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.
Matthew Slutsky (formerly of BuzzBuzzHome fame and now of Livabl fame) recently invited me on his podcast to talk about some of our current and upcoming condominium projects, as well as about the market in general.
Despite my best attempts, I only briefly talk about NFTs and crypto (in the context of our One Delisle project). So if any of you are sick of hearing that from me, the episode should be overall fairly tolerable.
To have a listen, click here. It’s about 30 minutes.
This is a fascinating interview with John Andrew Entwistle, the founder of vacation rental company Wander. The way to understand Wander is that it is a vertically integrated travel company. So unlike Airbnb, for example, Wander owns all of their real estate (vacation homes in top destinations), they property manage, they asset manage, and they are building out the technology required to connect all of this stuff.
They have also created what they are calling the first ever vacation rental REIT, which means that you can buy a piece of their real estate portfolio (currently 13 properties). In addition to being a source of cash, this creates an interesting flywheel effect where maybe you stay in a Wander and then decide to become an investor in their REIT, or vice versa.
Eventually though, Wander hopes to be just as asset light as Airbnb (which again, doesn’t own any real estate; they’re a booking platform). The idea is that REIT unit holders will ultimately own the real estate and they will be the asset manager / technology platform that sits on top. But that they will still control the entire travel experience.
John also gets into some of the specifics of how they run their business. For example, in each destination, they hire local cleaning crews and handy people (who are not Wander employees). They typically spend about 7% of the value of a property to furnish it (which is typically around $80-150k per property right now). And their average order size is around $4.5k, which suggests that people are willing to pay a premium for this vertically integrated travel experience.
I was recently a guest on Aaron Cameron and Adam Powadiuk’s Commercial Real Estate (CRE) Podcast. This is a podcast that they have been doing since 2016 (and it’s “powered” by First National Financial). In this episode, we spoke about making development projects work in this current environment, as well as a bunch of other things. If you’d like to have a listen, click here. It’s about 53 minutes.
Thanks for having me on your podcast, Aaron and Adam.
This an interesting discussion about Adam Neumann’s new startup Flow (which I recently wrote about here).
More specifically though, the discussion is about venture capital firms backing “failed” entrepreneurs, and whether or not Flow can really be that much more valuable than your typical apartment REIT.
In its simplest form, Flow might just end up being an apartment company with a strong national brand and a consistent resident experience. But maybe that’s all it needs to be.
If the link doesn’t already do it for you, jump to the 7:19 mark to start with this discussion. After Flow, the podcast moves on to housing policy in the Bay Area, Houston, and Miami. So you may also want to stick around for that.
A friend of mine sent me the above podcast episode this morning (click here if you can’t see it embedded above). I’ve only listened to a bit of it, but I plan to finish it up over the long weekend. Here are the topics it covers:
We discuss why the states with the highest homelessness rates are all governed by Democrats, the roots of America’s homelessness crisis, why economists believe the U.S. gross domestic product could be over a third — a third! — higher today if American cities had built more housing, why it’s so hard to build housing where it’s needed most, the actual (and often misunderstood) causes of gentrification, why public housing has such a bad reputation in the U.S.; how progressives’ commitment to local democracy and community voice surprisingly lies at the heart of America’s housing crises, why homeownership is still the primary vehicle of wealth accumulation in America (and the toxic impact that has on our politics), what the U.S. can learn from the housing policies of countries like Germany and France, what it would take to build a better politics of housing and much more.
I have heard from some of you that you don’t like it when I write about crypto and NFTs. This personal blog is supposed to be largely about city building after all. So today I thought I would write about crypto and NFTs. More specifically, this podcast episode, which I watched last night.
It’s with Marc Andreessen and Chris Dixon of the venture firm a16z, and it’s actually less about specific things like NFTs and more about the reinvention of the internet in general. Why I found it particularly interesting is that Marc co-invented the first widely-used web browser. Anyone remember Netscape?
So he was around for what we are now calling web 1 and he is around for what we are today calling web 3. And there are lots of parallels between then and now. Similar to today with crypto, the early internet had lots of critics and lots of people who thought it was dumb and that it would never amount to much.
Oops.
Here are a few other thoughts and ideas from the podcast that I found interesting (some of them even relate to city building):
No matter how many times we have seen the same movie, humanity seems doomed to repeat the same mistakes when it comes to, among other things, embracing new ideas and innovations. I agree with Marc in that part of this is generational. Younger people are often more open to new ideas because they view it as a way for them to establish themselves and make their mark on the world. Whereas older people (established people) often view new ideas and change as a threat to their current position in the world.
