Tag: real estate

• Red stripes, iceberg homes, and laneway houses

  This morning I was reading a CityLab article talking about a homeowner in London’s wealthy Kensington neighborhood who painted her house in red stripes after the city and her neighbors derailed her renovation plans. I’m thinking it is supposed to be symbolic of government “red tape.”

  She had hoped to add a two-floor “mega-basement” to her home, which is curiously enough a thing in London due to how restrictive traditional home expansions can be. Locally they are called “iceberg homes.”

  What’s interesting about this phenomenon is that it shows you how far people will go to find and/or create the space they want in the neighborhoods they want to live in. Kensington is an incredibly wealthy area and so one has to assume that she is not without other housing options.

  As another example, here’s how the article describes her house:

  The candy-striped home in question, for example, is actually a mews house, a kind of outbuilding running along an alley behind a great house, originally intended as a place to tidy horses, carriages and maids away from the main residence.

  So not only did she want to create an “iceberg home”, but she wanted to do so in what was previously a back alley. In Toronto, this home would be called a laneway house.

  What this tells me is that as real estate values rise, people will naturally start to seek out overlooked spaces to repurpose. They will look for some way to carve out a home. And it’s for that reason that I think laneway housing is an inevitable outcome here in Toronto.

  2015.05.11

• Name your laneway

  

  Urban Explorer by Andrew B. on 500px

  Laneway housing is becoming an incredibly popular topic here in Toronto. Lots of people seem to be interested in building, or least living in a compact ground-related laneway dwelling. 

  A big part of this, I think, has to do with affordability (or the perception of affordability). A lot of people want to live in a central urban neighborhood, but it has simply gotten both expensive and difficult to secure low-rise housing. Here’s an example of a young couple in Toronto who went door-to-door in their desperation to find a house.

  I believe that laneway housing has the potential to be a more affordable low-rise housing solution in this city, as well as in many other cities around the world who have a similar urban condition. But today, at least here, it’s not that way.

  Since the City of Toronto does not officially support laneway housing, it would be an uphill to get one approved and you need to be willing to put a significant amount of money at-risk in order to try. It’s unfortunate, but that’s the reality today.

  I’m certain that will change. But it will take a bit more pioneering. The Laneway Project, which I advise, is working to change the way Toronto thinks about its laneways and I know that there are many other small entrepreneurs working on doing the same.

  One of the first things that will need to happen is that we’re going to need to name our laneways. Some of them are already named, but many of them are not. And while this may not seem like a big deal, it is. For laneway housing to become a reality, they will need to have addresses and we will need to think of our laneways as legitimate streets.

  Recently The Laneway Project published a how-to guide called: How to Name Your Laneway. So if you’re interested in laneways and laneway housing here in Toronto, I would encourage you to give it a read and then try and get your local laneway named.

  2015.05.10

• Dubai time-lapse video

  I’ve only been to Dubai once. I had a lot of fun, but it’s not my favorite city in the world. That’s largely because I tend not to be drawn to cities where you feel like you need to drive in order to properly experience it.

  But boy, this time-lapse video sure makes the city look cool. Click here if you can’t see the video below.

  [youtube https://www.youtube.com/watch?v=zGtz_GOA79w?rel=0&w=560&h=315]

  2015.05.09

• Learning to build real estate financial models

  One of the things I did when I was in graduate school studying real estate and early on in my career was take a bunch of ARGUS and Excel modeling classes. Some of them I took through the University of Pennsylvania. Some of them I took through work. And some of them I just took on my own.

  Regardless, I always found them incredibly helpful. Because at the end of the day, you’re not just learning the software; you’re also learning the real estate business. You can’t build a financial model if you don’t understand the business. And I mean really understand it.

  So if you’re looking to get into real estate development or you just want to brush up on your skills, I would encourage you to consider taking a financial modeling course. I plan to do a refresher later this year.

  The last one I completed was through a company called REFM (Real Estate Financial Modeling). The founder is a Penn (Wharton) alum – so it must be good, right? 😉 There are a lot of self-study options if you just want to take them online from home and all of them include prebuilt Excel models that you can then use (and customize) going forward.

  Click here to check out REFM.

  2015.05.07

• A new chapter

  

  St. Lawrence by Ralph Sobanski on 500px

  I have an announcement to make on Architect This City today.

