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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Tag: construction

  • Risk and architecture

    Building things, as we all know, is a risky endeavor. I think of myself as an optimist, but the reality is that there are countless things that can go wrong. There’s approvals risk, political risk, market risk, construction risk, design risk, and many other kinds of risk, some/many of which will be entirely unforeseen. If you asked me two years ago, I wouldn’t have listed pandemic risk as being all that high up on the list.

    So one way to think about the process of building/developing is that it is an exercise in risk mitigation. This makes it sound a lot less sexy than “city building.” Given this, there can be a natural and understandable tendency to want to repeat what worked the last time around. Why make a change and introduce more risk into the system if you don’t have to, right? This is arguably one of the reasons why it is often said that the real state industry isn’t all that innovative. Too busy managing risk.

    To give a specific example, let’s say you’re really focused on managing design risk. In this case, you might make the decision to always work with the same architect. This way you can establish a set of typical approaches and a standard spec. You know how to work together and you know what you’re getting when it comes to working drawings. Rinse and repeat as best you can.

    There is also something to be said about a kind of product-driven or branded approach to development. In this case you want some consistency to help build a specific brand and experience. And just because you’re using the same firm, doesn’t necessarily mean you can’t innovate and be design forward. This is what great architects do. Think Foster + Partners and Apple. Their stores are powerful brand symbols but also wonderful and highly site specific.

    An alternative approach might be to continually use different (design) architects. And maybe partnering with an array of celebrated firms is part of your brand story. You introduce a certain degree of design risk because you’re now trying out and building new relationships, but you could perhaps argue that you’re mitigating other risks. Does using a brand name architect help to reduce market risk, for example? In some markets, it’s almost essential.

    I don’t think there’s a right or wrong approach here. Use the same firm, or don’t. Use international starchitects, or don’t. The point is simply that development is fraught with risks that need to be managed. Design is one of many. How you choose to do that depends on what you’re trying to do and what you’re after.

  • The Surfside tragedy

    What happened in Surfside, Florida this week with the partial collapse of a 12 storey building is a horrible tragedy. My heart goes out to everybody who has been affected. I can’t imagine how this must feel. The New York Times is reporting that some 159 people are still unaccounted for, as of last Friday night. At least 4 people have been killed in the incident.

    The focus right now is on saving as many human lives as possible. Without a doubt, that is priority number one. But this situation also raises a critically important question: How the hell could this happen in North America? When I saw the terrible news this week, I immediately flipped the article to one of our structural engineers with a note asking basically this.

    As many of you know, buildings are typically designed and built with lots of structural redundancies. This is so that these sorts of tragedies can be avoided. It is too early to know exactly what happened here, but there are going to be questions around the building’s original design and construction, its maintenance program (saltwater is awful for buildings), and much more.

    I am sure that all of this will come out in the fullness of time. And it is important that it does.

  • Below grade at Yonge & Eglinton

    I often hear people lamenting about all of the construction that is taking place right now at Yonge & Eglinton in midtown Toronto. But that’s kind of what happens when you build a new subway line (okay, a partially buried light rail transit line). Above is a recent drone video that Metrolinx released showing the progress at Eglinton Station (I think I would have gone with a little Booka Shade for the soundtrack instead). I bet that most of you will be surprised to see how much is happening beneath street level. If you can’t see the above video, click here.

  • The price of lumber is up about 193%

    Many of you are probably acutely aware that the cost of lumber has risen dramatically over the last year. Builders are building and many people seem interested in renovating their home right now — so demand is outstripping supply. But here is a chart from Fortune, with data from Random Lengths, showing you just how wild things have gotten. Back in April 2020, lumber was going for about $358 per thousand board feet, according to this data. As of the beginning of this month, the number had jumped to $1,048, which represents an all-time high and a 193% year-over-year increase. Who knows where pricing will go next, but the National Association of Home Builders is estimating that current pricing has added about $24,000 to the price of a typical new single-family home in the US.

    Image: Fortune

  • The crane is now up at Junction House!

