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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  • Hello Boston

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    I arrived in Boston early this morning. It has been about a decade since I was last here.

    I took the subway in from the airport, which is typically what I like to do when I visit a city. It’s such a great way to get a feel for a place. And in the case of Boston, Logan Airport is only a few stops away from downtown.

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    As soon as I got in, I walked over to see the Rose Fitzgerald Kennedy Greenway (above image). It’s a linear park that was made possible by burying the city’s elevated waterfront expressway – the infamous “Big Dig.”

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    I recognize that it was a lavishly expense infrastructure project that went many times over budget, but walking across the greenway to get to the water was rather pleasant. Will Toronto’s The Bentway achieve a similar result at a fraction of the cost?

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    With that out of the way, I went for a lobster roll. It had to happen. I then walked around Faneuil Hall and Quincy Market (above image). It felt a bit touristy, but what a remarkable pedestrian-only area. 

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    And now I’m on a boat heading over to Provincetown (Cape Cod) for a wedding. I’m writing this blog post over a spotty wifi connection, so out of fear that I may spontaneously lose it, I am going to end here. See you all tomorrow.

  • What system of measurement do you think in?

    A couple of years ago, an architect friend of mine from Chicago (who was in town for work) told me that when it comes to units of measurement the building industry in Toronto is schizophrenic. She basically said, sometimes you use the international system (metres) and sometimes you use customary units (feet).

    And this is absolutely the truth. We are constantly switching back and forth between the two. The drawings that go into the city are in metres and millimetres, but the drawings that get shown to prospective renters and buyers are in feet and inches. We’ll say that the Tall Building Design Guidelines stipulate that towers should be 25 metres apart, but then in the next sentence say that we’re going to need a 24 inch transfer slab. 

    This kind of measurement bilingualism is so common that I bet some of you have cheat sheets with common conversion factors posted up at your desk. It probably includes things like: 1 square metre = 10.76 square feet.

    Over the years though, I have found myself naturally drifting more and more towards metres and millimetres. So much so that when people throw out inches in a meeting, I’ll now sometimes ask them what it is in millimetres: “Wait, how thick does the slab need to be?” A lot of this has to do with the fact that all city planning documents are in metres. So it’s simply more efficient to stick with one system of measurement and avoid constantly converting back and forth.

    That said, there are still lots of people who prefer feet and inches (particularly in my industry) and many instances where I default to thinking in customary units. I’m 6 foot 3, not 1905 mm. But, I am ready to go all in with the international system. I think it would make life simpler and more efficient. After all, it is called the international system.

    What system of measurement do you think in?

  • Climate change gridlock

    I spent this morning reading an article called: How climate change is rapidly taking the planet apart. Here is an excerpt from the introduction: 

    “According to Naomi Oreskes, a great number of climate change scientists (she interviewed most of the top 200 climate change scientists in the US) suffer from some sort of mood imbalance or mild or serious depression. It is easy to understand why: we see the climate change taking the planet apart right in front of our eyes. We also clearly see, right in front of us, what urgently needs to done to stave off global disaster on an unprecedented scale. We need carbon taxes and the reconversion of industry and energy towards zero CO2 emissions systems. This route is without any doubt technically and economically feasible, but politically it seems to be permanently locked. If we do not unlock it, the future looks bleak, not to say hopeless, for humankind.”

    It’s clearly not a positive article. But it is an important read. We know we need to immediately and drastically reduce CO2 emissions (for all the reasons explained in the article), but we simply aren’t doing that.

    Part of the problem, I think, is that it’s easy to lull ourselves into complacency. We read about it and we notice the erratic weather patterns, but for the most part the status quo isn’t all that bad for most of us. Life just goes on.

    There’s evidence that revenue-neutral carbon pricing could actually increase productivity levels. It would force innovation. But it doesn’t yet appear to be 10x better than what we have today – which is often what you need to get people to accept change.

    So instead we hold largely ineffectual climate change conferences, which allow us to tell ourselves that we are, in fact, doing something. But I don’t think we’re being bold enough. And that’s too bad.

  • Monocle’s Top 25 Liveable Cities — 2016 Edition

    Monocle’s annual survey of the top 25 most liveable cities in the world was just released. It’s now in its 10th year. I found it in my inbox this morning and it was a good reminder that it was about time I renewed my subscription. I’ve been a regular reader of Monocle since 2007, but I let my membership lapse last year.

