Building August September 2019 by IQ Business Media

Urban Development / Architecture & Design / Innovation

PM#43096012

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building.ca August/September 2019 CDN $7.95

Drone Laws Retail Pop-Ups Integrated Project Delivery

PropTech: Moving Fast in a Slow Industry

2019-08-12 11:55 AM

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FEATURES

Departments

The Future is h[app]ening Ready or not, the rise of disintermediating technology platforms and solutions are having a major impact on the CRE industry. By Rhys Phillips

Out Of the Living Room, Into the Boiler Room How AI can help eliminate energy waste in multiresidential buildings. By John Macdonald

SuburbanI(C) Tes The tech sector is showing that not everything is happening in Toronto’s downtown core. By Shannon Moore

Here Today, Gone Tomorrow What to think about when thinking about retail pop-ups. By Daoust Vukovich

Weather Changes and Code Changes Ontario and Florida’s building code development shows two very different ways to approach change. By Gary Martin

Keep Your Friends Close How CCDC 30 could impact construction contractual arrangements. By Theron Davis and Bill Woodhead

ntee eign ents

05 06 08 11 28 41 44 46

Editor’s Notes Market Watch Legal Briefs Powers That Be In Their Words Site Visit Spec Sheet From the Bullpen

Building.CA

read Sittin’ on the Dock Life in Gananoque is like the song and exactly the vibe CaraCo Development wants to cash in on with their riverside condo project. Building.ca

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Volume 69 No. 4

Editor in Chief Peter Sobchak Art Director Roy Gaiot Legal Editor Jeffrey W. Lem Contributors Daoust Vukovich, Theron Davis, Megan J. Lem, Gary Martin, John Macdonald, Shannon Moore, Ben Myers, Kevin Powers, Bill Woodhead. Customer Service / Production Laura Moffatt, 416 441 2085 x104 Press Releases pressroom@building.ca Circulation Manager circulation@building.ca Sales Manager Faria Ahmed, 416 441 2085 x106 fahmed@building.ca Vice President & Senior Publisher Steve Wilson, 416 441 2085 x105 swilson@building.ca President, iQ Business Media Inc. Alex Papanou Design Consultation BLVD Agency

Building magazine is published by iQ Business Media Inc. 101 Duncan Mill Road, Suite 302 Toronto, ON M3B 1Z3 (416) 441 2085 x104 info@building.ca www.building.ca SUBSCRIPTION RATE: Canada: 1 year, $30.95; 2 years, $52.95; 3 years, $64.95 (plus H.S.T.) U.S.A.: 1 year, $38.95 USD. Overseas: 1 year, $45.95 USD. BACK ISSUES: Back copies are available for $15 for delivery in Canada, $20 USD for delivery in U.S.A. and $30 USD overseas. Please send prepayment to Building, 101 Duncan Mill Road, Suite 302 Toronto, ON M3B 1Z3. Subscription and back issues inquiries please call (416) 441 2085 x104, e-mail: circulation@building.ca or go to www.building.ca Please send changes of address to Circulation Department, Building magazine or e-mail to addresses@building.ca Building is indexed in the Canadian Magazine Index by Micromedia ProQuest Company, Toronto (www.micromedia. com) and National Archive Publishing Company, Ann Arbor, Michigan (www.napubco.com)

Building is published six times a year. Printed in Canada. The content of this p ublication is the property of Building and cannot be reproduced without permission from the publisher. Funded by the Government of Canada

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A wall and A Fast car

Forgive me, but I had to laugh. It happened while I was attending a mock Shark Tank where three PropTech companies presented their tech to a jury of three established industry experts and a room full of real estate professionals (mostly accountants, but hey…). One of the tech entrepreneurs was pitching a piece of AI-backed sensor-based software that reads micro-vibration patterns: good for many things including people counting, presence tracking, and fall detection. This is where my laugh came from, as I was reminded of the awful “I’ve fallen, and I can’t get up!” catchphrase of the late 1980s and early 1990s that forever inserted LifeCall’s commercial campaign into pop culture (I’m a horrible person, I know). Let’s be clear: this tech is amazing, no doubt about it. The above example can even monitor heart and breathing rates, something of interest to hospitals and child care facilities, but even applicable in the auto sector. But to be honest, there is an unmistakable Orwellian feel to all this surveillance technology purportedly intended for our better good. Yet what is just as interesting is what types of people agree with that sentiment. As I looked around the faux-Shark Tank room, I noticed I was easily in the upper age bracket (I’m not that old, but I guess old enough to remember that LifeCall tagline). Underlying this huge tech revolution is a clash of generations. As Oxford University’s Saïd Business School said in a report on this emerging sector, “Many of the start-ups are driven by, and aimed at, Millennials, but they often look to Baby Boomers for money.” For this report they interviewed over 50 real estate professionals, entrepreneurs and capital providers. “From one side, we heard that none of these start-ups know what they are doing and that young entrepreneurs misguidedly regard real estate as a sure thing,” say the authors. “From the other, we heard that real estate people are not good at strategy and are determined to protect inefficient fee-earning practices.”

Peter Sobchak Editor in Chief We welcome your feedback. Send your questions and comments to psobchak@building.ca

PropTech has been building such mass and momentum that the only real question now being asked is to what degree will it change the real estate business, one that is typically slow moving and highly conservative. The CRE industry would certainly love to know, and although nobody has a crystal ball, many are jumping on the speculation bandwagon, talking about how new business models associated with the sharing economy, co-working and e-commerce are disrupting CRE by cutting out inefficient middle steps, something the multi-stages of financing, funding and transacting processes are riddled with and therefore why disintermediating technology platforms will have major impacts on CRE. A major impact indeed, yet I can’t help but see in my mind old film of high-speed stunt cars driving at full tilt straight into a brick wall. Eventually the wall explodes, but not before a mass of car wrecks piles up around it. To you start-ups, the key will be not becoming one of those wrecks. As one of the Saïd Business School survey respondents points out, “The majority of PropTech firms that will succeed are not those that are trying to be disruptive; they are the ones focused on delivering products that bring efficiency and alignment to the market.”

Building.ca

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market watch Spotlight: Office and Industrial Space

Industrial supply and demand square feet (000s)

Key Trends: Office Despite a slower economy, the employment market in Canada continued to outperform with a record-high monthly gain of 106,500 new jobs created in April 2019 which resulted in the unemployment rate falling to its lowest level in 43 years to 5.4 per cent in May 2019. In the last 12 months to May 2019 there have been 453,100 new jobs created with full-time positions accounting for almost two-thirds of the growth. Led by 1.1 million square feet of positive net absorption in downtown centres, the national overall vacancy rate decreased 20 basis points (bps) quarter-over-quarter to 11.3 per cent. Record market fundamentals exist in

New supply

availability

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0 -2,000

Net Absorption

16,000

by businesses and developers suggest that our office and industrial markets are well-positioned for the digital economy.” Elsewhere in the country, Ottawa’s office vacancy dropped to 7.0 per cent in Q2, down from 9.9 per cent in the same quarter last year, owing to increased demand and limited new supply. Calgary’s downtown office vacancy rate continued its slow decline to 26.1 per cent in Q2, down from all-time high of 27.8 per cent a year ago.

2016

2017

2018

2019

0 -1

Source: CBRE

Vancouver and Toronto now share the title of North America’s hottest office market. Vancouver’s office vacancy rate dropped to 2.6 per cent in the second quarter of 2019, from 4.7 per cent only a year ago, according to CBRE’s Canada Q2 Quarterly Statistics Report. Toronto’s downtown office vacancy rate remained stable at 2.6 per cent amid a construction boom in the city’s core. Record-low vacancy is producing record-high rental rates. Average Class A net asking rents in Toronto’s financial core crossed the $40.00 per square foot (psf) threshold for the first time ever in Q2. As recently as two years ago these rates were seen mostly in Class AAA new builds. Vancouver’s average Class A downtown office rents jumped to a record $44.00 psf in Q2, up from $42.02 psf a quarter earlier. “Two years ago, it would have been unprecedented to have a Canadian city top the North American office rankings. We now have two Canadian cities setting the pace, which is truly remarkable,” says CBRE Canada vice chairman Paul Morassutti. “Something special is happening in this country and the investments being made

availability

Record low availability drives office and industrial rents to all-time highs

August/September 2019

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Vancouver and Toronto, and followed by San Francisco at 3.6 per cent, it should come as no surprise that the three tightest downtown markets in North America are tech hubs. On the back of four quarters of robust demand and limited new supply deliveries, the suburban office market vacancy rate contracted to 13.1 per cent in Q2 2019. This is down 200 bps from the 15.1 per cent vacancy rate recorded a year ago in Q2 2018. With only 589,496 square feet of new supply delivered in Q2 2019, the national construction pipeline increased 6.4 per cent quarter-over-quarter to 17.2 million square feet. Over 80 per cent of this development activity is occurring in downtown centres.

Key Trends: Industrial On the industrial front, Toronto and Vancouver also have among the lowest availability rates in North America. Vancouver’s industrial availability rate fell to 2.1 per cent in Q2 2019, despite that market having had the largest amount of new supply delivered in a single quarter in over 10 years in Q2: 1.5 million square feet. This shows just how insatiable demand is for industrial space in that market. Toronto’s industrial availability rate has sat at a record-low 1.5 per cent for the past two quarters. Strong demand and low availability pushed average net rents for Vancouver industrial properties to $12.62 psf in Q2, a 1.3 per cent quarter-over-quarter increase. In Toronto, average industrial net rents exceeded $8.00 psf for the first time in Q2.

Vancouver ties Toronto for North America’s lowest office vacancy rate.

For context, Toronto industrial rents had remained between $4.00 and $6.00 psf for two decades, up until 2017. In Montréal, availability of industrial product sits at half of what it was two years ago, dropping to 3.2 per cent in Q2. And Waterloo Region has had five consecutive quarters of positive absorption, resulting in an all-time-low industrial availability rate of 1.6 per cent in Q2, rivalling Toronto. Average net rents in that market have appreciated to a record-high $6.33 psf. Exports from Canada have rebounded in 2019 following the decline recorded at the end of last year. In the year-to-date to April 2019, merchandise exports rose 9.8 per cent to $50.7 billion, reversing the drop in Q4 2018 and nearing the record high reached nine months prior. Imports have also grown in 2019, albeit at a slower pace than exports, which helped shrink the trade deficit to a six-month low.

Industrial availability rates

The rollout of e-commerce networks in Canada’s gateway markets has led to an increase in competition for prime warehouse space from across the country. With a dwindling amount of supply readily available, demand for high-quality spaces has led the national average asking rate to increase 15.7 per cent year-over-year to $8.34 per sq. ft. To counteract the historical imbalance between supply and demand, there is 23.3 million square feet of industrial space under construction across Canada. Led by large bay projects in Vancouver and Toronto, this figure represents 1.3 per cent of the national inventory. “Across the country the demand for industrial properties, from tenants and owners alike, has seemingly never been stronger,” Morassutti said. “Third-party logistics, food and beverage and retail companies are snapping up space as the momentum of online retail sales continues to build.”

