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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  • Evolution of online marketplaces

    I have written a lot about Opendoor over the past few years because it is one of the most promising “proptech” startups in operation today and I am obviously very interested in the impact of tech on the real estate industry. 

    I also have a fascination with online marketplaces. From the Greek agora to today’s mobile apps, the exchange of goods and services is a fundamental human activity. Uber, Alibaba, Instacart, Airbnb, Amazon, and Kickstarter are all marketplaces. I think sometimes people forget that.

    Andrew Chen, who is a general partner with the venture firm Andreessen Horowitz, recently published an essay on the future of online marketplaces, where he argued that what’s next is a reinvention of the $10 trillion service economy.

    Andrew posits that the internet has brought about 4 eras of marketplaces. They are:

    1. The Listings Era (1990s)
    2. The Unbundled Craigslist Era (2000s)
    3. The “Uber for X” Era (2009-)
    4. The Managed Marketplace Era (Mid-2010s)

    The listing era birthed marketplaces that were essentially online versions of the things that already existed offline. Craigslist, for example, simply took the classified section and put it on the internet.

    Over time, these online marketplaces began to focus on specific verticals (the unbundling of Craiglist) and they started to introduce services and features that were native to the internet and later to mobile. Uber obviously only works when everyone has a smartphone.

    Today we are living in the era of what Andrew calls the managed marketplace. Opendoor – to get back to the first paragraph of this post – is a managed marketplace. Instead of just connecting homeowners with buyers, they take on specific steps of the value chain. They buy and fix up the homes themselves.

    So what’s next? 

    Supposedly it is regulated services (2018-?). As of 2015, it was estimated that about 26% of employed people in the US carried some sort of license. These are healthcare practitioners, architects, engineers, real estate agents, financial advisors, trades people, and so on.

    And the argument is that a lot of how we regulate services today is a result of us creating them before the internet. We needed licenses and certifications to signal to us who was qualified and who was not. But now we have technology to help us do that, which is why this could be the next great era of online marketplaces.

  • Project Profile: Hotel Emiliano, Rio de Janeiro

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    This is not exactly a new project. The hotel, pictured above, opened in 2016 and was the brand’s second location (their first opened in São Paulo in 2001). But I like the story and how it was executed.

    Hotel Emiliano is the work of husband and wife team Gustavo Filgueiras and Andrea Colli Filgueiras. He is a hotelier. And she is a jewelry designer. Both wanted to pay homage to the glory days of Rio’s Copacabana Beach.

    Designed by Arthus Casas and Chad Oppenheim – who, by the way, recently built himself a stunning home in the Bahamas – the 90-room hotel is clad in white shutters that can be used to modulate the Brazilian sun. 

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    On the roof is an infinity pool with a glazed side. Here is a screen grab from the hotel’s website:

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    And here is an aerial view of the pool taken from Dezeen:

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    The uniforms for the hotel were designed by Barbara Casasola and a custom jewelry collection was created by Andrea Colli. 

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    For more photos, check out Dezeen and Wallpaper.

    Architectural photography: Fernando Guerra

  • Rendering of block 8

    I really like what has been put forward for Block 8 in the newly developing West Don Lands neighborhood of Toronto. Here is a rendering looking east from the Distillery District toward the proposed westernmost tower:

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    It feels like an extension of the Distillery District, which was clearly the intent. The materiality also reminds me of Junction House. Red brick at the base to fit within its context, and a more modern material palette on the upper floors. 

    I also like how, in this instance, the building steps out on its south side, as opposed to in. It’s something different. Not every building has to look like a wedding cake, right?

    The architecture is by COBE Architects and architectsAlliance. The developers are Dream, Kilmer Group, and Tricon. And the plan is for 756 rental apartments, of which 225 will be affordable and integrated throughout the 3 towers. 

    For more information, check out Urban Toronto.

  • Man behind the map

    For those of you who are regular readers of this blog, you’ll know that I love to snowboard and that I leave Ontario every winter in search of fresh lines. It is an annual tradition that has been going on for over a decade.

    One of the things I wish I had been more diligent about is collecting all of the trail maps. I am sure I have a number of old ratty ones in some of my snowboard bags and snow pants, but none of them are probably worth keeping.

    That’s why I think this is a terrific Kickstarter campaign by James Niehues. Over the last 30 years, James has researched, photographed, and painted almost every ski map in use across North America. Yes, these maps are all painted by hand. 

    If you would like to back James’ project – a hardcover coffee table book of his work – you can do that here.

    https://www.kickstarter.com/projects/orsc/james-niehues-the-man-behind-the-map/widget/video.html

  • Increasing housing supply in Ontario

    The Government of Ontario is currently working on a Housing Supply Action Plan that they hope will address “the barriers getting in the way of new ownership and rental housing.”

