Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1094

BILD (the Building Industry and Land Development Association) just released its June 2017 data for the Greater Toronto Area’s new housing market. You can read the full release here . But I would like to point out a couple of things:

About 91 percent of the 6,046 new homes sold last month were multi-family condo apartments in high-rise and mid-rise buildings and stacked townhomes, while only nine percent were low-rise single-family homes.

The average price of available new condo apartments continued to rise with an increase of more than $22,000 from May. June’s $627,000 average price marked a 34 percent increase from a year ago. The average available unit was 845 square feet with an average price per square foot of $742 . A year ago, the average price per square foot was $587.

From this, it’s once again clear that Toronto is in the midst of an incredible transformation from a low-rise city to a more vertical city. New supply on the low-rise side of the market is heavily constrained.

I get the sense  sometimes that many people in this city, and others, believe that access to a low-rise detached house should be a right. Go to school. Get a good job. And then buy that house with a backyard. 

The data speaks to a very different reality.

Photo by Victoria Heath on Unsplash

In 2015, Studiolada Architectes (of Nancy, France) completed a 117 square meter home for a retired couple. On the firm’s website they call the project:  Réalisation d'une maison individuelle à Baccarat . 

Here are two photos (1 exterior and 1 interior) via the architects :

Most of the house is finished in wood. It was a modest build costing 174,361 € in total before taxes. The house itself cost 146,506 € and the standalone garage cost 20,245 € (both before taxes). The balance of the costs seem to have gone to exterior landscaping.

If you consider only the house, that works out to be about 1,252 € per square meter or about 115 € per square foot. Speaking of reasonable.

What’s particularly interesting about this project though is that after it was completed the architects published what they call a dossier de synthèse en Open Source  (click through to download) – effectively an open source file of all the project’s documents.

Included are all of the plans, assembly details, construction photos, and even the entire construction budget. The ambition was to build an affordable and sustainable house and then make all of the information publicly available so that others might replicate what was done.

I think this is great.

So I’ve decided to publicly commit to doing the same for my proposed laneway house . If and when it gets built, I will document and publish the entire journey – including all development/construction costs – and make it freely available on this blog and probably elsewhere.

I got a bit of flak (on the internet) for calling my laneway house a “prototype” project. But that’s truly what I want it to be for Toronto. Hopefully sharing more, rather than less, information will help it to serve that purpose.

The Globe and Mail recently published an excellent article on “ how e-commerce is driving a real estate revolution .” This is a topic that I’m very interested in: how online manifests itself offline.

Not surprisingly, the article talks a lot about Amazon, including their 4th warehouse in the Greater Toronto Area, which is an 850,000 square foot facility in Brampton equipped with 350-pound robots (8050 Heritage Road).

The first thing I did after reading the article was figure out the location of all of Amazon’s fulfillment centers in the GTA. Amazon doesn’t seem to publish this. But according to TaxJar , they are here (I mapped out the addresses):

There are two in Brampton at the precise location where Hwy 407 (toll route) and Hwy 401 meet. The other three are distributed along Hwy 401 in Milton and in Mississauga.

Now let’s get back to that Globe and Mail article :

- In 6 years, Amazon has leased over 2 million square feet of warehouse space in Canada.

- Toronto is the third largest warehouse market in North America. It represents 43% of Canada’s total inventory.

- Average net rents have increased 9.7% over the past year and vacancy rates have dropped to 2.7% (CBRE data). In Vancouver, those same numbers are 5.1% and 3%, respectively.

- Online shopping is thought to account for about 6.5% of all retail sales in Canada. But in Toronto, 23% of all industrial space is already e-commerce-related (CBRE data, again).

- CBRE believes that every $1 billion in new online sales per year requires an additional 1.25 million square feet of warehouse space. 

- Based on online sales projections, Canada needs another 27.5 million square feet of industrial space over the next 5 years. We don’t have that much space in the pipeline.

- Clear heights are increasing for stacking purposes. Amazon’s new Brampton facility is 45 feet tall / 4 floors. 10 years ago new warehouses were 26 feet tall.

- Average sale price of warehouses in the GTA has gone from $119.35 psf to $142.19 psf over the last year.

Perhaps the most interesting takeaway from the article is the discussion around “last mile” distribution hubs. These are fulfillment centers located closer to the city, which are used to offer shorter delivery times: 

“…instead of having inventory stored for days or months, these fulfilment centres will turn over their inventory in one day, sometimes twice a day.”

This is something that I addressed  in my recent presentation about the “mall of the future” at B+H’s retail design charrette. Where do these physical distribution centers want to be as online sales continue to grow and delivery times continue to compress? Where’s the future growth?

According to this article, it’s going to be in “last mile” fulfillment real estate – relatively smaller spaces that are located very close or directly in the city center.

Photo by Samuel Zeller on Unsplash