    Today was an important milestone for Junction House: The construction crane was erected! The crew started early in the morning and we ended up having a perfect bluebird day (I don’t know where this expression comes from but it’s used all the time by skiers and snowboarders).

    It’s been a tough winter for most of us. And so in my view, it is particularly important to celebrate these kinds of milestones and achievements. Thankfully, there seems to be a general optimism in the air these days. I think it’s going to be a great summer.

    Now that the crane has been installed, it’s time to start building up.

  • Net new housing units in New York City since 2010

    Here are a few interesting stats from a brief report that New York City published this month about their supply of new housing units:

    • From January 1, 2010 to June 30, 2020, New York City delivered 205,994 net new housing units across the five boroughs.
    • This total includes 202,956 units from new construction and 29,161 units from the alteration/conversion of existing buildings. However, it also factors units that were lost as a result of demolition (-17,400) or alteration (-8,723).
    • Brooklyn saw the most supply, followed by Manhattan. The four highest-growth Community Districts were responsible for 1/3 of all new housing additions. These CDs are all formerly non-residential areas that were rezoned to allow living.
    • Manhattan saw the greatest loss in housing units as a result of alterations (people combining units). This was most prevalent in wealthy neighborhoods such as the Upper East Side, Upper West Side, and Greenwich Village.

    What is interesting about this last point is that it shows you that cities are far from static. New York City lost 26,123 housing units during the above time period, with 8,723 units being lost to alterations and people combining units.

    The orange areas on the above map are neighborhoods which actually became less dense over the last decade. And of course, this phenomenon is not unique to New York City. We are seeing the same thing play out in some/many neighborhoods in Toronto.

    What this mean is that the role of new development is really twofold. It allows a city to grow (i.e. house new New Yorkers), but it also replaces lost housing and relieves some of the pressures on the existing housing stock. I don’t think many people appreciate this dynamic — or perhaps they don’t care.

    For a copy of the full report (it’s only two pages), click here.

  • The development value chain

    When I was in graduate school, my plan was to create a vertically integrated design and development company. I loved designing things and wanted to remain close to those sorts of details, but I had already decided that I wasn’t going to be an architect in the traditional sense and that I was going to be a developer. And so my objective was to figure out a way to combine everything under one roof. How could we be designers, but also be the entrepreneurs that make buildings happen?

    In some ways, Mackay Laneway House is a manifestation of that model. Through a partnership with Gabriel Fain Architects, we (Globizen Studio) have been heavily involved on the design side. Gabriel did all of the drawings and the overall architecture, but we weighed in (more than your typical client), selected most of the FF&E, and even designed things like the kitchen (with Scavolini) and the exterior signage. I wouldn’t call it true vertical integration, but we did start to blur the lines between architect/designer and developer.

    One of the interesting things about this approach is that it begins to create some consistency and a bit of a branded product. The hope is that when Mackay Laneway House is fully complete, it will read as a Globizen project, which is not that dissimilar from what David Wex of Urban Capital was talking about in this recent podcast. Their projects are a specific kind of product. They generally repeat it, and if that’s not what you’re interested in, then you don’t buy an Urban Capital home.

    But this also raises an important question: what is the role of architects and architecture in the case of buildings as very specific products? (This is something that we have discussed before on the blog.) Is the job of the architect to create an interesting exterior shell that then gets populated on the inside by a specific product offering? Or is it even worse, is architecture sometimes just an “empty vessel” that gets interior design and a brand slapped onto it? In some cases and with some projects, it does feel this way.

    I am a firm believer in the value of architecture and design. An “empty vessel” is not architecture. It is, well, an empty vessel. And that is not what I aim for in any of the projects that I’m involved in. Creativity, function, thoughtfulness and, yes, beauty, are all important. At the same time, I think this is a valuable debate. These sorts of questions are helpful in dissecting the architecture/development value chain. And so I would be interested in hearing your thoughts in the comment section below.

  • Double height space at Mackay Laneway House

    The drywall started this week at Mackay Laneway House. This is a fun part of the construction process because it is that moment in time where, very quickly, the space transforms from a full on construction site to something that starts to resemble a livable space.