Office vacancy rates

canada 11.3%

canada 3.1%

1.5% 1.6% 2.1% 2.4% 3.2% 3.7% 3.7% 6.5% 8.2% 8.4%

4.3% 7.0% 7.4% 8.8% 11.0% 11.2% 15.7% 18.3% 19.3% 24.4%

Toronto Waterloo Vancouver Ottawa Region

Vancouver Ottawa

Montreal London Winnipeg

Halifax Edmonton Calgary

Toronto Waterloo Winnipeg Montreal Region

Halifax

London Edmonton Calgary

Building.ca

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legal Briefs DRONE LAW

Flying an industrial drone may be as easy as playing a video game, but doing so legally is more complex with new regulations. By Jeffrey W. Lem and Megan J. Lem

Jeffrey W. Lem is the Director of Titles for the Province of Ontario. The views expressed in this article are those of the authors alone and do not necessarily reflect the views of Kirkland & Ellis LLP or the Province of Ontario.

Megan J. Lem practices corporate securities law at Kirkland & Ellis LLP and is called to the bar in New York and Ontario.

That buzzing you hear and the flashing you see overhead at your construction site is neither a bird nor a plane…it’s quite likely to be an industrial drone. Drone technology is “the” super new cool toy at construction sites all over the country. These camera-equipped industrial drones are being used for every imaginable task in and around construction sites, from the more obvious uses such as surveying (one estimate sees aerial drone surveying as seven times faster than the same task done by survey technicians on the ground); security surveillance; real-time process monitoring in high-risk sites (like the top of a wind turbine); staff time and attendance monitoring (when coupled with facial recognition software); to the silly (everybody’s favourite story about the foreman who had a coffee “droned-in”). Drone users should be aware that Transport Canada has issued new modern federal rules governing their use. These new rules came into effect on June 1, 2019 and ushers in a new era in drone use that coincides with the explosion of drone technology that is coming onto the market for construction and development applications. The new rules create a new category of user called an “Advanced” user who will need to be trained and licensed to operate a commercial drone (anything between 250g and 25kg in weight: above that weight, they are considered aircraft. To give perspective, the best-selling consumer “toy” drone sold on Amazon weighs in at about 100g). Certified Advanced users, referred to as “pilots” in the regulations, will be entitled to operate a lineof-sight commercial drone pretty much anywhere, except within five metres of (or anywhere above) people or too close to airports and heliports. In addition to being operated only by licensed pilots, all commercial drones now need to be registered and display call signs (like planes) and be manufactured to specified industry standards.

Recreational big drone users do not need to meet such stringent requirements to get started but are then subject to very strict rules on where, when and how they can fly their drones. These rules have been in place since 2017. For instance, recreational drone hobbyists cannot take their drones higher than 90 metres above the ground, or for more than 500 metres from the operator, and cannot fly their drones within 75 metres of any buildings, vehicles, vessels, animals, people or crowds or at all at night or within 9.5 kilometres of any airport or heliport (the drone that videotaped the recent Raptors celebration shooting violated pretty much every single one of these rules). If you think about it, these rules pretty much limit recreational big drone use to fairly remote rural areas (note that these are recreational big drones, starting at 250g: the toy you bought for your 10-year old nephew to use in the backyard doesn’t count). In May of this year, the first recreational user in Canada was convicted under these rules for operating a recreational big drone too close to Calgary International Airport. But the feds are not the only players in this regulatory space. Big drone uses, commercial or recreational, still face municipal authorities, and local councils are all jumping on the bandwagon by imposing even more regulations on where and when big drones can be used. For instance, Calgary’s 2019 amendments to its parks bylaws expressly forbids drone use (whether commercial or recreational, even if it otherwise complies with federal regulations) in certain parts of certain municipal parks, with other parks being designated as wide-open “off-leash” drone parks. Provincial law also applies but not so much from a regulatory aspect (other than provincial restrictions on big drones in and around provincial parks and government facilities). Instead, provincial law governs through the civil law of trespass and nuisance. Builders and developers will be very

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drones are becoming as common as excavators on job sites, complete with their own complex set of rules.

well acquainted with this law dealing with airspace in their dealings with crane swings. The airspace through which you pass may very well belong to your neighbour, in which case, crane swings are trespasses subject to an injunction. Alternatively, you might be high enough above the ground so that the crane swing is, at worst, a nuisance, making you liable to pay for such nuisance. Where that altitude is remains a bit flexible and

subject to the circumstances, but the point is, the same law that governs crane swings applies to your big drones. Even if you meticulously comply with the federal rules on licensing and on where and when you can fly, you may be doing so over private property and therefore be subject to civil trespass and nuisance rules, analogous to the scenario where you are swinging your crane through similar airspace.

Finally, as if this wasn’t getting complicated enough, there are still general Criminal Code rules about the dangerous operation of aircraft and endangering the safety of other aircraft which will indeed capture reckless drone use. Similarly, there are privacy rules in place which, while not drone-specific, will govern the use of some of the imagery that may be captured by camera-equipped surveillance drones. For those of you constantly bothered by a neighbour’s or competitor’s drone, there isn’t a lot you can legally do other than report the non-compliance and wait for the government to enforce the rules. Although there are many U.S. websites that promote the sport and legality of shooting down drowns on private property (the so-called “Texas Trap Shooting”!), that is not the law in Canada (even if the drones are trespassing or appear to be violating federal drone rules), nor can you legally use jammer technology to attempt to jam the signal. Love ‘em or hate ‘em, big drones are here to stay, and users had better get used to the complex regulatory regimes that comes with these big boy toys.

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powers that be Checking In What Chateau Laurier illustrates about city councils and geographic diversity. By Kevin Powers

Kevin Powers is managing principal of Project Advocacy Inc., a subsidiary of Campbell Strategies, and is focused on helping project developers facing public and government opposition. Find him at www.projectadvocacy.ca or email him at kevin.powers@ projectadvocacy.ca

For a time in early summer, the most intense political battle in Ottawa was taking place outside the House of Commons, 100 metres east of Parliament Hill. The site of the controversy was the neo-gothic Chateau Laurier hotel, a building that has been described as playing “a pivotal role in the visual composition of Canada’s Capital.” In 2016, the owner of the castle-like landmark first proposed a boxy 127-room addition at the back of the hotel, overlooking the Rideau Canal. The proposal was immediately met with criticism. Some described the addition as a “giant air conditioner,” others called it “visual vandalism in the heart of our Capital.” Three years later, as the proposal reached a final vote in council, it had become a cause celebre, attracting the ire of prominent journalists, Members of Parliament and Cabinet Ministers. A high-profile advocacy group, Friends of the Chateau Laurier, had formed featuring a “who’s who” of Ottawa, from the CEO of Heritage Ottawa to former ambassadors and Senators. They implored Parks Canada and the National Capital Commission and Heritage Canada to stop the addition. There was even an attempt to get the Prime Minister to step in. In a letter urging Trudeau to intervene, prominent architect Barry Padolsky said the “architectural box, aptly named the ‘radiator’” has “horrified many Canadians.” Even comedian and Ottawa native Tom Green appeared before council to share his thoughts on the design. “It looks like a wall,” Green said without humour. “It looks like Donald Trump’s wall is being built to hide the Chateau Laurier from one of the most dramatic vistas in the world.” Some reports pegged opposition to the project at more than 90 per cent of downtown Ottawa residents. And yet despite the size of the opposition, despite the strength of the opposition, and despite the high profile of the opposition, Ottawa city council voted down a motion 13-10 that would have voided a permit to build the addition to the century-old heritage building. The much-hated addition was a go. It is an outcome that should give hope to

developers facing opposition to their plans. Highly organized opposition groups can often kill a project — but not always. There are many lessons to take away from this saga, but the most valuable lesson is on the dynamics of city councils, and how they can favour even the most controversial projects. In this lesson geography plays a starring role. The city of Ottawa is much more than the National Capital Region, which is home to the Chateau Laurier. It comprises large swathes of rural land and small towns like Cumberland, Munster and Constance Bay. At 2,976 square kilometres you could fit Toronto, Montréal, Edmonton, Calgary and Vancouver inside the boundaries of Ottawa’s city limits. As one commentator put it, the councillors who voted for the renovation “represent people who have as much to do with the Chateau Laurier as people in Nova Scotia.” Sure enough, the 10 votes opposed to the project were those closest to the city centre; the 13 who were in favour were farthest away. While Ottawa is an extreme example, this type of geographic diversity is at the heart of every city council. No two wards will ever be affected by a project in the same way; an act of visual vandalism to one constituency is just another faraway building to another. Developers forget this fact at their peril. At the first sign of opposition, many developers get tunnel vision. They focus their efforts almost exclusively on the flip-flopping councillor and their handful of angry constituents. Outside the fray, though, is where smart developers should focus their efforts. In council, the vote of an outlying ward counts just as much as that of the project site. And there are always more outlying wards than the host ward. In this vote-rich environment the passions are much lower, the constituents more sanguine, and the chances of a “yes” vote higher. The lesson from the Chateau Laurier is that council votes are a numbers game, and that if played right no amount of noise, no number of influencers can affect the simple math of a vote tally.

Building.ca

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The Future is h[app]ening

Ready or not, the rise of disinter mediating technology platfor ms and solutions ar e having a m ajor impact on the CRE industry.

By Rhys Phillips

Building.ca

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The biggest challenge when assessing the impact of property technology or “PropTech” on commercial real estate (CRE) is establishing a working definition. For our purposes we start by limiting PropTech to the impacts of the digital revolution. Historically, by the mid1980s the first application of computers to data and analytics emerged with such performance management tools as Argus’ valuation and asset management software. By the 1990s, the internet introduced real estate portals and by 2007 improved “searchability” using digital technology: sites such as PropertyGuru allowed property agents, developers and owners to showcase their real estate assets on a single portal. CBRE Group subsequently started citing PropTech start-up numbers in 2012, marking the transition from importing and adapting existing technologies towards specifically tailored real estate solutions. Defining PropTech A narrow definition associates PropTech with CRE digital start-ups. A broader definition, however, seems more appropriate, given the developing range of real estate legacy firms integrating digital-based solutions, often increasingly as venture capital sources. This leads Scott Addison, president of Brokerage Services for Colliers International, to provide a much more expansive definition. “We look at PropTech as anything that touches buildings and real estate. You have all the sales tools, you have all the things that are driving building efficiencies and how

tenants interact with buildings.” Lorne Burns, partner and National Industry Leader for Real Estate at KPMG, goes even broader; “We consider it anything that utilizes a digital or technological innovation or application in the real estate industry.” Calgary-based Matthew Boukall is vice president of Altus Group, an international firm that uses technology and data to provide actionable CRE analysis and advice. He initially places emphasis on transactional efficiencies, “about enabling the digital workf low from a property management perspective, about automating or at least streamlining the existing paperwork flow.” But captured data also becomes a support tool that enables other participants in the market to gain more knowledge. PropTech includes multiple types of data-gathering sensors operationalized using automation processes that increasingly will use artificial intelligence (AI) and machine learning (ML) to limit human monitoring and permit automatic issue resolution. Improving client/ customer services is also a key issue. Finally, PropTech also encompasses outside digital influences such as autonomous cars, the gig economy and potentially disruptive alternative business models. Digital technology is often portrayed as disruptive, even transformative to legacy business models, and while both are certainly on display, ProTech’s most significant impact is probably more as an enabler that provides multiple tools for improving efficiency and service in existing business models.

