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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  • Studying to become a real estate developer

    Earlier this week I received a message from an undergraduate architecture student interested in moving into real estate development after school. That was his 10 year plan. And he had clearly read my blog post, “Transitioning from architecture to development.”

    In his message, he asked me if there were any books I would recommend he read to improve his real estate and finance knowledge, and, if I could have a “redo”, if I would still do a M.Arch (Master of Architecture) or just go straight to the MBA?

    After responding to his message, I thought: “This would make a good blog post, as well as an opportunity to talk about the current state of real estate education in Canada.” So here goes.

    If you’re looking for a good real estate book to get you started, I recommend checking out “Real Estate Finance and Investments: Risks and Opportunities" by Peter Linneman. It’s a much easier read and way more casual compared to most textbooks. When I was in grad school, people referred to this book as the "blue bible.” The cover on the previous edition was less purple and more blue. Unfortunately, he has also changed his glasses since the photo below.

    image

    To his second question, if I were to do it all over again, I wouldn’t change a thing about my education. I loved architecture school and combining it with business school classes and a real estate concentration was the best thing for me. I never wanted to be just a “numbers guy”, but I also never wanted to be a fanciful artist type who didn’t know how to build and manage a pro forma.

    Now, let’s talk about real estate education in Canada.

    I think we’re way behind. In the US, you can do a Master of Science in Real Estate Development, a Master of Real Estate Development, and all sorts of other real estate degrees. In Canada, you’re probably doing a MBA with a few elective real estate classes. Real estate is the largest asset class in the world. Does that not justify a dedicated degree?

    Part of the reason for this, I think, is because real estate development is still very much an entrepreneur’s business–though it has become more institutionalized in recent years. Because of this, people get into development from a variety of different professions. They just need that entrepreneurial hutzpah. And that’s all fine, but I still think that the profession, the economy and our cities would benefit from University trained developers.

    So if you’re reading this University of Toronto, I think–and I’ve thought this for awhile now–that The John H. Daniels Faculty of Architecture, Landscape and Design and The Rotman School of Management should get together and collectively form a real estate program. Who’s with me?

  • Location-based social network Foursquare is unbundling

    I’ve been a Foursquare user for a number of years now. I like seeing which friends are nearby and where I’ve been. I love the data aspect of it. It’s a kind of urban “spidey sense.”

    Sometimes when you “check-in”, the app will tell you the last time you were there (if it’s been awhile), how many consecutive weeks you’ve been there (which I like seeing when I check-in at the gym), and also give you any tips that others may have left about the place you’re at–such as, try the sea urchin ceviche.

    But Foursquare has been struggling. Check-ins proved to be a bit of a fad and Yelp solved the what-do-you-want-to-do-tonight problem better. However I’ve always felt that, on a fundamental level, Foursquare had the potential to be so much more powerful than Yelp. 

    Well, today the big news in the tech world is that Foursquare is unbundling its app. There will be Foursquare and there will be Swarm. Foursquare will be a recommendation engine that helps people find places to eat, drink, shop and so on (just like Yelp), and Swarm will be all about social–seeing where your friends are and which ones are nearby. And along with this unbundling, there will be no more check-ins:

    But how can Foursquare personalize its users’ results if they are no longer collecting check-ins, the foundation of Foursquare’s recommendation engine? Crowley smiles and says something a bit shocking. He no longer needs check-ins, the meat and potatoes of Foursquare’s entire business and data collection engine for the last five years.

    Not only has Foursquare collected 6 billion check-ins, he says, but it has collected five billion signals to help it map out over 60 million places around the world. Each place is a shape that looks like a hot zone of check-ins — of times when people have said “I’m here.” Foursquare’s “Pilgrim” location-guessing engine factors in everything from your GPS signal, to cell tower triangulation, to the number of bars you have, to the Wi-Fi networks, in order to create these virtual shapes.

    Now that it has this data, Foursquare can make a very accurate guess at where you are when you stop moving, even without a check-in, it’s a technology it hopes will allow it to keep its database of places fresh and accurate. Foursquare calls these implicit check-ins “p-check-ins,” or Neighborhood Sharing. Take your phone into four or five different Japanese restaurants over the course of six months and without a single check-in Foursquare will learn that you like Japanese food and start making recommendations for you based on that data.

    There will obviously be a number of people who have anxiety about an app that’s passively tracking everywhere they go and then trying to feed them recommendations (come eat here!), but I do think they’re on to something.

    The opportunity with Foursquare (and its data) is that the recommendations can be tailored. If I’m looking for a place to eat, Foursquare will already know that I love Mexican and that I just worked out (meaning I’m probably extra hungry). Personally, I’m okay with that.

    But then I start to wonder how this might impact cities. If the process of discovery becomes this automated and this tailored, how might it change the way we organize and design our cities?

  • Competition for young people under the age of 30 to reimagine public space in Toronto

    If you are under 30, you love Toronto and you care about public spaces in this city, I would encourage you to check out the NXT City Prize. It’s a public space competition being organized by a number of local organizations including Distl. (and my friend Mackenzie Keast), Loop, Gen Y, and the City of Toronto.

