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.

  • New Slate website

    Earlier this week, we (Slate Asset Management) launched our new website. You can check it out at slateam.com. It’s now much clearer who we are and what we do. (There’s also a neat drone video of the Toronto skyline.) 

    On the landing page and in the very first tab (What We Do) it shows our different business lines: Private Equity, Institutional Separate Accounts, and Public. This is all about matching the right capital to the right real estate.

    Lots of people in our office worked very hard on this website and so I’m excited to share it on the blog. Let me know what you think in the comment section below. You can also subscribe to the Slate newsletter here and follow on Twitter here.

  • The U.S. cities that gained the most workers over the last 12 months

    One of the great things about social media is that it gives us access to data that previously didn’t exist or was difficult to collect.

    Take, for example, LinkedIn’s monthly report on employment trends called the Workforce Report. They look at which industries are hiring, where people are moving for jobs, and so on. Click here for the June 2017 edition. 

    Note that architecture/engineering hiring appears to be up nationally, which is usually a positive leading indicator.

    I’ll leave you all to go through the report, but I did want to pull out a few of their maps and one of their takeaways. Below are maps of the cities that lost the most workers and gained the most workers over the last 12 months.

    The established trend of people moving from colder northern cities to warmer amenity-rich cities seem to play out here.

    That said, one of their “key insights” is that fewer workers today are moving to the San Francisco Bay Area. Since February 2017, there has been a 17% decline in the net number of workers.

    They blame housing affordability (ahem, lack of supply). People are simply turning to other great cities like Seattle, Portland, Denver, and Austin. They’re growing and cheaper.

    One of the other cool things about the report is that you can drill down into individual cities to see where people are moving from. I looked up Miami and Chicago just to do a quick comparison. 

    Not surprisingly, Miami is seeing a significant contingent from South America. What’s interesting about this random comparison is how international Miami is and how regional Chicago is in terms of their draws.

    I would love to see similar data for Canada. This is valuable stuff.

  • The death of Big Oil

    Designing a building for 5+ years into the future can be tricky. The pace of change in the world today is astounding.

    Last month Seth Miller published a Medium article called: This is how Big Oil will die. His argument is that the cost of running an electric self-driving vehicle will be so low – simpler technology and no labor cost – that the personal vehicle as we know it will come to an end. People are inevitably going to give up their cars, which will result in a peaking of oil consumption.

    We’ve talked about this future many times before on the blog. But Miller’s argument ties it back to oil and also comes with a set of predictions taken from a report prepared by the consulting company RethinkX:

    – Self-driving cars will launch around 2021.
    – A private ride will be priced at 16¢ per mile, falling to 10¢ over time.
    – A shared ride will be priced at 5¢ per mile, falling to 3¢ over time.
    – By 2022, oil use will have peaked.
    – By 2023, used car prices will crash as people give up their vehicles. New car sales for individuals will drop to nearly zero.
    – By 2030, gasoline use for cars will have dropped to near zero, and total crude oil use will have dropped by 30% compared to today.

    If all of these predictions prove to be true, then what should we be doing today to prepare our cities for this future?

  • Lessons in transit success

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    Dylan Reid of Spacing was recently at the International Transport Forum in Leipzig, Germany and has been publishing some interesting posts related to transit. Here is one about what makes transit systems succeed and fail.

    I really like the point that we too often think about transit projects as culminating with a big opening, while overlooking the importance of operations. It’s a bit like focusing on the wedding ceremony and forgetting that the ceremony is only really there to (hopefully) mark the beginning of a lifelong union.

    One of the reasons why this is important is because, as Reid points out, “fares need to provide a strong and consistent proportion of the agency’s funding.” So you need bums in seats, which means you need to build the right transit in the right locations. In other words, a new subway line through a low density suburb will probably result in an abysmal farebox recovery ratio.

    At the same time:

    “…fares will rarely cover all of an agency’s costs. Hong Kong’s Kam noted that, to be truly autonomous, an operator needs an additional dedicated, independent source of revenue. This cannot be based on additional transit-related non-fare revenue (e.g. advertising) – such revenue is helpful but never significant. It needs to be an external source. In Hong Kong, it is based on the agency’s extensive property ownership, but in other cities it could be a congestion charge, a dedicated sales or income tax, or other mechanism. Only with such a source can the agency have the independence to make its own choices for reinvestment and improvements.”

    This is one of the reasons why I am such a strong supporter of road pricing.

    Another point that Reid makes is that transit agencies should always have a consistent pipeline of new projects, rather than erratic periods of expansion. This makes a lot of sense given what it takes to ramp up for a large infrastructure project. But it’s obviously contingent on having sustainable funding sources.

