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.

Tag: toronto

  • 3 stages of intensification

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    We all know that the Greater Toronto Area is growing and intensifying at an incredible pace. In fact, last year the region set a record with 25,571 new condominium units completed.

    If you listen to industry experts, such as George Carras of RealNet, they’ll tell you that this level of intensification — which usually means condominiums — is really a decade in the making. That’s when the government set out to explicitly encourage this type of growth.

    But in the decade since that decision, we’ve seen both government and the market evolve in terms of what that intensification should look like. It started out with a largely high-rise building typology. Tall buildings were to be allowed in the downtown, as well as in specific growth nodes throughout the region. But for everything in between — the officially designated “neighborhoods” — there was to be no development.

    This is what I’ll call the first stage of intensification.

    Then, we started to think about mid-rise intensification along the avenues. Most of these “avenues” (also an official term) cut through those same stable neighborhoods, but the main streets were seen as an appropriate place to allow additional growth. It makes perfect sense and so guidelines were created to help dictate what this new building typology should look like.

    This is what I’ll call the second stage of intensification.

    And it’s one that I’d argue we’re currently living through with new mid-rise projects like DUKE in the Junction (TAS project), Kingston&Co in Kingston Road Village (another TAS project), Abacus Lofts on Dundas West, and The Hive in Etobicoke. These are all mid-rise buildings going up in established neighborhoods.

    With the recent decision to also allow wood frame buildings up to 6 storeys in Ontario (instead of 4), we’ll probably see an even greater surge in mid-rise buildings once the private sector gets its head around this shift.

    So what’s next?

    I think it’s inevitable that we’ll eventually see low-rise intensification within our established neighborhoods. We started by avoiding them altogether, and then deciding that it was desirable to build along their periphery. But as demand for urban housing continues to increase, I believe it’s only a matter of time before we start to loosen the reins on our single family neighborhoods.

    Some of you might be thinking that this is going to be a bad thing, but I actually think the opposite. Projects such as Vancouver’s Union Street EcoHeritage prove that it’s entirely possible to intensify existing neighborhoods through sensitive and beautiful infill interventions. And of course, let’s not forget about laneway housing.

    The fact of the matter is that Toronto has already been intensifying its neighborhoods for a very long time — likely since the beginning — by converting single family homes into duplexes, triplexes, and other multi-family dwellings. We just haven’t been doing it in any sort of structured way.

    I don’t know when this will change, but I think it’s only a matter of time. And that will be the third stage of intensification.

    Image: Flickr

  • The hard things about retail

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    Retail is one of the hardest – if not the hardest – real estate category to get right. If you don’t have the right setup, the right location, and the right tenant mix, you can fail pretty easily. It’s a bit of an art. And that obviously applies to both landlords and tenants. I mean, we all know what recently happened with Target Canada.

    This past weekend I had the opportunity to visit the Aura Condos in Toronto, which is supposedly the tallest and largest residential condominium in Canada. There’s about 1.1 million square feet of residential space across 79 floors and somewhere around 150,000 to 180,000 square feet of retail space (the estimates I found online varied). The main anchors include Bed Bath & Beyond, Marshalls, and Hard Candy Fitness (which also serves as the gym for the residences above).

    But what’s probably most unique about the retail component of this building is the P1 level (the first underground level). It’s made up of small retail condos, some of which looked to be about 90 square feet. That means that each retail unit is individually owned, just like a residential condominium, and there’s no singular landlord focused on curating the tenant mix and ensuring the entire retail center does well.

    Now, I’m told that this approach works perfectly well in other parts of the world and I know that we’re trying it in other parts of the Greater Toronto Area, but I worry about the long term viability of this (P1) space in particular. When I was there on Saturday there was almost no foot traffic and probably half of the retail units were vacant.

    Maybe it’s because there isn’t enough employment density in the area. Maybe it’s because it’s not well connected to other P1 level retail. Or maybe it’s because the anchors all sit above this space, as opposed to around it (as they do in traditional malls). Whatever it is, I wasn’t feeling product/market fit.

    I hope I’m wrong.

    Images: P1 Retail at Aura Condos

  • How I moved over the last 3 weeks

    At the beginning of this year I wrote a post about a mobile tracking app called Moves that I had heard about through my friend Sachin Monga. He had just published a beautiful set maps showing where he physically spent his time in both Toronto and San Francisco.

