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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  • Garden suite policies approved at council

    Earlier today, Toronto City Council voted 19-5 in favor of the new garden suite policies. This is great news, and something that I have been writing about since our laneway suite policies were first introduced and later expanded across the city in 2018-2019.

    The simplest way of thinking about this new housing type is that they’re like laneway suites, except now the permissions have been expanded to include all of the properties that don’t have access to a lane. In other words, they are backyard cottages (also known as accessory dwelling units).

    Not every property is going to be suitable for a garden suite, but these new policies do apply to all low-rise “Neighbourhoods” of Toronto. So this is yet another important milestone for what is ultimately a broader look at housing supply in our low-rise communities. Next on deck is likely to be more multi-unit dwellings.

    If you’re interested in building a garden suite and would like to connect with an accomplished architect, I am most certainly not your best resource. I would recommend Gabriel Fain (the architect behind Mackay Laneway House) or Craig Race (an important pioneer/entrepreneur in this space).

  • Buying condos with crypto

    If you happen to have made boatloads of money in crypto (which sadly isn’t me), one sensible thing you could do is put some of that money into luxury residential real estate. You know, to diversify your portfolio.

    According to this recent WSJ article, it is already happening, with some developers and some homeowners now accepting cryptocurrencies in lieu of US dollars and other fiat currencies. This is helpful if you’ve managed to accumulate a bunch of crypto and don’t want to convert it. It can also be easier when it comes to moving the funds around:

    Avi Dabir, vice president of business development at FTX US, said he sees real estate as a growing sector for the company because crypto transactions are faster and more efficient than traditional deals, which rely on an often-cumbersome banking system.“If I want to send a wire transfer today using my traditional bank account, it’s got to be banking hours, I need to make sure I hit that wire cutoff time and I can’t do it on the weekends,” he said. “That’s not a problem with cryptocurrency. It’s open 24/7.”

    But of course it is still early days for crypto. The article suggests that most developers and owners are arranging for any crypto received to be immediately converted into US dollars at closing. This is presumably because of how volatile cryptocurrencies tend to be — at least right now.

    To accept crypto, PMG had to partner with a regulated exchange that could quickly convert crypto to U.S. dollars, then convince an escrow agent to accept down payments from the exchange, rather than directly from the developer. Mr. Shear said most escrow agents looked at him like he was crazy, but “20 lawyers, one year later, and a lot of brain damage, everybody got comfortable.”

    There are also tax considerations (that I am really not an expert on). If you bought $100 worth of Ethereum and it is now worth $10 million, you are responsible for paying tax on this gain if/when you sell, trade, or otherwise dispose of the crypto. And it is my understanding that if you were to use this $10 million in Ethereum to buy something like a condo in Miami, it would also be considered a taxable event.

    Maybe all of this becomes commonplace or maybe it doesn’t. But it sure is interesting to see crypto already starting to flow into hard assets like real estate.

  • Some 60,000 condominium units were purchased last year in Toronto

    So 2021 was a pretty good year for condominiums here in the Greater Toronto Area. According to the latest data (Q4-2021) from Urbanation, this is what happened last year:

    • 30,844 new condominium sales. This is a 69% increase compared to 2020, which saw 18,282 new unit sales.
    • Fourth quarter alone saw 8,361 unit sales, which is the best quarter on record according to Urbanation.
    • Unsold inventory dropped 26% year-over-year because sales exceeded the number of new project launches by over 4,000 units.
    • Average price for an unsold condominium unit in Q4-2021 reached $1,322 psf, which is an 18% increase compared to the year before.
    • Resale condominiums also did exceptionally well with 29,880 unit sales — a 49% annual increase.
    • All in all, some 60,000 condominium units were purchased last year in the GTA. Of course, some were ready to be lived in and some were future homes.

  • Immersive digital experiences at Superblue Miami

    If you happen to find yourself in Miami or London in the near future, I would highly recommend that you check out Superblue. Neat B and I visited Superblue Miami this past weekend and it was an incredible experience.

    Above is a short video of one of the immersive installations (click here if you can’t see it embedded above). This one is by the Japanese art collective teamLab and what you’re seeing is a whole year’s worth of seasonal flowers coming to life and then dying off.

