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.
Earlier this week a good friend of mine from Rotman, Frank Luengo, launched his own blog called Frank’s Vault.
Given that he has used the same theme as I have here, I like to think it was inspired by ATC 🙂 But whatever the case may be, his mission is: “…to simplify the complicated, and to bring Bay Street and Main Street a little closer together.” In other words, it’s a finance blog. And I’m really enjoying it so far.
Last summer Frank told me that he was thinking about starting this and so I’m thrilled that he finally decided to do it. I’ve talked many times before about the benefits of personal blogging, and so I won’t repeat them here. But I did want to mention one other thing. When Frank told me he launched, one of the first things I did was congratulate him on claiming frankluengo.com.
And I did that because I’m a big proponent of owning your firstnamelastname.com. I look at internet domains as virtual real estate and I, therefore, look at firstnamelastname.com as your own piece of branded real estate on the internet. If you don’t buy it up, somebody else will. That’s obviously why I own brandondonnelly.com and why I host ATC on it.
But since I’m such a believer in real estate – both the offline and online varietals – I actually own many others. I also own brandondonnelly.co, brandondonnelly.ca, and brandondonnelly.me. The latter one links to my tumblog, and the first 2 just redirect to this site. I don’t derive much utility from having all these URLs, but I just want them so that nobody else can get them.
So if you haven’t yet thought about it, I would encourage you to think about claiming your own piece of real estate on the internet. I use Namecheap.com to buy my domains, but there are many others out there.
Urban Land Magazine recently published an interesting article on the Hudson Yards project in New York, which is the largest private real estate development project ever undertaken in the United States. Click here for the article. Thanks to my friend Evan Schlecker for passing it along. It’s a good read.
The project is being co-developed by Related out of New York and Oxford Properties out of Toronto, and when it’s all said and done, it’ll be over 17 million square feet of commercial and residential space. It’s a $20 billion development project.
But beyond just being massive and epic, there are a bunch of other things that make this project unique. You can read about them all in Urban Land, but I’d like to share a few snippets with you all here:
The first is about the project’s placement on top of a rail yard:
In order to make use of a site already occupied by a working rail yard—including more than 30 tracks for the Long Island Rail Road and three train tunnels, with a fourth under construction—most of the development will be built atop two steel-and-concrete platforms. That base, and the buildings on it, will be supported by hundreds of concrete-filled caissons, which will be drilled between the rail lines into the bedrock.
Because the location of the tracks and tunnels limits the placement of caissons, only 38 percent of the site can be used to support buildings.
The second is about the project’s use of technology:
Beyond that, a vast number of sensors embedded in the site’s infrastructure will collect mountains of data on everything from temperature and air quality to pedestrian and vehicle traffic. That information, which will be scrutinized in real time by managers in an effort to fine-tune Hudson Yards’ operation, will also be shared with New York University (NYU) researchers, who will turn Hudson Yards into a laboratory for studying urban life and finding ways to improve its quality.
And the last one is about how it interfaces with the High Line (click here if you don’t know what that is):
Pedersen [of Kohn Pedersen Fox Associates] found an intriguing way to address the building’s surroundings. He allowed the High Line—a public park built on a historic freight rail line elevated above the West Side—to penetrate underneath the tower through a 60-foot-long (18.3 m) public passageway, so that the building will interact with the park and its visitors. Inside the building, a dramatic atrium “becomes the terminus of the High Line as it moves from south to north,” he says.
So there are a lot of interesting and exciting things going on with this project. What’s amazing though is how “vertical” this community will be. You have rail lines below grade. Platforms on top. Retail at grade and across multiple levels. And an elevated linear park cutting through the buildings. Not every city can make this work. New York can.
I received an email from an ATC reader yesterday who is working on a publication about reimagining public spaces in Toronto. She sent me a few questions and specifically wanted to talk about the Yonge Redux project, which I wrote about a month ago. After I responded to her questions, I figured I should just share them publicly. So here they are:
How would citizens from different age groups benefit from the Yonge Redux project?
I would bet you that this stretch of Yonge Street experiences more pedestrian traffic than it does car traffic. And yet we’ve allocated space in the opposite direction: cars have more space than pedestrians do. So what this project is really about is reallocating the street, or public right-of-way, so that the dominant uses are actually prioritized through urban design. It doesn’t need to be more complicated than that. Ultimately, this will benefit people both young and old.
Do you know what kind of professionals are needed to complete a project like this?
