Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 519

One of the things that is common in Europe is that building floors often start with zero for the ground floor and then go both up and down from there.

This is different than most of North America where the ground floor is usually floor number 1 (regardless of what it might be called) and then the floors go up from there.

Using the pictured example (above), the key difference is that, with the ground floor as zero, you end up with the above-grade floors being off by 1 and the top floor being 6 instead of 7.

There is a certain rationality to the European approach that I like, but I am curious how suites on ground floors get typically numbered. I will seek this out and report back.

At Junction House, our ground floor residences follow 101, 102, 103, etc. Following the exact same logic, the European equivalent would be 001, 002, 003, etc. This, admittedly, feels a bit odd.

Which floor convention do you find more intuitive?

Either way, I’m thinking about adopting the European approach for no other reason than that height is a sensitive topic in the world of development, so one less “headline” floor could be helpful. (Half-joking)

https://twitter.com/donnelly_b/status/1519473551073583110?s=21&t=rwg2h9qw8_jiyrNjDxkSxQ

This is a great diagram from Smart Density comparing the urban and regional rail networks of Toronto, London, and Paris. All are at the same scale.

What immediately stands out to me — besides Toronto’s relatively miniscule network — is Paris’ compactness. I have said this before on the blog ( here , here , and here ), but I will say it again: There seems to be a tendency to fetishize the scale and height of Paris.

But building height is only one component of its ubiquitous built form. Unlike Toronto, we’re not talking about midrises built up against single-family homes. Paris is far more dense and its buildings are far closer together (usually with interior courtyards)

Are we also okay with these attributes?

https://twitter.com/volodyagusak/status/1519471129349349377?s=21&t=B9xA3Vnm75splqWNIDd--w

When you buy commercial real estate, you are buying a stream of future cash flows. Sometimes these cash flows are already in place and sometimes these cash flows are based on future expectations. Either way, as a general rule, it is better to have more rather than less rent.

But there are some short-term exceptions to this rule. If there is a higher and better use for your property and you’re planning to redevelop it, you probably don’t want to encumber the asset with any leases. Certainly not with any long-term leases. So vacant is likely better.

Another possible short-term scenario might be that the market has moved and you’re no longer able to command the same rents. But instead of adjusting your expectations, which would negatively and immediately impact the value of your asset, you decide to hold out in the hopes that the market will return.

Yet another more dire scenario could be that the market has moved entirely and you’re no longer able to find tenants at any price. But this isn’t a choice and so I wouldn’t consider it an exception to our more-rent-is-better rule. This is a systemic kind of problem.

I am going to assume that for Vancouver to propose an empty stores tax the belief is that scenario two, or some permutation of it, is what is playing out on retail streets. It’s not that the tenants aren’t out there (because of changes in the retail landscape), it’s that landlords are greedy and want too much money.

But my view is that this proposal ignores (at least) two things.

One, you can’t punish and tax your way to vibrant urban streets, particularly if something structural is going on in the market. If this were the case, the way to revive a declining post-industrial city would just be to tax any vacant buildings.

And two, the fundamental value of commercial real estate is, again, determined by rents. So sooner or later the rule of more rent being better than less rent will take hold. Vacancies are not in anyone’s best interest.