    Of course, any sort of list like this is going to be subjective. It all depends on the methodology you use. Still, their annual survey is an interesting way to see what each city is up to and where the tides are going. This year Monocle put extra weighting on each city’s nightlife. If you’re not a subscriber, here’s a short video you can watch. It will give you a rundown of all the cities. (I was happy to see Montréal creep onto the list. Incredible city.)

    This focus on the night is something that I’ve been writing about a lot both on this blog and elsewhere. It’s an idea that’s picking up momentum around the world as an economic development strategy. But for whatever reason, uptake seems to be slower here in North America.

    I like how architect Anna Dietzsch puts it in this video. She says that Rio may have the beaches, but Sao Paulo (where she’s based) has the night. That’s exactly how cities should be thinking about this opportunity. It used to be that cities thrived almost entirely because of location, waterways, transport, and other natural features (example: Buffalo). But increasingly, it’s becoming about things like nightlife.

    Vancouver may have the mountains, but Toronto has…

    Image: Monocle

  • Going swimming (and being transparent)

    I woke up this morning to this view:

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    I then went for a swim. The water tends to be on the cooler side in the Georgian Bay, but with the weather we’ve been having it’s pretty perfect right now.

    At this point I’m thinking about a beer and some reading. I have Capital in the Twenty-First Century by Thomas Piketty sitting in my car. It’s next in the queue.

    I am telling you all of this simply to be transparent. 

    Recently I had someone caution me that I should be careful about being too public and too open. I won’t get into specifics, but I was told that sometimes it’s better to just fly under the radar.

    I recognize that there have to be limits to transparency, but as a rule of thumb I subscribe to the opposite approach. When possible and when appropriate, I would rather be more, rather than less, transparent. 

    This blog is who I am. It’s indicative of how I think. And it discloses what I’m doing. So I don’t see a lot of downside. What you read is what you get. You’ll know if we should be friends and/or do business together.

    After I wrote about what I’m doing next I had a bunch of emails come in from various people telling me what they’re doing and, in some cases, suggesting that we work together. Some people had development sites that they thought I should take a look at. And some people immediately asked if I was hiring.

    I am grateful for each of those emails. But I also know that they’re an outcome of openness and transparency.

  • How will self-driving vehicles change our cities and our habits?

    Last night
    I had a dream that I was driving around in a snowstorm and, for whatever
    reason, my tires had almost no tread on them. So I was all over the road.
    Strange. I have no idea what this means, if anything at all.

    But it did
    remind me that I can absolutely imagine a time when the thought of driving your
    own car (outside of it being maybe a hobby) will seem positively archaic. I
    mean, think about how messy our current system is. Roads are a chaotic and
    oftentimes dangerous place.

    The more
    interesting question for me though is: how will self-driving vehicles change
    our cities, our habits, and so on? In Elon Musk’s recently published Master
    Plan (Part Deux)     he outlines 4 main goals for Tesla:

    1. Create stunning solar roofs with
      seamlessly integrated battery storage
    2. Expand the electric vehicle product
      line to address all major segments
    3. Develop a self-driving capability
      that is 10X safer than manual via massive fleet learning
    4. Enable your car to make money for
      you when you aren’t using it

    Let’s think
    about what these could mean.

    One
    translates into decentralized energy generation and storage. Now all of a
    sudden the cars on our roads will be roaming around our cities collecting and
    storing energy, eventually returning home at the end of the day to power our homes.
    I can already imagine fleets of sun worshipping cars chasing the light as it
    moves across our cities.

    Two is recognition
    that self-driving vehicles are going to have a meaningful impact on traditional
    public transit. (Elon reveals that Tesla is working on high passenger-density
    urban transport.)

    Three
    addresses the chaotic current state and the massive potential of networked
    cars.

    Four is particularly
    interesting to me. I wonder to what extent this income will simply subsidize
    car ownership or if it could actually transform cars into an investment (rather
    than purely an expense). Will people end up buying self-driving vehicles in the
    same way that people buy real estate for yield?

    Furthermore,
    how does this notion of a shared vehicle pool now completely change the way we
    think about parking requirements. For instance, today we think about parking in
    terms of individual usage. This tenant requires/wants X amount of parking. All
    2-bedroom apartments require Y amount of parking.

    But if we’re
    now all sharing our vehicles, parking requirements would then be based on some
    broader and collective demand curve. Parking would become less individualistic
    and instead become more of a yard where self-driving vehicles come to store
    themselves when not in use.

    Once again,
    we reach a point where utilization rates go up for each vehicle and overall
    parking demand goes down. Good thing we’re getting rid of parking minimums.

