Tag: development

• Empire and ego

  This morning I stumbled upon an old New York Times article from August 7, 1983 called: The Empire and Ego of Donald Trump.

  Here’s an excerpt you might find interesting:

  The essence of entrepreneurial capitalism, real estate is a business with a tradition of high-rolling megalomania, of master builders striving to erect monuments to their visions. It is also typically dynastic, with businesses being transmitted from fathers to sons and grandsons, and carried on by siblings. In New York, the names of Tishman, Lefrak, Rudin, Fisher, Zeckendorf come to mind.

  And now there is Trump, a name that has in the last few years become an internationally recognized symbol of New York City as mecca for the world’s super rich.

  “Not many sons have been able to escape their fathers,” said Donald Trump, the president of the Trump Organization, by way of interpreting his accomplishments. Three of them, built since 1976, stand out amidst the crowded midtown landscape: the 68- story Trump Tower, with its six-story Atrium housing some of the world’s most elegant stores; the 1,400- room Grand Hyatt Hotel, and Trump Plaza, a $125 million cooperative apartment. And more is on the way.

  “At 37, no one has done more than I in the last seven years,” Mr. Trump asserted.

  As I read this, 3 things came to mind.

  1) One could argue that, as real estate development institutionalizes, the megalomanic and dynastic nature of the business is being somewhat muted.

  2) I hope we are well beyond the point where a “dynasty” has to be transmitted only through men. We are, right?

  3) Trump sounded the same at 37.

  2016.05.21

• 3 obscure things to think about before buying a condo

  If you’re an architect, developer, or someone else in the business of building buildings, chances are you have an extensive mental list of things that you would think about before buying a piece of real estate. I know I certainly do. These are things you learn over time – sometimes by making mistakes.

  Depending on the type of real estate, this list would vary. So this is not going to be a comprehensive list of things to consider, by any means. But today I thought I would mention 3 things that a lot of people might not think about when buying a new condo, particularly when buying pre-construction off drawings.

  Noisy Adjacencies: 

  What’s around the suite? Elevator shafts, mechanical rooms, and gyms all create noise. There are measures to protect against all of these noises, but that doesn’t stop me from worrying about these sorts of things. For instance, in my experience, some (many?) condo gyms don’t have the right kind of floor to deal with dropping weights. In these cases, something is usually done after turnover to address the noise complaints.

  Exposed Overhangs: 

  Does the suite overhang the floor below or sit on top of a space that is exposed to the elements, such as a loading bay or walkway? If so, you might get a cold zone if it hasn’t been properly insulated or heat traced. Of course, most projecting condo balconies also create a thermal bridge that can create a cold zone around it. But the first example could be worse. If you live in a place that doesn’t have subarctic winters (Toronto) this may be a moot point.

  Transfer Floors: 

  The most efficient way to build a multi-family building is to repeat the same floor plan as you go up the building. This ensures that everything runs in a straight line. The minute you create stepbacks and offsets, you then need to start “transferring.” This means that structure and services will need to be brought from one location of the building to another. This can lead to deeper structural beams and additional bulkheads which could then impact ceiling heights in the suites. This won’t always be the case, but something to think about when you see dramatic changes in the building’s form next to your suite.

  Again, this is not a comprehensive list, but these are some of the small – perhaps anal – details that I would think about if I were buying a condo. Feel free to add other items in the comment section below. They don’t have to be anal-retentive in nature.

  If you’re on the building side, you work to get ahead of these issues by, for example, anticipating where you could need additional height for transfers and sound attenuation (such as around mechanical spaces). But buildings are complicated and sometimes things happen. It’s a long way from initial sketch to finished occupied building.

  2016.05.21

• What it takes to unlock infeasible development land (and some thoughts on parking)

  

  One of the questions that came up after my recent post about land pricing was: what is it going to take to develop underutilized land on the outskirts of city centers?

  So today I thought I would talk about a new development project that was also discussed at the Land & Development conference I recently attended. I think will begin to answer this question.

  The project today is known as the Rockport Weston Community Hub & Rental Building. And it’s going to include a community cultural hub, 26 live/work artist spaces, and 300 rental apartments. 

