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: development

  • Rethinking the tower

    The Ryerson City Building Institute recently published a new report called, Rethinking the Tower: Innovations for Housing Attainability in Toronto.

    It looks at four possible approaches to improving housing attainability/affordability in the city:

    Micro Living: Well-designed micro units can offer a cost-effective alternative to conventional apartments, particularly in central locations where higher land costs can be a barrier to affordability.

    Shared Space: Co-living, where residents share amenities and services, can improve affordability and create a sense of community, particularly in walkable, transit-connected neighbourhoods where housing costs are high.

    Home Unbundling: Features, finishes and amenities unbundled from the unit price of condominiums can allow greater choice and reduced costs for homebuyers.

    Equity Options: With more households renting, and the transition from renting to owning growing ever more challenging, new shared-equity models can help families invest in their home, even if they rent.

    In addition, the report also provides a number of project case studies from around the world. If you’d like to download a copy, you can do that here.

  • Junction House Sales Gallery — Now Open

    We just received a bunch of photos back of our Junction House Sales Gallery. So today is photo day on the blog. (Thank you Dialogue 38 for coordinating these.)

    Here’s the front “gallery” area. The artwork hanging on the wall is by local artist, Leeay Aikawa. Her work is terrific. You can see this space as you walk along Dundas Street West.

    Here is the model suite pavilion and main reception area (evening shot). The bar area is absurdly long. It was designed to accommodate beers from Indie Ale House down the street.

    Dialogue 38, the designers of the space, really wanted the model suite to be a “pavilion” — something akin to Mies van der Rohe’s Barcelona Pavilion. So here’s the ramp that takes you up and inside.

    Finally, here’s the model suite. The kitchen is by Scavolini. And the backsplash is a penny tile.

    The sales gallery is located at 2720 Dundas Street West and is now open every day of the week except Tuesdays. The hours are 1PM to 7PM during the week and 12PM to 5PM on the weekends.

  • Toronto to market 11 city-owned sites for new affordable rental housing

    At the end of last month, Toronto City Council adopted the “Housing Now” action plan. The first phase of the plan involves the public marketing of 11 city-owned sites for the purpose of finding non-profit and private sector partners to help redevelop the lands with new mixed-income housing. It is expected that these lands could accommodate about 10,000 homes.

    Here is the list of sites:

    As part of the offering, around 2/3 of the built units will need to be rental (the above chart shows more), and of these rental units, 50% will need to be affordable with rents set to 80% of Toronto’s average market rents. All of this should translate into approximately 3,700 new affordable homes. (Mayor Tory’s plan is to build 40,000 affordable rental homes by 2030.)

    The City wants to ultimately retain ownership of these lands, and so the sites will be offered up through long-term land leases. It looks like they’ll be for 99 years. The City will also be forgiving a number of fees and levies for the 3,700 affordable homes. They are pegging the PV (present value) of these development incentives at just over $280 million:

    Making use of surplus public land to increase the supply of affordable housing certainly makes a lot of sense. But there’s a cost burden associated with these affordable units, which is why discussions around inclusionary zoning often come back to offsetting measures. Who is going to pay for these subsidies?

    The above “financial incentives” — which in this case are simply foregone revenue — speak to this cost burden.

    Tables: City of Toronto

  • Height vs. density

    This Planetizen article (2014) by Brent Toderian surfaced over the weekend. It is about tall buildings and why we should be focused more on how they are designed, as opposed to just how tall they are. Brent talks about this in terms of “density done well.”

    One of the things that is often misunderstood when it comes to tall buildings is the relationship between height and density. It is often assumed that the two are perfectly correlated; but they’re not, which is why I like this quote from the above article:

    “Height and density have a relationship, one that can be over-simplified or mischaracterized, but they aren’t the same thing – you can have density without height, and yes, you can have height without density.” -Brent Toderian

    Part of the challenge is that density is a more nuanced metric. Height, on the other hand, is a lot easier to understand. How tall is this building? Oh, it is x storeys tall. But that’s only one piece of the puzzle.

    Photo by Erwan Hesry on Unsplash

  • Change, somewhere else

    I went snowboarding today. As always it was a lot of fun. If only Toronto had mountains.

    Here is a Canadian video about snowboarding from 1985 that, I think, does an excellent job demonstrating how resistant to change we humans can sometimes be.

