Tag: construction

• Project Profile: Cabin at 45 Dovercourt

  

  Last month,
  Curated Properties submitted a
  rezoning and site plan application for a 6-storey, 25-unit building at 45
  Dovercourt Road in Toronto. The project is known to the market as Cabin and you
  can register for it now.

  The project
  immediately caught my attention (because of its design, because of its
  branding, and because I like the work of Curated), so I decided to dig in
  further and get a copy of their architectural drawings. Development
  applications and their supporting documents are all public. Anyone can request
  a copy. But the city isn’t great at making this known.

  Since I’m excited
  to see more of these small scale urban infill projects in the city, today I
  thought I would highlight some of its key features and some of the things that
  are being proposed in order to make a project like this work.

  The Homes

  First of
  all, 100% of the suites are 2-storey. 76% of the suites are also 2 bedroom or
  larger.

  The result
  is that the project is essentially a series of townhomes stacked on top of each
  other. I suspect that this will appeal to more end-users as opposed to
  investors. Hopefully, it will also attract more families to the area.

  Here’s the
  third floor plan:

  

  You
  probably can’t see it, but all of the suites are marked as “Level 1”, obviously
  indicating that there’s more than one level.

  Also worth
  mentioning is the notch or cut out on the north side of the building. This is
  what makes the 2 suites in the middle of the floor plate possible. In order for
  them to have windows, they need to be setback from the (north) property line.
  It also means those suites get terraces.

  The Parking

  Turning to
  the ground floor plan, it’s interesting to see that they are proposing 8 triple
  car stackers that will be accessible off the rear laneway (right side on the plan below). That equates to 24 parking spaces in the building (8 bays x 3
  cars per stacker).

  

  On small
  urban sites like this one, it can be very difficult to accommodate parking. So
  it’s inevitable that we will see more parking stackers in the city and a continual
  reduction in parking minimums.

  The Construction

  Finally, I
  have been told that this project is expected to be framed in wood, as opposed
  to reinforced concrete, which is more typical of condominiums in Toronto.

  As of the
  beginning of this year (2015), the
  Ontario Building Code was modified to allow wood-frame buildings up to 6
  storeys. Before this change, the highest you could go was 4 storeys.

  This change
  was done with the intent of reducing construction costs so that it becomes more
  feasible to develop smaller infill sites such as this one. So expect to see
  more of this.

  I know that
  a lot of people would like to remain in the city even when they start having
  children. But it’s becoming increasingly difficult to find affordable low-rise
  homes. And not everyone wants to live in a high-rise tower. 

  That’s why I think
  we will see more, not less, low-rise and mid-rise infill projects like Cabin.
  If you’re interested in this topic, also check out a post I wrote called 3
  stages of intensification.

  The rendering at the top of this post is from Curated Properties and the
  drawings are by RAW Design.

  2015.07.20

• Multifamily vs. single family

  Since 2009 when the U.S. economy started to recover, housing starts (i.e. new residential construction) have favored multifamily buildings over single family housing. Apartment/condominium construction has grown 3 times faster according to the U.S. Census Bureau (via Bloomberg).

  

  A lot of this multifamily construction is assumed to be rental apartments, but this category also includes for sale condominiums. The classification has to do with building typology rather than housing tenure. (I would love to see how the above graph breaks down in terms of the latter.)

  The typical explanations for this trend often relate back to Millennials being poor and saddled with student debt. That’s why they’re delaying buying single family homes. But eventually the expectation is that they will resume doing

  (largely) what previous generations have done.

  Money and the economy, I’m sure, have something to do with the above trend. But I’m not convinced that it’s the whole story. 

  There are also shifts happening with respect to consumer preferences and with respect to how we plan and build our cities. That’s why I’m very interested in monitoring family formations and housing choices. 

  At the same time, I’m also a Millennial. And whenever I catch myself thinking a certain way, I assume that there are probably other Millennials out there who feel similarly.

