Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1013

February data (2018) for the new home market in the Greater Toronto Area was released this past week by BILD and Altus. I seem to have gotten into the habit of writing about this every month.

The benchmark price for new low-rise single-family housing was down slightly from January to $1,219,874, but still up 12.8% from a year prior.

The benchmark price for new high-rise housing was up a whopping 39.5% year-over-year to $729,735. But part of this is being driven by an equally dramatic increase in average unit sizes.

Here is the relevant graph:

The story continues to be about tight supply, historically low developer inventories, and a lack of affordable low-rise product. 

As I have argued many times before on this blog, I believe these factors — and in particular the last one — are, at least partly, driving this recent pop in high-rise pricing. People are priced out and now searching for substitutes.

So my prediction continues to be that we will see a convergence (i.e. diminishing spread) between new low-rise and high-rise pricing.

That will also bring about design and product changes on the high-rise side.

Here are the results from my primitive multi-unit building amenities survey :

Gym is number 1. No surprise there. 46% of respondents said it was in their top 3. 

Rooftop outdoor space at number 2 was perhaps a bit surprising. But then again, who doesn’t love a good rooftop patio?

As for concierge service, I tend to think this was driven by package delivery. That’s certainly the biggest value add for me.

One standout near the top, for me at least, is co-working space. Andrew LeFleur made mention of this on Twitter and I think he’s right: The changing nature of work is making these spaces more valuable in multi-family dwellings.

And now some color on the above results.

436 amenity selections were made as part of this survey. 

About half of the respondents were from the Greater Toronto Area, followed by Calgary, San Francisco, Ottawa, Boston, New York City, Denver, Los Angeles, Paris, Miami, and many other cities. Shoutout to whoever responded from Kuala Lumpur and Porto Alegre.

In terms of “Other” amenities, there were suggestions for a band rehearsal space, a vending machine, a grassy area for sports, and programming the helps you meet your neighbors.

In terms of this one last, it can be tricky for condo buildings. Developers only provide the space. It’s then up to management. But I’ve seen it done very well in rental buildings.

Are you surprised by any of the results from this survey?

So this is interesting.

Earlier this month, Travis Kalanick – co-founder of Uber and its former CEO – formed a new venture fund called 10100. According to the WSJ , it was funded with his own money after he sold 30% of his position in Uber for a cool $1.4 billion. 

Ten-one-hundred’s spartan website explains that the goal of the fund is “large-scale job creation, with investments in real estate, ecommerce, and emerging innovation in China and India.” On the non-profit side, the initial focus will be on “education and the future of cities.”

Then this week, Travis tweeted out “ My new gig… ” and disclosed that 10100 had entered into an agreement to buy a controlling interest in a real estate holding company called City Storage Systems (CSS) for $150 million. 

He also announced that he would become CEO.

The focus of CSS is on the redevelopment of distressed real estate, particularly parking, retail, and industrial assets. He goes on to say: “There are over $10 trillion in these real estate assets that will need to be repurposed for the digital era in the coming years.”

This whole series of events is a big bet on some significant changes in the real estate space.

Photo by Martin Reisch on Unsplash