    What else could
    you see happening?

  • The master plan

    I’m going through and dissecting Elon Musk’s second “Master Plan” this morning. 

    I love how he drops earth-shattering news in such a casual and honest way. Two days ago he tweeted that he was planning to pull an all-nighter to complete the “master product plan.” And then yesterday, he outlined his vision in a simple – and at times personal – blog post for how Tesla is going to change the world. It all feels very genuine.

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    There are so many interesting snippets from the master plan, that I’m simply going to quote them all here. There’s lots to think about and discuss.

    A reminder of the broader vision:

    The point of all this was, and remains, accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good. That’s what “sustainable” means. It’s not some silly, hippy thing – it matters for everyone.

    By definition, we must at some point achieve a sustainable energy economy or we will run out of fossil fuels to burn and civilization will collapse. Given that we must get off fossil fuels anyway and that virtually all scientists agree that dramatically increasing atmospheric and oceanic carbon levels is insane, the faster we achieve sustainability, the better.

    The solar roof and other electric vehicles that Tesla has in the pipeline:

    Create a smoothly integrated and beautiful solar-roof-with-battery product that just works, empowering the individual as their own utility, and then scale that throughout the world. One ordering experience, one installation, one service contact, one phone app.

    In addition to consumer vehicles, there are two other types of electric vehicle needed: heavy-duty trucks and high passenger-density urban transport. Both are in the early stages of development at Tesla and should be ready for unveiling next year.

    Thoughts on self-driving vehicles:

    Even once the software is highly refined and far better than the average human driver, there will still be a significant time gap, varying widely by jurisdiction, before true self-driving is approved by regulators. We expect that worldwide regulatory approval will require something on the order of 6 billion miles (10 billion km). Current fleet learning is happening at just over 3 million miles (5 million km) per day.

    The most important reason is that, when used correctly, it is already significantly safer than a person driving by themselves and it would therefore be morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability.

    Once we get to the point where Autopilot is approximately 10 times safer than the US vehicle average, the beta label will be removed.

    Why an even lower cost vehicle (compared to the Model 3) may never be necessary:

    You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost. This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla. Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not.

    And finally, Uber has a new competitor (that, to me, is a good thing):

    In cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are.

    I’ll provide my thoughts on all of the above in a subsequent post. I’m out of writing time for today.

  • Within-city house price gradients

    The Federal Housing Finance Agency recently published a working paper where they looked at within-city house price gradients for a selection of US cities over a 40 year period. The goal of the study was to address what they call a “persistent blind spot” in local house price measurements.

    Here is their diagram showing annual average real appreciation from 1990 to 2015 for 9 US cities: 

    The darker areas indicate more appreciation. They are generally clustered around each city’s CBD.

    And here is an excerpt from the paper’s conclusion:

    “In an area with a highly elastic housing supply, a permanent housing demand shock is first capitalized into prices, but over time as quantities adjust, prices return to pre-shock levels (see Glaeser, Gyourko, Morales,
    and Nathanson, 2014). In contrast, near the CBD, where buildable sites are less available and regulation is presumably more onerous, a permanent demand shock can outpace supply responses, leading to permanent price increases.”

    What stood out for me was this last sentence. It’s a reminder of the perfect storm that many cities now find themselves in.

    When everyone wanted to live in the suburbs, it was fairly easy to just build more homes. Supply was relatively elastic. And this kept prices in check.

    However, the same is not true for city centers. Supply is relatively inelastic, meaning it’s much harder to build more homes when demand increases. And demand has been increasing.

    So what we have today is a situation where many central cities are operating with basically a perpetual supply deficit. Hence the the comment about “permanent price increases.”

    I don’t want to oversimplify the situation, the potential solutions, and/or the well-documented mistakes, but there was arguably a middle class price benefit to mass produced sprawl.

    What should we be doing today to address housing affordability concerns?

  • What I’m doing next

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    A number of you have asked if I’m moving to New York. I can see why that was inferred from some of my posts, but that was actually not my intention. I am not moving to New York. (Sorry New York friends. I’ll visit soon.)

    Toronto is home base. I hope it’s clear how much I love this city. Sure, I’m a big fan of New York and Miami and Vancouver and Berlin and Tokyo and Jackson (to name some of the places I have on my phone’s weather app), but I made a deliberate choice to station myself here.