PropTech as Enabler A consensus suggests the penetration of enabling tools has been slower than in other sectors, but a report by Altus Group released earlier this year titled The Innovation Opportunity in Commercial Real Estate: A Shift in PropTech Adoption and Investment found a significant percentage of CRE firms are now targeting process and analytical efficiency tools. This means improving business intelligence is core, achieved through digitally-based data collection to which enhanced analytics is then applied. Increas ingly, firms are also applying process automation and, slowly, AI and ML to automate both decision making and responding. April’s Real Estate Capital Markets Conference in Vancouver agreed that innovation, with AI / ML predictive analytics will be the coming focus. Still, while the Altus report found automation by function ranged from 25 to 41 per cent of those surveyed, the average adoption of AI / ML only averaged approx imately 11 per cent. Nik Sudhakar and Jonathan Hills at CBRE Asia Pacific define analytic tools as those that transform data into useful guidance through “immense data processing, presentation, and analytics, and include reporting and querying software, online analytical processing, data mining and digital dashboards.” CBRE’s own offering, for example, permits users to “measure properties and leases against benchmarks based on current market costs and local efficiency standards, while highlighting and prioritiz-

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Organizing the PropTech Universe Some suggest using basic categories like software, hardware (sensors, smart phones, drones) and the distributive ledger Blockchain, while Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty, identifies seven linked organizational elements: big data; machine learning; IoT sensors; Blockchain; 3-D printing and modular construction; autonomous vehicles and drones. Big data, used across the board for development potential assessment, asset management, valuation, marketing and client/customer services, is optimized through automation with AI and ML. Hardware, like dedicated sensors, IoT sensors, drones and even satellites provide the big data. Blockchain will dramatically simplify real estate’s regulatory and paper flow burden. Tangentially, 3-D printing and modular construction may significantly transform the construction sector affecting brokerage timelines while autonomous cars will radically alter urban form and real estate development. Challenges from new competing business models and the impact of lingering out-of-date government regulations and new regulations, especially for sustainability and smart city infrastructure, are additional “verticals.”

I do not see a lot of tech experience in the C-suite. In fact I see almost none. ing portfolio cost saving opportunities, potential implementation costs and the complexity/achievability of savings options.” Automatically, algorithmic logic identifies optimization potential bypassing the need for months of manual assessment. When asked if PropTech is really more about being an enabler than a disrupter, Addison has no doubts. “Yes, definitely,” he answers. “It’s allowing us to use all this data that is floating around to bring it into reports more quickly and efficiently.” Burns agrees, adding that data management and analytics “is where most of the money has gone,” with robotic processes and automation representing the future. The potential range of functional applications is extensive. It starts with the use of digital mapping services, start-ups that provide deep intelligence on a site’s potential (ownership, zoning, etc.) and flows into design and construction (becoming known as ConTech). In terms of the latter, Addison cites the potential use of sensors embedded in poured concrete that use WiFi to indicate the concrete has cured in 10 days rather than the industry standard of 25 days. “If you can make occupancy times a lot faster,” he says, “it really helps clarify things for a brokerage.” But, he laments, changing construction industry traditions and regulatory norms will not be easy.

Deal sourcing, use pricing and location-based marketing are also significantly impacted by big data availability and analytics. In terms of marketing, increasingly sophisticated portals, virtual reality, and response programming improve sales and leasing performance. Focus on PropTech’s ability to improve tenant experience, whether a commercial business leaser, condo management board or residential renter is a core concern. Smart buildings are key, although a recent Globe and Mail report suggests builders may be plagued with a dearth of required skilled workers. While implanted sensors play a role, the internet of things will play a major role in generating big data to facilitate service provisions. Tenants’ control of their environment, including remotely through smart phones, improved services such as automatic programming of elevators based on usage patterns, responsive energy usage, and predicting potential failures are but a few areas. PropTech as Disruptor While enabling may be ProTech’s core outcome, disruption is also baked into the digital revolution, which broadly clusters into three categories: related digital trends; alternate business models; and public policy impacts, the first of which includes digital innovations

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10% of CRE executives “don’t really understand blockchain and what it does”: altus

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than competing against, co-working firms. Colliers, explains Addison, collaborates with Upsuite and Regis. “This originally helped our brokers identify spaces… [but it is also] helping landlords analyze whether to change a floor into co-working and can they advertise and market it directly themselves.” Brookfield, Canada’s flagship developer and institutional landlord, works with Convene in a similar fashion. Finally, public policy disruption around PropTech takes place in two ways. First, slow changes in regulations around such things as Blockchain and construction standards can inhibit innovation. Second, new sustainability, smart growth and new urban form standards will stimulate digital-based solutions.

CRE firms’ tech usage

61% Using or already trying out online lending marketplaces

PropTech as Transformer Legacy CRE firms are unlikely to go the way of Blockbuster. These existing companies will themselves transform markedly as the digital data revolution takes hold. Within some occupational professions, however, there may be significant casualties. Blockchain, and what Altus calls disintermediating technology, may eliminate conveyancing and other legal and regulatory professions. Sales and marketing platforms like Habiteo may replace traditional marketing operations. One transformative possibility, too broad to address here, is suggested by Alphabet’s controversial Sidewalk Labs project on the shores of the Toronto waterfront. Already the giant firm is proposing radical new urban form and talking about building cutting edge infrastructure. Is the next step to become the new, all-inclusive data-based developer in partnership with municipalities? Laggard or Leader PropTech is growing exponentially with start-ups and unicorns proliferating rapidly. According to Bisnow’s Mike Phillips, investment in 2018 reached $20 billion worldwide, representing a 38 per cent increase over 2017. The consensus on acceptance, however, is clearly that the CRE sector has been a laggard not a leader. As CBRE Canada vice chairman Paul Morassutti said early this year, “I do not see a lot of tech experi-

60% Using or already trying out online investment marketplaces and crowdfunding

Source: 2019 Altus Group CRE Innovation Report

not directly focused on real estate but has significant implications. Most frequently cited is autonomous/electric vehicles. With up to 60 per cent of urban space currently dedicated to cars and the high cost of below grade parking, the implications for CRE will be enormous. Although Addison believes the industry views this technology as 10 to 12 years down the road, he, as well as Burns and Boukall already see increased ceiling heights and flat rather than slanted decks to facilitate adaptive re-use. Perhaps the best Canadian example is Calgary’s new East Village garage designed to be converted to other uses as parking demand declines. Second, alternate business models like Airbnb and Sonder have disrupted the hotel sector. Recent studies found noticeable impacts on room revenues, average daily rates and occupancy rates in the mainstream hotel sector attributable to the former. Yet while Airbnb has been profitable since 2017, it faces issues of trust and loyalty. Perhaps most importantly, significant regulatory action by many municipalities may both cut into its cost advantages as well as limit available units. The latter will be encouraged by evidence that Airbnb kept 31,000 residential units out of Canada’s long term rental market last year. While the model is disrupting the hotel industry, it is probably more an irritant than a threat and, as is so often the case, has spurred innovation within legacy firms. Canada’s e-commerce penetration was nine per cent of retail sales in 2018 according to Statista, consistent with recent U.S. figures from YCharts but much lower than the U.K.’s 20 per cent rate and rising. While e-commerce has and will impact bricks and mortar retail, Boukall posits a new relationship with “smaller retail spaces, which are all about ‘experiencing the goods’ while also integrating with online delivery [creating] seamless interaction between the bricks and mortar retail and the online shopping model.” Similarly, co-working offerings have “certainly been disruptive to the commercial real estate space,” says Boukall, “But the impact on more traditional leases may be a bit overstated.” Additionally, legacy brokerage companies are increasingly working with, rather

48% Using or already trying out AI and machine learning

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Toronto is one of the four fastest-growing PropTech hubs globally market and business trends impacting investment and portfolio decisions YES - having influence on portfolio and investment decisions NO - not influencing or no influence yet

Sharing economy firms in real estate (e.g. airbnb)

23% 77% Co-Working (e.g. WeWork, IWG Regus)

66% e-commerce (e.g. amazon)

39% 61%

Source: 2019 Altus Group CRE Innovation Report

34%

ence in the C-suite. In fact I see almost none.” A sentiment echoed by P wC’s 2019 trend analysis, which reports only 10 per cent of real estate CEOs are concerned about the speed of technological change compared with 38 per cent in all other industries. As KPMG points out in their 2018 report titled The Road to Opportunity: An annual review of the real estate industry’s journey into the digital age, while 43 per cent of European real estate firms surveyed answered “yes” to having a clear digital and technological innovation vision strategy, only 23 per cent concurred in North America. “The property industry,” the report concludes, “is notoriously slow moving and the vast majority of organizations are followers rather than trailblazers, waiting for others to pave the way.” A sentiment echoed in both the Altus and P wC reports. Optimistically, however, the glass may now be half full and filling up. FOMO (fear-ofmissing-out), particularly by large legacy firms, is being driven not by the threat of alternative business models but by the cautionary tale of Blackberry, a once-mighty sector leader that just stopped adapting and paid the price. If the Altus Report starts with the observation that many are still watching and waiting with their spreadsheets in hand, there is a tipping point emerging where “CRE firms are, for the most part, fully engaged in PropTech advancement and adoption.” Perhaps this is nowhere more evident than in the number of firms developing their own internal PropTech capacities, partnering with

new service providers or investing directly in start-ups. “We are going to see a lot of job growth in real estate globally through hiring of tech people to adopt and implement a lot of these technologies,” is one key prediction from the 2019 Real Estate Capital Markets Conference, a conclusion supported by the PwC report and by Addison. The third trend, direct PropTech investment, is well-along in Canada. According to Altus, 53 per cent of CRE firms are directly investing in at least one start-up. Colliers, says Addison, is both developing its own proprietary apps around areas like valuation while partnering with tech-stars to operate Colliers PropTech Accelerator. Last September, 10 sta r t-ups were “graduated,” including MapYourProperty which, says Addison, provides searches, maps, and due diligence reports as well as providing analytics with regulatory data sets. With the Accelerator, “we get to be an early adaptor; [we] get our people on it a little faster.” In April 2018, Brookfield funded its Brookfield Ventures with $300 million. Initial investments included BuildingConnected, a networking and pre-construction management platform and, last May, VTS’s platform for commercial real estate landlords, brokers, and tenants. November 2018 saw DREAM Unlimited, whose business includes condominium, mixed-use and renewable energy infrastructure development as well as asset, REIT, and commercial property management, launch Alate Partners jointly with Relay Ventures. The $40 million fund is directed at PropTech companies with initial investments in Lane, a tenant experience and communication platform, and Park Whiz, a smart parking solution. Similarly, Cadillac Fairview announced a $50 million investment in PropTech venture capitalist firm Framework Venture Partners. Many also see start-ups now undergoing necessary consolidation that will lead to more relevant and seamless integration with services and products that respond more directly to specific CRE “pain points.” With Realtor Magazine declaring Toronto one of four fastest-growing PropTech hubs globally, Canada should be on track to become a leading CRE innovator.

