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.

Subscribe

  • The unbundling of the home

    Why self-storage continues to be a growing real estate asset class

    February 10, 2026 · View original

    I have never rented a self-storage unit. I have stored things at my parents’ places during certain periods of my life, such as when I moved to the US for grad school, but as a general rule, I never seem to conclude that I have too much stuff and that I should maybe rent some storage. However, I do on occasion fantasize about having a garage or large “man cave” where I could store an assortment of exotic snowboards, bicycles, and other life essentials. I mean, who doesn’t, right?

    In any event, I seem to be in the minority, because self-storage is a growing real estate asset class:

    > Investors have dramatically increased their allocation to self-storage over the last several years in the US]. A rush into the asset class occurred from 2020 to 2022, when transaction volume hit $50 billion, far exceeding the $35 billion spent during the entire seven‑year period from 2013 to 2020, according to [Cushman & Wakefield. Transaction volumes are now normalized but remain well above their pre‑pandemic baseline.

    Moreover:

    > It proved to be the best-performing sector in the NCREIF Property Index from 2005 to 2022, with returns since 2010 nearly double that of the overall index.

    So what’s driving this? Some of the explanations include a frozen housing market, millennials who haven’t yet bought a garage and are starved for room, and small-scale entrepreneurs who use it as cheap warehouse space. According to some reports, this latter use case accounts for nearly a third of total demand. And this makes sense to me. But generally, I have tended to apply an egocentric bias to this asset class. My mind discounts it because I don’t personally use it.

    One way to look at self-storage is that it represents the “unbundling of residential real estate.” Housing has gotten so expensive that we continue to search for ways to make it smaller and more efficient. One second-order consequence of this is that storage now needs to be disaggregated and moved to an off-site location where land is cheaper and the build costs are lower. From this perspective, there are strong structural reasons for the sector’s growth.

    There are also noteworthy differences between Canada and the US. Americans use self-storage at roughly 2 to 3x the rate of Canadians when measured by square footage per capita. Is this because Americans are bigger consumers and have more stuff? Or is it because the industry is more mature and built out at this point? It’s likely both of these factors.

    According to Avison Young, the supply of new self-storage in Canada is projected to nearly double year-over-year from under 1 million square feet in 2025 to over 1.8 million square feet in 2026. Another specific demographic factor contributing to this growth is Canada’s aging population. People are downsizing and then needing to put their stuff somewhere. How long this stuff stays in storage, I don’t know, but it’s there.

    I think the personal tension I have with self-storage is that there’s a big part of me that aspires to have less stuff. When I travel, I take great pride in often packing only a carry-on. There’s something liberating about having everything I need in one roller. Less is more. But then again, I could really use a new commuter bicycle and I have been meaning to get into splitboarding. How much do those storage units cost again?

    Cover photo by Aga Adamek on Unsplash

  • Patience is a virtue

    February 9, 2026 · View original

    A closed-end real estate fund is an investment vehicle with a finite life (call it anywhere from 5 to 12 years, plus extension options). These types of funds have a specific timeframe for raising capital, investing, harvesting the investments they have made, and then distributing proceeds to investors. This is in contrast to an open-ended fund, also known as an “evergreen” fund, which has an infinite life and can accept investments throughout its lifespan.

    As a result of these differences, closed-end funds are often used for opportunistic or value-add opportunities where the defined strategy is to buy, fix/develop, and then sell, whereas open-ended funds are often used for core opportunities, where the assets are intended to be held indefinitely for income. Neither fund structure is inherently good or bad; each has its benefits and drawbacks.

    However, the perceived weighting of these benefits and drawbacks shifts during market cycles. Since global real estate markets started to turn downward in 2022, the ability to be patient and think long-term has become a key ingredient for survival. You may have done everything you said you would do perfectly, but the market may not be there to grant you the liquidity you had originally planned for.

    Now the question becomes: How patient can and should we be?

    In my opinion, the greatest opportunities exist for (1) the larger firms that have a strong balance sheet and defensible income-producing properties and (2) the smaller, nimble firms that can capitalize on the dislocation in the market (and aren’t overly burdened with legacy assets that are sucking up resources and capacity).

    This perspective is true of other sectors as well. This weekend, venture capitalist Chris Dixon of a16z wrote a post titled, “The long game for crypto.” In it, he alludes to the current market downturn (ETH is down nearly 60% from its all-time high) and says that “we play the long game at a16z and a16z crypto: Our funds are structured with 10+ year horizons because building new industries takes time.”