    Toronto needs great ideas for its public spaces. Ideas that are big, bold and unconventional. Ideas from champions, outsiders and geniuses. Ideas that recognize Toronto’s greatness–and its potential for the future.

    The competition opens today and anybody (under 30) can enter. The winner will receive $5,000 in cash, and then $10,000 to work on actually implementing the idea(s). What’s cool and unique about this competition is that it’s not just an ideas competition. It’s a competition based on doing and executing.

    Click here to download the competition brief.

  • $30 million class-action lawsuit against condo developer

    Last Sunday the Toronto Star ran this article talking about a $30 million class-action lawsuit against developer Elad Canada. The claim is that the developer failed to deliver on the promise of direct underground subway access from its project—Emerald City Condominiums—to the Don Mills subway station.

    The developer, however, doesn’t feel that they made such a representation:

    The lawyer for condo developer Elad disputes the claim saying, “there was never any representation that there would be underground access” from the condo building to the subway or directly to Fairview Mall: Both are easy to reach by walking out the lobby doors and six metres to the subway entrance right out front.

    But when you check the project’s website, it says the following:

    Emerald City is also a commuter’s dream come true. With easy underground access to the Don Mills subway, you can be in downtown Toronto in just minutes.

    Now, I suppose you could argue that, since it’s the subway, that all access is underground. And that it’s certainly “easy”. But when I read the above statements, I can understand why somebody might think there’s underground access to the subway station from within the building. That’s what I would think. It’s misleading.

    But I want to hear from all of you (especially if you’re a lawyer).

    Do you think the developer unfairly led purchasers into believing that they would have direct and underground access to the subway station from their building?

  • Airbnb for retail spaces raises $7.3 million

    Though it’s sometimes common to downplay “this for that” startups (that is, derivative startups that try and borrow a model and use it in another market), Storefront–which can be described as Airbnb for retail spaces–has just raised a $7.3 million Series A round.

    Storefront is a marketplace for short term retail space (think pop-up shops). People with space simply create a listing and decide how much they would like to charge per day, per week or per month. In doing so, Storefront “helps all sorts of brands, sellers, and merchants to create their first brick and mortar retail experience.”

    What I find interesting about Storefront, and other startups like Airbnb, is that they’re really rewriting the way real estate marketplaces work. Instead of large retail landlords (Storefront) and multinational hotel operators (Airbnb), technology is allowing individuals to now participate in these marketplaces. Supply is being decentralized and anyone with extra space can participate.

    You could argue that these sorts of informal and short term rentals are nothing new, but I don’t think there’s ever been the possibility of scaling up like there is today. I mean, just look at how much attention Airbnb has been getting in New York. These startups are having an impact on the way the larger market functions.

    Change is coming. And I think we’ll see a lot more of it in the real estate space.

  • A brief history of T. Eaton Co.

    image

    I was out last night near Yonge and College for a friend’s going away party and the topic of the College Park building came up (originally an Eaton’s department store). We talked about how in the 1920s it was planned as a 38-storey Art Deco tower (see above photo), but that the Great Depression forced Eaton’s to scale back their plans. They ended up building a 7-storey building, albeit an impressive one.

    Then today, thinking about that discussion, I became curious about the story of Eaton’s. Where exactly did it start and how did they get to a point where they were planning the largest retail and office complex in the world?

    Well, as many of you probably know or can guess, the first Eaton’s store was opened where the Toronto Eaton Centre mall currently sits today. The exact address was 178 Yonge Street, which is just north of Queen Street. But what was interesting about this location is that, at the time, it was considered to be far removed from Toronto’s center of fashion and retail. That was King Street East. Below is a map from 1842.

    image

    In 1869 when Timothy Eaton opened his first store, the heart of Toronto was what is today known as Old Town (although most people would probably just refer to it either as King East or as the St. Lawrence Market). People shopped along King Street between Yonge and Jarvis, and Queen Street probably would have felt out of the way.

    image

    But Eaton’s succeeded at Yonge & Queen, along with rival store Simpson’s, and retailing shifted northward. With Eaton’s College Street, the company was once again looking north. In fact, they wanted to move their entire operation from Queen Street up to College Street, and they even tried to get Simpson’s department store to do the same (somebody clearly understood agglomeration economies).

    But since the full build out of Eaton’s College Street never actually happened, both stores were kept in operation and a customer shuttle bus was run between the two of them (until the Yonge subway line opened up in the 1950s). With the opening of the Toronto Eaton Centre mall in the 1970s, Eaton’s closed both Queen and College Street locations, and consolidated operations near Dundas Street.

    In 1999, after 130 years of operation, the company went bankrupt.

    What I find interesting about this story is that it speaks to how dominant the department store business model was at the time and how it was shaping the city around it. If Eaton’s had achieved its vision for the corner of Yonge & College, Toronto might look a lot different today. Perhaps we’d all be shopping for fashion along College Street.