    It’s meant to show you the continuous change and cycle of life and death that we all live through every day, and you certainly feel that as you go through the space. The installation itself also responds to how you move and interact with it, with some actions encouraging more blossoms.

    It’s, of course, all very Instagrammable.

    But I think this descriptor is old news and doesn’t do the work justice. Superblue is a serious cultural experience. One of the other works on display right now is a piece by light and space artist James Turrell. And for this one, there were no photos and talking allowed. The timed experience was meant to be more meditative.

    It was the first time that I had seen something by James Turrell in real life and it didn’t disappoint. It made me feel things, as did the entire Superblue experience. So again, a top experience that I would highly recommend.

    On a related real estate note, the 50,000 sf Superblue space is located in an area of Miami called Allapattah (which is west of Wynwood and 5 miles east of MIA). I’m an outsider to the city building undercurrents of this city, but I keep hearing people talk about the area as the next Wynwood.

    The other cultural institution in Allapattah is the Rubell Museum, which I wrote about in 2019 as it was moving over from its original home in Wynwood. Supposedly the family now has the largest private collection of contemporary art in North America. So that’s something.

    Maybe these two anchors will be what does it for Allapattah. When we walked around the area there didn’t seem to be much else going on. But we all know how quickly that can change.

  • Brand-specific vs. property-specific signage

    Here is an example of retail signage on Lincoln Road in Miami Beach. The interior signage (behind the glass above the doors) is specific to the brand Osklen (which is a great sustainable fashion company from Brazil). And the exterior soffit signage is specific to the property in that the same design and typeface is used for all of the retail tenants.

    I think that this consistency creates a more elevated feel for the overall property, but the obvious downside is that the retailers don’t get to express their unique brands and identities in quite the same way. Still, I think the above approach is a pretty good compromise. What do you think?

  • Good design is about caring

    I was in a “design charrette” meeting earlier today where the topic of good architecture and why some cities do better than others came up. It got me thinking about my recent post about the quality of Canadian architecture and so I’d like to revisit that discussion today. The Walrus article that I previously cited focused a lot on uninspiring public architecture and the procurement processes that generate them behind the scenes. But here are a few other things to consider.

    1/ Design guidelines and planning policies have an impact on our built environment in more ways than most people probably appreciate. For example, there are design moves in some of our projects that I really dislike. But we were given no choice. In fact, in one instance I remember us advocating for less area/density (shocking for a developer) because we thought it made for better architecture. We ultimately capitulated, and the additional area was certainly a nice to have, but it wasn’t our opening position.

    2/ Nice stuff does often cost more money. There is no question that a project like One Delisle is more expensive to construct compared to a “typical” building. However, we made the decision to invest in high quality architecture and we built our pro forma around this approach. In this regard, it is helpful to be in bigger and more expensive cities/submarkets so that you can generate the kind of revenues that will support high-quality architecture.

    3/ At the same time, there is no reason that thoughtful design needs to cost more. Good design is simply about being creative, responding to constraints, and, frankly, just giving a shit about what you’re doing. You want to see that somebody cared. So while nice things and elegant details do often cost more money, we shouldn’t use this as a crutch. The same is true for climate. Colder climates shouldn’t be considered handicapped. Creativity and thoughtfulness can thrive anywhere. We just have to give them the opportunity.

  • Lobby / co-working space at Junction House

    It has been cold and snowy in Toronto lately, which is great if you’re looking to shred pow on a snowboard, but suboptimal if you’re trying to construct buildings. It pains me deep inside my bone marrow when we lose productive days to weather. But what can you do?

    I was, however, thrilled to see this first glimpse (pictured above) of the lobby / co-working space at Junction House this morning. The slightly elevated section (which is the point of view of the above rendering) is the co-working area.

    The reason it’s elevated is that we needed the clearance below for our parking ramp. We thought about trying to make it retail, but a place for residents to hang out and work seemed like a pretty good idea.

    A lot of us on the team are big fans of a great hotel lobby bar, but that’s kind of challenging to do in a residential condominium. This is maybe the next best thing. It’s been very popular with purchasers so far, but I’m looking forward to seeing how it performs in real life.

