Brandon Donnelly

I’m trying to understand the new deal that was negotiated for the opening of the Gordie Howe International Bridge (scheduled for July 27, 2026) between Windsor and Detroit. The headlines read: “Tolls won’t be split with the US until the $6.4 billion of debt is repaid. Net revenues will be split with the US for 15 years.”

As I understand it, the nuance is that the gross toll revenue won’t be split, but the net proceeds — after expenses like debt service, I hope — will be, for 15 years. This is different from the original deal, which had Canada keeping 100% of everything until it had paid off its $6.4 billion debt balance. Importantly, Canada also had complete authority over toll governance.

This is objectively a worse deal for Canada and we were bullied into it at the last minute with a classic geopolitical re-trade. But how much worse is it?

The public messaging is that net profits will likely be close to zero, and maybe even negative, in the early years of operations. So it’s not inconceivable that no payments will be made to the US’s local economic development fund until later years. If this is the case, the impact on Canada’s net present value might be negligible. I haven’t seen any of the math, but it’s possible this was a small price to pay to get the bridge open.

From what I can glean, the most damaging aspects of this re-trade are the following: first, Canada lost sole authority to set its own tolls and govern the bridge — a bridge that we paid for in full! And second, it demonstrates that, at the present time, the US cannot be trusted to honour its agreements.

Re-trading, of course, happens all the time in politics and business, and the real estate industry is no different. But I would say that there’s a difference between a bad-faith re-trade and a legitimate risk adjustment. Sometimes new information is discovered or the market changes in the middle of a deal, and one party needs a deal adjustment to be able to proceed.

At the same time, there are also bad-faith re-trades where one party simply wants to apply any leverage it may have, be a bully, and capitalize on deal fatigue. “Ugh, let’s just get this open!” This is a short-sighted practice because it immediately destroys trust and damages your reputation. It may leave you better off on this one deal, but it makes the next ones that much harder.

Cover photo by Brad Switzer

During development downturns, at least two things tend to be true.

One, land on the periphery tends to get hit first and recover last. It’s a kind of “last in, first out” principle. During a market expansion, core areas become expensive first, and then demand “spills over” to the periphery in search of opportunity.

These areas are, therefore, last (or later) to appreciate and first to fall when the market turns. This also means that they’re last to rebound when the market recovers because, generally speaking, demand will start in the core and then move outward.

And two, execution becomes critical. If you don’t get your product offering right and execute well, you can’t rely on the tide of the market to carry you. We’re seeing exactly this today.

It is, as we talk about on this blog, extremely difficult to make new projects work in the current market environment, and so few developers are launching and breaking ground, and many projects are getting cancelled.

But it’s worth pointing out that there are still some projects moving forward, and that’s because they got their product offering right and they executed well. And maybe they leveraged public grants or incentives to help tip the scales of feasibility.

Cover photo by Ali Köse

This has happened to us on more than a few occasions this year. Development sites that we offered on years ago have come back around to us at significantly lower prices. The obvious first thought is, “Shit, good thing we didn’t buy!” At the same time, there’s a reason we didn’t. Typically, it’s because we were trying to make the deal work with a delayed close upon construction commencement, a VTB, or some other form of structure. We didn’t budge on what we needed, and so we didn’t get to a deal.

When a deal does come back around, it’s interesting to revisit our original pro forma assumptions to see how we did and how our thinking may have evolved. In today’s market, it’s not uncommon for our base rental rates to be even lower than what we were assuming a few years ago. Are we now at the bottom? Only time will tell.

The paradox of today’s market is that land prices are the lowest they have been since I started in development, but it’s exceptionally difficult to make new projects work. Of course, as soon as it becomes easier to make projects work, land prices will once again reflect that. So if you are looking for opportunities, today’s market is about finding ways to capitalize on cheaper land while protecting for the risks inherent in the current market.

In other words, you need to be a contrarian. And as we know, if you’re a contrarian and you’re right, there’s a huge upside. But if you’re a contrarian and you get it wrong, well, then at least you went for it! The ideal scenario is that you simply get the timing right, but that involves luck. The things you can directly control are looking at a lot of opportunities, being disciplined in your underwriting, manufacturing structures that reduce risk, and generally being creative.

Cover photo by Teuku Fadhil

Since about the mid-2000s, planning policies in the Greater Toronto and Hamilton Area have favoured higher-density development in already built-up areas, instead of on greenfield lands. The objective was to curb urban sprawl, use our already developed lands more efficiently, minimize our environmental footprint, and encourage a built form that is conducive to non-car forms of mobility.

As an urbanist and promoter of walkable, transit-oriented communities, I applaud this approach. Toronto is far from full. But I also recognize that this has restricted housing supply and shifted the market toward housing types that cost more to deliver for homebuyers and tenants. Reinforced-concrete buildings are more expensive to construct than wood-framed houses in the suburbs. The most affordable housing markets tend to have highly elastic supply.