  It’s located in the Weston neighborhood of Toronto, which is designated as a “Neighborhood Improvement Area.” These are lower-income areas that the city considers to be “at-risk.”

  Given this, rents are naturally lower here than in other parts of the city, which means that it’s basically infeasible to develop here. There has been no large scale development in this community since the 1970s!

  To put some numbers to this, the developer said they were projecting rents somewhere around “two and a quarter.” So let’s assume for a second that the average apartment rents will be $2.25 per square foot. 

  At this rate, it means that a 600 square foot one-bedroom apartment will have a face rent of $1,350 per month. This may seem fairly high, but it almost certainly wouldn’t be enough to get a project like this off the ground under normal market conditions. At least, that’s the case here in Toronto with current cost structures.

  So what had to happen was a fairly complicated public-private partnership, which you can read all about here. But at a high level, there seems to have been 3 main economic factors that allowed this project to move forward:

  1) The developer was able to acquire the land for cents on the dollar. As I said in this post, land is expensive. So this helps a lot.

  2) The developer was able to make use of extra parking in an adjacent building. Assuming that underground parking could cost around $50,000 per stall, this is a huge cost savings.

  3) Lastly, the project is benefiting from the public invest made in the airport rail link that now quickly connects this site to both Pearson International and downtown Toronto.

  The moral of the story is that infeasible sites require some sort of subsidy or top up to make them work. Or, there needs to be an exceptional circumstance. Because if the rents aren’t there, nobody is going to build. It’s as simple as that.

  That said, here’s one idea…

  This discussion reminds me of a post I wrote a while back called, The hypocrisy of parking minimums. Frankly, I don’t understand why a city like Toronto still has parking minimums. If anything, we should have parking maximums.

  Underground parking is a huge cost that has to get carried by purchasers and renters in a new building. For example, let’s assume that 300 apartment suites would require 180 parking stalls (ratio = 0.6). Assuming $50,000 per stall, that’s a $9 million cost.

  So the second takeaway is that it’s probably time we took a good hard look at how we think about and plan for parking in our cities. Especially since the entire mobility space is being quickly disrupted.

  Image: Rockport

  2016.05.12

• It sold for what?

  Today I spent the day at the Land & Development conference here in Toronto. If there was one running theme throughout the day, it was: “Holy shit, I can’t believe that X piece of land sold for $Y million. How will they (the developer) ever make the numbers work?”

  Outside of the real estate development community, there’s often the perception that developers are building everywhere and that there’s lots of land left in cities, like Toronto. When you see all the cranes in the skyline, it naturally seems like we’re building a lot. Things seem easy.

  But the reality is that it’s extremely difficult to find “land” in markets like Toronto and Vancouver. And by “land”, I mean properties that can be feasibly acquired/assembled, entitled, developed, and then brought to market. The way the speakers today spoke about land it’s as if it were a rare precious commodity.

  I say all this, not to complain about how tough things are, but simply to shed light on the process. A developer’s job is to take a piece of property and figure out a way to create additional value. But to do that, they need to find a suitable piece of real estate. “Land” is an input.

  This has implications for consumers, because inputs turn into outputs. And if one of the inputs is becoming scarcer, then it’s pretty safe to assume that the outputs, such as new housing, are also becoming scarcer.

  2016.05.11

• Is Toronto a world-class city?

  

  Earlier this week I was on a panel discussion called Building Toronto Tomorrow. One of the questions was about whether or not Toronto is world-class city. It elicited a good discussion, so I thought I would talk about that today on the blog.

  Shamez Virani, President of CentreCourt Developments, responded by saying that he thinks Toronto is the greatest city in the world and that he wishes more people would just accept how incredible this city is. I agreed with him.

  I also responded by saying that I hate this question. I think it reeks of insecurity and I think it’s a bit of a red herring. It distracts from more direct and meaningful questions – questions such as our livability and our position as a global city.

  Because the reality is that Toronto is one of the most livable cities in the world and, in my view, we are the only true global city in Canada. We are an important node in the global economy for the flow of goods, people (we’re particularly good at this), capital, and now information. There’s a lot to be proud of.