Marc drops a number of books throughout the talk and one of them is The Mystery of Capital — Why Capitalism Succeeds in the West and Fails Everywhere Else. This is a well known book by Hernando De Soto and the big idea is that property ownership and property rights are really the fundamental ingredients in our modern world. People need to know that if they hold title and invest money into something, it’s not just going to get taken away by someone. And it is this underlying legal structure that has allowed people to leverage property into wealth.
This is a fascinating observation in its own right, but it also relates to crypto. Hear me out. Chris Dixon makes the argument in the episode that web1 democratized information (anyone can search for stuff), and that web2 democratized publishing (anyone can share stuff through platforms like Twitter or the blogging platform I’m writing on right now). He then goes on to argue that the promise of web3 and crypto is really to democratize ownership of the internet. Anyone can buy crypto tokens.
Why might this be a big deal? Well if property rights in our offline world are a fundamental ingredient to modern society, it seems logical to me that property rights in our digital world(s) might also be equally transformative. And this is precisely one of the things that blockchain technologies enable for the very first time.
Finally, on a mostly unrelated note, I liked Marc’s comparison of happiness vs. satisfaction in life. Happiness, he explains, is like getting an ice cream cone on a hot summer day. The first and second feel great, but after that you move on. Satisfaction on the other hand is enduring. It’s the feeling you get from working on something really challenging and then finally succeeding. And that’s exactly how I feel about real estate development. There are lots of shitty days and lots of grinding. But in the end, I do feel very satisfied.
I was recently on RAD Marketing’s Future Frontiers podcast talking about real estate stuff with Daniel Marinovic (CEO and Managing Partner of Forest Gate) and Sean Zahedi (Vice President at RAD). I haven’t watched the video yet and I honestly don’t remember what I said (it was a few weeks ago), but if you’re interested, you can listen to it here and watch it on YouTube here.
This discussion between Patrick O’Shaughnessy and Marc Andreessen is a great follow-up to my recent post about the productization of housing. Broadly speaking it’s about tech, software eating everything, and the future of the world. But if you skip to around the 15 minute mark, Marc talks about the growing divide in our economy between sectors that are changing rapidly and sectors that are changing slowly.
Examples of the former include things like computers, media, retail, cars, and a lot of the other stuff that we regular consume. Examples of the latter include things like healthcare, education, and housing (you know, the pillars of the American Dream).
The noteworthy problem with this divide is that the fast changing sectors are producing things that have been getting more affordable over time. The specific example that he gives is televisions. Think about how much more TV you can get today compared to when they were first introduced.
In contrast to this, things in the slow changing sectors keep getting more expensive. The same university education is exponentially more expensive today than it was a few decades ago, even though it’s far more important for people to have an education than to own TVs.
A similar thing can be said about housing. How much has really changed in terms of the way we build new homes?
One of the common threads across these slow change sectors, Marc argues, is strong government intervention. We restrict supply such that we can’t meet demand. We then respond to higher prices by trying to subsidize demand, but this only drives prices up even further. Because, at the end of the day, we haven’t addressed the underlying issue.
The result is a doom loop.
If you can’t see the embedded podcast above, click here.
British designer Paul Smith was recently interviewed by Monocle on Design about his recent collaboration with BMW and Mini. If you like Mini cars, you’ll probably like the episode. But he also raises two interesting points about his business and about how he approaches design.
The first is that his business is a balancing act. In the front, he wants it to be pioneering, flashy, and self-indulgent. But in the back, he keeps the lights on by selling lots of navy blue suits and polo shirts. Both are important, because if you stop pioneering then you stop being relevant.
The second point he makes is about how he approaches design. Paul Smith’s London studio is famously cluttered. He likes to collect a lot of stuff. Some might call it hoarding. But for him, the space helps him think laterally and also remain “childlike.” (Where we work apparently matters.)
Children, as we know, are honest, curious, and free in a way that adults aren’t. They don’t have the same reference points and that can be very empowering. Forget the way that things are currently done and challenge yourself: “What if?” I like that a lot.
To listen to the Monocle on Design episode, click here.
Here is an interesting podcast with Austin Russell, who is CEO of Luminar Technologies. Luminar specializes in LIDAR vision systems for autonomous vehicles and has already cut deals with carmakers such as a Volvo. Starting as early as next year, Volvo hopes to start rolling out “fully autonomous highway driving” using LIDAR. And, supposedly, Luminar makes the best kind of LIDAR with ranges of up to 250m. But not everyone believes that LIDAR will be a necessary component of autonomy going forward. Tesla instead relies on vision (lots of cameras and fancy AI software), and Elon Musk has famously said that anyone relying on LIDAR will ultimately be doomed. Time will tell, though I am in the LIDAR camp because of the recency bias that this podcast has created. And in the interim, Luminar going public at the end of last year has made Austin Russell the youngest self-made billionaire in America.