You’d need an architect/designer – one who is awesome at landscape/urban design work. gh3 here in the city comes to mind as a firm I like, if you want an example. You’d need a bunch of engineers to deal with stormwater management and other infrastructure items. You’d likely need a transportation/traffic consultant to assess traffic flows in the area and prove that this project won’t cause the entire city to come to a grinding halt (it won’t). You would need someone to manage the day-to-day of the entire project. And this is just naming a few of the professionals/consultants that you’d probably end up needing.
You’d also have to work closely with the city, the local councillor, and the local community. It’s inevitable that some of the businesses will worry about the loss of potential customers – so that would need to be worked through.
What are some areas in Toronto that, in your opinion, need reimagining in the next few years?
My feeling is that Toronto is still at the early stages of this shift towards better public spaces and a better public realm. But in many ways, projects like Yonge Redux are much easier sells compared to the other areas that could use a face lift. Yonge Street is already urban and pedestrian friendly. The real challenge is going to be dealing with the areas outside of the core – most of which, frankly, aren’t that welcoming to pedestrians and aren’t all that urban. What do we do with those? And do the local communities even want them transformed? They’re going to be much harder to reimagine (though I’m not saying we won’t be able to do it).
Where do you see the future of Toronto’s public spaces in the next 50 years?
All signs point to a more dense, more urban, and more transit-oriented city. With that shift, we’re going to increasingly realize the importance of incredible public spaces. So if we continue down this path, I reckon our public spaces will only get better. I’m optimistic about the future.
How would you personally approach a project like this?
My understanding is that this project has legs. It just has to work through the city bureaucracy at this point. Jennifer Keesmaat supports it.
Every now and then a piece of architecture comes along that makes you feel like your city should be more beautiful – or at least very least: bolder. In this case, it’s the new Market Hall in Rotterdam, which has been making the rounds on the internet since it opened last week. It may not be everyone’s cup of tea, but I find it really exciting.
Designed by Dutch architecture firm MVRDV, the Market Hall is a 1.1 million square foot mixed-use building consisting of residences (102 rental apartments and 126 for sale apartments), a food market, a supermarket, a public space, and a 1,200 stall parking facility. But before I say anymore, here’s the money shot:
And here’s what it looks like from the inside of the market:
In the middle of the building is the food market. At night when it closes up, it then becomes a well-lit public space. The entire central area is enclosed, but well connected visually to the outside through a big and fancy glass facade.
The apartments wrap the central market and were constructed using standardized modules (despite the unique form). The spaces that require natural light face outward and all the spaces that do not require natural light (by Dutch law), such as the kitchens, face inward towards the market.
There’s a grocery store 1 level below grade (to help supplement the market) and all parking and loading is done underground. This means that the building itself has no real backside. Most buildings typically have an ugly loading and “back of house” area – the building’s ass if you will. In this case, the entire perimeter of the building is urban and accessible.
Finally, on the ceiling of the market is a massive mega-mural designed by Dutch artists Arno Coenen and Iris Roskam. Click here for a 360 degree panorama. It’s wild.
So what do you think of this building? Would you like to have it in your city? And would you consider living in one of its apartments? I would.
Depending on who you ask, the current condo boom in Toronto might be viewed as either a good thing or a bad thing (most will have an opinion). Some people think we’re simply building too many condos. And that too many of them are small, crappy, and geared towards investors – as opposed to end-users.
While I do agree that we could be doing more to create complete communities – that is communities which serve everyone from young singles to families with 3 kids – I think there are also a lot of positives associated with Toronto’s condo obsession (full disclosure: I’m a real estate developer). It has made us more sustainable, more reliant on alternate forms of (non-car) transport, and it has made us a generally more exciting place to live.
But that doesn’t mean we can’t do better.
Lately I’ve been wondering about how other cities do it. Specifically, those European cities that somehow seem to always be able to build awesome housing projects. So today I thought I would pick one and profile it. What I really wish I had was a financial pro forma to share with you all, but in the absence of that, I’ll try and back into some of the numbers on my own.