    The fact that he wrote this post says a lot, I think, about the psyche of investors today. The perceived weighting has changed, and people are now investing and building more for the future. As the late Charlie Munger once said, “The big money is not in the buying and the selling, but in the waiting.”

    Cover photo by KAi’S PHOTOGRAPHY on Unsplash

  • Developer sues City of Cambridge over its inclusionary zoning policy

    February 8, 2026 · View original

    Cambridge, Massachusetts, requires that 20% of the new space in larger housing developments include affordable homes. This, as we have talked about many times before on this blog, is known as inclusionary zoning (IZ). According to the Pioneer Institute, there are more than 141 communities in the state that have some sort of IZ policy.

    But now, what is happening is that the numbers don’t work on new housing projects. In the 30 years since the ordinance was enacted, it is reported that it helped create 1,603 affordable homes. However, since 2017 — the year the city increased the affordable requirement to 20% — only 200 new affordable homes have been created. That’s approximately 20-22 new affordable homes per year — not much.

    These numbers also don’t speak to the number of new housing projects that could have been built, but weren’t feasible precisely because of the IZ policy. This is the greater risk, because even new “luxury” projects help to relieve housing pressures within a market.

    It is for this reason, along with others, I’m sure, that a developer is now suing the City of Cambridge, arguing that inclusionary zoning is unconstitutional on the grounds that it infringes upon people’s property rights. To quote the developer, “I [would] have to build at a loss. Eventually, you just throw your hands up and say it doesn’t work.”

    If successful, this case could help to change how cities tax new housing and how they aim to create new affordable housing, though I should mention that there have already been prior rulings on this issue.

    Customarily, the way municipalities try to offset the burden of inclusionary zoning is to allow additional density and/or waive certain development levies. However, to accomplish this, you ideally need a planning framework where it’s perfectly clear what maximum density would have been permitted without IZ.

    For example, if 100,000 square feet is the maximum permitted density without IZ, and an additional 20% is permitted with IZ (+20,000 square feet) you can now calculate whether this additional density is enough to perfectly offset the IZ tax. If it is not, well then, you could maybe have a situation where it’s deemed as an unconstitutional “taking” of private land (oh boy, please don’t take this as any sort of planning legal advice).

    I think most of us would agree that cities are better when they are diverse and attainable to more people. The problem with IZ policies is that they run the risk of selectively taxing only certain people in an effort to create this outcome.

    Cover photo by Brett Wharton on Unsplash

  • Dubai wants to be more human-centric

    February 7, 2026 · View original

    Last September, Dubai announced a new initiative called the Urban Think Tank & Design Lab (officially D.M-ULab). Then, this month, they announced that architects Santiago Calatrava and Kengo Kuma would be joining the think tank as “principal contributors.”

    The lab is focused on several key areas, but grouping them together, it’s broadly focused on encouraging participatory design (as opposed to top-down planning), driving the use of new technologies such as AI, and enhancing quality of life through human-centric urban design.

    This includes the creation of 20-minute communities where 80% of daily needs are within walking or riding distance.

    This last focus area is particularly interesting because one could easily argue that modern Dubai started on the opposite end of this spectrum. Rather than focusing on the human scale, it was focused on the global-attention-grabbing-superlative scale.

    When a remarkable new building is announced, the focus tends to be on the building as a symbolic object, not how it meets the ground and fits into its broader urban context. That’s largely irrelevant to a global audience.

    But it is this latter quality that will largely determine how human-centric the city ends up feeling — it’s the spaces in between the buildings where public life happens.

    So, how does this think tank intend to shift the city’s focus? One of the first projects is the renewal of the city’s older neighbourhoods through the creation of Barcelona-like superblocks that push vehicular traffic to their edges.

    It’s an admirable move, but it is noteworthy that this implementation is planned for the city’s older neighbourhoods. Older neighbourhoods have the advantage of street grids that are already more human-centric in scale.

    The true test of this lab will be whether it can transform its newer neighbourhoods. If it succeeds, it will be a model worth exporting to the rest of the world.

    Cover photo by Dubai Travel Blog on Unsplash

  • No is the second best answer

    February 6, 2026 · View original

    Many years ago, a real estate broker said this to me, and it has stuck ever since. I often go back to it in my mind. The logic behind it is as follows.

    The best answer is customarily “yes.” “Would you like to invest $100 million into my development project?” “Yes, I’d love to! Where should I send the money? I’ll do that right now.” This is the outcome you want.

