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.

Subscribe

Tag: real estate

  • Toronto’s grand bargain gave us nodes instead of neighbourhoods

    Stephen Velasco maintains a wonderful set of models for Toronto showing existing, under-construction, and proposed/approved developments. Here’s his website and here’s an aerial he recently shared showing a large section of the city overlaid with subway and LRT stations.

    What is abundantly clear from this visualization is the “grand bargain” that has guided development in Toronto for over two decades: we won’t touch most of the low-rise residential land in the city, and instead we will create high-rise pockets next to transit.

    This was the path of least political resistance, and while building on top of and next to transit is obviously sound, the extreme density cliff we encouraged created several urban economic and city-building distortions.

    Land became artificially scarce, even though there’s lots of room within the boundaries of Toronto. And high density became our only option, eliminating many other housing typologies for Torontonians. But perhaps most importantly, it created an urban fabric of dense nodes that in many cases aren’t actually urban.

    What this means is that most of the city remains unwalkable, without urban amenities, and clogged with car traffic. The way to better use our existing transit infrastructure, create more amenity-rich communities, and reduce Toronto’s dependency on the car is to flank these isolated tower clusters with more evenly distributed density.

    Towers on top of stations are, of course, good, but there then needs to be a gradient of 4-12 storey buildings across the surrounding avenues, major streets, and interior residential streets.

    The good news is that we’re moving in this direction. It’s just going to take time for us to firmly strike a new grand bargain. But in my view, this city-building approach is going to guide the next two decades of development in Toronto.

    Aerial visualization by Stephen Velasco

  • A stack of single-family houses on Avenue Road

    I stumbled upon this proposal for 996-998 Avenue Road after Chris Spoke stumbled upon it. It immediately stood out to me because it’s a site we looked at when it was for sale, and because it’s a handsome-looking proposal designed by Richard Wengle.

    The minor variance application is for a new eight-storey building with 6 residential units, 1 surface visitor parking space, 6 long-term bicycle spaces, and 12 parking spaces in two underground levels (accessed via a parking elevator). This description alone should tell you the target audience, but here’s the typical floor plan:

    The fact that this 2,790-square-foot plan only has two bedrooms tells you that this is geared toward wealthy empty-nesters (although the family room could very easily be converted to a third bedroom). So the project is effectively a stack of single-family houses, each with two parking spaces.

    This is a segment of the Toronto condominium market that has proven to be the most resilient in the current environment, but who knows how deep that demand goes. Whatever the case, it does feel appropriate for this submarket.

    I’m not suggesting that this kind of unit mix should be aspired to everywhere, but this overall scale of housing is something we should be replicating all across Toronto’s major streets and avenues.

    That we’re starting to see more of it feels like a maturation of the Toronto market, or perhaps it’s just a sign that larger projects are significantly harder to underwrite today.

  • The $1.3M house built on a leftover triangle

    blogTO just wrote about 61 Seaton Street, which is a house on an atypical triangular lot in downtown Toronto and is on the market right now for $1,329,000. The story goes that this lot sat vacant for decades before architect Paul Reuber bought it in the late 1990s and took on Toronto’s zoning by-law to build what you see here. My rough estimate is that the lot is around 115 square metres, which isn’t that small, but it is a triangle:

    I love these kinds of irregular sites because they force creativity and offer a way to unlock hidden value. Our cities are full of neglected micro-parcels, but they often go undeveloped because of land-use policies or because the economics don’t work. Yet small or irregular sites are part of what gives cities their character. If any of you have an oddball parcel of land that has been sitting vacant for decades, drop me an email.

    Parcel map from the City of Toronto

  • The gravity of bond yields

    Customarily, the “risk-free rate” is considered to be the yield generated by a stable government’s debt. This matters to real estate investors because if you’re going to make an investment and take on additional risk, then you need to be compensated for that risk — earn a spread — above the risk-free rate.

    Bond yields are also similarly the foundational benchmark for lots of financial instruments, meaning that when yields go up, so does the cost of other things, like mortgages and real estate debt.

    As of August 17, the yield on the 30-year US treasury bond closed at over 5.3%. This was a 19-year high. Howard Marks of Oaktree Capital wrote a great memo on the topic that, as always, is worth a read. Among the factors contributing to higher bond yields, he calls out inflation being “stubbornly higher than is desirable” and the US’s “total lack of fiscal discipline.”

    The point of his memo is to once again argue that we cannot repeal the laws of economics without there being consequences. He quotes investor Stanley Druckenmiller who said, “Every basis point of artificial yield suppression is a subsidy to procrastination. Governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding.”

    Marks ultimately concludes: “I don’t think the U.S. can perpetually spend more than it takes in and not expect its creditworthiness to be questioned and its IOUs – its currency and Treasury securities – to be disrespected.”

