Tag: real estate

• 5 random charts related to cities and real estate

  I was reading through PwC and ULI’s 2016 Emerging Trends in Real Estate report this evening and a handful of charts stood out to me. They’re not all related to each other, which is why this blog post is called what it is. But I think you’ll find them relevant to many of the things we talk about on this blog.

  1. Average home size by country

  With all the interest today in “small urban spaces” it’s interesting to see that the average home size for half the countries on this list is somewhere between 500 and ~1100 sf. It’s also amazing to see Hong Kong hovering just below 500 sf.

  

  2) The decline in homeownership in the US

  I like to follow home ownership rates because there’s a lot of debate around whether or not this obsession with homeownership – which has been so central to the ethos of countries like the US and Canada – is at all falling out of a favor. This chart shows some pretty significant drops from previous highs.

  

  3) Average home prices and the price to income ratio in major Canadian cities

  Not surprisingly, Vancouver and Toronto are the top of this list with the highest average home prices and the highest price to income ratios (i.e. the worst affordability).

  

  4) Drivers as a percentage of all commuters in the US

  This chart is similar to what you would see if you looked at vehicle miles traveled. I’ve heard some people say that driving is now once again on the rise, but for the past decade and a half it’s been on a slow and steady decline.

  

  5) Countries buying US real estate

  Canada is a big buyer of US real estate. But with the dollar where it is today, I am sure that number is headed downwards.

  

  2016.01.02

• Yes, just do it

  

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  I have started to meet with developers for my new book – becoming a real estate developer – and I can’t begin to tell you how impressive and inspiring it is to learn about their stories.

  It’s easy to look at someone who is successful and feel overwhelmed by everything they’ve accomplished. But nobody starts at the top of their game (unless maybe they were born with a silver spoon in their mouth). Usually there’s a backstory of sweat and struggle that rarely gets told. As the saying goes: success has many fathers, but failure is an orphan.

  But those are exactly the kinds of things I hope to uncover with this little project. I am less interested in the successes and more interested in the early decisions, struggles, and thoughts that went into making those successes even possible.

  And one thing I’ve noticed is a tendency to just go for it. In fact, when I asked one developer if he had any advice for young aspiring developers, he said: just fucking do it.

  As soon as he said this I couldn’t help but think of my elementary school English teacher who used always tell us the same thing – minus the expletive – whenever we’d ask him something such as, how long should this paper be, should we focus on this or that, and so on. He would always say: What does Nike say? Just do it. No buts. Just do it.

  At the time, I obviously didn’t give this much thought. But the fact of the matter is there’s so much value in doing. And it’s easy to overthink at the expense of doing. What he was teaching us was to have confidence in ourselves that we would figure it out along the way.

  The reason there appears to be a lot of interest in “how to be a real estate developer” is because there isn’t really a set path. You don’t go to school, apprentice for a year under the wing of a developer and then, boom, you’re a developer. 

  Most developers have carved their own paths. They just did it.

  2015.12.30

• The benefits of sharing — what real estate could learn from tech

  One of the reasons I decided to start blogging was because I saw how open the tech community had become – with respect to sharing their ideas and experiences – and I thought that the same thing could and should be done in real estate, as well as in city building more broadly.

  But in many ways, the real estate industry is the antithesis of the tech industry. We are slow moving and secretive of our ideas. Now, some of this is driven by fundamental differences in terms of how these two sectors operate. It’s a lot easier to test and iterate on your ideas in tech than it is with actual bricks-and-mortar. But I still think about ways in which we, in real estate, could be pushing the envelope.

  As one example of what I’m talking about, take Union Square Ventures in New York. They call themselves a “thesis-driven venture capital firm”, which means they come up with a framework and core set of ideas, and then use those to drive their investment decisions.

  You would think that these frameworks and ideas would be pretty sensitive. I mean, they are the core drivers of their business. But their entire website is actually set up around sharing and collaborating – with the public – on these ideas. Here’s a screenshot:

  

  Each topic is something they are “thinking about” and something they want to make an investment in (or already have). Fascinating.

  Many of you, I’m sure, would argue that there are risks to doing this. But there are also benefits, some of which are driven by collective intelligence. By sharing their ideas and hypotheses with the public, it helps to evolve their thinking. After all, their investment thesis is not a static thing. It grows over time.

  But in addition to this, it also makes it abundantly clear to their customers (entrepreneurs) what they believe in and what they look for. And I am sure this helps them with deal flow. More and more customers aren’t just “buying” a product, they are also “buying” a philosophical underpinning and belief system.

  Can you imagine a real estate firm doing something like this? I can. But it’s not happening yet, as far as I know.

  2015.12.22

• Coworking, coliving, and an old architecture school project

  Coworking spaces are big business.

  One of the biggest of those companies is WeWork. As of last month (November 2015), the company had raised close to a billion dollars from investors like JPMorgan Chase, Harvard Management, and Benchmark Capital, and was valued at $10 billion. (Remember though, this is in the private not public markets.)

