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: new york

  • The accents of North America

    Yesterday I watched this three-part series on the accents of English-speaking North America:

    The videos are by dialect coach Erik Singer and, I must say, his ability to fluidly move through all of North America’s accents is incredibly impressive. As I was watching the videos, I kept thinking to myself, “I don’t know what this guy actually sounds like when he’s not putting on an accent.”

    The interesting thing about accents is that they really speak to settlement and migration patterns. In other words, who came in contact with who, and who didn’t come in contact with others? Geographic isolation also leads to unique accents.

    The other ingredient is time. The reason the UK, for example, has so any regional accents is that it had the time for them to develop. On the other hand, if you look to most of the southwestern United States, there is broadly a kind of generic American accent (with the exception of some California and Utah nuances according to Erik). This is because these settlements are relatively young compared to say the northeastern US.

    For Canada, the defining feature is “Canadian raising“. It is what leads to the stereotype of us saying things like “aboot” and “hoose”. It doesn’t sound exactly like this, but there is a way in which we tend to pronounce diphthongs (two adjacent vowel sounds) with open-vowel starting points.

    Open-vowels are sounds where our tongue is positioned as far as possible from the roof of our mouth. If you try saying “about” to yourself out loud right now you’ll notice that this is what happens. Your tongue drops. And it is these instances that lead to “Canadian raising”.

    The other thing that I find fascinating is how quickly language convergence can happen. I lived in Philadelphia for 3 years (for grad school) and when I would come home my parents used to tell me that I sounded fully American. I guess subconsciously we feel a need to assimilate.

    If you’re also fascinated by accents, I highly recommend you check out Erik’s videos.

  • Feel-good stories about city building

    One of the things that I have learned over the years from sitting on panel discussions about city building is that, if I talk about the challenges and economic realities of development, I will be less popular than if I just tell feel-good stories about urbanism and architecture. The latter is often what people want to hear. It’s more exciting.

    But to ignore the economic realities of the world is to ignore real solutions. And this, as I have talked about before, is one of the main qualms that I had with architecture school. Money, economics, and real estate matters were tertiary, if not entirely taboo. Just focus on the purity of design and everything else will resolve itself.

    Now don’t get me wrong, I love design. It is fundamental. But so are a bunch of other things, which is why I think this article, by Benjamin Schneider, hits the nail on the head. It is specifically a review of a MoMA exhibit called New York, New Publics, but really the overarching message is this one here: “Enough with the feel-good architecture.”

    To tell a feel-good story within this framework, urban development projects must be edited and curated to cleanse them of these associations. Favored projects must somehow appear to transcend capitalism, NIMBYism, an anti-urban federal government, and the compromises inherent in the transformation of the built environment. Because this is impossible—except in the case of marginal beautification projects—the public is left with false expectations about how cities get built, making the hard stuff even harder to pull off.

    City building always involves compromises. But the more we’re upfront about what they are, the sooner we’ll get to more optimal solutions.

  • Dubai is now the top “super-prime” residential market

    People continue to buy expensive homes:

    Global super-prime ($10m+) residential sales bounced back in Q1 2023, with 417 sales across the 12 markets tracked in Knight Frank’s new Global Super-Prime Intelligence report. That’s up 11% on the 376 recorded in Q4 2022 and the highest volume since Q2 last year.

    The biggest market in Q1 this year was Dubai (88 sales), followed by Hong Kong (67), New York (58), Los Angeles (46), Singapore (37) and London (36). While volumes rose in Q1, the total value of sales fell 4% to $7.2 billion. The most expensive average super-prime sales took place in Geneva ($23.8m) and London ($20.4m)

    What is perhaps most interesting, though, is how central Dubai has become in the flows of global capital. In 2019, Dubai accounted for 2% of all super-prime sales in the 12 markets that Knight Frank tracks.

    Today, looking back at the most recent 12-month period, Dubai now accounts for 17% of all super-prime sales, placing it ahead of London, New York, and Los Angeles.

    Part of this jump likely has something to do with the “housing disaster” that Dubai was going through back in 2019. But even still, it is impressive to see just how quickly the city has managed to build and position itself as an alpha global city.