    All of this suggests that real estate investors might want to be prepared for “higher for longer” financing costs. That means don’t count on cap rate compression.

  • New acquisition for Globizen Flats: 571 Oakwood Avenue in Toronto

    This week, Globizen announced a new acquisition for our Flats division: 571 Oakwood Avenue in Toronto.

    This is an exciting moment for us because it marks the first project in our strategy of unlocking underutilized urban sites to create thoughtfully crafted, design-forward rental homes in walkable, transit-oriented communities across Toronto.

    The mission is simple:

    • Fill a Housing Need: We believe there’s a gap in the market for spacious, well-designed, family-oriented rental homes at accessible price points.
    • Support Toronto’s Urban Evolution: We believe that Toronto is at a unique turning point in its urban history, transitioning from a monocentric downtown surrounded by low-rise suburbs to a polycentric city that fundamentally rethinks its relationship to the car.
    • Invest in Renewable Energy: Canada needs more clean energy capacity. We see this as an opportunity to create a decentralized renewable energy asset alongside our communities.

    Globizen Flats is a response to these beliefs.

    Check out the full post in the Globizen Journal. You can also subscribe and follow Globizen Flats (@globizenflats) on Instagram.

    As an aside, I initially created the above toilet image as a joke. It’s a photo of the bathroom in the existing house on site. But my partners thought it was cool and that we should share it publicly, so here we are. I bet that toilet was the neatest thing when it was first installed.

  • How Junction House built laneway towns for urban families

    Junction House was designed with 7 laneway towns on the north side of the building. The above photo is from 2023, right after we installed the wayfinding signage, which is why you can see the construction fencing sitting in the laneway. Alongside Superkul (architects), we made the design decision to incorporate ground-related towns for two reasons.

    First, we are supporters of laneway housing, and one of our city-building agendas is to find ways to revitalize and animate these spaces in Toronto. Incorporating laneway towns was a natural way to do this.

    Second, we were able to tuck these two-storey suites into the same height as our ground-floor retail on the south side. This meant that, even though our sales team was advising us that these would likely sell for a relatively low price per square foot compared to the rest of the building, it was the right business decision. It was still more accretive than additional single-level retail (or retail with a far less valuable mezzanine space) or some other unproductive back-of-house space.

    As a development aside, we originally designed these towns to be raised up from the laneway, accessible via a few steps. But during the rezoning process, the city asked us to shave down the overall height of the building to meet some symbolic height in metres that the local City Councillor demanded we achieve. It was frustrating, but we complied, and that’s why the towns are designed the way they are.

    Looking back on these suites a few years later, I continue to believe that we made the right big-picture decision, especially because of how they are now being lived in. These suites have a very high percentage of families with young children — children who often make use of and play in the quiet laneway.

    In hindsight, this makes perfect sense. These are larger, grade-related suites that offer some degree of relative affordability. In my view, it’s further evidence that not all families want to flee to the suburbs. We just have to find ways to deliver the right kind of urban housing for them.

    Second photo by Doublespace Photography

  • Why do cities build skyscrapers?

    Very generally speaking, cities build skyscrapers because of some mix of natural market forces and symbolic prestige. In cities like New York and Hong Kong, where land is extremely scarce and valuable, the only option is to go up. Tall buildings are essential. And in cities like Dubai, I think it’s fair to say that symbolic prestige has been the greater motivator, at least at the outset of the city’s modern reinvention as a global city. Tall, over-the-top buildings helped put the city on the map, even when tall, over-the-top buildings weren’t necessary from a direct economic standpoint.

    Another way to encourage tall buildings is to simply restrict everything else. Ontario’s Places to Grow Act of 2005 was well-intentioned. It was designed to encourage intensification, support transit investment, and curb urban sprawl. I believe that all of these things are desirable planning outcomes. But one of the ways that intensification was sold, politically, was that growth would only be directed to specific areas and that the preeminence of single-family housing in the region would not be in any way threatened.

    The result is what has been pejoratively referred to as “tall and sprawl,” meaning tall buildings surrounded by vast swaths of low-density housing. It’s a built-form contrast that feels unnatural precisely because it is a market distortion created by policy. In a pure market without zoning constraints, the likely built-form outcome would be a smoother density gradient down from major urban nodes and transit stations (where land values tend to be higher). Of course, the Toronto region is filled with countless counterexamples of this.

    Now, to be fair, good work is being done to address this missing layer of medium density, but we’re not there yet. And we’re still working through the supply of the last cycle. Rachelle Younglai recently published an article in The Globe and Mail called “Condo developers outside Toronto feeling the biggest strain from market’s downturn.” This is not surprising. Peripheral markets generally get hit the hardest during real estate downturns and take the longest to bounce back. But on top of this, there are suburban towers that probably didn’t need to get built. The economic imperative was tenuous but for the planning restrictions and the pre-construction condo market.