  Next week I’m joining the development team at CAPREIT (TSE: CAR.UN) here in Toronto. CAPREIT is one of Canada’s largest residential landlords. They are a growth-oriented real estate investment trust with over 41,839 residential units in major urban centers across both Canada and Ireland.

  They also happen to be headquartered in the St. Lawrence Market area, which means I now live and work in the same neighborhood. As we discussed here, location matters a lot.

  So here’s to a new chapter. I’m looking forward to diving into the multi-family business. Change is good.

  2015.05.04

• How Bitcoin could transform home buying

  

  Earlier today a friend of mine sent me this Fast Company article talking about bitcoin and the future of home buying. I’m really glad he did. Both because I wasn’t yet sure what I was going to write about today and because this is a topic that I’m deeply interested in.

  I recently heard Brad Burnham (venture capitalist at Union Square Ventures) say in a talk that if you’re thinking about Bitcoin just as a currency, then you’re thinking about it in the wrong way. If you take nothing else away from today’s post, I think you should remember that. Bitcoin, and the underlying block chain architecture, have the potential to be very transformative.

  The Fast Company article was written by Matt Weiss of IDEO (the powerhouse design and innovation firm). Here’s an introductory snippet:

  Insert block chains: a relatively new and promising technology that could transform the way we digitally exchange value, similarly to how Internet protocols, like TCP/IP, transformed the way we exchanged information. For example, to transfer ownership of a home today, there are countless check of authenticity and intermediaries involved to insure the transfer is legitimate. By using a distributed database (a.k.a. “a block chain,” the same technology behind Bitcoin) to prove authenticity, we could legitimately transfer ownership immediately without the need of a middleman. In fact, when we think about block-chain technology and the industries it could disrupt, real estate tops the list. While Trulia, Redfin, Angie’s List and others have brought some transparency to the opaque world of home buying and home ownership, most of our experiences in this industry are fraught with incomplete, inaccurate, and asymmetric information.

  Following this, he goes on to talk about what it might be like – each step of the way – to buy a house using the block chain technology. There are even mockups of what the app could look like. I highly recommend you give it a read if you’re interested or involved in this space.

  The real estate industry hasn’t seen a lot of innovation. It remains an opaque market with lots of information asymmetries. I have no doubt that will one day change; it’s just a question of when. Perhaps it’ll be the block chain that makes that happen.

  Image: IDEO via Fast Company

  2015.05.03

• Tesla introduces a battery for your home

  

  By accident, this week on Architect This City seems to be turning into Elon Musk week.

  Yesterday, Musk announced something called the Powerwall home battery. Measuring about 3′ x 4′, the shield looking battery pack will charge using the electricity generated from solar panels (or from the grid when rates are at their lowest) and then power your home.

  It’s designed for consumers and will cost between US$3,000 – $3,500 depending on capacity. The individual Powerwalls can also be daisy chained to increase capacity. It will be available starting this summer.

  A wall battery may not seem all that interesting to some, but I think this is actually a big deal for a few reasons.

  Renewable energy is often both intermittent and produced when you don’t need it. Here’s a great chart from Tesla that shows what I mean:

  

  During peak solar hours, most people aren’t home and most people aren’t consuming at peak levels. That’s why it’s important to be able to store the energy that you collect, whether it be from solar, wind or other renewal energy source. And from what I hear from my friends in the industry, storage has been a bit of an Achilles heel for adoption.

  It will also help to further decentralize energy production. What is produced locally (from say solar panels) will be stored locally for when it’s needed locally. This is in contrast to centralized production or producing energy locally and then feeding any excess capacity into the grid for use somewhere else. That requires transmission and will be by definition less efficient.

  Finally, the other interesting thing about Powerwall is that it closes the loop on two of Musk’s businesses: SolarCity and Tesla. SolarCity is about the production of renewable energy and Tesla is about the consumption renewable energy. But as the chart above shows, storage is often needed to link those two activities in an efficient way.

  All of this makes me excited about Powerwall.

  If any of you are an expert in this industry (which I am not) or you just have additional thoughts, I would love to hear from you in the comment section below.

  Images: Tesla

  2015.05.01

• Dublin 2007

  

  In 2007, I spent the summer working in Dublin, Ireland for a boutique real estate consulting firm called Urban Capital. (For those of you who are from Toronto and know the industry, there’s no connection between the Urban Capital in Dublin and the Urban Capital in Toronto.)