    Because unlike some of the other industries I write about on this blog, city building is hyper local. What I do involves the built environment. And that doesn’t generally happen via a laptop on a beach in Bali (at least not for extended periods of time).

    It happens by being on the ground, interfacing with local communities, meeting face-to-face with the city, and poring over drawings with smart people who know far more about their respective disciplines than I ever will. It is a collaborative and local effort. It’s about getting into the details.

    And so to be successful in this business, I think it helps to find a home and take long bets. I’m not saying that I will never work on projects in other cities (I have and I would), but I am saying that I’m not moving to New York right now and that home remains Toronto.

    On that note, here’s what I have to tell you. Later this year I’ll be joining Slate Asset Management as VP of Development.

    A bit about Slate:

    Slate is one of the most active acquirers, owners, and managers of real estate in Canada right now. Founded in 2005 by two brothers (Blair and Brady), Slate has over $3 billion of assets under management across over 16 million square feet and over 130 properties.

    All of this is done through four main investment vehicles: 

    1) The first is Slate Advisors. It acts on behalf of and alongside private institutional investors — such as Greystone.

    2) The second is Slate Office REIT (TSE:SOT.UN). It is a pure play Canadian office REIT focused on downtown and suburban properties all across the country.

    3) The third is Slate Retail REIT (TSX:SRT.U). It is a pure play REIT entirely focused on grocery-anchored U.S. retail properties. (Remember how many times I’ve written on this blog about how grocery has one of the lowest online shopping penetrations?)

    4) And the fourth: Slate is also starting a grocery-anchored retail platform in Germany. It is similar to #3, except that it’s in Germany.

    Most recently, Slate has been in the news because of the position it has taken at Yonge + St Clair in midtown Toronto — a perfect example of “finding a home and taking long bets.” Slate, in partnership with Greystone, owns all 4 corners of the intersection and about 60% of the properties along the St. Clair corridor.

    Here’s a diagram of those Slate buildings:

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    In case you didn’t put two and two together, the 8-storey mural I wrote about two weeks ago is going up (right now) on the side of a Slate building (1 St Clair Avenue West — shown above). The British street artist known as Phlegm is doing it.

    Up until today, the focus of Slate has largely been on acquiring undervalued / overlooked real estate and creating value through re-leasing and overall repositioning. That will certainly continue. But given what I do, I am sure you can posit what’s also next.

    I’m genuinely excited to be joining such a talented group of real estate professionals. As I mentioned last week, I wasn’t in the market for anything new. I was heads down working on cool projects. But life happens. And Slate quickly demonstrated to me that the incredible success they have seen to date is precisely because of how progressive, nimble, and entrepreneurial they are.

    On that note, I have “one more thing” to share today.

    In parallel to all of this, and with the support of Slate, I am also starting a boutique city building company called Globizen. The name is derived from Global + Citizen.

    The objective is to build a company that embodies everything I write about on this blog. I want it to be lifestyle and design-driven. I want it to leverage technology to improve the way that cities and the building industry operate. And I want it to function as a vertically integrated real state + design firm, focused on sustainable urban infill development. Think of it as city building by and for the responsible global citizen.

    It’s still early days, but the thinking is that this new platform could compliment the larger Slate platform in some way. It’s too early to say how exactly, but everyone is open to having those discussions. And that’s what matters at this stage.

    I am going to end with a quote. It’s by Partner and Co-Founder, Blair Welch:

    “On all of our deals we have had people say ‘can’t’ to us. They say ‘Can’t be done, can’t do that, can’t raise money, etcetera.’ At Slate, we don’t do ‘can’t’ well.”

    I like that a lot. So here’s to finding a home, taking long bets, and not saying can’t. Onward my friends. 

  • Urban pet peeve: copycatting

    One of my biggest pet peeves is when cities copy things from other cities. 

    Let me give you an example. Whenever I see one of those red double decker tourist buses roaming around Toronto, I always look to see if it’s the type that has London signage and destinations plastered all over it. And when it is, I cringe. (I saw one earlier today.)

    Why would anyone design a tourist bus that makes you feel like you’re half in another city? I don’t get it. The whole reason people are getting on that bus is because they’ve come to visit this city. It should make you feel like you’re here and nowhere else. It should feel locally authentic.

    To be clear, I’m not saying that we shouldn’t be learning from other cities and building on top of other’s great ideas. That’s precisely what we should all be doing. I’m talking about kitschy copies with little additional thought put into them. And I can think of many examples beyond just tourist buses.

    Am I just being pedantic?

    What about you? Any urban pet peeves?