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Out of the living room, into the boiler room AI is being used across industries to derive insight and drive value. Can it help eliminate energy waste in multiresidential buildings? By John Macdonald

Artificial Intelligence (AI) is playing an increasingly important role in our everyday lives. Whether it’s suggesting a reply in your email inbox, finding a rideshare in minutes, picking a song on a playlist or checking credit worthiness in seconds, it’s hard not to recognize the growing impact of AI and its applications. But if AI is so powerful and pervasive, what role can it play in helping reimagine efficient energy use in the buildings we live in? We’ve embraced AI in our living rooms, but perhaps it’s time to introduce it into our boiler rooms as well. Multi-residential buildings face an ongoing and significant challenge: energy waste. Typically, the energy (electricity and gas) that buildings manage and control is primarily consumed by HVAC equipment (provided each unit in the building does not have its own heat pump or equivalent system). This can account for 35 to 50 per cent of the utility spend for any particular building. Innovation has been slow to come to HVAC management. For the most part, today’s multi-residential buildings manage their HVAC energy the same way they did 20 years ago. The process is not data driven, dynamic, or measured against historical patterns and it certainly is not forward-looking. If anything, it continues to reinforce an unacceptable pattern of waste. How does it work? First, let’s talk about data. AI depends on large sums of data. The most successful AI implementations in in-

dustry pairing data-processing AI engines with human expertise. An example from healthcare is the potential for AI to assist in identifying different skin cancers through images; a study out of Stanford demonstrated that a trained system can meet the success rates of fully-trained dermatologists. Thus, the first substantial barrier for AI use in HVAC energy management is obtaining these large sets of information. With sets of labelled data, AI systems can learn what normal operations look like, how to identify states of failure, and where efficiencies can be found. Thinking about HVAC in particular, we need data sets that capture the interplay of sub-systems both across a range of multi-residential buildings (with differing demographics and usage patterns) as well as across year-long timelines. This is important because a building with an older, largely retired demographic will present a different data pattern than a much younger working demographic at 9 a.m., for example. AI can help us segment the exact needs and usage patterns of varying buildings and see in usage patterns how best to provide comfort to residents. In addition to data on the primary equipment, we will also need data on affected building areas such as hallway temperature. Further, any fulsome analysis requires additional input including external weather and third-party data where available (ie. utility pricing rates).

The more data the better In order to capture this data, building owners and property managers need to acquire capabilities to collect and store it. In the past, this requirement may have been enough to dissuade property teams from considering adopting new processes. New technology, however, can help facilitate powerful information gathering. Improvements such as lower-cost sensors and better connectivity to pass data to the cloud can help alleviate the burden on property managers and building owners. With hardware in place to collect data in real time, the industry will need to think about new levels of control that can leverage AI data processing. If existing equipment and systems can be controlled with new levels of accuracy, there is a greater opportunity for uptake; retrofitting existing equipment with new levels of control that are powered by cloud-based AI engines will likely be the most cost-effective way to leverage AI. Unsurprisingly, a Berkeley Lab study found that, “the higher the initial cost and the longer the wait for returns, the less likely a project is to be approved.” And thus, the challenge when capital-intensive equipment upgrades are proposed is they are riskier with longer payback times. Smart solutions don’t require new investments in big equipment; they can connect to legacy systems and use AI to make them efficient.

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With lightweight controls in place and data pipelines that can fuel AI engines, the real work will begin. Energy Management Platforms will need to be developed that can both make smart decisions and offer insight and control to domain experts such as mechanical technicians. The net result should be systems that can provide the right level of detail and information to the right parties whether that’s the condo unit owner, condo board member, property manager, mechanical partner, energy provider or research partner. The potential benefits of this kind of system are many including energy savings, environmental impact and greater operational insight. Condo managers and boards are under increased pressure from their residents to control escalating fees. This is no easy task. If buildings can reliably lower their largest operating expense — utilities — they can help to secure the financial viability of their building and better secure the investment of all unit owners. In my experience, when AI is leveraged appropriately, buildings can realize 20 to 30 per cent savings on utilities, without any upfront capital investment. This is prudent financial stewardship. A second benefit of reduced energy waste is the positive environmental impact. According to a UN report, buildings and construction account for 39 per cent of global CO2 emissions. As energy consumers, it behooves all of us to think about how we utilize resources and where we can be more energy efficient. As society transitions into denser and denser urban environments, our buildings’ environmental impact will only become a bigger issue. In Ontario alone there are more than 1.3 million condo residents; across Canada, it is estimated that one in eight households live in condo buildings. A third benefit of AI in buildings is the opportunity for more advanced alerting and notification when equipment is operating incorrectly. Real time data processing can help the equipment maintenance staff and give property managers better peace of mind that issues will be caught immediately on behalf of residents. A final benefit for AI in buildings connects to resident health. If we can better instrument our buildings and capture data related to the quality of our buildings’ environment (air and water in particular) we can

better inform residents on the health of their environment and better help safeguard it. Increasingly, we are able to monitor all aspects of health with the help of AI and data (ie. the heart monitor on your smartwatch). The same should be true of the environment where we spend so much of our time. If we can take the technology available today and innovate together, the net result will be a built environment that is more sustainable, cost effective, operationally secure and healthier.

above Lightweight retrofits can help eliminate energy waste in condo buildings. But to leverage the power of AI, multi-residential boiler rooms need to be connected and controlled.

John Macdonald is Chair of the Board of Parity, a Canadian proptech company. Previously, he was the first employee and CEO of Enercare, which has grown to be North America’s largest HVAC company. www.paritygo.com

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SuburbanI(C)Tes The tech sector is showing that not everything is happening in Torontoâ&#x20AC;&#x2122;s downtown core. By Shannon Moore

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When Amazon selected Toronto as one of the 20 finalists for its new headquarters in 2018, the reputation of the city as a budding tech hub became clear. Suddenly, industry giants like Apple, Google, LinkedIn and Microsoft began setting up shop, further strengthening the city’s global appeal. By early 2019, the Greater Toronto Area (GTA) had been ranked North America’s fourth-largest tech talent market, surpassing well-known leaders like San Francisco, Washington, D.C. and Seattle. In a single year, Toronto had hit the map. Though well on its way to fame prior to Amazon’s interest, the city benefited immensely from this international exposure. Today, it thrives as a top attraction for tech talent, boasting approximately 241,000 current workers, and a new mass moving quickly down the pipeline (thanks to leading academic institutions with specialized training). From software engineering and artificial intelligence to cybersecurity and data science and analytics, the city’s information and communications

technology (ICT) sector is alive and well. However not all tech businesses are located in Toronto proper; in fact, a new report from Avison Young titled The Technology Sector in the Greater Toronto Area: A MultiMarket Success Story, explores the increasing draw towards the city’s suburbs, and dives deep into the distribution of ICT businesses across the city’s suburban 905 regions — an impressive 62 per cent, according to Statistics Canada, which accounts for thousands of ICT firms at all stages of growth. “There’s this notion that tech companies are only congregating in downtown Toronto,” says Bill Argeropoulos, principal and practice leader, Research (Canada) at Avison Young. “There is much more to the story than the popular conception of fast-growing downtown start-ups that capture today’s headlines. We found that there is a critical mass of firms located well outside the downtown core which have equally impressive growth potential and are thriving in suburban areas.”

203 % 2017

2018

Source: Colliers International

gta technology tenants - year comparison

The reasons behind ICT sprawl are multifold. Not surprisingly, real estate affordability is a driving factor. More than that, though, these tech companies are chasing a variety in office product and talent. With considerable flex space and a good mix of lease options at their disposal, the suburbs can accommodate ICT firms of any size, from start-ups and scale-ups to international giants and those on the fast-track to success. Likewise, whereas ICT experts traditionally worried about losing talent to competitive foreign markets, Avison Young says the presence of tech workers across the GTA is currently strong. “Companies sometimes have difficulty finding the right talent for the jobs they need done,” the report states. “It is worth noting, however, where experienced and qualified ICT professionals live and work today, or more specifically, where those with the kind of technical skills that will be most in demand are to be found. In both cases, the answer shows significant distribution across the entire GTA.” Quality of life and personal affordability play a huge role in the location of tech workers, with housing options in the downtown core accurately described in the report as “prohibitive.” Luckily, expanding transit lines linking key hubs across the GTA make living and working outside of the city centre easier than ever. The York Region in particular has been identified as a tech hotspot, boasting “the highest concentration of ICT companies per population size in Canada,” as well as “the

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404 400

401

407

427

401 403

Tech. company area by leased SF

QEW

Very high High

Moderate Low

Source: Colliers International

country’s second-largest ICT cluster overall.” With nearly 4,400 ICT firms in its vicinity — including Vaughan’s Daisy Intelligence, Richmond Hill’s Compugen and Markham’s General Motors campus — York Region offers competitive rental rates, affordable housing options, and above-average transit connections. Argeropoulos says it’s also worth noting that of the 10 proposed GTA sites for the Amazon headquarters, nine were located outside of downtown Toronto, including the York Region itself. “These days, smart companies look beyond Silicon Valley,” he says. “Because the GTA is not a single market, but

offers tech companies a wide range of real estate options and skilled labour pools, there’s opportunity here, and companies can, and will, continue to thrive.” Hyphenating the Core Despite the appeal of the suburbs, however, the downtown core continues to attract talent. Many firms, both established and new, are drawn to the potential that accompanies proximity to the city centre; and while vacancy rates currently sit at a record 1.1 per cent, many companies are finding innovative solutions to secure commercial space.

This is especially true for young firms. “Tech startups are increasingly looking for alternative office options as they contend with a near zero per cent vacancy market in the GTA ,” says Daniel Holmes, senior managing director, Office Practice Group, Colliers International. “It may not align with a tech startup’s financial priorities to allocate their funding into longter m leases in high-demand a reas, so some are opting for co-working offerings that provide f lexibility, minimal set-up costs, and a collaborative and dynamic environment.”

