Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1349

Today I spent the day at the 11th Annual Land & Development Conference here in Toronto. I found it particularly good this year, but it’s now late, I’m tired, and I want to go watch game 6 of the NBA finals. So I think this is going to be a fairly short post.

Here’s a summary of some of my key takeaways from the day (a lot of it is Toronto-centric):

• Increasingly, the commercial and residential sides of the real estate development business are converging. And it’s being largely driven by the focus on urban intensification and mixed-use.

• This is leading to an “institutionalization” of the residential side, which has historically been the domain of smaller private/local companies and rich families.

• Merger is creating complexity around asset valuations: Is it about the income (cap rates) and/or the future development potential?

• Low rise house prices in Toronto continue to skyrocket. Supply is highly constrained. This has been the story for a number of years now.

• High rise condo prices in Toronto continue to be more or less flat (modest increase). The industry is going to need to figure out how to work with and compliment the current surge in rental apartment development. There is an element of competition between the two asset classes.

• According the RealNet’s new home price index, the spread between low-rise and high-rise housing in the Greater Toronto Area widened to $326,659 as of this past April (2015).

• Rental Apartment Case Studies:  Motion on Bay by Concert Properties (Bay and Dundas) was underwrote at $2.60-2.80 psf rents back in 2009. Rents are now in the $3 range. The Heathview by Morguard (Bathurst & St Clair) had $2.80-2.90 psf rents in its pro forma. It achieved and beat these numbers.

• There’s a flood of Asian money coming into (1) Vancouver and then into (2) Toronto looking for development projects. There appears to be a lot of impatient and/or dumb capital out there. Challenge remains finding good development sites.

• Vancouver is well ahead of Toronto in terms of transit oriented development . The initial intent in Ontario was to create a link between the greenbelt that surrounds Toronto + land use (intensification) + transit. But we haven’t been doing a good job of building transit and developing around it. This ties in nicely with a post I wrote called: The case for planning transit around minimum population densities .
  

I will end by saying that I found there to be greater transparency at today’s conference. There was a lot of talk about deal specifics and I don’t remember seeing this much detail at past conferences. 

Maybe I just wasn’t paying attention closely enough before or maybe the industry is slowly becoming more transparent. I hope it’s the latter.

If you were there today and I missed something groundbreaking, please share it in the comments below!

Completed in 1952, the Unité d'habitation  in Marseille, France (more specifically known as the Cité radieuse) is one of the most famous buildings by Swiss-French architect, Le Corbusier. Every architecture student learns about it at one point or another.

It’s famous because it was a model for a new way to live and build cities. Le Corbusier envisioned the apartment building as a kind of vertical city. The corridors weren’t thought of or referred to as corridors, they were instead called streets and lined with shops and businesses.

Of course, Le Corbusier later became famous for inspiring an entire generation of buildings that many people now hate. Some believe he was completely misguided and others believe we simply bastardized his intents. But whatever the case may be, he certainly had a profound impact on cities.

So if you happen to be in Marseille between July 4 to 19 (2015), you should check out an installation at the Unité d’habitation called Apartment N°50.

It’s an installation put on by Jean-Marc Drut and Patrick Blauwart. They are the owners of Apartment N°50 and, since 2008, they have invited a designer or studio to come in and renovate it on an annual basis. They then open it up to the public during the summer. I think that’s a really neat idea and would love to visit sometime.

Click here for the official Apartment N°50 website (it’s in French). The image at the top of this post is from Curbed .

I was browsing through my online reading list this morning (as I do every morning), and I stumbled upon  this Dezeen article  talking about a big new 6.5 million square foot development being proposed in Miami’s Park West neighborhood. 

The goal of the project is to transform Miami into “Florida’s Silicon Valley.”

This sort of thing is happening all around the world. From Buffalo to Lisbon , cities everywhere are betting on tech, startups, and entrepreneurship to grow their economy in the 21st century. And I personally think that’s really exciting.

But as I was reading the article, I couldn’t help but think of an old essay that Paul Graham wrote back in 2006 called, How to be Silicon Valley . (Paul Graham is a famous Silicon Valley entrepreneur/investor).

In his essay Graham argues that to be or to replicate the model of Silicon Valley in your city, you basically need two types of people: rich people and nerds. The idea, of course, being that the nerds work on the cool new ideas and the rich people then fund them.

Using this logic, he specifically calls out Miami as a city where few startups happen and as a city not likely to become another Silicon Valley. Though there’s lots of money and rich people in Miami, there simply aren’t enough nerds. In Graham’s words: “It’s not the kind of place nerds like.”

But that was back in 2006. 

The iPhone didn’t even exist yet. Things have since changed. Now there are successful tech companies like Snapchat ( valuation north of $15 billion ) that are based out of cities like Los Angeles. And I think you could argue that Los Angeles and Miami do share some similarities.

So while it may have seemed far fetched in 2006 for Miami to become a startup hub, is that really the case today?

Image: Dezeen