    I much prefer walkable cities, but clearly there are enough other people who don’t care about that sort of thing.

  • US public transit ridership since March 2020

    Consider the following stat: 65% of all transit trips across the US in 2019 came from just 6 metro areas: New York, Boston, Chicago, San Francisco, Washington, DC, and Philadelphia. Not surprisingly, these are all places with dense and walkable urban centers. In other words, they have built environments that are conducive to the use of public transportation.

    While we know that more people working from home has been bad for transit and that agencies across the world are facing deep holes in their budget, I continue to come back to two things. One, we have not yet reached a post-pandemic equilibrium. We are still making our way back to the office. And two, the single most important thing when it comes to transit ridership is land use.

    If we want more people to take transit, then we need to build our cities accordingly. That means streets people actually want to walk on, and a lot more density.

  • New York’s iconic Flatiron Building just sold

    Well sort of.

    Previously leased to Macmillan Publishers for the last 60 years, the building has been sitting vacant since 2019 and supposedly needs something like $100 million in CapEx to make it leasable again. Four of the five current owners have wanted to renovate it, but the fifth kept blocking it, and so the other partners sued for a “partition auction.”

    That auction happened last week, and even though the four owners were really trying to lock down the 25% share that they didn’t own, the auction was won by an outsider at $190 million. That said, a 10% deposit was to be due the following day and, apparently, that never happened. So maybe it hasn’t sold yet. But whatever, it’s still interesting to think about its purchase price.

    According to Wikipedia, the Flatiron Building is 255,000 square feet. So at $190 million, the building was “purchased” for $745 per foot. Assuming that it needs another $100 million, that’s another $392 psf, for a total of $1,137 psf.

    What I am curious about now is how this compares to other office buildings in midtown Manhattan. Is there any sort of premium for being the Flatiron Building? And what would space in this building lease for following a renovation? i.e. What cap rate is the market demanding right now for an empty office building needing $100 million in renovations? Or, is the play to convert to residential?

    I don’t know enough about the real estate market in midtown Manhattan to answer these questions with any sort of precision, but I’m hoping some of you do and that you’ll leave a comment below.

  • Where the rich don’t drive — is density the new luxury?

    This data is from 2019, but I imagine that things would look pretty similar today and that it might even be a little more pronounced. The dataset from the above article looked at how many people have cars in a given area (a darker dot = fewer cars) and then plotted this against population density and income per capita.

    Here’s what that looks like for the regions of New York, Boston, Los Angeles, and Houston (data from 2013 to 2017):

    What is fascinating about these charts is that they show two different correlations. In dense and transit-rich cities such as New York and Boston, car usage is most closely linked with population density and not with income. The dark dots form a horizontal line near the top.

    However, in the case of Los Angeles and Houston, car usage is instead most closely linked with income and not with population density. The dark dots form a vertical line near the left — the lowest income per capita.

    So what does this tell us?

    It tells us that if you design a city to broadly require a car, then you are likely to sort people based on those that can afford a lot of car and those that cannot. On the other hand, if you design a city around transit, then you are likely to instead create a place where both the rich and poor get around in similar ways.

    There is also evidence that the latter is being increasingly viewed as more desirable. 2017 was the first year in the US where high-income young people (ages 26 to 33) drove less than low-income young people. Presumably these high-income people had choices, and so I tend to view this as a preference.

    As a whole, this is surely a good thing for our cities. But now I think we need to be careful not to allow density and walkability to become the new luxury that only the rich can afford.

  • A “New” New York

    Earlier this year, the Mayor of New York City, Eric Adams, and the Governor of New York, Kathy Hochul, assembled a panel of civic leaders and industry experts to try and come up with a plan for a “New” New York.

    Initially, this panel was intended to be entirely focused on reviving the city’s business districts, and in particular those that have been slow to recover from the pandemic. But scope creep happens and it ultimately grew to include two other important goals: make it easier to get around and encourage “inclusive, future-focused growth.”

