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

  • Prime residential pricing in 10 global cities

    The below graphs are taken from a recent (June 2019) report by Knight Frank on “prime” residential pricing across the world. They define “prime” as generally being the top 5% of each market by value. What these graphs show are the spread between the average price of a prime property and the top price achieved in that market.

    The most expensive market is Hong Kong. The average price of a prime property in 2018 was USD 4,251 per square foot (or USD 45,760 per square meter) and the top price achieved was in 2016 at USD 28,154 per square foot (or USD 303,051 per square meter).

    Using the 2018 average, a 350 square foot studio apartment would run nearly USD 1.5 million (or almost CAD 2 million), assuming there are “prime” studios available in the market. Remember, we are talking about the top end of the market.

    If you’d like to download a copy of the full report, you can do that over here.

  • Snøhetta completes energy positive building in Norway

    Snøhetta has just completed an office building in Trondheim that produces more than double the amount of electricity that it consumes. If you recall my recent post on Norway’s new coastal highway, you may remember that Trondheim is the northern terminus of highway E39. I mention this because of access to sun. Latitude 63.43.

    The office building is about 18,000 square meters and it is wrapped with about 3,000 square meters of solar panels. The roof is angled at 19 degrees in order to maximize sun harvesting, and any excess electricity is fed back into the city’s grid / neighboring facilities. Large batteries also help to help carry the building through the winter months (again, latitude 63.43).

    Here are a few photos of the roof (via Dezeen):

    I wish I had more of the details so that I could see how the numbers pencil. Hard costs, utility costs, office rents, government incentives/disincentives, embodied energy in the batteries, and so on. Because this looks like an extraordinary accomplishment for a city that is remarkably north.

    Images: Dezeen

  • The good in change

    This deserves a blog post. Below is a great tweet by Jason Thorne. Jason leads the department of planning and economic development at the City of Hamilton, where, full disclosure, we have a development project.

    https://twitter.com/JasonThorne_RPP/status/1169749295299538944?s=20

    I have said this many times before on the blog, but the challenge with most “community engagement” is that cities typically hear from the people who disagree. Those voices are then taken as representative.

    My gut tells me that we need to make it easier for people to agree. We need to reduce the barriers. Some will take the time to write a thoughtful letter. But most won’t.

  • Standard elements in non-standard ways

    A few people have now sent me this TED talk by architect Débora Mesa Molina. But I watched it for the first time today. I guess my personal brand is pretty closely associated with architecture and design.

    In it, she talks about her firm’s approach to using overlooked and/or standard building materials in unconventional ways. For example, here, she used stacked precast beams to assemble a house in Madrid (c.2008). The entire structure came together in only 7 days.

    My first reaction is that I like the idea and approach — which is really quite interesting — more than the final designs. I am also curious if there were any cost savings as a result of using “standard” materials. What are your thoughts?

  • Every major hurricane in the North Atlantic and Eastern North Pacific

    I came across this map while reading up on Hurricane Dorian:

    It is a map showing the tracks of every known hurricane in the North Atlantic (1851-2013) and in the Eastern North Pacific (1949-2013). Major hurricanes (category 3 or higher) are shown in yellow and tropical cyclones (intensity less than category 3) are shown in red.

    The map is from the National Hurricane Center. Some of their other maps include the points of origin for tropical cyclones (here is August 21-31 from 1851-2015) and the total number of hurricane strikes by U.S. county (here is Florida from 1900-2010).

    What has happened is a catastrophe. UBS is already estimating the insured damages in the Bahamas to be between $500 million and $1 billion. But as is usually the case, the total economic losses will likely exceed the insured losses.

  • Norway’s $47 billion coastal highway

    The E39 highway in Norway runs along the west coast of the country and connects Kristiansand in the south to Trondheim in the north. There’s also a ferry connection to Denmark that forms part of the route. The entire highway (excluding the ferry south to Denmark) is about 1,100 km. But it takes about 21 hours to drive it because Norway’s dramatic fjords (see above photo) mean that there are seven ferry crossings along E39. The Norwegian government wants to transform the route into a ferry-free highway, which would dramatically reduce travel times. But this presents a number of extremely difficult engineering challenges — some of which haven’t been solved yet. You can learn about a number of them in the below video from The B1M. If you can’t see it below, click here. It’s a fascinating video.