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4% 2%

Reg

gio

l Pee

lto

21%

Hamilton

rl Wate

5% rh

Cit

oro fT

nto

36 %

ion

egion York R

Number of ICT Companies total in the Greater Toronto and Hamilton Area, 2018

Colliers’ report, Young tech firms: Flexibility requirements in a near zero vacancy market, narrows in on this trend. According to their findings, the top five players in Toronto’s co-working market — Regus/Spaces, WeWork, Workplace One, Workhaus, and IQ Office Suites — accounted for 1.4 million square feet of commercial space by 2018 year-end. “The majority of these co-working options are located in the Financial Core and Downtown West submarkets, home to the market’s largest concentration of tech tenants,” the report says. Not surprisingly, startups are drawn to these well-located spaces. But supply is drying up, and according to Colliers, many companies face further constraints by struggling to secure the right talent. To address this, the Government of Canada established a Global Skills Strategy program that allows quick approval for temporary worker applications. Colliers found that nearly 22,000 work permit applications were approved between June 2017 and September 2018, of which 4,233 were processed for the City of Toronto alone. “The growth of the program has helped address the shortage of highly skilled workers and allow tech tenants to access talent which enables them to grow their company,” the report says. Colliers also acknowledges the inevitable shift towards the suburbs in the face of a strained real estate landscape. Breaking down total market penetration, the report reveals more than 18.7 million square feet of occupied tech space across the GTA , accounting for 9.4 per cent of the region’s overall office inventory. Going forward, as vacancy rates inch even closer to zero per cent, Colliers predicts an increased demand for co-working space and a continued shift away from downtown. Statistics, talent distribution and commercial availability aside, the GTA’s tech sector is thriving; and to prosper even further, Avison Young concludes that suburbanites and city dwellers must learn to co-exist as one. “Currently, there is a tendency to view the GTA’s downtown and suburban regions as being in competition with each other,” says Argeropoulos. “However, the GTA and its ICT sector should be considered more holistically if the region’s tech sector is to retain its talent, support its enterprises and serve the public good.”

23 % Source: Statistics Canada, Canadian Business Counts 12/2018 - Census Division data by NAICS

office area by building class - Q1 2019 9%

Class A

Class B

12 %

18 %

Class C

29 % 62 %

75 %

gta overall

Vaughan

81% Markham

Source: Avison Young

global skills strategy results

21,775

55%

4,233

Canadian applications approved between initiation of the program in June 2017 and September 2018

Of these applications were destined for Ontario

Work permits processed for the City of Toronto alone, benefiting more than 450 employers

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in their words Click to Follow

In the inaugural episode of his Single Serves podcast, Arnaud Marthouret chats with marketing consultant Dave Sharp, president of Melbournebased Vanity Projects, about how and why architects are navigating the world of social media.

Arnaud Marthouret: The first question is, quite simply: why would an architect get on social media?

Dave Sharp: I think architects generally get on social media for the attention. And I mean that in the best possible way. We do really good work and we spend so much time thinking about making it as great as it can possibly be. We get photos taken and we want there to be an audience for that work. We want people to see our ideas. And whether they are just people in our industry or potential clients or just society generally, you do something good and you want people to see it. Eventually that sort of thing turns into business results. But, really, it’s that attention that I think a lot of architects are looking for. I don’t necessarily say social media has any special feature, necessarily, that makes it different to magazines or awards or any other place that architecture used to get published; it’s just another place where people go to spend their time and see great architecture. Everybody who’s out there looking for amazing architectural ideas are spending their time on social media.

The number one architecture magazine in Australia is only read by about 10,000 people and comes out four times a year. And you have to be very, very lucky to get a spot in that magazine. You really have to do the best work in the country to get even a tiny bit of space in there. Then you’ve got just every architecture firm, and there are hundreds of them, who have very, very big audiences on social media and they don’t need to rely on anybody, really. They are a little bit attached to what happens to the social media platforms but they are kind of the captains of their own ship and I love it. AM: Can you describe some shining examples of architects who’ve done very well on social media and why? DS: There’s a bit of a distinction, I think, between architects that have done really well on social media because they’ve been good at social media, and architects that have done really well through social media because their work has done really well on social media. In Australia, there is an archi-

Architects generally get on social media for the attention. And I mean that in the best possible way.

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tect, Andrew Maynard, who discovered Twitter, like, the first year it came out. And years before any other architect was on Twitter, he was building up a big audience. Then he did the same thing on Instagram and YouTube. He’s always moving ahead of the industry and gathering up this enormous audience because the general society moves onto these platforms so quickly that architects can sometimes be really slow to get there. But he’s always been able to do that, and he’s built this fantastic audience and this very loyal fan base in the residential space primarily. And they will now follow him to any new platform. He could open

up a Snapchat account tomorrow and he could have 5,000 to 10,000 followers on Snapchat by the next day. But then I think, on the other side of the coin, classic examples like Bjarke Ingels. Now Bjarke, I don’t believe, is technically very good at social media. I think he’s very open and transparent and he posts frequently. But what really makes Bjarke well-known and built an enormous following for him was his TEDTalk going viral on Facebook. That was seen by millions of people and that brought an enormous audience to him that liked his ideas, they liked the way he thought, and they’ve stuck with him over time.

The final example is an architect that I used to work for in Japan called Takaharu Tezuka. And he did a very popular TEDTalk called “The Best Kindergarten in the World” about his kindergarten project. And Tezuka is now somewhat of a famous architect and I don’t think his firm has a Facebook page, they don’t have Instagram, they don’t have Twitter — they have no social media. But his videos and his content, his projects and that TEDTalk have collectively generated hundreds of millions of views on Facebook: a shining example of what social media can do for an architecture firm.

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On the one side you’ve got people that really understand how the platform works day-to-day. Then you’ve just got successful architects on the other side who understand what type of content works really well on social media. They don’t actually have to personally be the one driving it day-today, but they create work and talk about it in a way that they know that social media will really love to take that story and spread it. AM: To me, it sounds like [those examples] were able, each in their own way, to leverage whatever platform they were on, [but also] all three of them are very smart architects who have very strong opinions and are not afraid to put them out there. I’m wondering if it’s more a function of being vocal about what they believe in and sticking by it, year-over-year, as opposed to being specifically on a social media platform?

DS: Yeah, they have a consistent message or a worldview that their work supports: they don’t do work and then figure out what to say about it, they have something they’re already saying and then they do work that fits. All three of those guys have very strong opinions: Maynard talks about suburbia and communities being broken; Tezuka talks about children and young people and what they need to grow and be happy; Ingels talks about the environment and the city. They have these narratives that are much bigger than architecture and I think that’s the key for success for the three of them. They have figured out a way to talk about their work in a way that can relate and have a big impact with non-architects. Social media works extremely well for them because they can have a conversation with people from any walk of life. You’re right; you tend to get known for a message that is supported by work, and that will translate across any platform. If you build a really potent following on one platform, as long as those channels are somewhat similar in terms of the content they produce, that audience will just follow you all the way across to the other platform, or the next one that comes out in a year’s time.

DS: At the macro level I think the mistake that most architects make is they wait too long. And they wait for everybody else to be doing it before they start doing it. Social media platforms can become a very crowded trade, a lot of people can be trying to compete over the same number of viewers and audience in one platform. It’s 2019 and there are still a lot of architects talking to me about whether or not they should start an Instagram account. Now, they are very late to the party. It’s not like social media is not going to happen for them, but I just wouldn’t go on Instagram. It’s kind of already worn out, I think, if you’re not there and you haven’t already developed an audience. I think waiting for confirmation from the rest of the industry before you do something is the single biggest mistake. I think it’s really helpful for architects to keep their eye on other industries: what are more fast-moving industries like graphic design, creative strategy, technology and marketing doing? You usually find strategies and examples of approaches that work years before your industry starts applying them. You might be a little early to the party, but that’s okay, I think it’s alright to be early. The other major issue is just a general perfectionism about the presentation of our brand and our portfolio: you want that quality to shine through in every aspect of your company, and that makes sense. But really, anybody, even a social media expert, that

thinks they can tell you that they know how social media works and which post is going to do well and which one isn’t, they’re pretty much just lying to you. I could look at five different images and a client might ask me which one will do best on Instagram and I’m always surprised by the answer. The lesson is that you just need to take a lot of swings at the bat and put out a lot more content than you probably feel comfortable with. Because a lot of it’s not going to really get seen by that many people. But that one in 10, that outlying post, will get seen by a hundred times what the typical post gets seen by. Trying to stage and prepare the release of our projects like we were releasing them in a newspaper or magazine so that everything is guaranteed — there are no guarantees in social media. You could pick the wrong time of day, the wrong day of the week, the wrong image, any little factor could come into play that could totally sink the debut of your new project. Instead, think about how you can break your work and your process down into smaller little chunks and be testing more of a variety of different kinds of things. And don’t feel bad if a post doesn’t do well or you post something and it doesn’t get many likes or nobody really shares. Most of the time what we share just gets ignored on social media. But you’ll be rewarded by that kind of consistency and experimentation, because when posts do well, they’ll do very, very well.

the mistake that most architects make is they wait too long And for everybody else to be doing it before they start.

AM: What would be the most common mistakes you see architects and designers make on social media?

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AM: How do you think social media fits into an overall business development strategy for design businesses?

DS: It really depends on your firm. Are you business-facing, are you consumer-facing? Which vertical are you interested in? Are you doing houses, are you doing cafés? That really affects how you use it as a strategy. It also depends on your content. If you’re just getting professional photography of your finished projects and the predominant output of your architecture practice in a year is photos, my recommendation about how you should use LinkedIn is somewhat limited by that. If you’re a writer and you’re not playing as much in the kind of visual aesthetic realm, but you’re thinking more about ideas and research and insights and getting a little bit more political with your work, then I think that your strategy will be completely different to another firm. You’re trying to marry up who your ideal client is, what kind of content are they going to find valuable or most persuasive to them? If your ideal client is the government and you want to do schools, Instagram and awesome photos of schools you’ve designed is probably not going to be your best in-road into that. Different avenues are more efficient. For architecture, I think we have this sort of general reluctance to pigeonhole ourselves or focus in on one particular thing, but really we’re doing ourselves a bit of a disservice because the best business development strategy that is made possible by social media is to really just focus on a very targeted group of people and create stuff just for them. AM: There are famous people who have a huge following on social media [saying that] the structure of social media, based on the kind of artificial interaction that people have with social media and posts, just causes more headaches, depression and negative emotions than it is a positive thing.

DS: I read a very good essay recently [that] was about what the platform is really selling is status, in a lot of ways [it’s] a status game like the popularity at high school. And, invariably, in a market of status and popularity there’s going to be winners and losers. If you’re at the top it’s sort of a new set of troubles. If you’re at the bottom, [where] you’re just posting and no one’s recognizing the good work you’re doing, that can be quite stressful as well.

I think for an architecture firm that’s [thinking] about social media, a lot of the time we’re not really attaching personal brands to our social media, which, if I was to add another social media mistake architects make, I’d probably say that’s one. To market on social media through the brand of your company is not as ideal as just going, “Hi, I’m Dave. This is my content.” But we tend to avoid the personal on social media, so in a lot of ways we’re an industry immune from the possibilities, but also immune from some of the dangers, as well. We kind of get to play this middle ground a little bit where we’re not personally feeling that invalidated by the reactions and the comments and the trolls. But it also means we have a bit of a ceiling over our heads about how well we can possibly do. Different architects see it differently. I work with a number of clients who don’t really give [their Instagram account] much mind and see it as almost like the phone book, as a place business comes from. They don’t get emotionally attached to it. But a lot of time those same architects, if they get snubbed for an award [get] very upset about that. So they get their status in different ways. Then there are some architects, particularly emerging firms, who are extremely sensitive to how their content does on Instagram and sometimes get what is called in shooting sports “target panic” [where] it takes a couple of bum posts and a few negative comments and they start getting really discouraged from posting more of their work. Or they start adapting their strategy based on some tiny amount of negative feedback. AM: How do we prevent ourselves from falling into the traps of social media and its design intent to create the maximum engagement possible, which can lead to addictive behaviours?