    What you are seeing above is a double height space (and 8 foot long skylight) that was incorporated into a sloping roof on the side of the house that faces the existing backyard. This is a design move that I felt pretty strongly about from the outset. Gabriel Fain, who is the project’s architect, likes to joke that it was really the only design directive.

    The move does a few things.

    1) It is a way to get light down and into the house without having a window facing the existing backyard. So it mitigates privacy concerns. 2) It frees up the north wall of the house, creating a place for a TV, art, photo backdrop, or whatever. You only have so many empty walls in a house of this size. And 3) it looks really cool and frames a large tree that overhangs the house.

    Stay tuned for more progress photos. The best way to do that is to follow @globizen.

  • 3 ways to get into real estate development

    The most popular post on this blog is this one here called, “What real estate developers do and why I became one.” This post alone has been responsible for a good chunk of the organic traffic that this site receives since I wrote it back in 2014. If you search for “real estate developer” in Google it usually comes up on the first page.

    Probably because of this post, the number one question I receive in my inbox is about how to become a developer or how to transition into development from some other discipline. Usually this comes from someone who is early on in their career and/or is in architecture (which is not surprising given my background as a fake architect).

    I have tried to respond to this question publicly and at scale with a number of different posts. But many of you probably haven’t seen them before, and so I figured it would be a good idea to summarize some of them here (they’re usually tagged with “developer dirt“):

    If you’re looking for a more succinct summary of what to do, here is what I would suggest to you. You basically have three options.

    1) You can convince someone to take a chance and hire you, even though you likely don’t have any development experience. Maybe you have a background in something relevant such as real estate law, architecture, or politics (good). Or maybe you don’t (less good). Either way, the best way to position yourself is to understand what it is that developers do and figure out a way to create value for them from day one. You want to be in a position to say, “Yeah, I know I don’t have any direct development experience, but I can do X, Y, and Z for you starting today and I think that would be helpful to you for the following reasons.”

    2) Get a relevant degree. I’m thinking an MBA in real estate or some sort of master’s in real estate development. The reality is that the development business has, in many ways, become more institutionalized. It has gone, though obviously not entirely, from rich private families developing with their own balance sheets to more institutional capital sources, such as pension funds. Because of this, there are going to be hiring managers out there who need to check off certain boxes. For example, does this person have a real estate degree? This may make it harder for someone to take a chance on you if you don’t have the right experience and/or credentials.

    3) Just go out and do it. Despite becoming more institutional, the development business remains, in my view, a deeply entrepreneurial endeavor. You have to be able to problem solve and you have to be creative. The best developers I know don’t focus on can’t, they focus on how. Because there are too many obstacles in this business. A can’t mentality wouldn’t get you very far. So consider renovating a triplex, building a laneway suite, or doing something else that allows you to take a piece of real estate and create some additional value. Because that’s all that development really is at the end of the day.

    If you found this post useful, please consider sharing it with someone that you think would benefit from it. And if there are other topics that you would like me to cover (or cover in more detail), please feel free to leave a comment below or to at me on Twitter. I prefer Twitter over email because it forces brevity. Happy Canadian Thanksgiving, all.

    Photo by Bernard Hermant on Unsplash

  • Creating and making things

    The construction process can be a pain in the ass. It’s messy. It’s inefficient. It’s always filled with surprises. And you could argue, as many have before, that every job is really a custom job — a kind of prototype. But at the same time, there is something so deeply satisfying about seeing a building come to life. Part of that satisfaction no doubt comes from the fact that it usually takes years and years to get to the point in which you’re digging holes, pouring concrete, and framing out spaces. It’s almost as if we don’t want things to get built. It’s a feeling of “finally.” But perhaps the bigger part of this satisfaction stems from the fact that building is creating and making something new. It’s about imagining what something could be and then going out and doing everything you can to make that a reality. Some people won’t like what you’re trying to build. But they might when it’s finished. And it is almost certainly not going to be an easy process. But it’s a fulfilling one. Few things are as rewarding as creating and making something new.