    His post spurred me to download the app and at the end of my post I promised to share my own set of maps once I had collected enough data points. It’s only been about 3 weeks, but already my maps are starting to fill out, so I thought I would do a release.

    The orange lines represent transport of some sort (car, subway, streetcar, and so on) and the green lines represent walking. I don’t cycle very often in the winter (I know, I’m a fair-weather cyclist), so you won’t see any of those lines just yet. However if I posted a map from the summer, I know it would look completely different.

    Here’s a first one showing a regional scale:

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    Here’s a second one showing the city of Toronto:

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    And here’s a third one showing mostly downtown:

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    What’s interesting about these maps is how much you can tell about me and the way I move around the city.

    For one, there’s a good chance I ski or snowboard given that I’m driving up to Collingwood, Ontario in the winter. You can also see how heavily dependent I am on the Yonge subway line, which is the thickest orange line in the middle of downtown. It’s also interesting to see how localized I am within my neighborhood (St. Lawrence Market). I walk to get groceries. I walk to the gym. I walk to coffee. And the list goes on.

    This is fairly typical for people living in urban neighborhoods, but it would be interesting to see where it applies in the city and where it begins to fall apart. I would also imagine that there’s a correlation to the area’s Walk Score, although this (Moves) might actually be a better measure since it’s usage data.

    Either way, imagine what cities could do if they had this sort of data for every resident. They would be able to see precise resident flows and then determine exactly where transit and infrastructure investments should be made instead of politicking to determine where they should be made.

    That time is coming.

  • East Room co-working space

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    Amy Bath needs to leave comments here on ATC more often because she has great feedback and insights.

    This morning she tipped me off to a brand new co-working space on the east side of Toronto called East Room. If you haven’t yet heard of it, I would encourage you to check out their website. They’re in a gorgeous heritage building along the Don Valley and they seem to have executed really well. I love their design aesthetic.

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    They currently offer two different memberships: a resident membership ($500/month) and a club membership ($250/month).

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    This is exciting to me because I have a soft spot for both good design and the east side of Toronto. But probably more importantly, it speaks to the changing nature of work and the workplace, as well as to the shifts in how space is being consumed.

    Co-working spaces are, of course, blowing up all over the world from Philadelphia to Berlin. The internet has empowered new ways to freelance and make money, and these kinds of spaces are really a result of that. Because even though it’s entirely possible for many of us to work remotely at home, we still crave the social interaction that comes from being within an office environment. And that’s a big part of what these spaces are. They’re a social fabric.

    Amy’s hope is that condos will eventually start including amenity spaces that are similar to co-working spaces, and I think that’s a really interesting idea. The challenge, however, is that most developers today (and property managers) aren’t equipped to operate these kinds of environments.

    But maybe it’s only a matter of time before some do become equipped, because I’m sure we’re going to see more, not less, of these kinds of urban spaces.

    Images: @eastroom_

  • Before and after at 109 Hazelton Avenue

    I recently connected with one of the principals of a Toronto-based construction management firm called Ripple Projects, which focuses primarily on contemporary custom homes (credit to 52 Pick-up for the introduction).

    They’ve only been in business for a few years, but the founders spent many years prior to this doing similar projects at similar companies, such as Wilson Project Management.

    Since they don’t yet have a lot up on their website, I asked if he could share one of his recent projects with me. He was happy to do that and so, with his permission, I’d now like to share it with all of you.

    It’s a renovation and expansion of a semi-detached house at 109 Hazelton Avenue in Toronto’s upscale Yorkville neighborhood. The end result is roughly 3,000 square feet with 3+1 bedrooms and 5 bathrooms. If I remember correctly, it sold for close to $3 million.

    Here are a few before pictures. It wasn’t in bad shape – just a bit dated.

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    And here are a few after photos.

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    I personally would have gone with something even more modern, but that’s just me and I wasn’t the client. It’s still a phenomenal project. So if you’re in the market for a new custom home, I would encourage you to give Ripple Projects a call. I was really impressed by our conversation.

    Note: I have zero affiliation to the company. I just believe that good people deserve exposure.

  • The pull from services to products

    This morning I woke up to a fascinating post by designer Tobias van Schneider called: The agency is dead. Long live the agency.