    Through initial consultations, they have already identified 5 key themes (my words below):

    1. The approvals/entitlement process for new housing is too slow
    2. There are too many restrictions on what is allowed to be built (that is, we should be encouraging more “gentle density” and “missing middle” type infill)
    3. Development costs are too high
    4. Tenants need protection; regulation is making it increasingly difficult to be a small landlord
    5. Overall housing innovation

    The province is also looking for public input and is currently running this online survey. It is open until January 25, 2019. And I would encourage all of you to complete it and help shape the action plan.

    My understanding is that the plan should be ready by Q2-2019.

  • Embracing our cities

    This is a great TED talk by Edward Glaeser about why it is time to embrace our cities. If you can’t see it below, click here.

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

    The talk was filmed in 2012 – right around the time that Triumph of the City was released – but the video was published at the beginning of this year.

    It is also a good add-on to yesterday’s post about transportation costs and cities. I love how passionate Glaeser gets about these topics.

  • A decentralizing or centralizing force?

    I was on two panel discussions over the last week and, as is the case with all real estate panels, the topic of parking invariably came up, as did the impact of autonomous vehicles.

    There seems to be a general consensus that the advent of driverless cars will result in less demand for parking. Every developer I know is trying to build as little parking as possible and is thinking about how – when the time comes – they might convert their parking into something more productive. I have yet to speak to anyone who is building excess parking in order to prepare for autonomy.

    Where there’s a split, however, is whether autonomous vehicles will represent a decentralizing or a centralizing force for our cities. Historically, new technologies have lowered transportation costs and encouraged decentralization. Before the advent of rail, the US population hugged the coasts, because it was cheaper to navigate across the Atlantic than it was to move inland.

    A similar phenomenon also played out with our streetcar suburbs and with our car-oriented suburbs. These new technologies made it possible for people to travel further distances in order to get to work and other places. So it is not at all surprising that many people today are inferring that autonomous vehicles will produce this same outcome.

    But there is a counterargument. 

    We know that the demand for transportation services is highly elastic. Uber and other ride sharing apps have demonstrated this to us. Lower fares translate into dramatic increases in demand. So the opposing argument is that as the cost per kilometer drops – autonomous electric vehicles are going to be much more cost effective to operate – we’re going to see boatloads of induced demand.

    This induced demand will then force us to look toward road pricing and other demand management tools in order to cope, which then begs the question: How much cheaper and more convenient will autonomous vehicles really be? 

    At the same time, it is important to acknowledge that autonomous vehicles should correct many of the inefficiencies currently caused by humans acting like humans. There is also the opportunity to operate these autonomous vehicles more like public transit than as personal vehicles. And that will have a profound impact on urban mobility.

    Still, it is not yet clear, at least for me, that autonomous vehicles will be the decentralizing force that many assume they will be.

  • Forever mural now complete

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    Ben Johnston completed his “Forever” mural at Junction House last week. More photos on his Instagram.

    If you would like to see it in person (worth it), stop by 2720 Dundas Street West in Toronto’s Junction neighborhood. Here is a before photo of the wall (along with some directions).

    If any of you have any blank walls in need of art, I would encourage you to give Ben a shout. The wall certainly doesn’t need to be in Toronto.

    Thank you once again Ben. We really appreciate you collaborating with us.

    Image: Ben

  • The [Next] Pepsi Generation

    The product matters. How big is the screen on this smartphone? How many horses does this all-wheel drive car have? And how high are the ceilings in this condo? (Some architects get grumpy with me when I call buildings a “product.” It’s so much more than that, right?)

    But here is a good reminder from Zander Nethercutt via a post he did on Medium earlier this year: People Don’t Buy Products, They Buy Better Versions of Themselves.

    The example he gives is that of Pepsi. While damn near identical to Coke in terms of its chemical composition, Pepsi was struggling until it decided to try something new. They stopped focusing on the product itself and instead starting selling the type of person you would become, if you drank Pepsi.

    These people, and this campaign, became known as the Pepsi Generation.

    We have talked about this idea before on the blog and this approach to selling is now quite commonplace. But I like how Nethercutt distills it down: Desire translates into consumption. And I want to buy a better version of myself.

    I also buy his add-on argument that social media has amplified our awareness and desires around self, because today we are so often externalizing it to the world and being instantaneously judged on it. Like. No like.

    Am I the kind of person who eats here, stays there, and consumes this?

    Photo by Christina Boemio on Unsplash

  • The next 20 years

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    Above is a screenshot from a presentation about the future of tech that Benedict Evans gave last week at venture capital firm a16z’s annual conference. And below is a video of the talk. If you can’t see it, click here.

    [youtube https://www.youtube.com/watch?v=RF5VIwDYIJk&w=560&h=315]

    The talk is positioned as “the end of the beginning.” In other words, here is where the internet and smartphones have taken us, but that’s just the beginning. Quote: “We used to do apartment listings [online] and now Opendoor will buy your home.”

    It’s only 24 minutes and well worth a watch.