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.
The garage shown above (with the pseudo green roof) is located in the Chelsea neighborhood of London. It measures about 11’ x 7’ and it – along with the site it sits on – is about to go up for auction.
It’s expected to go for more than £550,000 according to the DailyMail UK, which would make it the most expensive garage ever sold in the UK. The site area is 535 square foot – about the size of an average 1 bedroom condo in Toronto.
Below is an aerial view of the site. It basically looks to be residual land.
But as awkward as this site might appear, the expected value is being driven by the fact that planning permissions were granted to turn it into this:
It’s a 2 bedroom house that feels a lot like a laneway house. It certainly fits the description of “a house behind a house”, which is often how laneway housing gets described here in Toronto.
I wanted to share it because it supports my belief that, sooner or later, Toronto will come around to laneway housing. As property prices rise and affordability continues to erode, people will – quite justifiably – start looking in all sorts of new places for a decent urban home.
Many thanks to my friend Adrian for sending me the link.
I recently wrote about a startup called Flux.io in a post titled: How technology could completely change the real estate development industry. Given that I received a lot of positive feedback on this post, I thought I would let you all know that, as of today, you can now test out the product yourself for free online.
At Flux we believe that data, analytics, and visualization can help bridge understanding between stakeholders and result in smarter growth and faster development and faster building. The Austin Preview of Flux Metro is an important first step in this direction.
Flux Metro aggregates geographic data from public and private sources to build a three dimensional visualization, starting with downtown Austin. Alongside a rendering of the existing landscape, Metro shows what can be built on a lot or parcel under the zoning code. It considers more than 10,000 code sections for land use guidelines, height limits, floor area limits, setbacks, and view access rights as well as the locations of protected trees and daylight shadows to project what can be built and how it fits into the existing environment.
We believe that everybody should be able to understand what a zoning code means for their city and that visual representations are the best way to create a shared understanding.
Click here to signup and give it a try. It is based on Austin’s development code and on the same building site that was shown in the video I shared in my post.
Earlier this week, I wrote about the Charlotte Apartments in Berlin and tried to back into some of the numbers for the project. I wanted to compare the economics behind a mid-rise project in Berlin to one in Toronto.
After I wrote that post I forwarded it to Michels Architecture – who are the architects behind the project. I thought they might be interested in reading about my (crappy) back of the napkin type of assessment and I was also hoping that they might be able to shed some additional light on the details.
Well, they responded and graciously offered to do exactly that. So today I thought I would write a follow-up post with some additional details. I obviously don’t have everything – because they weren’t the developer for the project – but I still think you’ll find the information I got interesting.
The building has a total of 3 parking spots and they’re all on the ground floor (you can see them in this post in the second photo towards the right). They were for the penthouse maisonette/duplex units. This means that there’s only one level below grade and it’s basically for mechanical systems, storage, and waste disposal. So why does this matter?
It matters because it means lower construction costs and the ability to develop smaller sites where you may not be able to properly layout a parking garage without car elevators and other clever strategies. This is possible because, unlike Toronto, Berlin doesn’t have any parking minimums or maximums.
With respect to unit sizes, the penthouse units are 135 square meters or 1,453 square feet which, according to the architect, are small. From the 2nd to 6th floor, there are 4 units per floor and the sizes are 37 sm / 398 sf, 65 sm / 699 sf, 68 sm / 732 sf, and 81 sm / 872 sf. On the ground floor there are 5 units and they’re at 34 sm / 366 sf (x 2), 42 sm / 452 sf, 45 sm / 484 sf, and 76 sm / 818 sf. I would say that this is comparable to what you might find in a downtown Toronto condo project. Side note: Apparently the smallest units sold the quickest.
As of December 2011, the average sale price was 4,120 € per square meter. At today’s exchange rate, that would convert to $5,815 per square meter or $540 per square foot (in Canadian dollars). If we translate that into 2014 dollars, that’s about $575 per square foot, which would be low for prime locations/buildings in Toronto.
A big thanks to Michels Architecture for providing this additional information. It’s always great to get local insights. I hope you all enjoyed it – happy Friday.
Urban Land Magazine recently published an interesting article on the Hudson Yards project in New York, which is the largest private real estate development project ever undertaken in the United States. Click here for the article. Thanks to my friend Evan Schlecker for passing it along. It’s a good read.
The project is being co-developed by Related out of New York and Oxford Properties out of Toronto, and when it’s all said and done, it’ll be over 17 million square feet of commercial and residential space. It’s a $20 billion development project.
But beyond just being massive and epic, there are a bunch of other things that make this project unique. You can read about them all in Urban Land, but I’d like to share a few snippets with you all here:
The first is about the project’s placement on top of a rail yard:
In order to make use of a site already occupied by a working rail yard—including more than 30 tracks for the Long Island Rail Road and three train tunnels, with a fourth under construction—most of the development will be built atop two steel-and-concrete platforms. That base, and the buildings on it, will be supported by hundreds of concrete-filled caissons, which will be drilled between the rail lines into the bedrock.