  If you’re unfamiliar with coworking spaces, check out this post from The Spaces. It’s a great demonstration of how beautiful these spaces can be.

  All of this is interesting because it speaks to the changing nature of work. There are a lot of people freelancing, participating in the “online gig economy” and working on new ideas. And in many of these cases, they don’t want or need traditional office space and/or they want the community that many of these coworking spaces afford – both offline and online.

  But it’s not just the office that is changing. It’s also potentially living spaces. Since 2014, WeWork has been talking about their new coliving concept, WeLive. The idea here is to combine smaller living spaces with larger common areas and create an overall live-work community. And they are not the only ones thinking about this.

  Below is a building section of what this might look. It’s from a Vornado Realty presentation. They are working with WeWork to deliver their new WeLive concept in Crystal City, Virginia.

  

  It’s so interesting to see this concept come to fruition. Back in 2008 when I was in architecture school, I worked with a classmate of mine and designed a modular coliving apartment building. It was called the Philly Flex Dwelling and it worked like this:

  

  The idea here was to start with standard floor plates and use a structural exoskeleton to minimize interior columns. This way you could insert whatever prefabricated modules you wanted and also re-purpose the structure should you want to change the building’s use in the future. 

  This is not that dissimilar from what was originally proposed for One Bloor West here in Toronto. Though the goal there was column-free retail spaces. 

  The yellow spaces are the shared common areas and the remaining spaces are the residential living “pods.” We also designed a “solar skin” that was perfectly tuned to the building’s orientation and location in Philadelphia. The idea here was to maximize winter sun (for heating) and minimize summer sun (to keep the building cool).

  That was a fun project to work on.

  2015.12.21

• 16 mobile theses and how tech might change the built environment

  

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  One of the things that I try and do here on this blog is examine the intersection of design, real estate, and technology. I didn’t explicitly set out to do that, but more and more I find myself thinking that way when I’m writing and when I’m giving talks.

  Part of that is because of my passions, but part of it is because there is a big and important overlap. One example of that is autonomous, self-driving cars. The tech community is enamoured with driverless cars, but everyone involved in the built environment should also be thinking about their impacts. Because it’ll be significant.

  Benedict Evans – who is a venture capitalist with Andreessen Horowitz in the Valley – recently published a post called, 16 mobile theses. It’s a look at 16 topics, trends, and shifts that are happening in the tech space. (There’s also a related podcast discussion.)

  If you’re involved in internet products, you absolutely need to give it a read. But I also think it’s interesting to read it through the lens of a designer or real estate person. Productivity is changing. Notions around the living room are changing. And yes, autonomous vehicles are going to have a profound impact on the urban landscape of our cities – just as cars did initially.

  Below are 3 excerpts from Benedict’s post that I really enjoyed.

  The first is about mobile and just how massive it is:

  “The mobile ecosystem, now, is heading towards perhaps 10x the scale of the PC industry, and mobile is not just a new thing or a big thing, but that new generation, whose scale makes it the new centre of gravity of the tech industry. Almost everything else will orbit around it.”

  The second is about how “networked” is quickly becoming a given:

  “Our grandparents could have told you how many electric motors they owned – there was one in the car, one in the fridge and so on, and they owned maybe a dozen. In the same way, we know roughly how many devices we own with a network connection, and, again, our children won’t. Many of those uses cases will seem silly to us, just as our grandparents would laugh at the idea of a button to lower a car window, but the sheer range and cheapness of sensors and components, mostly coming out of the smartphone supply chain, will make them ubiquitous and invisible – we’ll forget about them just as we’ve forgotten about electric motors.”

  And the third is about those self-driving cars:

  “The move to electric and the move (if and when) to autonomous, self-driving cars fundamentally change what a car is, but also what the whole automotive system might look like. Electricity changes the mechanical complexity of cars and hence changes who might build them and what they might look like. Autonomy and on-demand services change who buys them, meaning the buying criteria will be different. But they could also change the urban landscape just as much as cars themselves did – what do mass-market retail or restaurants look like if no-one needs to park?”

  Can you think of other ways in which tech will impact cities and the spaces we occupy?

  2015.12.20

• I’m writing a book on becoming a real estate developer

  

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  One of the most common questions I get from readers of this blog is: How do I become / get into real estate development?

  In fact, I get it so often that I’ve decided to write a book as my response. It may be a short one or it may end up a long one. If you’ve emailed or messaged me with this question and I haven’t responded, I’m sorry. There’s a lot of you out there. But I do want to help and that’s why I’ve decided to take on this hobby book project.

  As part of the book, I’ll be talking about my own journey, as well as the actual nuts and bolts of development. But I would also like to feature some much more established players in the business. In order to do that, I’ve decided to crowdsource some of the content for this book. 

  So here’s my ask to you: If you’re a real estate developer and would like to share your story, please complete this short questionnaire. You can be located anywhere in the world.