    Click here if you’d like to read the rest of Dylan Reid’s post.

  • MOMO TOKYO

    Last summer, photographer Parker Woods spent two weeks walking over 100 miles in Tokyo with a peach-colored (”momo” in Japanese) backdrop and a metal c-stand. He used this accessory to “contextualize his first encounter with Japanese culture.”

    In some cases, it functions as you would expect: as a backdrop for the new people that he encountered along his walking journey. 

    But in other cases, the backdrop is simply inserted into the urban environment. Sometimes rolled up amongst a pile of metal tubes. And sometimes fully erected in the middle of a busy road.

    This is an interesting photography project based in one of my favorite cities in the world, and so I wanted to share it on the blog. All of his photos were shot on Kodak film. It’s also giving me some ideas for my own photos.

    If you’d like to buy a copy of the book ($40), you can do that here. There’s a limited run of only 250 copies. If you’d like to read a bit more about the project (and see a few additional photos), you can do that here on VSCO.

    Image: Parker Woods

  • The geography of superstars

    We often talk about superstar cities such as New York, London and, in the case of tech, San Francisco. But what about the superstar people that drive these economies?

    Aaron Renn recently wrote a post called “The Superstar Gap”, where he argues that the interior of the U.S. is suffering from a big handicap because of its lack of superstars. Chicago is one example he gives. Very good, but not the best.

    He also cites a 2010 analysis by Carl Wohlt that shows the “100 Most Creative People in Business” predominately living in the West and Northeast, compared to the Midwest and South.

    This is interesting because – if we assume this gap to be true – it gets me thinking about a number of important questions:

    • Is it that the interior isn’t effectively fostering superstar talent?
    • How much superstar talent is actually latent and untapped?
    • Is it that superstar talent is getting sucked into a select few superstar cities, away from other places? Definitely happening.
    • How many superstar cities (filled with superstar people) can sustainably exist in today’s world?

    Now by definition, superstar talent is going to be a smaller segment of the population – it’s one tail of the bell curve. 

    But I do think we should be careful not to assume that the raw talent doesn’t exist in certain cities. People and place are linked, and superstar cities are arguably just empowering new forms of individual superstardom.

    If we are to use successful startups as one measure of superstardom, it’s important to keep in mind that they are incredibly fragile in their nascent stages. The right people need to come together. The right funding has to fall into place. And the list goes on. 

    Below is an excerpt from a 2006 essay by Paul Graham (Y Combinator) called, Want to start a startup?

    Successful startups are almost never started by one person. Usually they begin with a conversation in which someone mentions that something would be a good idea for a company, and his friend says, “Yeah, that is a good idea, let’s try it.” If you’re missing that second person who says “let’s try it,” the startup never happens.

    That someone might have been a superstar.

  • The gentrification cycle — is it a natural outcome?

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    Here is the stereotypical gentrification narrative: Rundown neighborhood sees artists (or other cool gentrification catalyst) move in. Area becomes cooler. Other people start to move in. Developers start building. People start to complain about gentrification.

    I don’t mean for this to be pejorative in any way. I was just trying to be matter-of-fact about it.

    When I wrote yesterday’s post about the Drake Commissary and the changes that have and will continue to happen in West Queen West and in the Junction Triangle, I knew in my mind that people would be thinking about gentrification. 

    Sterling Road is home to many artists and creatives. What will happen to them as the area develops? I am sympathetic to concerns around displacement. We’ve also seen what can happen to a neighborhood when even the big brands and big money decide to leave.

    But let’s dig into this narrative a bit more.

    Virtually every private sector building ever built was done with a profit motivation behind it. When that old abandoned brick-and-beam warehouse was built, it made economic sense to do so – or at least somebody believed that to be the case.

    In many/most cases this ends up being true. So when the building eventually loses its utility, it is because something has changed in the world. Manufacturing has gone offshore. People are now shopping online. The city has gone bankrupt. Tastes have changed and nobody wants to lease the building. The list goes on.

    When groups rediscover and repurpose these spaces they are effectively kick-starting a new lifecycle for the building. And under the right circumstances, a new cycle for the neighborhood. These are the artists, the nightclubs (see Berlin club scene), the brewers, and so on. This is a hugely valuable phenomenon for cities because fresh ideas often require cheap space.

    Of course, it may also be the case that the buildings aren’t empty. But new energy is still introduced to the neighborhood and things start to visibly change. 

    Where I think many people take issue is when these early adopters and pioneers ultimately get displaced because of their own actions. They are the ones who made the area desirable again and there’s a sense of ownership: “Hey, I was here first.” I get that. 

