Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1484

I’ve spoken about global cities, such as New York and London, many times before on Architect This City. I’ve also talked about the rise of consumer cities. That is, cities with a high “ urban amenity premium ”, which could be great outdoor amenities or great restaurants, theatre and so on. These are places of consumption.

Sometimes global cities and consumer cities are one and the same. But there are also cities–such as Vancouver–where I view the urban amenity premium as outweighing their status as a global city. Vancouver, quite simply, is an awesome place to live and enjoy life. I almost went to UBC for grad school because of Whistler Blackcomb  and the city itself.

Today, I’d like to introduce another type of city into the discussion mix: the necessary city. I heard about it here and, although it seems somewhat intuitive, I think it’s an important reminder that, even though a city may not be an alpha global city, it may be fulfilling a specific function for a particular industry or aspect of the global economy. It may still be a necessary city for your corporate headquarters.

For example, Houston is the city for energy companies. If that’s your business, you likely need a presence there. For fashion and luxury, it’s Paris. And if you’re in the auto industry :

The major global equipment manufacturers are widely dispersed, but when you look at leading global parts suppliers, they virtually all have their North American headquarters in Detroit – including the German, Japanese and Korean ones. Among them are companies like Robert Bosch, Denso, Yazaki and Hyundai Mobis. If you’re in the auto industry in America, you have to deal with Detroit. Unsurprisingly, Detroit boasts several nonstop flights to key Asian destinations.

In essence, we’re talking about cities making themselves necessary by becoming niche experts. And what I think is interesting about this concept is that it’s likely much more attainable for a lot of cities. Most cities will never become New York. And most cities will never be able to transform themselves into the next Silicon Valley.

But maybe those are the wrong economic development goals. It’s not about becoming the next, whatever; it’s about finding and owning a particular niche and making yourself absolutely necessary to the global economy.

Earlier this week I received a message from an undergraduate architecture student interested in moving into real estate development after school. That was his 10 year plan. And he had clearly read my blog post, “ Transitioning from architecture to development .”

In his message, he asked me if there were any books I would recommend he read to improve his real estate and finance knowledge, and, if I could have a “redo”, if I would still do a M.Arch (Master of Architecture) or just go straight to the MBA?

After responding to his message, I thought: “This would make a good blog post, as well as an opportunity to talk about the current state of real estate education in Canada.” So here goes.

If you’re looking for a good real estate book to get you started, I recommend checking out “ Real Estate Finance and Investments: Risks and Opportunities " by  Peter Linneman . It’s a much easier read and way more casual compared to most textbooks. When I was in grad school, people referred to this book as the "blue bible.” The cover on the previous edition was less purple and more blue. Unfortunately, he has also changed his glasses since the photo below.

To his second question, if I were to do it all over again, I wouldn’t change a thing about my education. I loved architecture school and combining it with business school classes and a real estate concentration was the best thing for me. I never wanted to be  just  a “numbers guy”, but I also never wanted to be a fanciful artist type who didn’t know how to build and manage a pro forma.

Now, let’s talk about real estate education in Canada.

I think we’re way behind. In the US, you can do a Master of Science in Real Estate Development, a Master of Real Estate Development, and all sorts of other real estate degrees. In Canada, you’re probably doing a MBA with a few elective real estate classes.  Real estate is the largest asset class in the world . Does that not justify a dedicated degree?

Part of the reason for this, I think, is because real estate development is still very much an entrepreneur’s business–though it has become more institutionalized in recent years. Because of this, people get into development from a variety of different professions. They just need that entrepreneurial hutzpah. And that’s all fine, but I still think that the profession, the economy and our cities would benefit from University trained developers.

So if you’re reading this University of Toronto, I think–and I’ve thought this for awhile now–that  The John H. Daniels Faculty of Architecture, Landscape and Design  and  The Rotman School of Management  should get together and collectively form a real estate program. Who’s with me?

I’ve been a Foursquare user for a number of years now. I like seeing which friends are nearby and where I’ve been. I love the data aspect of it. It’s a kind of urban “ spidey sense .”

Sometimes when you “check-in”, the app will tell you the last time you were there (if it’s been awhile), how many consecutive weeks you’ve been there (which I like seeing when I check-in at the gym), and also give you any tips that others may have left about the place you’re at–such as, try the sea urchin ceviche .

But Foursquare has been struggling. Check-ins proved to be a bit of a fad and Yelp solved the what-do-you-want-to-do-tonight problem better. However I’ve always felt that, on a fundamental level, Foursquare had the potential to be so much more powerful than Yelp. 

Well, today the big news in the tech world is that Foursquare is unbundling its app . There will be Foursquare and there will be Swarm . Foursquare will be a recommendation engine that helps people find places to eat, drink, shop and so on (just like Yelp), and Swarm will be all about social–seeing where your friends are and which ones are nearby. And along with this unbundling, there will be no more check-ins :

But how can Foursquare personalize its users’ results if they are no longer collecting check-ins, the foundation of Foursquare’s recommendation engine? Crowley smiles and says something a bit shocking. He no longer needs check-ins, the meat and potatoes of Foursquare’s entire business and data collection engine for the last five years.

Not only has Foursquare collected 6 billion check-ins, he says, but it has collected five billion signals to help it map out over 60 million places around the world. Each place is a shape that looks like a hot zone of check-ins — of times when people have said “I’m here.” Foursquare’s “Pilgrim” location-guessing engine factors in everything from your GPS signal, to cell tower triangulation, to the number of bars you have, to the Wi-Fi networks, in order to create these virtual shapes.

Now that it has this data, Foursquare can make a very accurate guess at where you are when you stop moving, even without a check-in, it’s a technology it hopes will allow it to keep its database of places fresh and accurate. Foursquare calls these implicit check-ins “p-check-ins,” or Neighborhood Sharing. Take your phone into four or five different Japanese restaurants over the course of six months and without a single check-in Foursquare will learn that you like Japanese food and start making recommendations for you based on that data.

There will obviously be a number of people who have anxiety about an app that’s passively tracking everywhere they go and then trying to feed them recommendations (come eat here!), but I do think they’re on to something.

The opportunity with Foursquare (and its data) is that the recommendations can be tailored. If I’m looking for a place to eat, Foursquare will already know that I love Mexican and that I just worked out (meaning I’m probably extra hungry). Personally, I’m okay with that.

But then I start to wonder how this might impact cities. If the process of discovery becomes this automated and this tailored, how might it change the way we organize and design our cities?