Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 71

Happy New Year! And welcome to another year of this daily blog. (In August of this year, we'll enter the 14th year of this daily practice.)

Exactly a year ago, I published a post talking about what might happen in 2025 . It was last year's prediction post. Today, let's see how I did.

• Real estate development: I admitted that I had been overly optimistic in terms of how soon the market would reset (specifically Toronto). But I did still argue that 2025 would be an important turning point in terms of people capitulating and more legacy assets/deals getting reset. I think we did start to see this. We looked at a number of receivership sites and came across many instances where a landowner would take 40-50% of what they paid. The problem is that the market still hasn't fully reset and we're still in the midst of absorbing our current housing supply pipeline. So while it sounds nice to buy something for $0.40 on the dollar, what do you then do with it?

• Return-to-office: I said that we would see the average weekly occupancy index in downtown Toronto reach 90% by the end of 2025 (it was 73% when I wrote the post a year ago). As of November 2025, it was 82%. Not quite.

• Autonomous vehicles: I reversed my position (relative to the prior year) and said that autonomous vehicles are way further along than most people thought, at least at the time. And boy, was 2025 a great year for Waymo. It feels like they're now in scaling mode.

• EU carbon permits: A year ago, they were priced at €71.98 per tonne of carbon dioxide, compared to an all-time high of €105.73 in February of 2023. I guessed that they'd be between €90 and €100 by the end of 2025. Right now they're at €87.28 .

• Crypto: I thought that 2025 would be a good year for crypto given the MAGA movement's support for it. For a while, it seemed like that would be the case. But if I look at the price of Ethereum, it's down 15.21% year-to-date. So not what I predicted. But I continued to dollar-cost average.

• Web3: I went on to predict that we would see a breakout web3 consumer app in 2025. I also mentioned that I was impressed by NFT marketplaces like Rodeo. Well, Rodeo has gone on to mostly die and I'm not sure it would be fair to say that there was anything that crossed over into the mainstream. I'm going to give myself a zero for this one. But if I had to pick something, I would say that Coinbase's "Base App" represents meaningful progress. Base continues to dominate the Ethereum Layer 2 market . It's fast and cheap.

I wish you all a healthy, prosperous, and fulfilling 2026.

Cover photo by Jamie Fenn on Unsplash

I'm a big fan of the period between Christmas and when most of the world gets back to work in the New Year. It's the only time of year that I know of where the email firehose shuts off, the social permission to do "nothing" turns on, and the world generally quiets down.

I know that not everyone gets this time off. We all have different jobs. Earlier in my career, I used to always work these days between Christmas and the New Year because I couldn't spare the vacation days. But if you are fortunate enough to have it off, it's a unique time of the year.

It's a time for family and friends, and a good time for vacations that aren't riddled with email and work anxiety. But it's also a time that creates space for the mind to wander, and for me, it gives me a creative burst of energy.

I've been trying to think of the best way to describe this feeling, and it truly feels like "mental space." When work is "on," it simply crowds out everything else. But a more accurate neuroscientific definition would be that we're simply engaging different parts of our brains.

Supposedly, when the mind is given "space" to wander — which is also referred to as wakeful rest — we engage a system in our brain known as the Default Mode Network . This network is thought to serve several different functions, including forming the basis for the self, thinking about others, remembering past events, and imagining possible future events. Generally, this makes it very good at connecting the dots, so to speak.

The counterpart network is our Executive Control Network. This part of our brain is most active during focused, demanding, and goal-oriented tasks — so work.

These two networks are also thought to be inversely correlated, meaning when one activates, the other often shuts down. But not always and not entirely. A 2018 research article by Roger E. Beaty et al. found that highly creative people have a unique brain "wiring" that allows these different neural networks to work together, rather than in opposition.

What this suggests to me, as a cognitive neuroscience layperson, is that engaging our different brain networks is good for us. Sometimes it's good to turn down executive control and give some space to default mode.

And I find that this time of year is a perfect time to do just that.

Cover photo by Milad Fakurian on Unsplash

One of the big housing stories of this year was that Austin has built a lot of new apartments and it is now causing rents to fall precipitously — by as much as 22% . The market is working.

But as we also talk about on this blog, the benefits of new "luxury" housing don't just apply to those who can afford it. Since real estate development happens on the margin — in other words, it's based on the feasibility of the next unit of housing supply, not an average for the market — new market-rate housing typically needs to cater to the top end of the market. Otherwise, it wouldn't be economically feasible to build it.

However, study after study also shows that the delivery of any new housing in a city broadly tempers rents, including in a city's oldest housing stock . This is true in virtually all cities:

The above chart is from this recent Bloomberg article , talking about how "luxury apartments are bringing rents down." But if you look closely, there is one city on this chart that appears to be an outlier: Miami.

Despite adding a respectable number of homes, rents have not fallen as much as you might expect given the figures for the other cities on this list. The intuitive explanation is likely that Miami is in the midst of experiencing an extraordinary wealth transfer.

For the five-year period through to 2022, it was estimated that some 30,000 New Yorkers with combined annual incomes of $9.2 billion moved to Miami-Dade and Palm Beach counties. It's also an important capital safe haven for Latin America.

I vividly remember looking at condo listings in Miami in 2008 and thinking, "Damn, this is cheap!" I even tried to find a job there after grad school, but at that time, it was no place for a new real estate developer. My best bet would have been something in loan workouts.

Who could have predicted such an incredible transformation? It isn't the third most important global city in the US according to the numbers, but it certainly has a lot of momentum right now. In this instance, new supply does not appear to be more than offsetting demand.

Cover photo by Valeriia Neganova on Unsplash