Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 403

Kelly Alvarez Doran shared this article with me on Twitter earlier today. It talks about some of the work that his design studios are doing at the University of Toronto around embodied carbon. More specifically though, his studios are being tasked with figuring out how to halve the carbon emissions generated by new buildings during this decade.

And one of the big findings from his studio is exactly the title of this post: our buildings have become carbon icebergs. Here in Toronto, we tend to build a lot of below-grade parking. We recently got rid of parking minimums (which obviously needed to happen), but the market still demands it in certain areas and for certain projects. So we continue to build it.

What the above section drawings are showing is the percentage of carbon emissions resulting from the below-grade construction component in each project. And as you can see, the numbers are significant, particularly in the case of smaller mid-rise buildings where you don't have a lot of above-grade area to grow the denominator.

Looking at 2803 Dundas Street West, which is just down the street from our Junction House project, the number is 50%! And sadly, I would guess that our project is probably only marginally better; we're a bit taller up top, but we also have a raft slab foundation and a watertight below-grade.

This is one of the reasons why I recently tried to make the case for above-grade parking . A big part of my argument was that if we want parking that can be adapted to other uses in the future, and if we want to reduce the embodied carbon in our buildings, then we should be building "unwrapped" above-grade parking. That is, parking which isn't hidden behind other uses.

But this is often frowned upon in planning circles and it's not going to be feasible in smaller mid-rise buildings like the ones shown here. We're also just talking about what is less bad . What we really ought to be doing is trying to build our cities so that people don't need to rely so heavily on cars to get around.

Image: Ha/f Studio

One way to define "brand" is that it is "the sum of how a product or business is perceived by those who experience it." And it's a pretty awesome construct when you stop to think about it. Because if I perceive one brand to be superior to another -- which might just mean that it better matches my sense of self -- then there's a good chance I'd be willing to pay more for that brand.

And if I happen to own a brand that people perceive to be valuable, then I can also monetize this brand by lending it out to other people for money.

It is for this reason that in the world of real estate development there is something known as branded residences. Broadly speaking, it involves a pretty simple trade. Person 1 has a brand that lots of people perceive to be desirable. Person 2 has real estate that it is looking to sell, but it doesn't have a brand with the same kind of cachet as person 1.

So what happens is that person 1 offers the following trade to person 2: pay me $X (upfront and/or over time) and then I will let you use my highly coveted brand to sell your real estate. And hopefully you won't screw it up by doing weird things with it. (But other than this, person 1 isn't really taking on much risk with this trade.)

Because person 2 believes that they'll be able to sell their real estate for more money and/or faster than without the brand, it gladly accepts the trade. And as long as the benefit it gains is, in fact, greater than the cost of using the brand, it should be a good trade and both person 1 and person 2 should be happy with the outcome.

Now here's an actual example. Earlier this month, the proposed Baccarat Hotel and Residences in Dubai set a new pre-construction pricing record when it sold a ~14,507 square foot apartment for 203.1 million dirhams (or US$55.3 million) . For those of you who are wondering, this works out to be about US$3,812 psf.

Supposedly this is the most that anyone has ever paid for a new place in Dubai, and there's a strong argument to be made that the developer got this pricing because it was a branded residence.

Image: Bloomberg

Rapid and high-volume decision making are fundamental to real estate development.

In fact, it's hard to think of anything being more important when it comes to executing on a project. This is not to say that being thoughtful and doing remarkable work aren't important. You, of course, need to do those things as well. But it is to say that the benefits of moving as fast as you possibly can usually outweigh all else.

What this means is that any decision is often far better than no decision. Because no decision can grind everything to a halt. You need to maintain momentum and the way to do that is to make a lot of high-quality decisions.

As someone who was originally trained as an architect, this is something that I had to learn in the workplace. Because in architecture school, you're basically taught to work on your projects for as long as humanly possible and then, when you're done, you work on them some more. They'll never be good enough and you certainly haven't spent enough time "working in studio".

But in practice, you need to go. I would like to once again reiterate that this is not a license to do crappy work. I think the way to think about this is that speed and excellence reinforce each other. Our team always strives to do exceptional and remarkable work. And one of the ways to actually do that is by focusing on speed.