  At the time, they were working with a number of government agencies on the development of masterplanned communities, as well as on specific development projects. Real estate was booming and everyone wanted to be a part of it – including the band U2.

  But as you all know, the following year (2008) wasn’t kind to the real estate industry and, in particular, to Ireland. That year the country fell into recession for the first time since the 1980s and became labeled as one of the “PIGS.”

  I really wish I had started this blog by that point because it would be interesting to look back today on my posts from that summer and see how I was thinking about the Dublin real estate market. I remember having many Guinness-fueled discussions about whether the bull market could continue.

  In any event, the Irish economy is coming back.

  This year GDP is expected to grow by 5.4%, which would make it the fastest growing economy in Europe. National debt is also falling. At the end of 2013 it stood at €215 billion or about 123% of GDP. And at the end of 2014 it had fallen to €203 billion or about 109% of GDP. The national debt is expected to fall below 100% of GDP by 2018.

  At the same time, Ireland also got permission to pay off its bailout loans early. That’s a good sign.

  I’m thinking and reading about all of this today because I was looking through my photo collection this morning and I stumbled upon a folder titled “Dublin 2007.” The photo at the top of this post was the terrace that I had outside of my apartment in the Docklands area. I don’t think I used it once that summer. 

  And here’s a photo of my bedroom. It must have been the curtains that sold me on the apartment.

  

  I had a great time in Dublin that summer. It’s a fun and young city and I remember being incredibly impressed by the quality of city building that was going on. I’m sure that wasn’t lost in the Great Recession.

  2015.04.26

• Waterfront Cities of the World comes to Toronto

  

  This morning I was interviewed for a Montreal-produced TV show called Ports D’Attache. The English version of the show is called “Waterfront Cities of the World” and it airs on Discovery. 

  Here’s a list of all the cities they’ve visited in the first 4 seasons and here are all the shows from the first 2 seasons in English (which you can watch online for free).

  Rather than a travel show, it’s a look at the “spirit and soul” of each waterfront city through the lens of “local personalities.” There’s definitely a lot of fodder for city geeks and so I thought you all might find the series interesting.

  Toronto was the last stop of season 5. The other cities from this season include Philadelphia, Budapest, Rome, Taipei and Kuala Lumpur, to name only a few of them. 

  I’m glad that they decided to come to Toronto and I’m delighted that they invited me to be on the show. The team was great and, if you haven’t already noticed, I love supporting this city.

  The show will first be released in French (with my comments dubbed over), but an English version will follow. Once that version is released, I’ll circulate a link.

  2015.04.25

• First crowdfunded real estate project opens in D.C.

  

  Want further evidence that technology and the internet are going to dramatically transform many “non-tech” industries such as real estate? 

  Take a look at 1351 H Street NE in Washington D.C (pictured above). It houses a hybrid retail store and restaurant and is probably the first truly crowdfunded real estate project.

  The project was completed using a platform called Fundrise, which I’ve written about before here on Architect This City. Their vision is to completely democratize real estate investment by removing middlepeople and outdated regulations that restrict who and how people can invest in real estate.

  To accomplish this, the founders of Fundrise went out in 2011 and bought the building located at 1351 H Street NE for $825,000. The goal was for it to act as their proof of concept. 

  They then spent a significant amount of time and money figuring out how to make it legal for small and local investors to participate in the project (as opposed to just accredited investors). It was ultimately done through a “local public offering” filed with the SEC.

  So how does it work?

  In the case of 1351 H Street NE, they first went out to the local community and asked them what they wanted to see. That’s how they ended up with a unique retail store / restaurant. It’s what the community wanted.

  Once this was established, they went out and issued 3,250 shares and crowdfunded $325,000 from 175 local investors. This was for an ownership share in both the building and the future business. The average investment amount was $2,000, but people were able to invest as little as $100.

  This is an incredible accomplishment. It takes real estate investment and development to a local level and really empowers small entrepreneurs to start businesses that may have been previously unfundable by traditional sources.

  I don’t know what you think, but I think this is the beginning of a powerful transformation. Many of the structures that are currently in place were formed at a time when it wouldn’t have been practical to crowdsource ideas and crowdfund money. But now that is very possible. It was just done.

  Image: Maketto 

  2015.04.23