    The recommendations from this panel were released today and it’s in the form of a report with 40 specific initiatives. In keeping with its original intent, the first recommended initiative is one that you would expect: “Make Midtown and other business districts more live-work-play.” And what that means is the following:

    We will remove barriers that have kept Midtown and other business districts stagnant by making it easier to convert and redevelop outdated office buildings to other uses, including residential, thereby empowering the market to create more vibrant, mixed-use districts. We will also update old-fashioned regulatory codes that have prevented small businesses from locating, expanding, and innovating in those districts, providing zoning flexibility for businesses to thrive. And we will unite our business districts behind a shared goal of vitality by aligning incentives for businesses to help maintain vibrant business districts.

    New York isn’t the first city to be encouraging office-to-residential conversions and it certainly isn’t going to be the last. I think most of you know that I am a firm believer in office-centric cultures and that I’m in mine 5 days a week. But this is a recalibration that is going to need to take place in some submarkets.

    And here is one of the capitals of the world — New York City — telling us that it needs to happen there.

  • Bright Moments should come to Toronto

    I love what Bright Moments is doing. And Fred Wilson’s post this morning — about their latest event in Mexico City — reminded me of that.

    Bright Moments describes themselves as “an NFT art collective on a mission to create environments where artists and collectors witness the birth of generative art together.”

    What this means is that they are working to move the experience of NFT art away from individual computer screens toward physical events where the art can be consumed and also created (i.e. minted) in a group setting.

    For a taste of what this actually means, check out their website and then hang out for a bit with their homepage video.

    So far they have hosted an event in the following 5 cities: Venice Beach (okay, actually a neighborhood), New York, Berlin, London, and Mexico City. And at each stop on their tour of what will be 10 places, they have done an in-person minting of their official collection, called CryptoCitizens.

    I haven’t been to one of them, but I can see how it would be a lot of fun and how it might change your perception of NFTs. So I am hoping that for one of their last 4 stops (the first stop was in the “Galaxy”), they’ll come to Toronto. Ethereum was pretty much created in this city, so I think it only makes sense for there to be Toronto CryptoCitizens.

    If you too would like to see this happen, make sure you tweet at Bright Moments and tell them that they should come to the greatest city in the world.

  • Super-prime home sales in New York and London

    Here’s what I can tell you this morning: Real estate development is a bit more fun when you don’t have to constantly worry about supply-chain issues, access to labor, high inflation, and regularly increasing interest rates. That said, if you just want to buy a super-prime property in one of the world’s preeminent global cities, things seem to be just fine:

    According to FT, both New York and London have continued to see a rise in super-prime sales this year and both have seen more of these sales in the first 8 months of 2022 compared to all of 2019 (before the pandemic). Note: These charts are showing home sales greater than US$10 million and greater than £5 million, respectively.

    On top of this, many or most of these buyers are, apparently, still able to access financing at LTVs of 100% (i.e. no money down). For what it’s worth, there is a London mortgage broker quoted in the article saying that he has arranged more 100% mortgages this year than in his entire 20-year career. Turns out that the best way to ensure access to debt is to not need it in the first place.

    Charts: FT

  • The disproportionate impact of urban renewal projects on non-white families

    Here is an interesting chart from the New York Times explaining the disproportionate impact that highway and urban renewal projects have had on non-white families in the US. The x-axis is the non-white population share in 1950. And the y-axis is the percentage of displaced families that were non-white. What this means is that the diagonal dotted line through the middle represents a kind of racially balanced displacement.

    However, as you can tell from the graph, displacement from 1950 to 1966 was not balanced. In Providence, for example, only 3% of families were non-white in 1950. But these families represented 31% of the ones displaced for renewal projects. In Philadelphia, about 18% of families were non-white, but here they represented 71% of those displaced.

    I don’t think that this will be news to a lot of you. “Urban renewal” is a loaded term in American urbanism. But the article does do a great job of taking you back through time in cities like Houston, Chicago, and New York. The article is also by Adam Paul Susaneck, who is the founder of Segregation by Design. If you’re interested in this topic, I would encourage you to check out his website.