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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  • Smart-lock company Latch to go public

    The WSJ announced today that smart-lock company Latch is getting SPAC’ed (i.e. going public). The deal, which is sponsored by commercial real estate firm Tishman Speyer, values the company at about $1.56 billion.

    One of the things that is attractive about Latch is that they’re a lot more than just a smart-lock company. They really bill themselves as being a “full-building operating system.” Their platform, called LatchOS, offers everything from access door solutions to guest/delivery management.

    If you operate a multi-family apartment building, one of the first things that you would like to do away with is all of your suite entry keys. They are a pain to manage. So smart entry locks are a huge value-add. I guess that’s why 1 in 10 apartments in the US are now being built with LatchOS, according to the company.

    Another thing that is attractive about Latch is that they operate as a SaaS/subscription service. So reoccurring revenue and (probably) a higher multiple. Given that changing all of the locks in a big apartment building is no simple task, there are also some natural barriers to churn.

    To learn more about today’s announcement, you can check out the WSJ or TechCrunch.

  • Compact housing for the future of our urban spaces

    “Unexpected approaches for the future of our urban spaces.” Publisher Gestalten has a new book out that you can pre-order called, Vertical Living: Compact Architecture for Urban Spaces. The book is not about tall buildings, despite what the title might suggest, but rather about “impossibly slender homes” in narrow and tight urban spaces. As many of you know, I have long been a fan of compact and creative homes. One, they force creativity. It’s like designing a boat (not that I have done that before). Every inch matters. And two, it is about seeing opportunity where others don’t.

    Sometimes we miss these opportunities because of cultural biases. We believe that a home should look and behave a certain way. But these viewpoints are not necessarily universal. They vary across cities and they can even vary within cities. As Toronto and many other cities around the world try and figure out how to deliver the so-called “missing middle,” we are going to need to open ourselves up to some of what’s in this book — namely the unexpected. New housing solutions that don’t fit within certain neat and tidy definitions.

    We’ve done this before with laneway suites. Formerly an illegal housing type, Toronto is now in the midst of what feels like a laneway housing boom. I don’t know exactly how many are under construction or have been completed under the city’s new policies, but I would wager that the uptake has been strong. And over time, this new housing typology is going to reshape how we think about our laneways. They will evolve along with the new uses that are now beginning to flank them. The unexpected will become the expected.

    Shall we try this again?

    Image: Gestalten

  • The development value chain

    When I was in graduate school, my plan was to create a vertically integrated design and development company. I loved designing things and wanted to remain close to those sorts of details, but I had already decided that I wasn’t going to be an architect in the traditional sense and that I was going to be a developer. And so my objective was to figure out a way to combine everything under one roof. How could we be designers, but also be the entrepreneurs that make buildings happen?

    In some ways, Mackay Laneway House is a manifestation of that model. Through a partnership with Gabriel Fain Architects, we (Globizen Studio) have been heavily involved on the design side. Gabriel did all of the drawings and the overall architecture, but we weighed in (more than your typical client), selected most of the FF&E, and even designed things like the kitchen (with Scavolini) and the exterior signage. I wouldn’t call it true vertical integration, but we did start to blur the lines between architect/designer and developer.

    One of the interesting things about this approach is that it begins to create some consistency and a bit of a branded product. The hope is that when Mackay Laneway House is fully complete, it will read as a Globizen project, which is not that dissimilar from what David Wex of Urban Capital was talking about in this recent podcast. Their projects are a specific kind of product. They generally repeat it, and if that’s not what you’re interested in, then you don’t buy an Urban Capital home.

    But this also raises an important question: what is the role of architects and architecture in the case of buildings as very specific products? (This is something that we have discussed before on the blog.) Is the job of the architect to create an interesting exterior shell that then gets populated on the inside by a specific product offering? Or is it even worse, is architecture sometimes just an “empty vessel” that gets interior design and a brand slapped onto it? In some cases and with some projects, it does feel this way.

    I am a firm believer in the value of architecture and design. An “empty vessel” is not architecture. It is, well, an empty vessel. And that is not what I aim for in any of the projects that I’m involved in. Creativity, function, thoughtfulness and, yes, beauty, are all important. At the same time, I think this is a valuable debate. These sorts of questions are helpful in dissecting the architecture/development value chain. And so I would be interested in hearing your thoughts in the comment section below.

