Tag: development

• RioCan REIT announces new residential group

  On Monday, RioCan REIT announced its new residential brand: RioCan Living. This is the group that will now be responsible for redeveloping the 43 properties within their portfolio that they have identified as having intensification potential. Here’s how they are describing the new brand: “RioCan Living delivers best in class purpose-built rental units and condos along Canada’s most prominent public transit lines.”

  It has been interesting watching RioCan over the last 6 months. In the fall they announced that they would be selling off somewhere around $1.5 billion of their portfolio to rebalance toward Canada’s six largest markets, and in particular the Toronto market. And with this recent unveiling it is clear that they are doubling down on transit-oriented mixed-use communities as a way to future-proof their retail portfolio against disruption.

  Major markets. High-density. Transit-oriented. This shouldn’t surprise any of you. Here is a link to their latest investor presentation in case you’re curious.

  2018.03.06

• Manhattan apartment rents post biggest decline since 2011

  A friend of mine sent me this article earlier today with a sarcastic comment about the relationship between housing supply and rents.

  The article talks about how rents in almost every Manhattan neighborhood have fallen compared to a year ago because of a flood of new apartment supply coming online. The median rent dropped 3.6% (year-over-year) which is the biggest decline since October 2011.

  

  There has also been a spike in the number of leases with some sort of incentive attached to it (see above). As a landlord you typically want to use incentives, such as free rent, before resorting to lower face rents. Because lower rents mean a lower overall net operating income, which in turns depresses the value of your property.

  But sometimes you have no choice:

  “Landlords have finally realized, ‘OK, we have to adjust these prices because the concessions aren’t doing as much,’” said Hal Gavzie, who oversees leasing for Douglas Elliman. “Customers are looking past the concessions being offered and just looking for the best deals they can find.”

  A few weeks ago I wrote about a similar story playing out in Seattle. It’s almost as if excess housing supply is driving down rents.

  2018.02.14

• One year of Inclusionary Housing in Portland

  

  About a year ago, Portland enacted “Inclusionary Housing” policy requiring new apartment buildings of 20 units or more to offer up a portion of the units at below market rents.

  Developers are able to select from a few different options and the rents are calculated according to a percentage of the city’s median family income (30-80%). I’m not sure how this policy would apply to new condo buildings.

  This is an interesting account by The Portland Mercury of what this policy may be doing to the housing market. I say may because it’s only been a year and there could be other factors at play.

  Between 2013 and 2017, Portland typically built between 3,000 and 6,000 new units per year. Since the IH policy went into effect on February 1, 2017, 682 new units have applied for permit. 

  About half are coming from one developer who appears to be building the requisite affordable units in exchange for no parking minimums. They are now proposing buildings with zero parking.

  Again, in all fairness, it’s only been a year. But already Mayor Ted Wheeler is looking at other incentives to encourage more new construction in the central city. The biggest levers: height and density.

  All of this begins to speak to the very real impact of inclusionary zoning on development feasibility.

  Photo by Zach Savinar on Unsplash

  2018.02.08

• Skater’s Paradise: On/Off

  This skateboarding video is incredibly well done. I particularly like the 42 second mark. If you can’t see it below, click here.

  [vimeo 227394921 w=640 h=280]

  It’s incredible from a filmmaking standpoint, but – as I have said many times before on this blog – it also showcases the deep relationship between skateboarding and the urban environment.

  I can’t think of many other sports with that kind of relationship.

  2018.02.05

• Revisited: Habitat 67

  Last summer I went to see Moshe Safdie’s Habitat 67 in Montréal. Unfortunately, you can really on experience the architecture from the street. The entire complex is clearly marked as private and you can tell they have to work very diligently to keep the throngs of architecture nerds at bay. I almost called up an agent to see if I could see one of the listed apartments, but decided not to waste anybody’s time.

  Thankfully, James Brittain has a photography exhibition going on in London right now called Revisited: Habitat 67. The aim of the exhibition is to expose the hidden side of the famous housing complex, which I find fascinating, particularly because I wasn’t able to see anything hidden last summer. You can check out a bunch of his photos over at The Spaces.

  There are many dimensions to Habitat 67. But one aspect that stands out is this idea of conferring the benefits of low-rise single-family housing – things like large outdoor spaces and access to light – onto higher density urban housing. It is something that architects today still explore and something that we consider in basically all of our development projects. Habitat 67 considered this over 50 years ago.

  2018.02.03

• Los Angeles Councilman says upzoning near transit is the worst idea he’s ever heard

  Earlier this month I wrote about California Senator Scott Wiener’s bill to increase housing supply and mandate greater land-use intensities adjacent to transit. Here is that post.