DS: I think the best thing you can do is be a bit of an omni channel firm. And that means being a little bit unbiased and a little bit unprejudiced towards all of the major social media channels. Because then you start to see that they all have different roles and they all serve different purposes. There isn’t a single social media platform that is all-important that you just need to be there. At least in the Australian architecture space Instagram is thought of as the only game in town. In the U.K., Twitter is seen that way, and

in the U.S. Facebook and Instagram are seen that way now. But when you believe that there is one gatekeeper and one source of status and projects, I think you begin to develop a feeling that your livelihood really depends on your success or failure on this one platform. But, instead, those things are largely out of your control and you really don’t want to be reliant on one individual platform. When I look at marketing my focus is on the quality of whatever content I’m making. If I was making architecture my output would be photos. In my case, I’m writing, I’m making podcasts, I’m recording videos. Then I have a pretty broad, unbiased, emotionless point of view of the social media channels, and I just look at each one individually and go, “How could I take my writing, my video or my podcast and recycle them and repurpose them and put them out on those platforms.” A bit like Joe Rogan’s [“Post and walk away” mantra]. Sometimes so much that I have to remind myself to go back and actually respond to people’s comments. You can find yourself getting very distant and selfish on social media and, to me, what’s more of an internal struggle is to insulate yourself from this feeling of addiction or anxiety about how the platform is treating you, while also still keeping your heart a little bit in the game so that you’re actually a nice person and participant and contributor. Because if you just see social media as some bullhorn that you can just fill with messages and walk away and can then get back to the drawing board, that’s not going to be appreciated by any audience, really. So there always has to be a reciprocity and back and forth between you and the people that follow you. It is a fine balance, but when you create content and you share it and are generous with your ideas, you tend to find that you get very positive feedback that [can] quickly turn into real relationships. Social media is a great way of generating long-distance, professional friendships.

An architect by training, Arnaud Marthouret is a culture, communications and media maven for the architecture and design industry.

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Here Today, Gone Tomorrow What to think about when thinking about retail pop-ups. By Daoust Vukovich

A recent study shows that in Canada, almost a quarter of all online and brick-andmortar retailers are using pop-up stores to enhance sales. Pop-ups come in all shapes and sizes and have a broad range of uses, from formats testing new products and concepts, to support for online retailers. Pop-ups typically pay lower rent or fees than traditional retail tenants, and payment is often structured as a gross amount, inclusive of all common area expenses and property taxes. In some cases, even utilities are included. These amounts may be payable as one lump sum in advance, or in monthly instalments. Pop-up users with little upfront capital may prefer a percentage rent structure, in which the user pays the licensor/landlord a percentage of the gross sales from the popup location. This arrangement is appealing to pop-up users, since it correlates with the success of the user’s business, but for the same reason may be less appealing to the licensor/landlord.

Space to be taken “As Is” Given the temporary nature of the arrangement, it seldom makes economic sense for landlords to invest in pop-up premises. Consequently, most agreements specify that the premises are taken in an “as is, where is” condition. Landlords typically deny pop-up users the

right to significantly alter or fixture their space in any way that might compromise its longterm value or marketability. Choice of Document In most cases, pop-up deals move quickly and are temporary in nature. As a result, the pop-up transaction must be papered efficiently; this means the document governing the relationship between the parties is more likely to be a licence agreement or short form lease and not the landlord’s standard form commercial lease. A licence is a personal right between the owner of the lands (the licensor) and the licensee, which grants a contractual, non-exclusive right of possession. This permission may be revoked at the will of the licensor (upon notice) and cannot be transferred unless transfer rights are expressly granted in the licence. By contrast, a short form lease (like a full-blown lease) transfers an interest in land. It confers a right of exclusive and irrevocable possession on the tenant. Any lease, long or short, carries rights and remedies including certain statutory rights, but a short form focuses only on essential terms and expresses them in an abbreviated form. The choice of licence agreement or short form lease depends on a few factors: the

length of the term, the complexity of the business arrangement (including the dollars at risk) and the particular use of the pop-up space. Terms of longer duration with complex rent/fee structures (such as triple net deals or financial arrangements tied to sales) are more typically documented by a short form lease. In contrast, a simple licence agreement is well-suited for short terms and straightforward gross fee structures. Risk Allocation The insurance provisions of the pop-up agreement are arguably among its most important terms. Because the rental stream flowing from a pop-up arrangement is often slim, licensors/landlords are justified in shifting as much risk and liability to the pop-up user as possible through the risk allocation provisions, including releases and indemnities. Pop-up agreements should therefore contain comprehensive insurance requirements similar to those found in a long form lease. The user’s covenant may be strong or weak or in-between, with the result that procurement of the appropriate insurance is fundamental. Default and Termination Rights Because speed is usually key to a pop-up transaction, licensors/landlords may overlook

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Loïc Romer

Le Petit Montréal at Phillips Square

Can big communal tables, light strings, designer furniture and shady relaxation spaces distract visitors and locals from the dog’s breakfast that is SainteCatherine Street’s seemingly never-ending construction? Destination Centre-Ville, a downtown Montréal commercial development association, certainly hopes so, and tapped Îlot 84 (known for Aire, an open-air co-working space in Mile End) to devise a pop-up structure that at once offers respite without blocking the natural movement of people. The result is Le Petit Montréal, located directly on Phillips Square for as long as the summer weather holds out. With an elevated terrace, Le Petit Montréal not only creates unobtrusive seating but also a vantage point from which to observe the construction site, making it possible to watch the (slow) progress and better understand it. Its large staircase acts as both stands highlighting the statue, and also as a wall blocking the noise nuisance of construction work. Urban-friendly furniture and a pink line on the ground help delineate the space, while two of the three containers supporting the structure have been furnished to create interactive, informative spaces for tourists and neighbourhood workers, with the potential for micro-retail. “Sainte-Catherine Street is in transformation, and it is essential for it to maintain its charm and attractiveness in spite of the construction site. Le Petit Montréal will attract visitors and workers near the construction site, increasing traffic in the stores and restaurants in the vicinity,” says Émile Roux, executive director of Destination Centre-Ville. “Our intention is to create an annual rendezvous that can move along SainteCatherine Street, mirroring the progress of the construction work.”

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certain operational issues of the pop-up user, such as failure to secure permits or the necessity to respect existing exclusives at the property, relying instead on short-fuse termination rights and strong default provisions. At a minimum, the licensor/landlord should be permitted to terminate the deal immediately or on very short notice in circumstances of a default or breach of another tenant’s exclusive use right. Sometimes the landlord/licensor might even insist upon a unilateral right to terminate the agreement at any time, with minimal notice, for any reason or no reason. If these unilateral rights are unrelated to any default, they can be exercised pre-emptively without any recourse to the courts. Pop-up shops usually occupy small areas of retail space for relatively short periods. Consequently, the rights granted under an agreement are typically “personal”, i.e. they are granted only to the named user. The governing document prohibits the user from assigning or subletting or allowing the popup space to be occupied by any other party. Is it a Licence or a Lease? Parties considering a pop-up relationship

should be aware of the Ontario Court of Appeal’s decision in Exchange Corporation Canada Inc. v Mississauga (City). In this case, a dispute arose as to whether the parties’ agreement was a lease or a licence, where the answer would determine whether realty taxes were payable to the local municipality. The application judge held that the agreement between the parties was a licence, not a lease, because the term was not clear, and the tenant was not granted exclusive possession or rights to assign. The municipality appealed to the Divisional Court, which overruled the application judge based on the intentions of the parties. Exchange Corporation then appealed to the Court of Appeal, which held that the application judge did not take into account provisions of the agreement such as the quiet enjoyment clause, the obligation to pay “rent,” the description of the premises, and the obligation to surrender the space on expiration or termination of the term. Because the agreement also referred to the parties as “landlord” and “tenant” and in fact labelled the transaction a “lease” the Court of Appeal concluded that the parties intended to enter into a lease. This

case underscores that the determination of whether an agreement is construed as a lease or a licence will follow the substance of the agreement as a whole, as well as the intentions of the parties. Both property owners and users can benefit from the excitement generated by pop-ups, if they are careful to document their temporary and unique relationship. At their heart, pop-up agreements deal with the core concepts of money, use, term and risk, and, as such, are deserving of the same attention as a fullblown lease.

Daoust Vukovich LLP is recognized as a leading Canadian law firm in the field of commercial leasing and property management. www.dv-law.com This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice.

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Weather Changes and Code Changes Comparing Ontario and Floridaâ&#x20AC;&#x2122;s building code development shows two very different ways to create and upgrade codes that guide the construction of thousands of dwellings. By Gary Martin

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Building codes are changing, with a movement afoot to harmonize codes across Canada. With the stage being set for change, this is a good time to review the Ontario system, and for adopting some of the strategies used in Florida to democratize code change. Why compare building codes in Florida and Ontario, you may ask. After all, Florida is tropical and we are subpolar. They have four months when it’s too hot to breathe and we have four months when it’s too cold to do anything. They have snowbirds and we have snowy owls. They’re the Sunshine State and we are the Great White North. They have more hurricanes and more competent hockey teams. These are two very different regions. So why would we compare them? There is one key similarity in both jurisdictions: politicians, code officials, insurers and homeowners are very concerned about severe weather. Both places have been on a trajectory towards regulatory change for decades, but Canadians have really only just begun to devote considerable resources to updating the Canadian National Building Code, on which the Ontario Building Code (OBC) is based, to make housing more resilient to severe weather and wildfire. There are other similarities. Both Florida and Ontario have very complex and mandatory state/province-wide building codes. Both jurisdictions have challenging environmental conditions for construction. Both places took a long time to get their codes to catch up to the weather (though Florida is much further along). Both have building official and trade-related labour shortages. Both have

insurers and reinsurers who want the bleeding to stop from weather-related homeowner claims. Then there’s the standard stuff: both Florida and Ontario codes are about keeping occupants safe and standardizing construction so everyone knows how and what to build across local jurisdictions. Comparing Ontario and Florida is useful because, while it is clear that codes and code change mechanisms are incredibly complex, it is also clear that Florida has a much more efficient and transparent code development process. So while weather affects us all, these comparisons have surprisingly less to do with weather and more to do with regulation and regulatory change at the state/provincial level. The Florida Building Code The defining moment for Florida’s building code was a monster Category 5 storm, Hurricane Andrew, in August of 1992. The extent of the damage from Andrew made it obvious that building regulations in Florida were inadequate, due to a confusing patchwork of codes across the state confounded by sketchy compliance and enforcement. Many insurers realized Florida was seriously underinsured and overexposed to risk. Several insurers went bankrupt and many threatened to pull out of the state. Remaining insurers had no choice but to significantly increase their rates. Andrew created the worst property insurance crisis in U.S. history. The state government responded by committing to a tougher building code that would result in more resilient houses, and 10 years later, in 2002, the Florida State Legislature and the Florida Building Commission passed

the Florida Building Code (FBC) into law. Florida finally had a mandatory state-wide minimum-standard building code to be enforced by local governments, similar to how the building code in Ontario is administered and enforced. Around 2007 the Florida Building Code Commission merged the FBC with “I-Codes,” a family of codes and code development system created and managed by the International Code Council (ICC). The most recent Florida Code, the Florida Codes 6th Edition (2017) is based on the 2015 version of the I-Codes. As with the OBC, the FBC prioritizes regulations for health and safety of occupants. But it also standardizes building design, construction and compliance, and includes “performance-based provisions” akin to Canada’s objective-based alternative provisions in Parts 3 and 4. The FBC is updated every three years and can be amended yearly with clarifications. Like in Ontario, the online version is free and openly accessible but one has to pay for printed copies of the FBC. Florida officially adopted I-Codes and, as of the sixth edition updates, the state has assumed responsibility from the ICC for administering and enforcing the state code via state/county/municipal bodies (similar to the relationship between three levels of governance in Canada). Though the Florida code is no longer administered by the ICC, the ICC and Florida work together on regular code updates. However, Florida now reviews the thousand or so changes to the I-Code upgrades every three years and selects only those changes that are pertinent to Florida.