    The video sure sounds silly today, but it probably didn’t in 1985. It aired on the CBC.

    I am writing this post on my iPad and there doesn’t appear to be a way to embed the video. The Tumblr app isn’t great. So all you’re getting today is a link.

  • Cost-plus pricing

    Today, Urbanation released its Q4-2018 market highlights report for the Greater Toronto Area. 

    The general media will pick up these numbers and tell you that there’s been a precipitous decline in the number of new condominium sales. But the reality is that 20,028 units were sold in 2018, which is actually in-line with 10-year averages for this region. 2017 was a particularly frenetic, and unsustainable, year.

    The average pre-construction sold price for a new condominium in the former City of Toronto (the core) was $1,117 psf last year, and $921 psf across the broader region. These numbers represent significant double digit increases from the year prior. But again, what I don’t think many people appreciate is that the cost environment has also changed dramatically over the last few years.

    Construction costs are way up, as are development charges and a myriad of other pro forma line items. The above numbers are simply a result of cost-plus pricing. Here’s where costs are at and here’s where we need to be to make the project feasible. Margins haven’t increased; in fact, they’ve probably been squeezed for many developers.

    I think this is an important topic that deserves more transparency and visibility. So I’m hoping to work with a developer friend of mine and publish something more substantial in the coming months.

  • Q4-2018 high-density land sales in Toronto

    image

    Bullpen Research & Consulting and Batory Management just published their Q4-2018 High-Rise Land Insights Report for the Greater Toronto Area. 

    Above is a mapping of the estimated per square foot buildable prices for the land that traded hands specifically in Toronto last quarter. 

    The average is $178 per square foot. And the projected average sale (condo) price is $1,097 psf. That sounds right. You basically need that kind of end pricing to make the math work with today’s costs.

    Across the GTA, the average spread between zoned and unzoned land was almost $40 psf. $159 psf versus $120 psf, respectively.

    A full copy of the report can be downloaded here. 

  • The geography of gyms

    Richard Florida and Patrick Adler recently looked at the geography of gyms across the United States. They analyzed 17 different fitness chains, over 10,000 gyms, and nearly 5,000 zip codes. Full article over here at CityLab.

    image

    The findings probably won’t surprise you, but it’s still interesting to see some of the data. Gyms and fitness studios tend to concentrate themselves in affluent neighborhoods with a high number of college graduates.

    The median household income of the average zip code with a gym or fitness studio is $72,720. This is compared to $56,694 for all zip codes. And when it comes to zip codes with an Equinox, SoulCycle, The Bar Method, or Town Sports Clubs, the median income jumps to over $100,000.

    Above is from the second post in the two part series they are doing on “the geography of fitness.” For the first one, click here.

  • Risk game

    “Francis is one of the most decisive people I know. He made a commitment to invest in our first venture capital fund in a five-minute cab we shared to work one morning.”

    —Fred Wilson, Co-Founder, Venture Capitalist, and Blogger, Union Square Ventures

    Francis Greenburger, who is founder and CEO of the real estate investment and development firm Time Equities, recently appeared on Barry Ritholtz’s Masters in Business Podcast.

    They touch on a number of topics, including why development sometimes produces more bankruptcies than billionaires; why development margins are compressed in Toronto; and how Francis popularized the co-op in New York. 

    Francis is also the author of Risk Game: Self Portrait of an Entrepreneur. So if you like the podcast – which is a great listen – there’s also a book for you. Click here for the podcast.

  • Director, Real Estate

    The University of Toronto is looking for a Director, Real Estate to manage their tri-campus portfolio of income producing real estate, as well as the development opportunities that they have on and adjacent to their three campuses. The downtown campus alone is over 120 buildings across 130 acres.

    A good friend of mine is helping with this search; I went to the University of Toronto (twice); and I believe that institutions, such as U of T, play an important city building function. So I’m sharing this opportunity with all of you today. For more on the University’s development strategy, click here.

    They are looking for someone with 10+ years of experience. The salary will be competitive and commensurate with this level of experience. And you would be reporting directly to the Chief of University Planning, Design & Construction. 

    If you’re interested, you can apply here. You have until January 25, 2019 to do that. I hope the position gets filled with a star. Also, sorry if this post isn’t relevant to you. Regularly scheduled programming will resume tomorrow.