    The second-best answer is “No, I don’t like you and I don’t like your project.” This is not what you want to hear, and it will probably sting at first, but it’s the next-best answer in that it offers complete certainty. You know where the person stands, and you can move on.

    The absolute worst answer is a “no” disguised as a “maybe.” “I don’t know. Seems interesting. We’ll see. Let me talk to my partners about it and get back to you.” This answer creates false hope and delays things. Whenever possible, you want to suss out and avoid delaying an inevitable “no.”

    It’s, of course, okay to need to think about things and do due diligence when it comes to important decisions, but ultimately, the goal is to get to either a “yes” or a “no” as quickly as possible.

    It’s okay to just say “no.” In fact, it’s the second-best answer you can give to someone.

    Cover photo by Ryoji Iwata on Unsplash

  • Why record rentals won’t stop our looming housing shortage

    February 5, 2026 · View original

    As most of you know, the Toronto housing market has shifted its attention from condominiums to rentals. This is out of necessity. According to the Toronto Regional Real Estate Board, the GTA saw approximately 71,392 condominium apartments leased (counting only those leased through MLS) in 2025.

    | Quarter | Units Leased | Y-o-Y Change | | — | — | — | | Q1 2025 | 14,797 | +16.7% | | Q2 2025 | 20,417 | +16.6% | | Q3 2025 | 22,491 | +20.2% | | Q4 2025 | 13,687 | +16.0% | | Total | 71,392 | |

    These increases are a result of having no other option. As demand has waned for new condominiums, a greater number of investors have decided to rent out their new condos. If you’re a tenant looking for a new home to rent, this has been good news.

    At the same time, Urbanation just reported that a total of 9,821 purpose-built rental apartments started construction in 2025, representing a 42% increase from the year prior. This is the highest annual total since the 1970s.

    At year-end, this resulted in a total of 27,815 purpose-built rental apartments under construction in the Greater Toronto & Hamilton Area. And like individual condominium buyers, developers are doing this because there is, in most cases, no other option.

    But while these may seem like large numbers, it’s important to keep in mind that new condominium completions are currently on a downtrend toward zero completions in the coming years (for all intents and purposes).

    Even with rental starts approaching 10,000 units per year, it’s not enough to replace the condominium supply that is starting to evaporate. Based on current sales and starts, 2029 looks to be the year where we’ll hit our housing supply bottom.

    Cover photo by Nadine E on Unsplash

  • That’s a wrap

    And why urban messiness is an important feature of cities

    February 4, 2026 · View original

    I’m back in Toronto. And another “fresh pow annual” is in the books.

    The BC interior is a specific kind of ski and snowboard trip. It’s not about dancing on tables in neon onesies while Champagne gondolas fly overhead. It’s about chasing champagne powder with like-minded middle-aged men, all pretending that they don’t otherwise live a sedentary, low-range-of-motion lifestyle for the balance of the year.

    Both have their merits.

    We stayed in four different accommodations for this trip, and one of the things that became very apparent is that everyone is trying to over-optimize around “good service.” In each case, I was getting text messages and emails before the stay, during the stay, and after the stay.

    “Here’s how to prepare before check-in.” “Is there anything we can do to make your stay more enjoyable?” “How was your stay?” “Please share your experience with us here.” In one case, I even received a phone call from the front desk as soon as I got to my room: “We just wanted to see if everything in your room is to your liking.”

    On the one hand, this level of communication and responsiveness is fantastic when you do need something. But on the other hand, it can be overwhelming. Blasting everyone with automated text messages and emails does not, in my opinion, stand out as exceptional hospitality, especially since everyone now seems to be doing it.

    Outstanding hospitality is emotional, rather than technical.

    In city-building news, Bloomberg recently published an article about why cities should embrace “messiness.” In it, they cite a book that was assembled by some fellow Torontonians:

    > This premise — that urban planning’s efforts to impose order risk editing out the culture, character, complexity and creative friction that makes cities cities — is a guiding theme in Messy Cities: Why We Can’t Plan Everything, a collection of essays, including Thorne’s, gathered by Toronto-based editors Zahra Ebrahim, Leslie Woo, Dylan Reid and John Lorinc. In it, they argue that “messiness is an essential element of the city.” Case studies from around the world show how imperfection can be embraced, created and preserved, from the informal street eateries of East Los Angeles to the sports facilities carved out of derelict spaces in Mumbai.