  2015.07.17

• Building on optimism

  To be a real estate developer, or at least to be a good real estate developer, I think you need to have a certain kind of personality. Specifically, I think you need to be an optimist.

  Because if you’re going to take big risks and deal with lots of uncertainty – which is how most development projects work – then you have to believe that you’re going to be able to figure it all out and make it happen.

  That is not to say that you’re not worried about risk and you’re not thinking critically about what you’re doing. Managing risk is a hugely important part of the business.

  Rather it’s accepting that unexpected things will come up, whether it’s a small construction hiccup or a huge black swan event. And knowing that if and when that happens, you’re going to do whatever it takes to get through it.

  As an example, I remember a developer telling me a story about one of his projects in South Florida. This was back when I was in grad school so some of the details are a bit fuzzy.

  But basically he had excavated a site for an underground parking garage and they had just finished pouring the foundations and first underground level. (Because of its high water table, underground parking garages are rare and expensive to build in South Florida.)

  It’s then 2 ’clock in the morning and he gets a call from his engineer telling him that a hurricane is coming through. And that once it comes through the water is going to lift up his foundation from below and basically destroy it.

  They immediately start brainstorming solutions and the engineer ultimately decides that if they fill up the hole with water before the hurricane comes through that it will weigh down the built structure and keep it intact.

  So in the middle of the night, before a storm was about to hit, they’re all on-site pumping water into a big hole.

  The storm eventually came and went and the engineer was right: the water-filled hole kept everything in place. So instead of spending what could have been millions, the developer probably spent tens of thousands on a water bill. That’s a much easier pill to swallow.

  This, of course, wasn’t in the development pro forma or in the construction schedule. But it happened, as stuff invariably does. And for future projects, I’m sure it’ll be something he thinks about it. 

  But it’s all part of the game. And to be good at the game, I believe you need to be an optimist.

  2015.07.08

• W57 — A new hybrid building typology

  

  We’ve been talking about a lot of heavy topics here on Architect This City lately. Everything from the contentious Gardiner Expressway East to minimum population densities to density creep. 

  So today I thought we could talk about something a bit more fun: architecture.

  When I was in New York last weekend, one of the buildings that was on my must-see list was the now under construction West 57th Street by Danish architect Bjarke Ingels. See photo above. (It also happens to be at the exact location where the West Side Highway transitions from elevated to surface boulevard.)

  This is supposedly the first North American project for Bjarke Ingels (he also has a project in Vancouver now). And if you’re a regular reader of this blog, you’ll know that I’m a fan of his work. His diagrams and storytelling ability were a big inspiration for me when I was in architecture school.

  The concept behind the project was to create a new hybrid building typology, one that is a cross between the typical European perimeter block building and the North American skyscraper. And the result is pretty wild.

  Here’s a video in case you aren’t familiar with the project. Click here if you can’t see it below.

  [youtube https://www.youtube.com/watch?v=_0JbTbOm_iQ?rel=0&w=560&h=315]

  I think it’s a really exciting project. What are your thoughts?

  2015.05.30

• Art and apartments

  

  Image Source: Vancouver by Marc M on 500px

  According to a recent Bloomberg article, this is where the rich are putting their money today:

  “The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” said Fink. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”

  In case you wondering, Laurence Fink is the founder and CEO of BlackRock Inc., which today is the largest asset manager in the world. They have over $4.77 trillion in assets under management according to their website. That’s a mind boggling number.

  And if you read the Bloomberg article cited above, you’ll see that this interest in both art and apartments represents a shift away from gold as the de facto safe haven.

  “Historically gold was a great instrument for storing of wealth,” the chairman of BlackRock Inc. said at a conference in Singapore on Tuesday. “Gold has lost its luster and there’s other mechanisms in which you can store wealth that are inflation-adjusted.”

  What’s interesting and probably most relevant to the Architect This City community though is this investment focus on apartments.

  When people talk about a possible housing bubble in Canada they often cite house prices to median household income as a key ratio. The question then becomes: How can house prices be such a high multiple relative to local incomes?

