy and have begun short selling Zillow (according to the Bloomberg article). I keep getting the sense that there’s a greater end game in the cards here. It is about building up A (algorithmic home buying and flipping) in order to unlock B.

    But what’s B — a new end-to-end transactional model for the housing market?

  • Rethinking the tower

    The Ryerson City Building Institute recently published a new report called, Rethinking the Tower: Innovations for Housing Attainability in Toronto.

    It looks at four possible approaches to improving housing attainability/affordability in the city:

    Micro Living: Well-designed micro units can offer a cost-effective alternative to conventional apartments, particularly in central locations where higher land costs can be a barrier to affordability.

    Shared Space: Co-living, where residents share amenities and services, can improve affordability and create a sense of community, particularly in walkable, transit-connected neighbourhoods where housing costs are high.

    Home Unbundling: Features, finishes and amenities unbundled from the unit price of condominiums can allow greater choice and reduced costs for homebuyers.

    Equity Options: With more households renting, and the transition from renting to owning growing ever more challenging, new shared-equity models can help families invest in their home, even if they rent.

    In addition, the report also provides a number of project case studies from around the world. If you’d like to download a copy, you can do that here.

  • The Russian James Bond

    This is last year’s news and some of you may have already seen it, but here is a video of Zaha Hadid’s only completed private residence:

    It was built in the Barvikha Forest near Moscow. The client, Vladislav Doronin, is a real estate developer. He owns/runs Capital Group, OKO Group, and Aman. Zaha used to call him the Russian James Bond.

    The central idea behind the house is the raised master bedroom suite. Vladislav wanted to wake up and only see trees and sky. And so Zaha raised the bedroom 22m above grade.

    Look at it in section (those stairs!):

    It wouldn’t be my first choice, but I can appreciate its boldness. What are your thoughts on this house?

    Image: Dezeen

  • Construction update — MIRA, San Francisco

    The MIRA Tower in San Francisco is one of my favorite buildings by Studio Gang and probably my favorite tall building under construction right now. Here’s a video and a few photos from the San Francisco Chronicle’s urban design critic, John King:

    When we first met Studio Gang, this project hadn’t yet started construction. They broke ground in April 2017. But it was one of the designs that got us particularly excited about what a Studio Gang building could mean for midtown Toronto.

    Now that the MIRA Tower is well underway, I have to say that it looks even better than it did pinned to the walls of their Chicago studio. I can’t wait to see it in person once it’s complete.

  • Height vs. density

    This Planetizen article (2014) by Brent Toderian surfaced over the weekend. It is about tall buildings and why we should be focused more on how they are designed, as opposed to just how tall they are. Brent talks about this in terms of “density done well.”

    One of the things that is often misunderstood when it comes to tall buildings is the relationship between height and density. It is often assumed that the two are perfectly correlated; but they’re not, which is why I like this quote from the above article:

    “Height and density have a relationship, one that can be over-simplified or mischaracterized, but they aren’t the same thing – you can have density without height, and yes, you can have height without density.” -Brent Toderian

    Part of the challenge is that density is a more nuanced metric. Height, on the other hand, is a lot easier to understand. How tall is this building? Oh, it is x storeys tall. But that’s only one piece of the puzzle.

    Photo by Erwan Hesry on Unsplash

  • Change, somewhere else

    I went snowboarding today. As always it was a lot of fun. If only Toronto had mountains.

    Here is a Canadian video about snowboarding from 1985 that, I think, does an excellent job demonstrating how resistant to change we humans can sometimes be.

    The video sure sounds silly today, but it probably didn’t in 1985. It aired on the CBC.

    I am writing this post on my iPad and there doesn’t appear to be a way to embed the video. The Tumblr app isn’t great. So all you’re getting today is a link.

  • Cost-plus pricing

    Today, Urbanation released its Q4-2018 market highlights report for the Greater Toronto Area. 

    The general media will pick up these numbers and tell you that there’s been a precipitous decline in the number of new condominium sales. But the reality is that 20,028 units were sold in 2018, which is actually in-line with 10-year averages for this region. 2017 was a particularly frenetic, and unsustainable, year.

    The average pre-construction sold price for a new condominium in the former City of Toronto (the core) was $1,117 psf last year, and $921 psf across the broader region. These numbers represent significant double digit increases from the year prior. But again, what I don’t think many people appreciate is that the cost environment has also changed dramatically over the last few years.

    Construction costs are way up, as are development charges and a myriad of other pro forma line items. The above numbers are simply a result of cost-plus pricing. Here’s where costs are at and here’s where we need to be to make the project feasible. Margins haven’t increased; in fact, they’ve probably been squeezed for many developers.

    I think this is an important topic that deserves more transparency and visibility. So I’m hoping to work with a developer friend of mine and publish something more substantial in the coming months.

  • A beautiful destination: Rio de Janeiro

    Below is a breathtaking video of Rio de Janeiro by Beautiful Destinations. If you haven’t heard of them before, they run a great YouTube channel profiling places and experiences from around the world. I think they also post a new video every week. If you can’t see the video of Rio below, click here.

    [youtube https://www.youtube.com/watch?v=gYy1RITRN9s&w=560&h=315]