Shown above is the 9-storey Charlotte Apartments in Berlin. It was developed by WI Concept and designed by Michels Architecture Office. I chose this building because I think it’s an attractive one and because it’s of the (mid-rise) scale that Toronto is trying to promote along its many avenues. Here are the stats I was able to find online:
Site area: 347 square meters / 3,735 square feet
Building area: 3,000 square meters / 32,291 square feet (says gross floor area, but I don’t know if that means the same thing as it does here)
Construction costs: €3.6 million / C$5,065,691 (as of today’s rate)
Units: 28 (sold within 1 week of launch)
Market: ~70% of buyers in Berlin are believed to be foreign investors
Now, if we were actually building a development pro forma, we’d want to get a lot more granular in our calculations than what I’m about to do. We’d want to know gross construction area, net saleable areas, and so on. But for the purposes of this post (and because I have very little information), I’m going to simplify and do a back of the napkin set of calculations.
Based on above, the FSI (or density) is about 8.65 (32,291 sf / 3,735 sf). That’s roughly in line with many of the residential developments we’re seeing in downtown Toronto. The average unit size works out to be about 1,153 sf (32,291 sf / 28 units), but in reality it would be less if that 32,291 number is truly the gross floor area. You would need to subtract the corridors and other non-saleable areas from it before doing this calc. Either way, that is big compared to most downtown Toronto condos, but small for Berlin standards according to this ArchDaily article. Finally, if we look at construction costs, we get $157 per square foot in Canadian dollars ($5.065M / 32,291 sf). That’s low. I wonder what the land costs were.
Again, these numbers are rough rough. But I wanted to try and dissect a European development project and compare it to Toronto. The most surprising figure seems to be the low construction costs. If you have any additional insights, I would love to hear from you in the comment section below.
This morning I finished watching the rest of Steve Jurvetson’s Spark 2014 talk, which I shared with you all yesterday. And so I’ve got technology on the brain right now.
I’ve said this many times before on ATC, but I truly believe that the pace in which technology is infiltrating “non-technology” companies is only going to increase. The video clip of Flux.io is a perfect example of that. After watching that demo yesterday, I immediately thought a handful of consultants that real estate developers use on projects that the Flux platform could replace.
So today I thought I would share another company that Steve talks about in yesterday’s video called Planet Labs. Planet Labs’ mission to image the entire world and make it universally accessible to people. But unlike Google and Microsoft – who already offer satellite photography – Planet Labs has figured out a cost effective way to do it on a daily basis.
Because the problem with services like Google Maps and Bing is that they’re updated too infrequently. If I go to Google Maps right now, the building I live in doesn’t even exist in their aerial photography of Toronto – it’s still a parking lot. So there are limits to what you can do with this information.
But once you increase the image frequency to daily, you create all sorts of new opportunities. You could track the number of cars in every parking lot in the world to measure retail activity (an example Steve gives in his talk). You could track changing water levels. You could track deforestation. You could track urbanization in China. And the list goes on. Here’s a blog post from Planet Labs that gives a few examples of the benefits of daily imaging.
To return to my earlier point, consider the fact that every potential use case I’ve just outlined is in an industry that most of you wouldn’t consider to be tech. And yet Planet Labs is clearly a technology company. So the key insight here is really to focus less on the way things are done and classified today, and more on the way they could be – and likely will be – done in the future.
If you’re involved in the built environment in any way, shape, or form – as a developer, architect, policy maker, and so on – I would highly recommend you watch the video below. My friend Candice Luck, who I went to Rotman with, sent it to me this morning with a link starting at the 24 minute mark. I haven’t yet watched the whole thing, but given how interesting this short section was, I plan to.
The video is a talk by Steve Jurvetson, who is a venture capitalist with DFJ. He was one of the founding investors in Hotmail and currently sits on the board of companies like SpaceX and Tesla Motors. At the 24 minute mark he talks about a startup called Flux.io that hasn’t yet launched their product, but is working towards “reimagining building design”. They’re a spin-off from Google X and plan to officially launch in early 2015.
Rather than try and describe the video here, I will just say that it’s an incredible example of how technology and digitization could completely change the real estate development industry. If you can’t see the video below, click here. The video starts at the Flux.io section.
Yesterday I wrote about the High Line Park in New York and the tremendous success that it has seen since the first section opened in 2009. It attracts somewhere around 5 million visitors a year and is thought to be responsible for over $2 billion a year in economic activity.
But the economic activity it’s generating and the future tax revenues it’s creating are really a byproduct of the fact that people, quite simply, love the High Line. It attracts people. And that reminded me of a short post I wrote earlier this year called: It’s all about people. Because if you think about it, that’s really the key metric for a lot of things in life and in business.
When you build a park like the High Line in New York or Millennium Park in Chicago, you’re designing it to attract people. When you build a mall, you seek out anchor tenants, because you know they drive foot traffic. When you build a new neighborhood, you’re trying to create street life from scratch. When you run a bar, you want headcount. And when you build a web or mobile app (or write a blog for that matter), you want registered users and eyeballs on your platform.