  That’s relevant, but it’s not the entire story for cities like New York, London, and Vancouver. That ratio alone assumes that real estate isn’t a global investment vehicle. And for some people people it is exactly that.

  2015.04.21

• Reading between the lines of a midtown triplex

  

  A few days I retweeted the above home from Dwell Magazine. Then yesterday I was driving through midtown Toronto and I stumbled upon it. And that got me thinking more about this kind of project.

  The house is a triplex with, presumably, one unit in the basement, one unit on the main floor, and one unit across the 2nd and 3rd floor. The existing detached house was only 2 storeys and so a third floor was added to create what is likely the “owner’s suite.”

  It’s not uncommon for many of the houses in central areas of Toronto to be converted into duplexes and triplexes or to flip back into single family homes after being subdivided for rentals. It goes to show how adaptable the single family house can be.

  But it’s not everyday that you see such a high end triplex being built as, what seems to be, a permanent residence and kind of dream home for the owners. Historically, when people built their dream home it has meant a single family home.

  This might not seem like an important distinction, but I think it demonstrates a growing acceptance of intensification within low-rise single family neighborhoods.

  Part of this I’m sure has to do with rising housing costs. But I think it also has to do with valuing location over raw space and with an acceptance of urban density.

  I don’t know about you, but I would have no concerns with permanently laying down roots in a house like this. It’s beautiful.

  Image: Dwell

  2015.03.21

• 3 risks that real estate developers face

  

  ‘Jailhouse Rock’ by Michael Hill on 500px

  Real estate development is a risky game. So much so that some people in the business like to say that their primary function is to mitigate risk. 

  Today I’m going to focus on 3 risks that developers face. There are, of course, others risks, but these are some of the biggest. Some people might also categorize them differently, but this is my simplified way of thinking about it.

  The first risk is approvals. Oftentimes in development you need some sort of special permissions to build what you hope to build. These permissions come in many different forms, but whatever the case may be, there is risk associated with this part of the process. 

  What happens if you’re not able to build what you were hoping to build? Is the project still feasible? Do you have a viable plan B? Did you budget for a redesign? Have you now overpaid for the land? There’s a lot of uncertainty in this phase and uncertainty generally means risk.

  Assuming you’re able to obtain your entitlements (this is more of an American term), the next big risk factor is the market. Can you sell or lease out the space that you’re about to build and can you do it at the rates you were assuming when you acquired the site? 

  In a bull market this isn’t usually a problem. In fact, prices and rents may actually exceed your early assumptions. But what if you bought the site in 2006 and now it’s 2008 and you’re hoping to go to market. Now you might be in trouble. In business school I learned to do sensitivity analyses and stress tests. How far does the market need to drop before I lose my shirt? Those are good exercises to do in development.

  Assuming though that the market holds up and you’re able to pre-sell and/or pre-lease your new project and obtain financing, you would then be ready for construction – another big risk. This is why many developers bring construction in-house. It’s them trying to exercise more control over the process and mitigate risk.

  Construction is messy both literally and figuratively. There’s a lot to consider. 

  Are the drawings that you’re using to buy construction properly coordinated? Because if they’re not, you’re going to pay for it later. Is that Chinese curtain wall a great bargain or are you going to end up on a flight to China when it never shows up on your construction site? Are the trades hungry for work or are they busy? If it’s the latter, you’re going to get higher prices. And oftentimes there’s nothing you can do about it. You’re just buying construction at the wrong time.

  But we all know that with risk there’s reward. So if weren’t for all these risks, real estate development just wouldn’t be the same. 

  If you’re in the business, what keeps you up at night? Did I miss something? Let us all know in the comment section below.

  2015.03.19

• A cold ski town is building one of the first vertical farms in the world

  

  I have a soft spot for Jackson Hole, Wyoming. It’s a beautiful town and, out of all the places I’ve snowboarded, it’s easily my favorite.