    Photo by Christiann Koepke on Unsplash

  • The new decentralized workforce

    A few weeks ago the WSJ published an article about Toronto’s growing tech talent pool, arguing that its base now rivals the top US cities, but that it may not be an entirely good thing for the city’s ecosystem. I wrote about it here.

    This morning venture capitalist Fred Wilson published a post on his blog talking about the necessity of scaling tech companies in lower cost locations. It’s a good follow-up to the above article/post.

    Here’s an excerpt from Fred:

    Last week I heard some shocking numbers about salary levels for certain kinds of engineers in the bay area. I checked them out with a few of our bay area portfolio companies and they were more or less corroborated.

    The tight technical labor markets in the bay area, NYC, and a number of other regions in the US are making it hard to scale software businesses without burning massive amounts of cash.

    He goes on to argue that (startup) companies now need to think about scaling in other/remote locations sooner than they ever have before — basically as soon as the company hits about 50 engineers (or 100-200 employees).

    Many companies are now working with a distributed workforce. Supposedly 2/3 of the global workforce now spends at least one day of the week working remotely. I almost never work from home, but I do get how this is possible.

    So what is happening is that engineering talent is spilling over into secondary markets out of necessity. There’s an economic imperative to colonize. But I would imagine that, at least initially, most of the economic benefits accrue to the colonizer.

    Photo by NASA on Unsplash

  • Pritzker Prize-winning architect Kazuyo Sejima designs Japanese commuter train

    In commemoration of the company’s 100th anniversary, Japanese rail operator, Seibu, recently unveiled a new commuter train designed by Pritzker Prize-winning architect Kazuyo Sejima. Sejima is a founding partner in the Tokyo-based firm SANAA, which has started branching out beyond buildings. She recently designed a neat and multi-functional bag for Prada.

    One of the key features of the “Laview” commuter train is its unusually large 1.35m x 1.58m windows. They’re designed to maximize views, as this particular route travels from the city and into the mountains. It’s a simple design move, but it’s one I have never seen before. The overall result is quite beautiful and it goes to show you just how much the Japanese value train travel.

    Images: Dezeen

  • Art vs. transit

    This September 25, 2019, the Bronx Museum of the Arts will be opening up a new exhibition called, Henry Chalfant: Art vs. Transit, 1977-1987. Henry is a renowned photographer who is most known for his work on graffiti, breakdance, and overall street culture. This exhibition is about all of this, but there’s a particular focus on the subway car art that was once ubiquitous in New York City.

    There’s also a Kickstarter campaign if you’d like to support this exhibition. What struck me as I watched the campaign video, was that the “urban street culture” of this era doesn’t seem to exist in quite the same way today (or maybe I’m missing it). In the video, Henry talks about things like the birth of hip hop, which he documented outside, on the street.

    We shouldn’t forget that New York was also a scary place at this time. Removing the subway art that Henry fastidiously documented was one of the ways in which the city is thought to have broken its patterns of crime. But at the same time, there’s something really special about new ideas forming out in the public realm.

    It’s also a uniquely urban phenomenon.

  • Boom babies (of China)

    A few years ago I wrote a post talking about “depression babies.” In it, I cited a research paper that looked at the impact of macroeconomic shocks on people’s willingness to take on financial risk in the future. The term “depression babies” stems from the Great Depression and how it is believed to have impacted risk taking, savings rates, and probably many other things.

    I was reminded of this when I read this recent article in the WSJ talking about how the Chinese have started spending — and taking on the debt — like Americans, particularly among Chinese under 30. It is the inverse of the depression baby phenomenon. In this case, it is arguably years of economic expansion leading to greater comfort around financial risk.

    Here are a couple of figures from the article:

    JPMorgan estimates China’s ratio of household debt to gross domestic product will climb to 61% by 2020. That’s up from 26% in 2010 and higher than current levels in Italy and Greece.

    The level in the U.S. is about 76%, after falling from 98% in 2006, according to the International Monetary Fund.

    By another measure—the ratio of household debt to disposable income—China appears to have already surpassed the U.S. Its ratio reached 117.2% in 2018, up from 42.7% in 2008, according to calculations by Lei Ning, a researcher at the Institute for Advanced Research at Shanghai University of Finance and Economics. The U.S. peaked at 135% in 2007 and dropped to 101% in 2018.

    Not surprisingly, the article goes on to talk about how this dramatic increase in household debt might be something to worry about. Maybe. I’m not an economist. But I do think this is designed to boost the Chinese growth machine and I do think it makes them less reliant on other countries — such as, maybe, the United States.