  Judging by the comments, many of you seemed to think this was a fairly sensible proposal. I know I certainly did. Senator Wiener called it a housing-first agenda, as opposed to a housing-last agenda.

  So I thought it would be interesting to share how some people have responded to the proposal. 

  Los Angeles City Councilman Paul Koretz called it both “devastating” and “the worst idea [he’s] ever heard.” He went on to tell the LA Times that, within 10 years, people should expect their neighborhoods to be transformed into Dubai. 

  His conclusion: “I don’t think people want to see significant rezoning around single-family neighborhoods whether they’re near transit or not.”

  I don’t agree with his first set of remarks, but I agree with his second one. And that, of course, is the challenge. If you own a single-family home down the street from transit, what great incentive do you have to support intensification?

  Paul is the messenger.

  2018.01.30

• Why are apartment rents in Seattle dropping?

  This week I saw it reported that in this decade alone, the Seattle area is set to deliver more new rental apartments than it did in the prior 50 years combined. 

  And as a result, the sentiment is that new housing supply is finally starting to keep pace with demand and put downward pressure on rents. 

  Do you remember who was the crane capital of the US a year ago? They may still have that title.

  In some of the most desirable neighborhoods of Seattle – where much of the new supply is coming online – rents dropped 6% compared to the prior quarter. At the county level, this last quarter was by far the biggest drop of the decade according to the Seattle Times.

  

  Funny how that works.

  It’s also worth noting that the US as a whole is building far more rental apartments than condominiums. Here is a post I wrote in August 2015 which pegged condos as a percentage of overall multifamily construction at around 5.5%. That’s a tiny percentage.

  2018.01.20

• Hong Kong in plan view

  This morning I came across this drone photo of Hong Kong by @vnthota:

  

  I immediately thought it was a good example of the typical Hong Kong tower plan that I have been writing about on this blog. You can see the cruciform plan, the light/air cutouts, and how this plan allows for towers to be built directly beside each other.

  In some cases the result is perhaps not that dissimilar from a European courtyard block, except the building typology here is high-rise as opposed to mid-rise. Note the outdoor spaces in the middle of the blocks.

  The cruciform plan also creates a secondary scale of courtyards at the corners of these “tower courtyard blocks.” That is, where you have 3 towers arranged in a triangle. I only see two instances where you have 4 directly adjacent towers. Probably discouraged.

  It’s also interesting to note how relatively subtle shifts in tower positioning seem to open up the possibility of additional towers. You can see that just below the boat in this picture (not sure what the boat is all about).

  Is there anything else you find interesting in this picture?

  2018.01.13

• How the Time Warner Center came to be

  New York Magazine is running a weekly series right now that tells the stories behind key moments in the city’s cultural history. This week’s is about how the Time Warner Center came to be.

  Like most real estate projects, it took an enormous amount of time for it be realized. Multiple developers had attempted to buy the site, which previously housed the New York Coliseum.

  In 1987, the agency put out a call for proposals, its parameters calculated to yield the highest price and the biggest building. Among the 13 developers who responded was Donald Trump, who proposed the world’s tallest tower, 137 stories high.

  It’s a good example of just how difficult it can be to get a large project off the ground. The Time Warner Center opened in 2003. Thank you Paul for sending this along. Click here for the full story. 

  2018.01.12

• Price of 432 square feet in Hong Kong and the future of the region

  I came across this Hong Kong apartment listing earlier in the week. Sai Ying Pun is the neighborhood.

  

  HK$9.8 million = C$1,554,833 based on today’s exchange rate (1 CAD = 6.30293 HKD).

  At 432 square feet (net), that’s C$3,599 psf. But I have also been told that new buildings here could easily fetch C$5,000 psf and probably much more.

  There’s certainly a tremendous amount of wealth in Hong Kong. However, the topic of discussion right now is the new money being generated in mainland China.

  I am curious what all of this could mean for Hong Kong, it’s place within the PRC, and for real estate long-term.

  Hong Kong’s Basic Law stipulates that the region shall maintain a capitalist system and that its current way of life shall be preserved outside of the PRC. 

  But that constitutional document is set to expire in 2047 – fifty years after the handover from the British. And one would assume that China would favor more, rather than less, integration. 

  Already the Cantonese language – the official language of HK along with English – seems to be getting diluted in favor of the “speech of the officials.”

  So what will Hong Kong look like by the middle of the 21st century? Will it simply become a “second city” to Beijing and Shanghai?

  Place your bets in the comments below. Or call Miss Winnie.

  2018.01.05