A recent report by Frank Clayton for the C.D. Howe Institute agrees. Planning policies in the Greater Toronto and Hamilton Area have become disconnected from consumer preferences, limiting the kind of housing supply that people want the most: grade-related housing. The proposed solution is to increase the supply of serviced greenfield land, reduce the barriers to development, and diversify the housing types built in our traditional suburban subdivisions.

I think this is an important topic, and I have two immediate thoughts.

Firstly, is it really true that Canadians and residents in the GTHA have an overwhelming preference for grade-related housing? The 50 people who responded to my Twitter poll seem to generally think so, but as I have argued many times before on this blog, I think it’s hard to know exactly right now. There could be a large segment of households who might prefer to live in a mid-rise courtyard building with a large private green space in the middle and lots of ground-floor amenities. Until this becomes an available housing option, we won’t really know.

Secondly, unlocking additional greenfield land does very little to change the market forces playing out within our existing urban areas. The Toronto CMA lost about 77,500 people last year to domestic outmigration, presumably because they found greater economic opportunity and/or more affordable housing elsewhere. At the same time, 92% of the housing starts in the City of Toronto in 2025 were apartments. This is not because we’re holding back greenfield land within the city proper boundaries, it’s because intensification is the only option left.

The broader CMA is a different story. Only about a third of its land area is physically urbanized. The remaining two-thirds is heavily restricted by environmental protections, which is precisely where Clayton sees opportunity for more grade-related housing. “Housing policy cannot succeed if it ignores consumer demand,” says Clayton. “Canadians continue to aspire to ground-related homes. Planning for the housing people want, rather than simply counting units, is key to restoring affordability.”

I’m all for giving housing consumers as much choice as possible. Not everyone would prefer a Parisian apartment to a house in the suburbs (which is what the algorithms will tell you about me). But let’s not forget that we have yet to solve this problem: How do we create attainable family-friendly housing at scale in our existing urban areas and reorient the city toward a post-car future? Toronto is now an apartment city and this is only going to become even truer, regardless of what happens on the periphery.

Change is starting to happen with our new major street and multiplex policies, which can be a form of grade-related housing. This typology is just denser, often has no parking, and is delivered in an urban, transit-supportive format rather than a car-dependent subdivision. To argue that “planning policies have missed the mark” is not wrong, but we’ve also been missing the mark by not building enough of what people may want within our urban areas.

Cover photo by Dillon Kydd

July 13, 2026 · View original

Real estate development is cyclical. Supply adjusts slowly to demand, and so it’s common for developers to get ahead of their skis and build too much space. This is what happened in the 1980s when American developers built more office space than in all previous years of the republic’s history (yes, it’s true), and then nationwide vacancy rates went from 4.6% to 16.9%. And it’s what happened following the dot-com crash when office vacancy in Silicon Valley went from almost 0% to over 20%.

Today, things feel kind of similar.

According to Cushman & Wakefield, nearly 37% of the office space in downtown Seattle is now vacant. Since 2020, it is estimated that these office properties have in aggregate lost about $15 billion, or almost half, of their value. This has people repeating the regular refrain that “this time is different” and that “the office market may never come back.” And indeed, the commonly held belief is that this time isn’t just cyclical, it’s also structural. How and where we work has changed.

But unless you believe that offices as a spatial construct will fully cease to exist at some indeterminate point in the future, then the reality is that the demand curve has simply shifted. We may not need office space in quite the same way, but we will still need some office space. This means that, at some point, we will find a new supply-and-demand equilibrium and, at some point, developers will get back to building, and overbuilding, office buildings. It’s just impossible to determine when that might be.

Cover photo by Zhifei Zhou

July 11, 2026 · View original

Periodically, Twitter will surface posts for me that bemoan modern architecture and advocate for good old-fashioned traditional architecture. Sometimes these posts will share a modern building with a disparaging comment like, “Imagine wanting this over traditional architecture,” and sometimes I will engage because, yeah, I would prefer the modernist building to traditional architecture.

But let’s be clear: I don’t have an issue with traditional architecture done well, and there are also countless examples of “modern” architecture that I think are truly abysmal. This is not about architectural tribalism. I love Paris and think it is beautiful, but I also think Brazil’s equatorial brutalism is equally beautiful. Both feel authentic.

Here’s how I would describe my position.

First, focusing on one style or another is not the goal. Many contemporary architects think of “style” as a bad word. It implies a superficial veneer. Great architecture aims to be something deeper and more intentional. It solves problems, responds to specific conditions, and also presents new ideas.

Second, the beauty of art, architecture, and design is that they are never created in a vacuum. They always reflect the current cultural environment. The challenge I have with traditional architecture is that I find it curious to try to speak to a moment in time that no longer exists. I am much more interested in authenticity and what the future might bring.

And third, movements take time. It’s easy to romanticize the past as being better than our current environment. Whether we’re talking about Impressionist painters or architecture free of ornament (in the case of modernism), it is intellectually easier to think the old ways were better. But history has shown us that posterity will almost certainly come to see things differently.

Cover photo by laura adai