  But that’s not to say that we’re perfect. Everyone knows we need better transit. And to name a few others (non-exhaustive list), I also think we need to:

  • Get a move on road pricing.
  • Loosen up our archaic alcohol laws and start using nightlife as a competitive advantage for attracting talent.
  • Acknowledge through our governance structures that cities are what drive today’s information economy.
  • Stop thinking about the Canadian/Toronto value proposition as being about cost savings. That is, buy this from us because our currency is weaker than yours. This is anti-innovation and there are much better ways to create sustainable value. (Innovation is still a weak spot.)
  • Focus on developing an information economy that leverages the unique talent and knowledge base of Toronto. For example, I think we’re in a great position for real estate + tech innovation.
  • Do everything we can to encourage big tech IPOs in this city. They are critical to developing the ecosystem.

  There’s a saying in Silicon Valley that you “make what you measure.” It means that whatever you decide to focus your attention on, is invariably what you end up making – regardless of whether or not you happen to be focusing on the right metric.

  In the context of Toronto, I think we’d be better served if we focused on and quantified our position in the global economy, as opposed to chasing some idea of “world-class.” The latter will grow as the former grows.

  I also think that this needs to be balanced against our livability. Sometimes there’s a tension. But there are cities – the best example is perhaps Tokyo – who have managed to pair a high quality of life with one of the strongest positions in the global economy.

  Is there anything else you think we should be doing? We can talk about it in the comments below.

  Image: Building T.O Toronto (BuzzBuzzHome Event)

  2016.05.07

• De Rotterdam…

  

  “Manhattanism is the one urbanistic ideology that has fed, from its conception, on the splendors and miseries of the metropolitan condition – hyper-density – without once losing faith in it as the basis for a desirable modern culture. Manhattan’s architecture is a paradigm for the exploitation of congestion.” 

  –Rem Koolhaas, Delirious New York, 1978

  Image: De Rotterdam by photographer Ossip Van Duivenbode via The Architectural Review

  2016.05.07

• Lisbon creates 24-hour district

  

  About a year ago I wrote a post called, Lisbon is the new Berlin. The timing of the post happened to coincide with Monocle’s first ever Quality of Life Conference, which was held in the city.

  Since then, I’ve been keeping an eye out for all things Lisbon and the city has quickly jumped to the top of my list of places I want to visit. I am obsessed with understanding the triggers that catalyze change within a community and/or city.

  On a related note, Lisbon has recently put in place new regulations to control nightlife in the city. Bars in certain areas must now close at 2am on the weekdays and 3am on the weekends. Outdoor patios must close at midnight. If you have the right kind of soundproofing though, your bar can remain open until 4am. The impetus for these changes was to address nightlife noise complaints – a perennial problem in many cities.

  However, Lisbon has also created a 24-hour district along a supposedly underdeveloped area of the waterfront. This means that bars and clubs in this area will have the option of staying open 24/7. At the same time though, investments are being made (Portuguese article) to transform the area into something more than just a place for drinking and dancing.

  I am noticing a real trend in European cities around using nightlife as a strategic lever to attract talent and revitalize neighborhoods. Oftentimes the knee jerk reaction is to simply focus on the negative externalities associated with nightlife. But there are strategic benefits. Many cities today recognize that.

  Image: Mhx on Flickr

  2016.05.01

• 100 years since Cincinnati tried to build a subway

  

  I can get lost on Google Maps for hours on end. I love looking at maps and I love using Street View to virtually explore cities. This morning I’m honed in on Cincinnati, Ohio (a city I’ve never been to) while I listen to this podcast about their unfinished subway.

  In 1916, the city voted in favor of spending $6 million on a new subway. But it was never finished and so today – 100 years later – it has the dubious distinction of being the largest abandoned subway tunnel in the United States. 

  The podcast I’m listening to is with a fellow by the name of Jake Mecklenborg. He has written a book on the subway’s history and has emerged as the expert on this topic. And it all started with him just throwing up a website.

  One particularly interesting aspect of the subway is how it tied into the city’s flooding problems. At the time, the population density of the constrained downtown was surging and the subway was viewed as a way to stitch together desirable land and relieve some of those urban pressures.

  I’m also very interested in understanding how cities got founded in the locations that they did. As in, who was the person who dropped their bag and said: “yup, this, is the spot.” Somebody had to have made a decision.