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construction codes must change with changing weather. For example, Floridians have no use for snow load or earthquake provisions in their codes, just heat and hurricanes. Upgrading the codes: What distinguishes FBC from OBC? As mentioned, the Florida code runs on a shorter cycle than do code cycles in Canada (three years versus five years), which means innovations can be implemented more quickly there. But what is really remarkable about the FBC is the technology-assisted access stakeholders have to the state’s code change process. For example, it is required by law in the Sunshine State that all agendas and meeting locations be easily accessible online for all code-related meetings, as well as Florida Building Code Commission meeting agendas and minutes and Program Committee agendas and reports. Even emails between Commission members are required to be available for inspection. Not only can one easily access records of commission meetings, but the state is required to make public all Technical Advisory Committee (TAC) member names and affiliations, meeting schedules, notices, agendas, change proposals and links to live meetings broadcast online. Any member of the public, building industry, government, private sector — essentially anyone — can watch decisions being discussed, voted upon and then posted online. In Ontario, by contrast, unless one is invited it is difficult to find information about meetings. Those who have submitted code changes are not invited to meetings and it is not obvious how one may follow code change

submissions. Proposals are first vetted from within by the Ministry of Municipal Affairs and Housing (MMAH), and then go out for public comments. Then proposals and comments disappear back into the Ministry and TACs. Invited TAC members read through proposals, comments and background documents, travel to Toronto, and sit through long Part 9 (i.e. houses and small buildings) code meetings to deliberate on numerous code change proposals. (Plus, it’s almost impossible to identify who sits on TACs: when I asked some TAC members about who participates, this pesky researcher was told to “ask the Ministry”.) And then you get a regime change. A new Ontario premier was elected in June, 2018. In November of 2018 there were apparently 510 code change proposals sitting at the Ministry waiting to go to the Ontario Cabinet for final vetting. These proposals had taken years of research and work by public and private stakeholders, and years of long meetings and debate and adjustments. As of late May 2019, there is no clear way for anyone outside of a cloistered process to follow any of the change proposals that were sitting at the MMAH. These changes (and all the effort that went into them) are, according to the MMAH, still “waiting for government direction.”

surrounding areas area in September, 2018 (more than $300 million insured). Ottawa just flooded for the second time in three years, and just suffered another tornado. There is growing consensus that construction codes must change with changing weather. After a quick review it seems that the Florida model is a faster and more open way to upgrade a building code. With technology and access policies, it seems to attract more input from more diverse stakeholder groups, making it more transparent and equitable. It would appear that the Florida process would also suffer less politics and delay from changes in government. On the surface, at least, it looks like a more efficient democracy. Given rapidly increasing impacts of weather events, perhaps it is time to rethink stakeholder input, timelines and overall transparency in the Ontario building code change process. Codes are complex regulations that protect homeowners from threats including severe weather. I’m not claiming that Ontario should take the same measures as Florida to protect Ontarians: that would be absurd. But we do have an increasingly pressing impetus to re-examine how we develop the regulations that will get us to more resilient new homes for Canadian families.

The argument Although natural disasters are different in Ontario and Florida, there have been some significant loss events here in just the last few years alone, like the 2013 Ontario floods ($1 billion insured), and the outbreak of seven tornados in Ottawa, Gatineau and

Gary Martin is a Research Fellow at the Sprott School of Business, Carleton University.

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Keep Your Friends Close How CCDC 30 could impact construction contractual arrangements. By Theron Davis and Bill Woodhead

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There will be a steep learning curve for the industry. In early 2019, the Canadian Construction Documents Committee (CCDC) released the CCDC 30 Integrated Project Delivery Contract 2018 (the CCDC 30). Various other North

American and international industry organizations have also introduced their own form of Integrated Project Delivery (IPD) contracts. Though the CCDC 30 creates exciting new possibilities for the optimization of construction contracting, early adopters should ensure they are well equipped if they want to implement what is, in many ways, an unconventional contractual arrangement. IPD is at its core a method of contracting that seeks to replace the adversarial nature of segmented traditional construction contracts with a collaborative partnership among the key players. The terms and conditions of IPD contracts are drafted to discourage litigation and increase communication and cooperation throughout the life of the project. CCDC 30 promotes these goals by, among other things, having major parties involved in a project enter into the same contract, engaging the services and insights of all parties early in the life of the project, working together to create a shared risk/reward pool, and by instituting a waiver of liability between the parties to the agreement to reduce the likelihood of finger pointing in the event of issues during the various phases of a project. Key differences and areas for concern At the time of contract formation, the design specifications, cost of the project, and scopes of work for the project are not complete.

Though a “Contract Task Matrix” may be included as a Schedule to the CCDC 30, there is no detailed scope of work included as part of the agreement at formation such as a change order process, occupational health and safety requirements, lien protection provisions, design reviews, etc. The risk pool in CCDC 30 includes the anticipated profit of all the parties to the agreement. This is adjusted throughout validation and design and procurement phases of the project. Parties are compensated for their direct and hourly costs throughout the project and paid out of a risk pool if the project costs come below the agreed upon target cost. All participants collectively benefit or suffer based on one party’s actions or omissions. IPD parties should be aware that once the risk pool has been eliminated, the parties are not entitled to any profit, but the owner is still responsible for all reimbursable costs. With few exceptions, the CCDC 30 requires that the teams render decisions unanimously. While this is a laudable concept, in the event of a stalemate, the standard terms of the CCDC 30 do not adequately provide for a quick way to resolve an impasse. The CCDC 30 includes an indemnification and waiver of liability regime that requires the IPD parties to waive all claims against each other, except for certain claims that are specifically enumerated. Those enumerated claims, which are not waived, may also be captured by limitations of liability. While this likely falls in line with the philosophy behind CCDC 30 and IPD con-

tracts generally, participants should ensure they are aware of the impact these waivers and limitations may have before executing an IPD contract. In addition to the above, CCDC 30 raises various other concerns which parties will likely want to address through the use of supplementary conditions. Parties to an IPD construction project should carefully consider the benefits and sacrifices that are inherent within CCDC 30 and determine whether the project and the participants in question are well-suited for this type of arrangement. There will be a steep learning curve for the industry as the CCDC 30 rolls out. But if parties are able to embrace the cultural shift IPD is designed to encourage, select the right projects, and perhaps most importantly choose the right participants, then the authors are optimistic that CCDC 30 and IPD contracts generally could have a positive impact on an industry that is traditionally slow to change.

Bill Woodhead is partner in the Corporate Commercial, Construction and Public-Private Infrastructure Projects Sectors Groups of Borden Ladner Gervais LLP’s Calgary and Vancouver offices, and Theron Davis is an associate in the Construction Group in their Calgary office. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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CANADIAN MODERN MODERN ARCHITECTURE ARCHITECTURE CANADIAN COMING THIS THIS FALL! FALL! COMING Preorder now now from from your your favourite favourite Preorder bookseller! bookseller! Canada’s most distinguished architectural critics and Canada’s most distinguished architectural critics and scholars–including George Baird, Larry Wayne Richards, and scholars–including George Baird, Larry Wayne Richards, and Adele Weder–offer fresh insights into the country’s unique Adele Weder–offer fresh insights into the country’s unique modern and contemporary architecture. Beginning with the modern and contemporary architecture. Beginning with the nation’s centennial and Expo 67 in Montreal, this fifty-year nation’s centennial and Expo 67 in Montreal, this fifty-year retrospective covers the defining of national institutions and retrospective covers the defining of national institutions and movements, how Canadian architects interpreted major movements, how Canadian architects interpreted major external trends, regional and indigenous architectural external trends, regional and indigenous architectural tendencies, and the influence of architects in Canada’s three tendencies, and the influence of architects in Canada’s three largest cities–Toronto, Montreal, and Vancouver. largest cities–Toronto, Montreal, and Vancouver. “This fascinating and much-needed compendium will certainly be “This fascinating and much-needed compendium will certainly be welcome universally, and particularly in Canada, where it will welcome universally, and particularly in Canada, where it will raise the consciousness of a country that has respected, but not raise the consciousness of a country that has respected, but not celebrated, the wide origins of its populations and its culturally celebrated, the wide origins of its populations and its culturally as well as physically different regions.” as well as physically different regions.” — PHYLLIS LAMBERT, FOUNDING DIRECTOR EMERITUS, — PHYLLIS LAMBERT, FOUNDING DIRECTOR EMERITUS, CANADIAN CENTRE FOR ARCHITECTURE CANADIAN CENTRE FOR ARCHITECTURE

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With major support from 1. Residence for the Sisters of Saint Joseph, Toronto, Ontario. Shim-Sutcliffe Architects, 2013. Credit: James Dow, Courtesy Shim-Sutcliffe Architects 2. Residence Aanischaaukamikw Cree of Cultural Institute, Oujé-Bougoumou, Quebec. Rubin & Rotman Architects in collaboration with Douglas Cardinal, 2011. Credit: Mitch Lenet 1. for the Sisters Saint Joseph, Toronto, Ontario. Shim-Sutcliffe Architects, 2013. Credit: James Dow, Courtesy Shim-Sutcliffe Architects Photography & Digital Arts, with the permission of Aanischaaukamikw Cree Cultural Institute 2. Aanischaaukamikw Cree Cultural Institute, Oujé-Bougoumou, Quebec. Rubin & Rotman Architects in collaboration with Douglas Cardinal, 2011. Credit: Mitch Lenet 3. Photography Coronation Pool, Edmonton, Alberta. Hemingwayofand Laubenthal Architects, 1970. Credit: Courtesy James Dow & Digital Arts, with the permission Aanischaaukamikw Cree Cultural Institute 4. Coronation Perimeter Institute for Theoretical Physics, Waterloo, Ontario. Saucier + Perrotte 2006. James Credit: Dow Marc Cramer, Courtesy Saucier+Perrotte Architectes 3. Pool, Edmonton, Alberta. Hemingway and Laubenthal Architects, 1970.architectes, Credit: Courtesy 4. Perimeter Institute for Theoretical Physics, Waterloo, Ontario. Saucier + Perrotte architectes, 2006. Credit: Marc Cramer, Courtesy Saucier+Perrotte Architectes