  That’s why I was excited to learn that Jackson is currently building one of the first vertical farms in the world (and in a cold ski town at that). Using a vacant site in the middle of town, a new venture called Vertical Harvest is building a three storey, 13,500 square foot hydroponic greenhouse. It’s being done as a public/private partnership.

  

  The business will operate year round and supply fresh produce to the local community – replacing food that was previously being shipped in from Mexico and California. 

  The site itself is 1/10 of an acre, but it’s expected to have the same output as a 5 acre piece of land using conventional agriculture methods. 95% of their product is already committed through pre-purchase agreements. 

  Here are some of the businesses that have jumped onboard:

  • Rendezvous Bistro
  • Il Villaggio Osteria
  • Q Roadhouse
  • The Kitchen
  • Jackson Hole Mountain Resort’s five restaurants
  • Snake River Brewery
  • St. John’s Medical Center’s Refuge Grill

  What makes this project even more exciting is their commitment to employing members of the local community with disabilities. This is apparently a growing concern in Jackson, and so Vertical Harvest will be doing their part to address that.

  If you’d like to learn about the design of the facility, check out this article by Fast Company. The team was was very methodical in ensuring that this facility would consume less energy than the status quo of shipping in food from out of state.

  The go-live date is this fall (2015). I should probably plan another trip to Jackson.

  Images from Vertical Harvest

  2015.02.28

• More on the real estate development process

  

  A few weeks ago I received the following comment from a reader:

  Really enjoyed reading this post about being a real estate developer. I was just wondering if you could do a write up on the various jobs and functions in a typical real estate development company so that people like me, who intend to work for a developer can roughly know what kind of skills are required or demanded in order to work there.

  It’s a great question and so I will try and answer it today. The first thing I should say though is that real estate developers are typically very lean on people. I’ve worked for big publicly traded real estate companies and small boutique ones, and the development teams are always fairly small.

  It’s that way because development projects can be messy and intermittent. The industry itself is also prone to regular market cycles and so the strategy is generally to remain fairly lean and outsource a lot of the work. You ramp up consultants and suppliers on a per project basis – as you need them.

  With that said, let’s talk about the typical development process and some of the key skill sets required. A simplified process might look like this:

  1. Buy development site (Acquisitions)
  2. Design a project (Consultant Coordination)
  3. Make sure project is feasible (Finance)
  4. Obtain approvals for said project (Planning & Approvals)
  5. Sell/lease space (Sales, Leasing & Marketing)
  6. Build project (Construction)
  7. Make money (The goal)

  Depending on the size of the firm, one person may be responsible for managing many if not all of these steps, or they may be split up into different departments. So you could end up with a department list like this:

  1. Acquisitions
  2. Development/Project Management
  3. Finance
  4. Sales, Leasing & Marketing
  5. Construction

  From my experience as a developer, you’re going to be involved in all aspects. And that’s part of what makes development so exciting. But let’s talk about some of the key areas:

  Planning & Approvals

  After tying up a winning development site, securing your approvals (commonly referred to as “entitlements” in the US) is usually the first major step. The reason this step exists is because oftentimes what you want or hope to build isn’t what you’re actually allowed to build as-of-right.

  So you have to go through a process to make that happen. It can take years depending on where you might be doing business, but there’s typically a significant amount of value creation at this stage. Some developers only focus on this stage and don’t actually build.

  City planning is a good background for this function. You need to understand the local planning policies and frameworks.

  Consultant Coordination

  As I mentioned before, development teams are often small. And that’s because all developers rely on outside consultants to make a project happen (architects, engineers, and so on). So a big part of being a strong developer is just being a strong project manager. The expression often thrown around the industry is that development is like herding cats.

  Having some sort of a technical background helps for this function. You end up dealing with a lot of technical details (which I find super interesting), and so it helps to have a bit of a background or an interest. If you’re not inclined in this way, you might find this area boring.

  Financial Modeling

  Building project pro formas and managing budgets is obviously a key component of the development process. From the moment you first look at a site up until project completion, you’ll be building financial models and constantly refining them as you get more information. The first version might be on the back of a napkin and the last version might be a complex Excel spreadsheet.