  Oftentimes there were specific strategic, economic, and/or environmental reasons for a certain location. And this is something that Jake touches on. In the case of Cincinnati, flooding was again a major determining factor. 

  If you can’t see/listen to the podcast through the embed below, click here.

  //html5-player.libsyn.com/embed/episode/id/4210424/height/90/width/580/theme/custom/autoplay/no/autonext/no/thumbnail/yes/preload/no/no_addthis/no/direction/backward/render-playlist/no/custom-color/87A93A/

  Image: Jonathan Warren via Wikipedia

  2016.04.30

• Project Sidewalk

  One of Alphabet’s subsidiaries is a company by the name of Sidewalk Labs. Some of you, I’m sure, have been following it. The goal of the company is to leverage technology in order to solve some of our biggest urban challenges.

  Initially, they were fairly under the radar, but more recently they’ve become a lot more public with their projects and their mission. Here is a snippet from a recent blog post written by their CEO, Daniel L. Doctoroff: 

  “The world is poised for a fourth urban-tech revolution — an age of connectivity capable of reshaping cities as much as the steam engine, electricity, and automobile have in the past. New technologies will help citizens and elected officials tackle those intractable urban challenges that Larry outlined last summer, but making sure this age imposes fewer social costs than those previous shifts is critical.”

  Earlier this week it was also announced that the company is likely to enter the real estate development business and construct a new city precinct in order to pilot some of their ideas and projects. The initiative is called Project Sidewalk. 

  Here is an excerpt from the Wall Street Journal:

  “According to people familiar with Sidewalk’s plans, the division of Alphabet is putting the final touches on a proposal to get into the business of developing giant new districts of housing, offices and retail within existing cities.

  The company would seek cities with large swaths of land they want redeveloped—likely economically struggling municipalities grappling with decay—perhaps through a bidding process, the people said. Sidewalk would partner with one or more of those cities to build up the districts, which are envisioned to hold tens of thousands of residents and employees, and to be heavily integrated with technology.”

  When I read this, I immediately thought of the Port Lands area in Toronto. Not because Toronto is decaying – far from it – but because it’s a massive 880 acre site that is both adjacent to downtown and entirely underutilized. I can’t wait to see this area transformed into a thriving waterfront community.

  In any event, if or when Project Sidewalk gets off the ground, it will be very interesting to see what a Google-backed real estate development company looks like.

  2016.04.29

• The Social Life of Small Urban Spaces

  “It is difficult to design a space that will not attract people. What is remarkable is how often this has been accomplished.” -William Whyte
  

  In 1980, the sociologist and urbanist William Whyte published a revolutionary book called The Social Life of Small Urban Spaces. 

  The ambition was to discover why some urban plazas are successful and why many others fail. And to do that, he went out and studied urban plazas throughout New York using video and simple observation, such as head counting.

  His work has been hugely influential for architects, designers, and other urbanists. But if you think about how often we fail at creating urban spaces that actually attract people, I think it’s worthwhile revising what Whyte discovered way back in the 70s and 80s.

  Some of the principles – such as providing places to sit – are dead simple and intuitive. But again, a lot of urban spaces suck. So we’re clearly not doing it.

  The other thing I feel we often forget is that it’s not just the space itself that matters, it’s also the urban fabric around it. The Seagram Building in New York plays a central role in Whyte’s work as an example of a successful urban plaza. 

  But we can’t forget that Mies van der Rohe’s simple gesture of setting the tower back from the street is strengthened by the remaining urban fabric and the activity along Park Avenue. The plaza acts as a kind of release.

  Alongside the book, Whyte also published a 60 minute video. If you’ve never seen it, I highly recommend you watch it when you get a chance. Click here if you can’t see the video below.

  [youtube https://www.youtube.com/watch?v=MjxXTsHgc8g&w=420&h=315]

  To close out this post, I thought it would be fun if everyone shared their favorite public urban space in the comment section. It can be in your city or it could just be a place you’ve visited.

  To kick things off, I’m going to go with with a space that’s close to home: Berczy Park. It has lots of places to sit, including movable chairs. There’s a great water feature. And it’s well connected to the rest of the area and surrounding streets. I often sit there during lunch or when I just want to think.

  It’s also in the midst of a revitalization and I’m excited to see that come together.

  2016.04.27