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site visit Life in the Fast Lane

How one architecture firm’s fast-track approach kept a university building’s construction on budget and on time. By Shannon Moore

THIS PAGE Revery’s distinctive façade design is composed of alternating strips of energy efficient, undulating framed precast concrete panels and reflective glass, meant to represent a circuit board, relating to the technological subject matter that will be taught within the building. Photography by Ema Peter

For Revery Architecture, expedited design and construction schedules are nothing new. With two fast-track buildings under their belt — the Guildford Aquatic Centre and the Surrey City Centre Library — the firm was well-prepared to tackle its most recent project: the Sustainable Energy and Engineering Building at Simon Fraser University in Surrey, British Columbia. Partially funded by the federal government’s Post-Secondary Institutions Strategic Investment Fund, the project initially required a substantial completion in just 24 months. Using lessons learned from these previous projects, Revery was able to deliver on this ambitious schedule, while also strengthening its record of successful fast-track designs. When asked about the firm’s approach, associate director Lisa Potopsingh — who

was involved in the project from functional programming to indicative design and construction — credited two clear priorities. “Knowing our roles and keeping each other informed was crucial from the onset,” she said. “The very first thing we did was call the City of Surrey to engage them early in the process. We knew we could meet our own deadlines, but we wanted to ensure there would be no challenges related to permit approvals to allow construction to take place, which was progressing in tandem with the design.” Over the course of the following months, the team worked closely with the City and communicated amongst themselves, dividing up responsibilities to ensure that permits and tender documents, as well as client requirements and expectations, were adequately

Building.ca

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THIS SPREAD Designed by the late Bing Thom, the new campus landmark features teaching labs, an open atrium and a 400-seat theatre. The building will accommodate 440 new full-time equivalent (FTE) student spaces (320 undergraduate and 120 graduate spaces) and also support SFUâ&#x20AC;&#x2122;s Mechatronics Systems Engineering (MSE) program with space for research and student entrepreneurship.

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secured and addressed. Early conversations with the construction manager and those responsible for mechanical and electrical components also helped. “Giving everyone a seat at the table at our coordination meetings meant that we could iron out details related to schedule, budget, feasibility and constructability early on,” said Potopsingh. From a design perspective, the firm ensured quality control through mock-ups and used prefabricated elements where possible to speed up installation. The building’s award-winning exterior, for example, was built using prefabricated concrete panels and highly reflective glazing, framed by precast fins that undulate and animate the façade. Constructed off site, the concrete served multiple purposes. “Having the exter-

ior precast sandwich panels provide the exterior finish, moisture and thermal barrier, and interior finish, contributed to achieving our cost and schedule goals,” said Potopsingh. Conceived by Revery’s design principal, Venelin Kokalov, the building’s façade mimics abstracted circuit board geometry, serving as a nod to the energy and engineering activities occurring inside. Set to welcome students in September 2019, the resulting 223,000-sq.-ft. LEED Gold-targeted building has become an attainable and accessible model for fast-track design. “Our firm’s motto, no matter the project timeline, is building beyond buildings,” says Potopsingh. “In the end, we want to fulfill the basic requirements of architecture, while also creating places where people want to be.”

Building.ca

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spec sheet Product Round-up New & noteworthy for building specification.

Arriscraft | Parliament Adair Arriscraft, part of the stone products group of General Shale, the North American subsidiary of Wienerberger AG, has expanded its natural limestone offering with Parliament Adair Limestone. A natural, quarried stone harvested in the Georgian Bay region of Ontario, Adair Parliament is designed for coursed installation (laying one size continuously), which is an efficient option to a classic ashlar pattern, which is also available. Parliament features a rugged split face finish and natural sepia tone, and is available in three face rises at random lengths up to 35-5/8”. arriscraft.com

Cyclone | Trika The Trika family of outdoor luminaries includes post-top, side-mount, bollard and wall-mount products in the range that have an advanced light engine and optics, and are IP67 rated for harsh weather conditions. Custom built, the light engine is fully sealed and combines state-ofthe-art optics and thermal management to offer the most advanced and durable high performance lighting available. cyclonelighting.com

HP | App-based Printers HP has a new app-based and cloud connected multi-function printer portfolio designed for the architecture, engineering and design community. With cloud-based connectivity, the portfolio is designed to print, scan and copy from virtually anywhere, with smart apps, interfaces and overall fewer “clicks” to print. The new HP DesignJet T1600 printers and T2600 MFPs, and HP DesignJet XL 3600 MFP are the latest additions to the world’s most secure Large Format printers. hp.com

Trex Commercial Products | Railing Systems Trex has re-engineered Equinox and Monaco, two of its most popular railing systems, with more customizable features. The clean lines of Equinox amplify the best features of glass railing with a rod-anddisc assembly that features zero visible fasteners. The Monaco system for high-traffic commercial settings uses sleek stainless steel clamps to mount the glass infill, for a barely-there appearance. Like Equinox, this system is now available with a variety of design options: either square or D-shaped stainless steel clamps, as well as round, square or rectangle posts. trexcommercial.com

August/September 2019

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Bradley | Mills Privacy Partitions The new partitions add extra height, width, and No-Site options to create the feeling of a private individual room, including 72”-tall doors and panels mounted six inches above the finished floor for standard stalls, and 69”-tall doors and panels mounted nine inches above the finished floor for ADA stalls. To provide additional space, panels are available up to 84” deep, and feature a new aluminum “H” bracket that provides a cleaner design aesthetic and faster installation. bradleycorp.com

Brinno | BCC2000 The BCC is a professional construction camera that gives all the components you need to shoot professional outdoor projects. The bundle is made of the Brinno Empower time lapse camera, extended Power Housing, and Clamp Mount Kit. Powerful HDR & FHD sensors greatly improve images of high contrast scenes for quality works, outdoors or indoors, daytime or night. brinno.com

Honeywell | Forge for Buildings This cloud-based software will help optimize building portfolios using advanced data analytics. Able to pull and analyze data, and providing insights in a day or less, building and facility managers will be able to: manage space optimization across an entire building portfolio and enhance individual occupant experience; help reduce operating expenses up to 25 per cent by providing visibility, monitoring and control all from a single screen; digitize and better connect operations with a hardware and software agnostic approach, enabling the use of existing systems. honeywell. com

Post-it | Extreme XL Notes An addition to Post-it’s line that find their home on construction sites, the Extreme XL Notes are made with ultra-strong Dura-Hold paper and adhesive, are water-resistant, durable and writable in both indoor and outdoor environments. They stick to textured surfaces including wood, brick, cement and steel, the adhesive holds in hot and cold environments, and removes cleanly with no clean-up required. Post-it.com/Extreme

Turf | Tubular Vertical channels carved into the surface of this new collection of acoustical wall tiles allow it to flex to fit a cylindrical or curved wall down to 12 inches in diameter. The carved wall tile is digitally fabricated from PET felt, of which 60 per cent is pre-consumer recycled, using a single colour of 9mm material or in two-tone, 12 mm styles. Tubular comes in two standard square sizes, 11.75 or 23.5 inches, and is offered with or without an easy-to-install adhesive backing. https://turf.design/

Building.ca

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from the bullpen Stop Attacking Real Estate Investors Real estate investors, landlords and developers provide a valuable service to the market, and we need them more than ever. By Ben Myers

Ben Myers is president of Bullpen Research & Consulting, a boutique real estate advisory firm that works with land owners, developers, and lenders to better inform them of the current and future macroeconomic and site-specific housing market conditions that can impact their active or proposed development projects. Follow Bullpen on Twitter at @BullpenConsult or find Ben at www.BullpenConsulting.ca.

Statistics Canada recently published data on residential properties in British Columbia, Ontario and Nova Scotia on ownership and occupancy of residential properties. In B.C. they looked at a sample of 1.7 million properties and estimated that 457,000 were not “owner-occupied.” In Ontario, just over one million of the 4.8 million total properties are not owner occupied (21 per cent), and in Nova Scotia nearly 120,000 properties of the 450,000 total were not occupied by the owners. When getting more granular, data showed that about 37 per cent of condominium apartments in the Toronto and Vancouver Census Metropolitan Areas were not occupied by the owner. The immediate response from the “real estate shock jocks” in Canadian media was to rile up the housing bears and anti-development crowd by blaming investors driving up prices and rents. If we only had fewer investors, they said, the cost of living would be so much lower. However, more investors, and thus more demand, can only drive up prices and rents if supply doesn’t keep up with demand. There is a higher percentage share of investors in Nova Scotia than Ontario, and house prices are less than half of those in Ontario. Every investor that buys a unit and leases it out is adding to rental supply. The typical response to that point is: we don’t need momand-pop investors buying units to lease them out; those units should be available for purchase, and that rental units should come via purpose-built apartment projects. Ignoring the fact that not everyone that wants to rent, wants to rent an apartment, the owners of rental apartments are...investors! Property owners, landlords, developers are in business to make money, and buying, renovating, maintaining and building apartments have risks, and participants in the industry are looking for appropriate risk-adjusted returns on their investment in the residential housing market. Like any needed product or service, we need investors to invest their time, expertise and capital into creating more of that product

or service, and that includes rental apartment developers and owners. Even the much-dreaded mom-and-pop pre-construction condo investor provides a valuable service by acting as a middle man, helping the developer secure enough sales to qualify for construction financing and eventually selling or renting that unit to an eventual end-user. Are there some investors that keep their units vacant? Yes. Are there some investors that fund their purchases via illegally-gained funds? Yes. Are there some investors that are not paying their fair share of taxes? Yes. These are all issues that should be addressed, but they are not reasons to ban “investors” or stop building new housing to prevent these (small number of) investors from acquiring more property. We don’t prevent McDonald’s from building more restaurants because some kids waste food! We can all agree that the short-term speculative buyer, that adds no value to the houses they purchase and only intends to flip the property as quickly as possible is an undesirable investor, but the reason these speculators exist is scarcity. One of the reasons that property is scarce is not enough new housing is getting built. For more housing to be built, we need more investors! The next complaint is that new housing is too expensive and not affordable. Where do you think developers should cut costs to make new housing affordable? No basements; no parking; no balconies; no ovens; cheap interior finishes; micro units? Should a developer source cheap alternative materials; lower ceiling heights; buy smaller appliances; reduce green features; pay employees less? Many costs are fixed, and it’s not easy to create affordable new housing. The only way to make housing more affordable is to increase supply. We can reduce the number of empty homes, vacation properties, or Airbnb units, but we’re eventually going to need to build more supply. If we want more supply we need investments from developers, from real estate equity firms, from construction lenders, from mom-andpop investors, and from end-user buyers.

August/September 2019

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MAPEI Canada

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Are You Ready for

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