  My plan is to select a handful of developers from around the world and then feature their stories, one-by-one. I’m confident that there will be a lot of interest in hearing how successful developers established their careers and/or own businesses.

  I’ve been thinking about doing this for quite awhile now. It feels good to get started. 

  2015.12.19

• The highs and lows of mid-rise

  Last week
  was developer Urban Capital’s 5th annual “Naughty or Nice” party. It’s obviously a holiday tradition of theirs and it has become a tradition of mine to attend. Judging by my vast collection of photo booth photos, there’s a chance I may have been to all of them. It’s easily one of the best holiday parties in the business.

  One of the things that Urban Capital does at its annual party is release its annual magazine. And this year I was fortunate enough to be invited to write a piece for it on the highs and lows of mid-rise development. Put differently, it’s about the challenges facing developers who want to build mid-rise, but also why they’re pretty great for cities.

  

  If you’d like to have a read, you can do that online by clicking here. And if you’d like to receive a hard copy of the magazine, I can make that happen as well. Tweet at me. Alternatively, you can also pick up the magazine at any Urban Capital sales office.

  I deliberately tried to make it so it wasn’t your typical real estate puff piece: condos are great, yada, yada, you should buy one from us. I tried to make it an intelligent piece on some of the real challenges facing mid-rise developers. And that’s what Urban Capital wanted as well. I hope you enjoy it 🙂

  2015.12.17

• Why multi-family developers are shifting their customer focus

  One aspect of the Toronto housing market that I’ve been paying close attention to is the adoption of multi-family dwellings by both long-term end-users and families. 

  I’ve written about this before (here and here, over a year ago) and have argued that here in Toronto we are at an inflection point. Multi-family dwellings – both rental and condo – are evolving to now target these new customer segments. Whereas previously, the new construction multi-family housing market was heavily geared towards investors and first-buyers. And often it was simply a stepping stone towards a single family home.

  Now, every city and real estate market is different. And I have heard many people in U.S. cities say that Millennials are simply deferring what we saw with previous generations. At the end of the day they (or we, I’m a Millennial) are going to move to the suburbs and buy that car. The current trends we are seeing around city living and reduced driving are just that – short-term current trends.

  But I think it’s worth reiterating: I do not believe that the status quo is what’s happening right now in Toronto. And I’m sure it’s also happening elsewhere. Time and time again I speak to developers in this city who are starting to shift at least some, and in some cases all, of their focus towards end-users, families, and larger units – particularly for new mid-rise product in the “neighborhoods.”

  And if you think about it, this makes perfect sense. 

  The average price of a detached single family house in Toronto is well north of a million dollars. So when a developer brings to market a 1,200 sf family sized apartment at $600 psf ($720,000) or even at $700 psf ($840,000), that home now becomes a relatively “affordable” option in many desirable areas of the city. Particularly if you value location amenities and your time (i.e. shorter commutes) over raw quantity of space. I know I certainly do.

  I know this isn’t going to appeal to everyone. But there is a big market here. Get ready.

  What are you seeing in your city? Let us know in the comment section below.

  2015.12.15

• [Video] The Skyline Forum: Architect or Developer?

  I recently had a discussion with Ben Stevens about architecture and real estate development for his video blog, The Skyline Forum. I’ve posted about his blog before because I think it’s a great idea and a great forum for the industry. I sure hope he keeps it up.

  Here’s what we talked about in Ben’s words:

  “In Episode 6, I caught up with Brandon Donnelly of the very popular blog Architect This City. Brandon has degrees in both architecture and real estate development and as such has a unique perspective on the two disciplines. In this episode, I was interested to hear about the rationale behind his decision to pursue development over architecture, his definition of “real estate developer,” and his suggestions for pursuing the kind of work in real estate development which he does (currently in Toronto). It was a great conversation and confirmed for me a lot of things I’d learned through reading his fantastic blog.”

  And here’s the video discussion:

  [youtube https://www.youtube.com/watch?v=_-o_gT9czfM&w=560&h=315]

  A big thanks to Ben for inviting me to participate – he has chatted with some big names. As a published author himself, I also appreciated him encouraging me to write a book. I’ve been thinking about doing that. Oh, and a big thanks to my mom for providing the Christmas poinsettia that ended up being prominently featured in the background 😉

  I haven’t watched the full video yet, but one thing is clear: I’m quite the hand talker.

  2015.12.14

• K-House

  

  My friend Nicolas Koff – who I went to architecture school with, twice – recently completed a house near Hamilton, Ontario. I think it’s stunning and so I wanted to share it with you all today. It was also featured in Dezeen Magazine this week. That’s where the photos are from.

  

  Beyond its good looks though, it’s also a great example of sustainable design. The walls were prefabricated and are 40cm thick in order to reduce energy consumption. There are also solar panels on the roof to offset some of the electrical loads. And this is just some of the sustainability strategies employed.

  Click here to see the rest of the photos at Dezeen. I hope you like it as much as I do.

  2015.12.11