Because the location of the tracks and tunnels limits the placement of caissons, only 38 percent of the site can be used to support buildings.
The second is about the project’s use of technology:
Beyond that, a vast number of sensors embedded in the site’s infrastructure will collect mountains of data on everything from temperature and air quality to pedestrian and vehicle traffic. That information, which will be scrutinized in real time by managers in an effort to fine-tune Hudson Yards’ operation, will also be shared with New York University (NYU) researchers, who will turn Hudson Yards into a laboratory for studying urban life and finding ways to improve its quality.
And the last one is about how it interfaces with the High Line (click here if you don’t know what that is):
Pedersen [of Kohn Pedersen Fox Associates] found an intriguing way to address the building’s surroundings. He allowed the High Line—a public park built on a historic freight rail line elevated above the West Side—to penetrate underneath the tower through a 60-foot-long (18.3 m) public passageway, so that the building will interact with the park and its visitors. Inside the building, a dramatic atrium “becomes the terminus of the High Line as it moves from south to north,” he says.
So there are a lot of interesting and exciting things going on with this project. What’s amazing though is how “vertical” this community will be. You have rail lines below grade. Platforms on top. Retail at grade and across multiple levels. And an elevated linear park cutting through the buildings. Not every city can make this work. New York can.
Depending on who you ask, the current condo boom in Toronto might be viewed as either a good thing or a bad thing (most will have an opinion). Some people think we’re simply building too many condos. And that too many of them are small, crappy, and geared towards investors – as opposed to end-users.
While I do agree that we could be doing more to create complete communities – that is communities which serve everyone from young singles to families with 3 kids – I think there are also a lot of positives associated with Toronto’s condo obsession (full disclosure: I’m a real estate developer). It has made us more sustainable, more reliant on alternate forms of (non-car) transport, and it has made us a generally more exciting place to live.
But that doesn’t mean we can’t do better.
Lately I’ve been wondering about how other cities do it. Specifically, those European cities that somehow seem to always be able to build awesome housing projects. So today I thought I would pick one and profile it. What I really wish I had was a financial pro forma to share with you all, but in the absence of that, I’ll try and back into some of the numbers on my own.
Shown above is the 9-storey Charlotte Apartments in Berlin. It was developed by WI Concept and designed by Michels Architecture Office. I chose this building because I think it’s an attractive one and because it’s of the (mid-rise) scale that Toronto is trying to promote along its many avenues. Here are the stats I was able to find online:
Site area: 347 square meters / 3,735 square feet
Building area: 3,000 square meters / 32,291 square feet (says gross floor area, but I don’t know if that means the same thing as it does here)
Construction costs: €3.6 million / C$5,065,691 (as of today’s rate)
Units: 28 (sold within 1 week of launch)
Market: ~70% of buyers in Berlin are believed to be foreign investors
Now, if we were actually building a development pro forma, we’d want to get a lot more granular in our calculations than what I’m about to do. We’d want to know gross construction area, net saleable areas, and so on. But for the purposes of this post (and because I have very little information), I’m going to simplify and do a back of the napkin set of calculations.
Based on above, the FSI (or density) is about 8.65 (32,291 sf / 3,735 sf). That’s roughly in line with many of the residential developments we’re seeing in downtown Toronto. The average unit size works out to be about 1,153 sf (32,291 sf / 28 units), but in reality it would be less if that 32,291 number is truly the gross floor area. You would need to subtract the corridors and other non-saleable areas from it before doing this calc. Either way, that is big compared to most downtown Toronto condos, but small for Berlin standards according to this ArchDaily article. Finally, if we look at construction costs, we get $157 per square foot in Canadian dollars ($5.065M / 32,291 sf). That’s low. I wonder what the land costs were.
Again, these numbers are rough rough. But I wanted to try and dissect a European development project and compare it to Toronto. The most surprising figure seems to be the low construction costs. If you have any additional insights, I would love to hear from you in the comment section below.
This change has been in the works for a number of years. And it’s already allowed in most of Europe and in other places in Canada, such as British Columbia. So it’s nice to see this finally happen here in Toronto.
The reason this is a big deal, and worthy of a blog post, is that it changes the cost structure for mid-rise buildings. Simply put, wood frame buildings are cheaper to construct compared to reinforced concrete and other buildings materials.
Some people think this just means developers will make greater returns. But I don’t think that’s the case (see microeconomics). The real opportunity here is to spur mid-rise development on sites that – before this change – would have been previously un-developable. That is, you just couldn’t make the numbers work.
As much as mid-rise buildings make a lot of sense from an urban design standpoint, it’s not always easy to find good mid-rise development sites. Mid-rise buildings are generally less efficient to build compared to towers and you have a lot of fixed costs that don’t scale down just because you’re doing a smaller project.