And you want these things because foot traffic, street life, eyeballs, impressions, users, and headcounts ultimately generate revenue. But here’s the thing: if you focus directly or too much on that end goal, you run the risk of missing an important step along the way, which is simply to delight real people.
In his most recent essay, startup guru Paul Graham put it perfectly when he said:
“The way to succeed in a startup is not to be an expert on startups, but to be an expert on your users and the problem you’re solving for them.
He’s obviously talking about technology products, but the same could be said for parks, streets, malls, plazas, and so on. To design and build better cities, we need to be experts on people. And we need to create spaces and environments that people actually want to occupy. Spaces that improve people’s lives.
Now, this may sound fairly obvious to some of you. But quite often I feel like we get sidetracked by things that don’t matter as much as people do.
In 1980, the last train ran on an elevated corridor on the west side of Manhattan known as the High Line. Originally built in the 1930s, the trucking industry had made these trains obsolete and service was halted.
At this point, neighboring property owners began to lobby for the demolition of the High Line, as they no doubt saw it as an opportunity to increase the value of their land holdings. But thanks to local residents – most notably a man by the name of Peter Obletz – the 1.45 mile-long elevated rail corridor was saved from demolition.
In 1999, Joshua David and Robert Hammond then decided to form a non-profit with the goal of both preserving and reusing this unused rail corridor. The group was called Friends of the High Line.
By the early 2000s, Friends of the High Line had successfully made an economic case for transforming the rail line into a public open space and things started moving forward. Initially, it was thought that a public park of this sorts would attract about 400,000 people annually and generate upwards of $286 million in new tax revenues over the following 2 decades (Globe and Mail).
With these expectations in mind, construction on the new High Line Park began in 2006. The first section opened in 2009 – a decade after Friends of the High Line was formed. And the third, and last section, opened just two weekends ago at the end of September.
Today the High Line Park attracts 5 million visitors a year and is believed to be directly responsible for about $2.2 billion in new economic activity. The increased tax revenues over the next 2 decades are expected to reach about $980 million. Without a doubt, the High Line has been a huge success. It has become the 2nd most visited cultural attraction in New York (Globe and Mail).
Which is why every city now wants their own High Line. Philadelphia wants one. Chicago wants one. Mexico City wants one. Seoul wants one. And the list goes on. Here in Toronto, we’ve recently proposed one called the King High Line, which will connect the Liberty Village and West Queen West neighborhoods across a rail corridor.
While I do believe that this is an important connectivity problem to be solved, I worry about how explicit the references are to the actual High Line. Even the street furniture is the same in their promotional video.
I worry not only because it means we’re clearly taking on the role of follower, as opposed to leader, but because an elevated park isn’t going to work in all urban contexts the same way that the High Line worked in Chelsea. This is similar to how Frank Gehry can’t magically turn your city into the next Bilbao.
So while I have shown my support by becoming a “Friend of the King High Line” (and I would encourage you to do so as well), it’s important to keep in mind that the problems we’re trying to solve here aren’t necessarily the same ones that New York had to deal with.
The High Line – from the start – was designed to have an intimate relationship with its surrounding buildings. The tracks rain directly through them so that the trains could easily load and unload their cargo – that was the whole point. So when the High Line was redone, all of a sudden these buildings were able to reconnect themselves to the park in a way that they were already accustomed to doing.
But in Toronto’s situation, and perhaps in your city, that’s not the case. We’re talking about stitching together two completely disconnected neighborhoods. It’s a noble goal and certainly one that I wholeheartedly believe we should pursue. But I don’t think we should assume that it’s a problem that has already been completely solved for us.
Below was the scene at the DUKE Condos site in The Junction last Saturday morning at 7:00AM. Michael Bros. mobilized their equipment to begin site preparation so that shoring and excavation can begin. The plan is to be at the bottom of the hole by the beginning of next year.
We’re all very excited in the office and so I half jokingly told our VP Construction that I would meet him on-site at 7:15AM with beers. He responded with a one word email saying: champagne. In the end, I decided to go swimming instead (probably a better decision), but I am sure we’ll have a drink soon.
There are still some killer suites available at DUKE, so feel free to drop into the sales office at 2800 Dundas Street West, give the sales team a call at 416-800-7738, or tweet the TAS team with any questions.