  • Introducing Crosby Studios’ virtual shoppable showroom

    One of my favorite interior design firms — Crosby Studios — has just launched a new home goods and accessories concept called Crosby Studios Home. The offerings are unmistakingly Harry Nuriev (the founder of Crosby Studios). It’s all about design, art, and fashion coming together. But what is also noteworthy is how the concept was launched using a virtual shoppable showroom. And the experience, which is pictured above, is shockingly good. You simply wander around this blue-floored apartment and click on whatever stuff you would like to add to your shopping cart. This isn’t the first virtual showroom experience, but as I was using it, I couldn’t help but think that we’ll be seeing a lot more of this in the future. This and things like shoppable augmented reality.

    Images: Crosby Studios Home

  • The war on beauty

    A recent essay by The School of Life asks: “Why is the Modern World So Ugly?” Here’s how it opens:

    “One of the great generalisations we can make about the modern world is that it is, to an extraordinary degree, an ugly world. If we were to show an ancestor from 250 years ago around our cities and suburbs, they would be amazed at our technology, impressed by our wealth, stunned by our medical advances – and shocked and disbelieving at the horrors we had managed to build. Societies that are, in most respects, hugely more advanced than those of the past have managed to construct urban environments more dispiriting, chaotic and distasteful than anything humanity has ever known.“

    Naturally, it turns out that this is, at least partially, the fault of greedy and unscrupulous real estate developers:

    “When property developers heard that the artistic avant-garde was now promoting a concept of functionalism, they rejoiced. From the most high brow quarters, the most mean minded motives had been given a seal of approval. No longer would these developers have to spend any money on anything to do with beauty. Out could go the symmetry, the flowers, the nice but slightly more expensive materials. It could all be as quick, ugly and cheap as possible; after all, isn’t that what the great minds of architecture had advised?“

    The author goes on:

    “Yet this nuance was lost on the property developers who came after them. Their constructions weren’t elegantly pared down with grace. They were something far worse: sloppy, mean-minded and ugly. Except that now, because of the words of the modernist masters, there was apparently nothing one could do to charge them with a dereliction of duty. The concept of beauty had been rendered old-fashioned, it smelt elitist and woolly. No one could any more complain that beauty was missing from the world without sounding soft-headed.“

    To be fair, the essay doesn’t entirely blame developers. It, more specifically, outlines six possible reasons for the ugliness of the modern world. And I do agree with some of them.

    Click here for the full essay.

  • The year of the missing middle

    It is starting to feel like 2021 could be a turning point for “missing middle” type buildings here in Toronto. Momentum seems to be growing and there’s increasing interest in finding ways to make this scale of housing more feasible — everything from duplexes to low-rise walkup apartments.

    This week Councillor Bradford published a great op-ed in Spacing Toronto as a kind of call to action: Let’s make this year the year. In it, he provided an update on a pilot project that will be taking place in his ward — Beaches-East York — this year:

    We’ll be setting out this spring to find a city-owned site and the right partners for the project. From there, the work will be to go through every step of the development process, from design to construction. This Pilot is about accomplishing two key tasks. One, building housing that meets the Missing Middle typology while aiming to incorporate the affordability and sustainability elements Toronto needs. Two, through undertaking that development process, to identify the execution issues so we can bring forward the policy corrections that’ll make what we achieve in the Pilot build replicable across the city.

    With the continued run-up in single-family home prices, it really is starting to feel like we’re at a tipping point. Something is going to need to change. People continue to move to Toronto from all over the world. Perhaps this year will be the year. To learn more about the pilot project, take a look at this update report.

  • We are hiring for the Development team

    Slate Asset Management is hiring.

    We are looking to hire an Associate or Director to join the Development team here in our Toronto office. The full set of responsibilities can be found over here on LinkedIn, but at a high level, we are looking for someone who wants to join an entrepreneurial team and lead — fairly independently — a portfolio of urban infill projects.

