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: McDonald’s

  • More retailers are buying real estate in New York

    Last week we spoke about how many businesses don’t want to own their own real estate, but that some do. We then spoke about Prada’s recent acquisition of 720 and 724 Fifth Avenue for $835 million. However, they’re not the only ones. According to New York’s The Real Deal (thank you John Bell for the article), last year saw the following transactions:

    • Swiss fashion house Akris bought a property from SL Green for $40.6 million
    • Japanese coffee retailer Geshary bought a property on Fifth Avenue from the Riese Organization for $38 million
    • And Dyson bought a building in Soho for $60 million

    Now, some, or a lot of this, is strategic. New York is New York, and global brands need to be there. Another part of this is that there was less competition last year. Fewer real estate companies wanted to buy retail and office buildings, and so end users seem to have stepped in at what they presumably saw as favourable prices.

    But it’s also not totally foreign for retailers to want to own their own real estate. Perhaps the most famous example is McDonald’s, which owns its own real estate and then leases it out to franchisees. Though as I alluded to last week, it’s important to know what business you’re ultimately in. And McDonald’s knows it’s in the real estate business.

  • Which building or structure would you say best symbolizes Toronto?

    I tweeted this out last night:

    blogTO then picked it up and it got quite a bit of engagement.

    Some people, okay a lot of people, used it as an opportunity to be tongue in cheek and respond with things like: cheaply built condos, boarded up Starbuckses, Hooker Harvey’s, Drake’s house in the Bridle Path, the crumbling Gardiner Expressway, and that McDonald’s at the northwest corner of Queen and Spadina (this one is no longer a contender for me now that they’ve gotten rid of their walk-up window).

    Of course, there were also a lot of the usual suspects: The Sky Dome, The Gooderham Building (our miniature Flatiron Building), Casa Loma, The Royal Ontario Museum (specifically the expansion by Studio Libeskind), “New City Hall”, The Royal York Hotel, Honest Ed’s, The St. Lawrence Market, Robarts Library (University of Toronto), and a bunch of others that you might find displayed on the seat screen on your next Air Canada flight.

    But I’d like to unpack the initial question a bit more. Because what does it really mean for something to be a symbol of a city? And is there an important distinction between the symbols that resonate with locals on a personal level and the symbols that get exported around the world as a city’s brand and identity? Indeed, one of the criteria in most global city rankings is a prominent and recognizable skyline. Icons are important.

    Let’s consider an example. I agree entirely with Sean Marshall that “New City Hall” is a deeply symbolic building. Built in the early 1960s after decades of work, New City Hall was the outcome of an international design competition. And it was decidedly modern at a time when Toronto really wasn’t that modern. Montréal was the biggest and most global city in the country and multiculturalism hadn’t yet become a federal mandate. And so New City Hall symbolized our genuine ambitions to becoming something more.

    But does the rest of the world care? If you were to ask somebody my question on the streets of Rio de Janeiro or Tokyo, what would they say? What would they remember? The thing about most tall buildings or other city symbols is that they become abstractions. They turn into pictures on social media — like logos of a company. But maybe that’s all we can reasonably ask of the world. Maybe all that really matters is that a symbol has local significance; it’s then up to us to export it and tell that story to the rest of the world.

  • The “job” of a McDonald’s milkshake

    Management guru Clayton M. Christensen died this week. Sadly, he was only 67 (leukaemia). A professor at Harvard Business School, Christensen was best known for probably two things: His work on disruptive innovation and his teachings on how to live a more fulfilling life. If you’ve read anything on innovation and disruption, I am sure you’ve come across the work of Christensen. He had a way of explaining things by reframing them. Here is a short video about the “job” of a McDonald’s milkshake. And here is another one where he explains the cycle of disruptive innovations, sustaining innovations, and efficiency innovations. Both videos are worth watching.

  • On good design

    Last summer, Zach Mortice published this article in Metropolis talking about two new buildings in Chicago. Here is his architectural description of the first:

    Ross Barney’s design is unabashedly cosmopolitan, yet welcoming. Conceived as a series of interlocking Miesian pavilions, it comprises a glass cube containing the dining room and a smaller opaque volume, which holds the kitchen. The glass envelope shows off the restaurant’s burly cross-laminated timber beams, the first time this ultra-strong, low-carbon structural system has been used in Chicago. The exterior pergola is clad with solar panels and provides shade across an entire city block while also generating most of the restaurant’s energy. With a landscaped plaza and outdoor seating, there’s a strong focus on attracting pedestrians to this green-starved section of the city, with a landscaped plaza and outdoor seating.

    Zach is describing the then new flagship McDonald’s in the River North area of Chicago. That’s maybe not what you were thinking as you were reading the description, but it is, of course, part of a broader transformation for the brand:

    “We don’t need to be loud anymore,” says David Vilkama, McDonald’s global creative director. “We’re trying to move away from the old, cheap, plasticky, in-your-face fast food culture.”

    It is a clear example of the value of good design and also how it has seemingly become table stakes for many firms and industries. 

    But as Zach points out in this article, is this also evidence that brands need to, not only invest in good design, but also move upmarket in order to maintain growth?

    In other words: Does good design inevitably equal more expensive?

  • Digitizing fast food workers

    I think I am 1 of only 7 people in the world who actually likes the Filet-O-Fish sandwich from McDonald’s. That said, I rarely go, maybe only after a fancy small plate dinner. You know, the kind where you leave starving and you’re desperately searching for a burger on the way home just so you can go to sleep full.

    I have, however, been noticing the introduction of their digital ordering kiosks, which are part of the McDonald’s Experience of the Future strategy. The plan is to replace human cashiers in at least 2,500 U.S. locations by the end of this year and in another 3,000 locations by the end of 2018. By 2020, the majority of U.S. locations should have “EOTF” in place.

    Because of this, analysts are raising their price targets for McDonald’s. They are also attributing its surging stock price to these new operational efficiencies. MCD is up about 26% YTD. And you can bet the ROI math on these kiosks only looks better if/when minimum wages increase.

    This isn’t necessarily groundbreaking news, but if you’d like to dig into some of the math behind why customer-facing fast food workers are clearly going to become a thing of the past, you can do that here.

    I did want to single out one stat that I came across when researching how I will be experiencing Filet-O-Fish sandwiches in the future. 

    More than 70% of all McDonald’s sales in the U.S. happens via drive-thru. This stood out to me as being an extraordinary number, not because I don’t believe it, but because it very clearly speaks to urban-suburban form. It is saying that more than 70% of sales are happening in geographies where it’s actually feasible to have a drive-thru window.

    That’s not possible at the corner of Queen and Spadina.

  • burgerlords:

    anyone know who made these?

    Cyprien Bellens