Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 739

One of the most famous and important houses in Toronto, and in North America, just sold. It was reported last week in the Globe and Mail in an article called, " Integral House finds buyer amid wave of high-end Toronto deals ."

Designed by Shim-Sutcliffe Architects , the 18,000 square foot Integral House was commissioned by mathematician and musician James Stewart . It was completed in 2009 at a cost that seems to vary widely depending on where I look online. But it did just sell for $18 million.

For photos and drawings of the house, click here . The section is really interesting because of the way in which the house is built into the side of a ravine. The house is 5 storeys, but only 2 of these levels would be visible from the street .

The article goes on to mention a bunch of other high-end transactions that were consummated during this pandemic, ranging from a $13 million home in Forest Hill to a $9 million condo in Yorkville. These are all positive signs for this pandemic market.

Back in March and April, the belief seemed to be that cities had lost their allure . Density had proven to be a bad thing and we were now all going to live in the country and spend our days working via Zoom. But as our cities begin to slowly reopen, something else seems to be taking place. In fact, the great irony of this pandemic is that it will probably strengthen our cities in the medium and long-term.

We're pedestrianizing our streets. (Above is a photo of King William Street in Hamilton that I took last week. London is similarly looking at pedestrianizing parts of Soho .) We're encouraging restaurants to expand their patio footprints. We're adding bicycle lanes faster than we ever have before here in Toronto. And we're finally becoming a little less uptight about the public consumption of alcohol . This is among many other things.

The reopening of our cities isn't going to happen overnight. Some, if not all, will probably stumble as we find our way. But as unfortunate as this period of time is for most of us, it is forcing us to reconsider how life is lived in our cities and how we allocate urban space. Some of this will be temporary, but I suspect that a great deal of it will actually stick.

We'll then wonder, "why didn't we do this sooner?"

Photo: King William Street, Hamilton

A good friend of mine, who is also in the industry, once described real estate development as a three-legged stool. In order to develop, you really need three things: expertise, capital, and a site (i.e. land). This probably seems fairly obvious. I mean, you need to know what you're doing, you need the money to do it, and then you actually need a place to build. But as simple and as obvious as this may seem, there are barriers to entry. Real estate is a capital intensive industry. And despite what the general public seems to believe about the pockets of developers, most are raising outside capital .

The thing about this three-legged stool is that you don't necessarily need to have all of the legs at once, and in many cases you won't. If you have two of them in place, it's usually feasible to figure out and get the last one. For example, if you know what you're doing (expertise) and you have a site (owned or "under control"), then presumably you have a development pro forma that makes some economic sense. And with those things, you generally should be able to find the capital that you need to execute on your project.

I've also met people who have managed to build this three-legged stool starting with only one leg. They didn't have much development experience or capital connections, but they learned enough to figure out how to value development land. They then went out and started knocking on doors, eventually putting together a development assembly. They then took this assembly to developers (people with expertise) and the stool eventually got built. Starting with only one leg just means you're going to have to work harder to fill in the others.

A one or two-legged stool won't stay upright on its own. But hustle will hold it up temporarily while you figure out a creative way to attach the missing leg(s).

Photo by John Boatile on Unsplash