    But what we often forget is that what is old was once new. Some developer presumably made money building that abandoned building and many people came before us to lay claim to its spaces. 

    The fact of the matter is that neighborhoods and cities naturally go through cycles. They also ideally grow. That’s why I like when people talk about cities as organisms with metabolic rates. Change is a constant, even if it may not seem that way.

    Take, for instance, the suburban neighborhood where I grew up. We moved in when it was basically a new subdivision and so the area was filled with young families. I had lots of kids my own age to play with. It was loads of fun. The streets were always filled with kids.

    But we’ve all grown up and most of us have moved on, meaning the neighborhood no longer has the same character, despite the fact that the built form has basically remained the same. When I go back to the area, I no longer see any kids playing in the streets. But that’s not to say it won’t happen again.

    This is a subtle example of one of the ways in which neighborhoods go through cycles – this one being a demographic one. Though it can obviously happen through more dramatic changes, such as new development or the abandonment and repurposing of older buildings.

    So if we are to assume that these sorts of natural cycles and changes are happening all around us, here are my honest questions. 

    Can and should gentrification (i.e. investment) be stopped? If so, are we saying that neighborhood cycles should be halted at one precise point in time, perhaps after the early-adopters take root? Or should we try and temper the pace of change? Is it simply a case of too much of a good thing?

    Let me give another example.

    I live in a condo building that is less than 5 years old. It’s 33 storeys, which is one of the higher buildings in the area. I’m sure it was contentious when it was initially proposed.  

    There are people who live and own in my building who today have real concerns about the other developments proposed and underway in the neighborhood. They worry that it will negatively impact the neighborhood, traffic, their views, and so on. But how does that work?

    To me, this is selfish. Because this is not a case of investment with displacement. And less than 5 years ago – before my building was built and occupied – we were the outsiders. I was the guy that current residents were worried about. Who am I to now turn around and say that nobody else is welcome now that I’m here?

    I say all of this not because I profess to have all of the answers. But because these are hot button issues and I think we’d be well-served by more precision in our discussions. Cities change and grow. That’s what makes them incredible and resilient places. Stasis is not an option. 

    So how should we ride the growth and the cycles?

  • Bakery, bar, larder: Drake Commissary opens in the Junction Triangle

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    Tonight was the opening party of the new Drake Commissary in the quickly emerging Junction Triangle neighborhood of Toronto. It officially opens on June 12th (2017).

    The concept is a “gastronomic town square.” It’s a bakery. A bar. And a larder. You can get fresh breads, pastas, charcuterie and pantry items, and you can consume them on the spot or take them home.

    The space (see above) was designed by + tongtong. Not surprisingly, it’s beautiful. It also very clearly blurs the boundaries between guests and the bakers and chefs.

    From a city building standpoint, it’s interesting to consider what all of this means for Sterling Road (where the Commissary is located).

    The original Drake Hotel was and continues to be a powerful cultural anchor in the West Queen West neighborhood. In fact, it’s my belief that the Drake was the most important catalyst for what eventually emerged along that strip. 

    So I can’t help but think that we are about to witness a very similar transformation in the Junction.

  • The top 10 most suburban cities in America

    According to NewGeography, ~85% of the population in the 53 major metropolitan areas in the U.S. lives in the suburbs or the exurbs. (Data from 2011-2015.) And according to some definitions, a number of these cities could be classified as being 100% suburban.

    NewGeography recently looked at America’s most suburbanized cities using the “City Sector Model” of classification. Here’s generally how it works:

    1. Urban core-CBD: Employment density > 19,999 people per square mile
    2. Urban core-inner ring: Population density > 7,499 per square mile and > 19.9% transit/walk/bike modal split
    3. Earlier suburb: Not urban core or exurb, and median year house built before 1980
    4. Later suburb: Not urban core or exurb, and median year house built after 1979
    5. Exurb: Outside of 2010 principal urban area or under 250 people per square mile 

    Based on the above criteria, here are the top 10 most suburban cities in America:

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    All of these cities have virtually no urban core. To break the 10 way tie, they were simply sorted based on the size of their exurban population. To see all 53 metropolitan areas, click here.

  • Internet Trends 2017

    Mary Meeker – who is a partner in the VC firm Kleiner Perkins – just recently released her annual Internet Trends report. 

    I’ve pasted the table of contents above so you can quickly decide if you’d like to spend your time going through it. The entire report is over 350 slides.

    If you can’t see the embedded slideshow below or if you’d like to access the reports from previous years, click here.

    [slideshare id=KGiWuuYFlhbQBC&w=595&h=485&fb=0&mw=0&mh=0&style=border:1px solid #CCC; border-width:1px; margin-bottom:5px; max-width: 100%;&sc=no]