    My suggestion would be to upzone the areas surrounding these towers and remove as many development constraints as possible, especially around transit nodes. This may seem paradoxical given we’re currently talking about excess supply, but the glut is likely a product mismatch problem. Allowing the surrounding areas to fill in invites the market to build what is most in demand, smooth out the density gradient, build amenities, and create destinations that could then lift the value of the entire node.

    This is not an immediate solution, but it’s a path toward a more natural market outcome. Need a case study to point to? Look to Tokyo. Flexible permissions, mixed-use zones by default, and an orientation around rail have allowed Tokyo to organically evolve into one of the most livable global cities on the planet.

  • Why some of the world’s most valuable real estate is human-centred

    Yesterday we spoke about the growing divide between what I am calling machine-centred and human-centred real estate (feel free to suggest better titles in the comment section below). Machine-centred assets are introverted. By definition, they do not need to engage their environmental context. They are utilitarian spaces optimized for machine efficiency. Human-centred spaces, on the other hand, are extroverted spaces.

    A prime example of this is the approach taken by luxury conglomerate LVMH:

    • Trophy Real Estate: LVMH sees value in prime urban real estate in the world’s top global cities. In 2023, the company spent €2.45 billion on real estate in cities like Paris, London, and New York.
    • Mixed-Use Placemaking: Stores are no longer just stores. They are mixed-use places that blur the lines between retail, culture, food and beverage, hospitality, and whatever else strengthens the core brand.
    • High Street Bias: Between July 2024 and July 2025, JLL found that 59% of new luxury store openings across the US were in open-air, street-level locations. The three most active areas in the US were Madison Avenue, Fifth Avenue, and SoHo.

    A big part of this strategy is naturally about complete control. By owning standalone real estate assets in prime urban locations, brands can decide if they want to clad a 15-storey building in monogrammed Louis Vuitton trunks. But implicit in this desire is a recognition that the human experience is paramount when it comes to luxury. Emotional immersion, physical discovery, and a curated brand story are all part of the offering.

    Physical spaces also provide a platform for signaling identity and status, which is primarily why people buy luxury products in the first place. Machines can optimize for function, but human-centred spaces create the emotion that fuels some of the world’s most valuable real estate.

  • Site Tour: Craft Residences in the Junction

    This week, my friend Bill, who is the founder of Gairloch Developments, took me through his Craft Residences project. Bill has done and is doing a number of beautiful projects in the Junction and Craft is one of them.

    When we met up on Dundas, I immediately complimented him on the project’s use of green (which is, of course, Globizen’s brand colour). Craft has green brick mortar, green windows (on the outside), and green picket balcony guards. Love it.

    His response was, “It feels to me like a housing project you’d find in London.” And I think that’s exactly right.

    There are some design details that objectively just cost more to design and build. Often the simpler the detail, the more expensive it is to build. As one of my favourite design sayings goes, “Only the rich can afford this much nothing.”

    But there are other design details that don’t cost more; you just have to give a shit and make good decisions. Bill gives lots of shits, and it shows in his work. I’m super happy that he’s building in the Junction. Below are my photos from the site tour.

    P.S. Globizen has an upcoming, soon-to-be-announced project where we’ve been looking at design details to specifically communicate our brand. Some of them will be green. Please take it as a compliment, Bill.

    Update: Craft Residences was designed by BDP Quadrangle. Heather Rolleston is the principal in charge and senior designer.

  • Why real estate development is an art form

    When I interviewed Michael Cooper, founder of Dream, back in 2016, one of the things he said to me was that real estate development is one of the most creative things you can do. What did he mean by that?

    As a developer, you have to problem-solve within extreme constraints. There are zoning regulations, building codes, investor interests, neighbourhood associations, market conditions, and many other sometimes-competing demands at play.

    The job of the developer is to navigate through this maze, rely on the expertise of others, and come up with the best possible solution. That requires creativity, and it’s what Cooper was getting at.

    The process is also self-reinforcing: constraints are good for creativity. As filmmaker and actor Orson Welles once said, “The enemy of art is the absence of limitations.” In architecture school, we used to always say that the hardest thing is a blank canvas, because design is about solving problems. Constraints present problems.

    Of course, developers can’t solve these problems on their own. They rely on talented multidisciplinary teams and the advice they provide. But it’s important to keep in mind specific professionals tend to view problems through the lens of their discipline.

    A lawyer might feel strongly about a particular legal clause, or a structural engineer might view a particular design as optimal, but ultimately the developer is going to have to take these recommendations and evaluate them against the entire list of constraints they are facing. It becomes a creative trade-off.

    The developer has to have the largest field of view. Seeing the whole board is how you make it out of the maze.