    What he’s talking about is the phenomenon of design agencies being gobbled up or “acqui-hired” by product firms such as Facebook and Google. The latest of which is (or was) Toronto-based design agency Teehan+Lax. The partners have closed up shop and are in the process of moving to San Francisco to join Facebook Design.

    But what he’s really talking about is the pull from services to products.

    When you’re a services firm, you do work for outside clients and they pay you for that work. But there are only so many hours in the day, which is why the marginal cost of taking on new clients is relatively high – to scale up you generally need lots more people.

    On the other hand, when you’re a software company creating products, the marginal cost of serving additional customers is almost nothing. Sure, there are some variable costs, but the impact to your cost structure is not nearly as significant as when you’re a services firm. That’s how a company like Instagram can be bought for $1 billion with 30 million users and only 13 employees.

    So products are a bit of a holy grail in some circles. You can achieve greater scale. You can focus on fewer projects as opposed to jumping around from client to client. And you can make a lot of money.

    But it’s often easier said than done. Back in 2012, Teehan+Lax wrote a great post where they talked about the allure of products and the challenges they faced in trying to build their own:

    37Signals* was the worst thing to happen to services businesses trying to make products. They fucked it up for all of us, because they made it. For those of us old enough to remember, 37Signals was a services company like Teehan+Lax. They had clients and did work for hire. Of course, 37signals isn’t a services company anymore. They make amazing digital products and their success is enviable. (*37Signals became Basecamp)

    So why is it so hard to transition from services to products?

    Clayton Christensen, the father of disruptive innovation, says, “you can’t start a disruptive business from inside an incumbent one.” The incumbent business will always take the resources from the disruptive one. He argues that if you want to create a disruptive business you need to isolate it from the incumbent business. The disruptive business needs its own values, processes and resources to be successful.

    Regardless of whether you’re trying to build something disruptive or not, amazing products are hard to build. They take focus.

    But what’s also interesting about services and products is that there’s a parallel in the world of architecture and real estate development. As an architect, you’re basically a service provider. You have clients and they pay you for the work that you do. However, as a real estate developer, you offer a product: physical space. The cost structures are not nearly as beneficial as with software, but it’s a product nonetheless.

    And similarly, we’re already starting to see some developers bring architecture in-house. Will we see more of this in the future? Will there be a similar pull from services, to products?

    Image: Flickr

  • Why Dovercourt Village is the next Ossington

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    Back in 2011, blogTO ran an article calling Geary Avenue one of the ugliest streets in Toronto. And it’s certainly up there. It’s an industrial street with a mixture of different building types (lots of autoshops), giant power lines running along the south side of it, and a railway disconnecting it from the city to the south.

    But as somebody who used to live around the corner from this street, I’ve had my eye on it for a number of years. Despite the fact that it was never very pretty, it always felt like an area with lots of potential. And sometimes it’s the areas that seem most unlikely to gentrify, that end up doing exactly that.

    Probably the first signs of hipness came with the opening of places like Kitch Bar on Geary Avenue and Actinolite on Ossington Avenue. More recently though, it was announced that Dark Horse Espresso will be opening on Geary and that Bellwoods Brewery will be opening their second location on Dupont Street in this incredible building:

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    So whether you call it Dovercourt Park, Dovercourt Village, or some other name, I think it’s only a matter of time before Ossington cool moves north and the area in and around Dovercourt Road and Dupont Street becomes one of the hippest areas in the city. Get ready.

    Full disclosure: I own a house very close to this neighborhood.

    Images: Actinolite and Bellwoods Brewery

  • Is Toronto’s urban growth boundary really making the city less affordable?

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    This morning the Globe and Mail published an article by Toronto’s chief planner, Jennifer Keesmaat, called Greenbelts make cities more livable, affordable and transit-friendly.

    The headline immediately caught my attention because conventional economic wisdom would suggest that supply constraints – whether natural or artificially created – generally have a negative effect on housing affordability.

    To be clear though, I support Ontario’s greenbelt. I think an urban growth boundary is the right thing to have if we want to build sustainable, walkable, and transit-oriented communities. But I’m also not blind to some of the potential (negative) externalities.

    However, Keesmaat’s article got me wondering just how prevalent those externalities might be and to what extent our greenbelt is actually impacting housing affordability in Toronto. In her article she cites a recent report by the Pembina Institute that very clearly argues the following:

    “There is no shortage of land throughout the GTA [Greater Toronto Area] to build single-family homes for decades to come, but this land is predominantly located far from the City of Toronto and other established centres of employment in the GTA.”