  • The Human Scale

    Earlier today I stumbled upon a documentary called “The Human Scale.”  I haven’t watched it yet, but I’m planning to rent it from iTunes later this weekend. Here’s the trailer. Click here if you can’t see it below.

    [youtube https://www.youtube.com/watch?v=5CyLNS_ljHw]

    One of the things that’s so fascinating about studying cities right now, is that it feels as if we’re at a major turning point with respect to how we think about them. We’re coming off a long period (decades) of infatuation with the car, where planners and engineers predominately cared about one thing and one thing only: efficiently moving cars in and around cities.

    But having now fully built out cities around the car, we’ve come to realize two important things. First, that it’s virtually impossible to keep up with the demands of the car. No matter how many highways and roads you build, there always seems to be gridlock. And second, by focusing so closely on the car, we’ve built cities that aren’t great places for people.

    If you take a look at this short clip from The Human Scale (featuring Siena, Italy), I think you’ll immediately see how differently we used to build our cities and how disruptive the car has been to them. 

  • 34th Annual BILD Awards

    I just got home from the 34th annual BILD awards. It’s late and I’m tired, but I had a good time. TAS won a few awards, including green builder of the year, and I saw a lot of old friends and familiar faces.

    For those of you not in the industry, BILD is the Building Industry and Land Development Association. And every year a gala is held where a bunch of awards are given out for things ranging from the best marketing brochure to the best suite design under 750 square feet. If you’d like to get a feel for the event, check out #BILDAWARDS.

    It was held out in Woodbridge, which is a suburb of Toronto. So today, I did something that I don’t do all that often or even every week: I drove my car. That’s fine, but it reminded me that one of the perks of living in a dense and transit oriented area (like downtown Toronto), is that you never have to worry about drinking and driving.

    I’m really disciplined about not doing that, but it’s nice not to have to worry about it. It can make driving feel like a liability. So there’s another reason to love cities. You can drink whenever you want.

  • Les escaliers de Montréal

    Montreal is one of my favorite places on the planet. In fact, if I have one regret in life it’s that I didn’t do my undergrad at McGill University. Living in Montreal as a poor student would have been the best. Though I shouldn’t complain because I did spend quite a bit of time there when I was a poor student.

    If you’ve ever been to Montreal, the image at the top of this post will look familiar. The urban landscape of Montreal–at least in the residential areas–is filled with exterior staircases. They’re all over the place. And this always strikes everybody as a bit odd given that it’s a pretty cold and snowy place a lot of the time. Nonetheless, those staircases are quintessentially Montreal.

    Some people think it was done to minimize the amount of interior space that needed to be heated, but I’ve never really gotten a definitive answer. Either way, all those stairs are an interesting byproduct of Montreal’s commitment to one predominant building type: the multiplex. A multiplex is essentially a small apartment building containing a handful of units. They’re usually only around 3 storeys high. And they’re all over the Ville de Montréal.

    To be honest though, I don’t think I’ve ever really explicitly thought about this defining Montreal quality. But then last night I stumbled upon an interesting blog post called “Les escaliers de Montréal vs towers of Toronto." (escaliers = stairs) In it the author talks about how Montreal is essentially this city of multiplexes (with stairs everywhere) and Toronto is this, more modern, city of towers surrounded by single family homes.

    And here’s the data to back it up:

    When it comes to single-detached houses and apartment buildings taller than 5 storeys, Toronto dominates. But when it comes to apartment buildings less 5 storeys, it’s all Montreal. And if you add in apartment duplexes, you’ve accounted for almost 75% of Montreal’s housing stock. Note: These figures are for the city proper and don’t include any amalgamated suburbs.

    The author’s explanation for this comes down to zoning and timing. Since Montreal is an older city, the belief is that Montreal was simply further along in its evolution when formal land-use planning came into effect and started to order the city. I generally agree with this hypothesis, but I think it’s also worth keeping in mind that, just because a Toronto house might be zoned as single family, doesn’t mean it’s actually begin used as such.

    A lot of the older houses in Toronto have been subdivided into what are effectively illegal multiplexes. Since this is all happening under the radar, nobody really knows what the actual stock of multiplexes might be. Nonetheless, there’s no denying that there are some real differences between the urban fabric of Montreal and Toronto. 

  • Video: Paris in Motion

    If you only watch one video on the internet today, then I suggest you watch this one called Paris in Motion (Part 2). It was created by Paris-based photographer Mayeul Akpovi and it’s a beautiful time-lapse rendition of the City of Light. If you can’t see the video below, click here. Make sure you fullscreen it and turn your speakers on.

    //player.vimeo.com/video/50467187

    The video really does a great job of capturing the energy of the city. I think cities should consider commissioning videos like this in order to market themselves. If you enjoyed it, I recommend also checking out Part 4 of Paris in Motion.

    Thanks to the Urbanophile for sharing this video series. That’s how I found out about it.