    Messiness and allowing for ground-up urban interventions are themes that I have written a lot about on this blog over the years. I think we have gone overboard with rules and regulations, to the point that we stamp out many of the things that make cities so wonderful.

    Top-down planning will never get everything right. It’s impossible. And the big thing about over-planning is that, in the end, we don’t actually know what we’re missing out on. We don’t know what might have been possible if only we had allowed for it or were more flexible in our approaches.

    Messiness is a feature of cities, not a bug. We should be embracing it.

  • Waymo AV hits child in Santa Monica

    February 3, 2026 · View original

    On January 23, a Waymo autonomous vehicle hit a child in Santa Monica, California. The age and identity of the child are not public, but “minor injuries” were reported. Waymo responded with this blog post where they essentially argued that “if this had been a human driver, the accident would have been worse.”

    > The event occurred when the pedestrian suddenly entered the roadway from behind a tall SUV, moving directly into our vehicle’s path. Our technology immediately detected the individual as soon as they began to emerge from behind the stopped vehicle. The Waymo Driver braked hard, reducing speed from approximately 17 mph to under 6 mph [~9.7 km/h] before contact was made. > > To put this in perspective, our peer-reviewed model shows that a fully attentive human driver in this same situation would have made contact with the pedestrian at approximately 14 mph. This significant reduction in impact speed and severity is a demonstration of the material safety benefit of the Waymo Driver.

    All car accidents causing human injury are unfortunate, but car accidents involving AVs are obviously more noteworthy right now. In my mind, it makes sense that a Waymo should be more responsive than a human driver in the face of a pedestrian jumping out into a roadway.

    But being “less bad” is not going to win everyone over. The accident is being investigated to ensure “the Waymo AV exercised appropriate caution given, among other things, its proximity to the elementary school during drop off hours, and the presence of young pedestrians and other potential vulnerable road users.”

    The headline is suboptimal for AVs, but it’s very possible the Waymo did everything it could, and did it better than any one of us could ever do. We shall see.

    Cover photo by Andri Aeschlimann on Unsplash

  • France opens its seventh urban cable car line

    February 2, 2026 · View original

    I was surprised to learn this week (I should have already been aware) that France operates seven urban cable cars (or gondolas). Its first was built in Grenoble, at the foot of the Alps, in 1934, and its latest opened in December 2025 in the country’s capital region.

    Called Câble 1 (or C1), this latest line is 4.5 kilometres long, carries 11,000 passengers per day in 105 gondolas, and connects Villeneuve-Saint-Georges to the Métro Line 8 in Créteil (a southeastern suburb of Paris). The total trip takes 18 minutes, compared to an estimated time of 40 minutes by bus or car.

    Importantly, the project only cost €138 million, or about €30.6 million per km, which is about 10-15% of what a subway might have cost based on data from the Grand Paris Express. Estimates for the latter were over €1 billion, meaning it would have likely been a non-starter.

    Gondolas are most commonly used to navigate mountainous terrain, but they’re increasingly being used in urban settings to stitch together isolated communities. Forty minutes to eighteen minutes is a significant quality-of-life upgrade. I think more cities should be considering cable cars as a possible mobility solution.

    Cover photo via Région Île-de-France / Aymeric Guillonneau

  • Until next time Revelstoke

    February 1, 2026 · View original

    Revelstoke is out. Golden is in. But before we move on, here are several things I noticed about Revelstoke compared to the last time I was there in 2015.

    – It is clear that the city and resort have gotten significantly more popular (mind you, when we came in 2015 the weather was suboptimal). – The city has been investing in great wayfinding signage (separate post here). – Monster luxury homes have been built around the resort and across the valley. I don’t recall seeing these, or at least this many, on my last trip. – A modest single-family house in the city now lists for around $1 million. – Anecdotally, I can also say that I spoke to a number of people on the lifts who had moved from Toronto and other big cities in order to “retire” or “spend the winters” in Revelstoke. – The city and the resort were very busy over the weekend. The resort could probably use some more lifts and/or gondolas during these peak periods. – The après spots on the mountain were full. And there are fantastic restaurants downtown, a number of which are quite fancy. Think $50-60 entrées. – I noticed more Australians living/working in the city.

    I’m sure that the locals would rather that Revelstoke remain more under the radar. But that’s not what is happening. It’s quickly becoming a global destination for skiing, snowboarding, and other outdoor activities.

    I left feeling very bullish on its future.