    More specifically, the report found that of all the land available for development in the region (within our growth boundary), 81% of it is projected to still be unused by 2031. This got me thinking: it’s not that there isn’t land still available in the region; it’s that there isn’t land in the areas where demand is the greatest.

    Put differently, young families aren’t clamoring for single family homes in High Park and Leslieville because the greenbelt has restricted their ability to find new housing. They’re doing so because they want to live in neighborhoods like High Park and Leslieville.

    If you dive into the data, the report shows that in 2004 the average price of a detached home in Toronto was about $117,000 more than the rest of the Greater Toronto Area. As of 2013, that spread had grown to about $200,000. And indeed the data shows that it’s the core of the city where home prices seem to be appreciating the fastest.

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    So when it comes to housing affordability and supply, the greenbelt may actually be a red herring. Releasing it would not increase the supply of housing in areas where demand is already high, which is probably why this same report also found that – with or without an urban growth boundary – most Canadian cities are seeing similar increases in home prices.

    So what should we be doing?

    I think we should do two things: (1) focus on accommodating more growth in the areas that people already want to live in, and (2) figure out ways to transform the less desirable areas into more desirable ones. This second one will be the hardest, because it’s likely going to mean changing car dependent areas into transit-oriented ones, which is no easy task.

    The good news though is that we are already doing these things. There’s more that I would like to see happen, but we’re headed in the right direction.

    If your city has a greenbelt or you have experience with greenfield development in the Toronto region, I’d love to hear your thoughts in the comments. This is an area of development that I’ve never really been involved with.

    Image: Flickr

  • A look at One Spadina Crescent

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    One of the projects that I’m most excited about here in Toronto is the renovation and addition to One Spadina Crescent. The building sits in the middle of a roundabout along Spadina Avenue and occupies what is easily one of the most ceremonial positions in the city.

    But for as long as I can remember, the building hasn’t been living up to its full potential. So much so that in the 1960s it was going to be demolished in order to make way for the proposed Spadina Expressway. That would have been an absolute tragedy. Thankfully, our friend Jane Jacobs stopped that one.

    Today, exciting things are happening at One Spadina Crescent. The Daniels Faculty of Architecture, Landscape, and Design at the University of Toronto is in the midst of renovating and expanding the building, and will eventually relocate there from its current location on College Street.

    When it’s all said and done, One Spadina Crescent will look something like this (via Daniels).

    From the south:

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    From the west:

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    From the north:

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    What’s most exciting to me about this project are the following 3 things:

    First, it’s an opportunity to connect One Spadina Crescent to the surrounding urban fabric. Today, it feels very much like an island in the middle of the street. 

    Second, it’s a wonderful example of the new layering on top of the old, which is something that I believe we should aspire to do in our cities. The University of Toronto has become quite good at doing that on campus.

    And finally, the intent is for this building and site to include a number of research centers and public facing functions devoted to architecture, design, and city building. And so One Spadina could become quite the hub in the city. That’s exciting.

    If you’d like to take a look inside the building (pre-renovation), check out these great photos by Peter MacCallum. The picture at the top of this post is his.

  • Life below zero and underground

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    A few years ago, I was touring a friend from the US around Toronto’s Financial District and the first thing he said to me was: “You have no retail.” And that’s certainly what it might look like at first glance.

    But there’s actually lots of retail. It’s just all underground in an over 30 kilometer long network of walkways called the PATH.

    Initially conceived of as the antidote to Canadian winters, “underground cities” are a kind of uniquely Canadian form of urbanism. Toronto and Montreal have the largest ones in the world and they continue to grow. As new towers are built, new connections are added.

    But the downside to all of this is that it pulls street life down underground. And it can conceal a lot of the urban vibrancy that is actually take place. So maybe we need to come up with design solutions to better connect these subterranean cities back to street level and also not forget about the street.

    I’m thinking about this today because of a CBC documentary I watched this morning called Life Below Zero. It basically argues that – unlike other cold climate cities and countries – the vast majority of Canadians actually hate winter. And underground cities are our way of trying to ignore it.

    Well, I don’t hate winter. In fact, I love it because it signals snowboarding season for me. But I may be in the minority. What’s your position on winter?

    Image: Flickr