So what this change in cost structure will, hopefully, do is allow more product to enter the market. And since many big urban centers operate with perpetual supply deficits – precisely because it’s often so hard to build – this should actually help with affordability.
A few weeks ago I was invited by Toronto realtor Andrew la Fleur to participate in his True Condos podcast series. I had actually never met Andrew before in person, but I knew of him because of Twitter, his blog, and because he was an early user of my past startup, Dirt.
I was initially a bit apprehensive about being on a realtor podcast, because I thought it might end up as some sort of cheesy marketing piece. But I’ve come to learn that Andrew is not that kind of guy. He’s also interviewed some really great people in his podcast series (here’s the full list), so I feel honored to have been invited.
I’ve embedded the podcast below, but if for whatever reason you can’t see it, click here to be redirected to Andrew’s site. We talk for about 30 minutes, with a big focus on openness and transparency in the real estate industry. Thanks again for the invite Andrew. It was great to meet you in person.
Last month Oxford Properties submitted a site plan application for the redevelopment of the rundown Cumberland Terrace in Toronto’s Yorkville neighborhood. If you’d like to browse the full application (including all the drawings), you can do that here.
The proposal is a departure from previous plans and now includes 3 buildings: a 4.5 storey building, a 2.5 storey building, and a midblock 54 storey residential tower (the lobby is shown above). There will be both retail and residential uses.
For those of you familiar with the mall, it should go without saying that Cumberland Terrace is in desperate need of redevelopment. So I’m not going to talk about that today. Instead, I’d like to mention 2 other points that stood out to me about the application.
The first is the 2 midblock connections on either side of the tower, running from Cumberland Street to Mayfair Mews in the rear (see below). Yorkville has a history of intimate laneways, and so it’s nice to see some of this being carried through in a new development. It also opens up the opportunity for an improved Mayfair Mews.
Secondly, it’s somewhat surprising to see that the 54 storey residential tower is being proposed as rental. Toronto doesn’t build a lot of purpose-built rental apartment buildings. There are some (from the likes of Morguard and Concert Properties), but we haven’t done it at scale for decades. And that’s largely because the demand for condos has been so great.
But recently I’ve been noticing a renewed interest from the real estate community in multi-family rental assets. Cadillac Fairview also proposed a 65 storey rental building at the north west corner of Yonge Street & Queen Street last year – though they later withdrew their application.
In the US, rental apartments as a share of all new housing is also at record highs – over 30%. And that’s partly because credit remains tight (certainly compared to pre-2008) and economic growth has been tepid. But also because of demographic changes. People are having fewer children, later in life, and so many are putting off buying.
So I think we’re going to see even more rental apartments being built in Toronto in the coming years.
Earlier this week, Toronto City Council approved the equivalent of 755 storeys of new development, a lot of which will end up in the downtown core. The translates into 6,887 new housing units and roughly 4 million square feet of new commercial space. The Globe and Mail called it the Manhattanization of downtown.
If you’d like to go through the complete City Council meeting agenda, you can do that here. (I warn you though, it won’t be an exciting read.)
One notable project that was approved is 50 Bloor Street West, which is a 71-storey mixed-use building in Yorkville adjacent to and on top of Holt Renfrew (It includes a $6 million Section 37 contribution). I mention this one because it’s impressively tall and because it’s a project that I was involved with when I was at Morguard. Watch for Yorkville in the coming years, there’s a lot in the pipeline.
While I think this is all incredibly exciting, our chief planner, Jennifer Keesmaat, is entirely correct in pointing out that all of this highlights the desperate need for better infrastructure, the most critical of which is a relief subway line that cuts across downtown.
But to be clear, this isn’t a question of just planning for growth. This is a question of planning for growth and making up for decades of infrastructure disinvestment. That’s the position we’re in today, which means we have a lot of hard work to do. Though I’m confident we’ll get it done.
The other thing that this level of intensification should highlight for you is that public transit, and other forms of mobility such as biking and car sharing, have to be central to our goals. It’s simply infeasible for everybody to be driving around in a car. We’re currently demonstrating how efficient that ends up being.
One of the things that makes cities so exciting is the fact that they’re always changing. New restaurants open up. New buildings are built. Old buildings (with no heritage value, of course) are demolished. Bike lanes are added. New infill homes pop up in quiet residential neighborhoods. And the list goes on.
For years I’ve wanted an app or some sort of product that would allow city builders to keep track of everything that’s going on in their city. In the same way that Foursquare helps you find cool restaurants around you, I would like to know about everything that’s going on, from rezoning applications to construction updates.
One of the challenges, of course, is that I’m sure more people care about cool new restaurants than about esoteric planning applications. It’s definitely a niche market. But that doesn’t mean there isn’t a thriving group of people who do care. So I’ve decided to introduce an Architect This City hashtag on Twitter: #ATHISCITY.
I’ll be using it for city building updates and, if some of you join in as well, I think it could become a great way to keep track all of the neat things that are happening in our city, as well as in others around the world.