  Banking and finance is obviously a good background for this function. But you also need to understand the real estate business. Models are only as good as the information you feed it, so your assumptions have to be sound. 

  Sales, Leasing & Marketing

  I cannot over emphasize the importance of this function. If you are not selling units or leasing space, then you do not have a project. So no matter how amazing you might be at all the other functions (even fundraising from investors), if your firm is not bringing in money from your customers (purchasers or tenants), then you are dead.

  When I was at Penn, a lot of the real estate professors used to tell us that leasing is the best way to get started in the industry. And I don’t disagree with that – even though I didn’t start there. This is often handled by a separate department and/or outside team, but you’ll need to be intimately involved.

  Construction

  If you’re at this stage, that’s usually a good sign. It usually means you’ve managed to sell a bunch of units and/or lease a bunch of space. Some developers (with enough scale) will have a construction team in-house, but many others will just outsource it to a 3rd party. Regardless of the setup, it once again helps to have a technical background.

  If I missed anything or you want to add more detail, please let me know in the comment section below. I’m always happy to receive questions and post ideas, so feel free to tweet or email me. Tweets will almost always get a faster response.

  Image: Flickr

  2014.12.29

• The hypocrisy of parking minimums

  

  Earlier today, Christopher Hume of the Toronto Star published a review of The Residences at RCMI building currently under construction on University Avenue. He gave the building a ‘B’ grade. 

  His main criticism was the faux facade that has been integrated into the base of the building:

  Then there’s the question of the historic 1907 building the RCMI occupied until recently. Though listed as a heritage site in 1973, the city approved its demolition. Planners also allowed the neo-classical front façade to be replaced with a replica that will fool no one, another example of the city talking out of both sides of its mouth.

  But faux facades aside, one of the things that makes this development project unique in Toronto is actually something that you can’t see from the outside: there’s no resident parking. Apparently there’s 9 spots for deliveries and other short-term uses, but for the 315 suites in the building there’s no parking.

  Depending on where in the world you’re from this may not seem like a big deal. I’ve written before about minimum and maximum parking requirements, and how some cities – such as Berlin – don’t have them. But here in Toronto, we do. And the city generally takes them very seriously.

  “To assume a residential development of the project’s scale might be totally car-free runs counter to expert study and experience,” municipal staffers argued. “Although there are many households in the downtown without cars, it would be highly unlikely to find 315 of them permanently concentrated in one building.”

  The fact planners were dead wrong is a shocking sign of a department either out of touch or that doesn’t believe its own hype.

  In so many ways – as Hume pointed out in his article – this is complete hypocrisy. We’re always talking about building walkable communities and encouraging alternate forms of mobility, but when it comes time to build anything new, we force a certain number of parking spots to be included. And so we end up encouraging the exact opposite.

  This also has a significant impact on the way we build our cities. Parking minimums can actually render smaller sites “undevelopable” simply because there isn’t enough room to lay out the required parking. In fact, it might surprise you how much of what we do ends up being governed by cars, parking, and traffic.

  That’s why I think this image is so impactful:

  The most accurate representation of the public space we give up for cars. Courtesy of @tchebotarev 🙂 #athiscity pic.twitter.com/KBUX0Td4fj

  — Brandon G. Donnelly (@donnelly_b)

  November 13, 2014

  //platform.twitter.com/widgets.js

  But I’m certain that a lot of this will change as Toronto continues to grow. Progressive cities all around the world are rethinking their positions on parking, and on cars in general.

  Earlier this year Sao Paulo joined the club and got rid of parking minimums for sites along major transit corridors. And they actually imposed a parking maximum: 1 spot per residence. The expectation is that this will reduce traffic and improve housing affordability.

  Parking minimums may not seem like a big deal, but the reality is that their impacts are far reaching. They change development patterns, they change project economics, and they send a message about the kind of city you hope to build.

  Image: Looking south on University Avenue in Toronto (Flickr)

  2014.11.15