  • We’re hiring, again

    The development team at Slate is hiring once again for our Toronto office. We are looking for a coordinator/analyst to join the team and work on all aspects of our projects (which span the full lifecycle of development and are pretty cool if you ask me). If you’ve read some of my past hiring posts (examples here and here), there isn’t a lot more that I can say about our company, our culture, and our approach to development.

    But what I would emphasize is that our culture is paramount. I am biased, but I think we have a great team that works well together and that cares deeply about what we do. All of this is important, which is why in the past I have encouraged candidates to go beyond their resume and share something else like their online presence or a link to something that would help us get to know them a little better.

    If you would like to learn more about the position and/or apply, please do that over here on LinkedIn. And if you have any questions, feel free to reach out to me on Twitter.

  • Is Canadian architecture bad?

    Tracey Lindeman over at the Walrus recently asked: Why is Canadian architecture so bad? Is it because Canadians are too passive and apathetic when it comes to good design? Or is it because we’re too cheap and don’t like our tax dollars being spent on unnecessarily lavish public buildings?

    Whatever the case, there is an argument out there that we maybe had this wonderful period between the 50s and 70s where we really excelled in modern architecture and design (including graphic design), but that we kind of stopped caring and have built mostly banal stuff since then.

    Part of Tracey’s argument is simply that we’re cowards. We’re more interested in “checking boxes instead of taking chances.” We’ve become too bureaucratic when it comes to procuring new public architecture. And she’s not wrong.

    Why we accept it is a patently Canadian phenomenon: our national psyche has us much more interested in checking boxes than in taking chances. Our standard process for contracting buildings often gives projects to the lowest bidders, even if a vastly more beautiful design is just a little bit more expensive. We have become so devoted to frugality and bureaucracy, and are so readily appeased by basic functionality, that we have lost the fortitude to take and demand risks, even if the outcome could be the most beautiful thing we’ve ever seen.

    Great architecture requires not only great architects, but also great patrons of architecture. That has generally been the way all throughout history. But here’s the fortunate thing. We have lots of wonderfully talented architects in this country and lots of people who see the value in architecture.

    In fact, I think you could argue that over the last 5-10 years we have seen the quality of architecture in our cities step up dramatically. Some of these projects have been designed by top Canadian architects and some have been designed by leading international architects.

    In both cases it’s because we see the value proposition and have decided to invest in architecture and design. Now we just need to be bolder across the board and get bureaucracy and checkboxes out of the way of Canadian creativity.

  • A nation of apartment dwellers

    The Canada Mortgage and Housing Corporation (CMHC) recently published its latest data on housing starts, housing under construction, and housing completions. Here are a few of the highlights:

    • Canada saw 271k housing starts last year (2021). This includes single-detached housing and multiples, which captures semi-detached housing, row housing, and apartments (and other unit types). This is the highest number of annual housing starts that we have seen over the last five years. The range for the prior years has been between roughly 209-220k.
    • Ontario saw 100k (~37% of the country), Quebec saw 68k (~25% of the country), and British Columbia saw 48k (~18% of the country).
    • What I was curious about when I first saw these numbers was the split across the various housing types. Single-family homes, for instance, came in at 82k for all of Canada. So that’s about 30% of total housing starts. If you add in semi-detached and row, which I believe would also be all grade-related, you get to 124k or 46% of all housing starts.
    • Apartments and other unit types make up the balance at about 147k or 54% of all housing starts. This is kind of interesting because they now represent a majority.
    • Looking at Ontario, the percentage of apartments actually drops to 50%. But the numbers are much higher in both Quebec and BC at 69% and 63%, respectively. Again, this is kind of interesting.

    Despite all of our deference to single-family housing, the numbers suggest that we are actually in the midst of building a different kind of country — one that entails people living in “apartments and other unit types.” Maybe it’s time we got more granular with this line item.

    Note: CMHC defines “apartment and other unit types” to include not just apartments, but also stacked towns, duplexes, triplexes, double duplexes (whatever this is), and row duplexes. A number of these will, of course, be grade-related. But they still represent more intense forms of land use.