    Our approach to development really stems from the broader Slate platform. We are bold and thematic investors who work to create long-term value for our investors and partners. From a development perspective, that translates into an unwavering commitment to design & culture, innovation, and disciplined project execution.

    We pride ourselves on working alongside the world’s best architects and designers, and uncovering opportunities that others may be overlooking. We are proactive and hands-on in everything that we do. We also feel an inherent sense of responsibility for the buildings that we create and we want the work that we do to help improve our cities. We stand behind our product.

    If this sounds like a mission that you can get behind, then I would encourage you to learn more about us at slateam.com and submit an application via LinkedIn. Please note that we are also asking candidates to introduce themselves through a short video.

  • Finding an audience (on Facebook)

    Social media can be both fun and useful. Over the weekend, we were exploring a few different design options for an address sign at Mackay Laneway House and so I posted this image on Twitter and storied it on Instagram. I got a bunch of responses, as well as some great suggestions. And we ultimately ended up making a small change to the design. That process was both fun and useful. The final design is now out for pricing and production.

    But as we all know, there is also a dark side to social media. The algorithms that power social media have been optimized to amplify whatever drives the most engagement. Oftentimes that means whatever gets people the most enraged. In this recent NY Times article, Stuart A. Thompson and Charlie Warzel make a compelling argument that Facebook has actually been coaxing many Americans into taking more extreme views on the platform — it made them more popular.

    And we’re not talking about extreme views on home address signs.

  • Tokyo-based BALMUDA delivers one sexy toaster

    Founded in 2003, Tokyo-based BALMUDA refers to itself as a creativity and technology company that creates home appliances and other products designed to deliver “thrilling and wonderful experiences.” Last year they entered the US market with products such as The Kettle and The Toaster. A toaster is perhaps one of those things that isn’t usually described as being thrilling. But BALMUDA The Toaster is one beautiful toaster, and according to Monocle Magazine it has become a sleeper hit around the world. (The company went public last December in Tokyo and its share price is up nearly 80% at the time of writing this.) It has a special steaming technology that keeps bread moist on the inside and crispy on the outside. What you do is add 5 cc of water to the toaster before heating it up and that produces a thin layer of steam within the appliance. I never knew that my bread needed this, but clearly it does. Watching the latest movie from The Minimalists has taught me nothing. I hope these guys start shipping to Canada very soon.

    Image: BALMUDA

  • A few thoughts on working from home/anywhere

    https://twitter.com/donnelly_b/status/1350479215574056960?s=20

    One of the big questions for this year is about whether or not work from home (WFH) and work from anywhere (WFA) policies are going to stick following this pandemic. It’s something that I mentioned in my 2021 predictions at the beginning of this year because it is something that would obviously have a massive ripple effect. So today I thought that it would be interesting to look back on data and articles that were published prior to 2020, before everyone really started prognosticating about the rise of fully distributed workforces.

    What is clear, at least from census data, is that working from home was on the rise before COVID-19, but that it still only represented a relatively small percentage of the overall workforce. The numbers are significantly higher if you consider people who maybe occasionally worked from home, but for those who were 100% remote, it was estimated to be only about 5.2% of the US workforce in 2017 (~8 million people), about 5% in 2016, and about 3.3% in 2000. But the question still remains: Now that many/most people have had a taste of the increased flexibility, to what extent will it stick?

    There’s a ton of research out there about the impacts of working remotely — covering everything from productivity to morale. But one takeaway that makes intuitive sense to me is that WFH/WFA flexibility is perhaps best when two things are present: 1) the employees already know how to do their job really well and 2) the work that these employees are doing is fairly independent.

    The corollary to this is that remote work is probably not the best environment for newer and younger employees who would benefit from being around other more experienced people, and for situations where collaboration among coworkers and outside humans is essential for the job. When I think of the job of a real estate developer, I would place it high on the collaboration scale. Building a building involves a full orchestra of people that all need to be playing in sync. Personally, I find that easier to do when you’re sitting across a table.

    My belief continues to be that we are are greatly exaggerating the extent to which work is going to disperse in the short-term. I recognize the trend line that existed prior to this pandemic and I recognize that some jobs are perhaps well suited to decentralization. But I think we will continue to see real limits on how much of this sticks as we move past this moment in time and into 2022.