In Little Italy, a flexible home for an expensive city – The Globe and Mail
As recently as June, 2019, Google street view shows the comically small house that Katie Bryant, her husband, and their children, called home. While attractive, the wooden, doll-like house was just 12 feet wide on the 18 foot wide lot; also, it was pushed so far back, only a massive addition would’ve brought it in line with its neighbours and, more importantly, afforded this active family of four the space required to thrive and grow.
“I’m an archaeologist,” Ms. Bryant says as she swirls a glass of red over her kitchen island, “so I went to the [Toronto] archives and researched the house and it was 1888. … I think it predated the others.”
“It was quite a sweet-looking house,” her architect, Kyra Clarkson, says with a smile.
Sweet indeed, especially when the Bryants were newly married and childless in 2006. But, as the Bryants began to build a life in the Little Italy neighbourhood, challenges emerged as musician-hobbyist hubby (a scientist by day) tried to shoehorn a soundproofed band rehearsal room/recording studio in the low-ceilinged basement (which he dubbed LoHeadroom Studios), the second of two children came along – the house had no closets and one bathroom – and gaps in the old windows began to widen.
“We had a sentimental attachment to it,” Ms. Bryant says. “But I think it was either you pay all the land transfer taxes or real estate fees [to move] or [you pay] an architect.”
So, they decided to hire Ms. Clarkson to come up with feasibility studies, since they’d met during a tour of one of her projects during Doors Open Toronto and liked what they saw. Graft something onto the front of the old house and create a sort of central courtyard/entryway in the middle? Tear down and start fresh? Or give up on their lot and try to find something else in a neighbourhood where houses routinely sell for two million or more?
Because of Toronto’s hot market, it actually made financial sense to stay put and build new.
And because Kyra Clarkson isn’t just any old architect, not only did the couple tick off all of their boxes, they got a handsome house that fits into the existing streetscape. Standing no taller than the bay-and-gables nearby, the now wider, peaked building is clad in a dark blue, shiplapped wood that is punctuated by a simple made-in-Denmark door. If passersby stop to examine the roofline, they’ll note that eavestroughs are hidden from view, which produces a crisp, and very sexy, silhouette.
Standing in the foyer, invited guests will be treated to an uninterrupted view to the tall sliding glass doors at the back, and a creamy-white wonderland of surfaces and finishes. The wooden stair, the kitchen’s wood cabinets, a vivid blue-green-gold backsplash and the couple’s antique dining set and hutch provide splashes of colour. Oh, as do plants … lots and lots of them.
“We moved the kitchen, which used to be at the back of your house, into the middle so that your dining could expand out into dining outdoors and take advantage of the west light,” Ms. Clarkson says, “and benefit the plants because you’re great with plants.”
And about that stair: while contemporary in execution, it features traditional pickets rather than fingerprint-hungry sheets of glass. Climb up during the day, and a bank of skylights illuminates your path; in summer, hit the remote to open one for instant hot air exhaust.
Up here, behind tall doors, one will find a bedroom for each girl (one gets a commanding view of the CN Tower and skyline), their bathroom, the laundry pair, and the primary bedroom and ensuite. Of note in this room is the full wall, built-in bookcase – complete with ladder – and cozy window seat to curl into once the right tome is chosen.
“Take advantage of this ceiling space,” Ms. Clarkson says simply. “Build in some closets, and you can see they’re lockable so that you can travel or rent [the house] out.”
And there’s the rub. How does one build a house for $1.4-million on two public servant’s salaries and not go broke in the process?
All along, the Bryants planned for (and got) a bachelor-apartment-sized income suite in the basement to offset payments to their construction loan (currently tenanted by a student). The other parts of the basement, a family rec room and hubby’s new recording/rehearsal studio (cheekily dubbed MoHeadroom Studios) also allows for income-generation. During travel-heavy summers, perhaps the family could live down there when in town and rent the top two floors out. Or, once their journalism student tenant leaves, perhaps they could rent the entire basement to a musician or a music student, who would pay more and/or help set up recording sessions for other musicians. And, since there is room on the lot for an eventual laneway suite, the world is their oyster.
Speaking of income-generation, while not installed yet the peaked roof has been readied for photovoltaic panels. And, since the mechanical room is just under that roof – it occupies the space over the flat-roofed corridor – it will be easy to wire up when the time comes.
It’s a lot of flexibility for 1,700-square-foot house, plus basement. No, it’s not an Airbn-behemoth, nor was it ever intended to be. It is, however, a well-designed, thoughtful take on how to make housing work in an expensive city by a skillful architect – Google Ms. Clarkson’s “modernest” work for proof – and a builder, The Fifth Wall, who got it right.
“I don’t think we did anything really high end,” Ms. Bryant finishes. “We wanted stuff that would last.”
House of the Week: $4.8 million for a humongous Whitby estate with a turret and a 15-foot-tall waterfall
Neighbourhood: Central Whitby
Size: 6,500 square feet
Agent: Kelsey Schoenrock, Chestnut Park Real Estate
A stately country house in Whitby sitting on a staggering 13 acres of forested land. Located off Anderson Street, it’s a short drive to Whitby’s downtown strip but far enough from city life to feel like an escape.
The current owners, Bob and Judy, were living nearby and raising their three kids when they came across this property in 1991. Bob was eager for a slice of cottage life, and Judy wanted to stay close to Whitby, so the spot seemed like the perfect compromise. After several years of living off-site, they hired architect Duff Ryan and Vicki King of Willow Hill Designs to help them realize their dream. Construction finished in 2001, and now, 22 years later, they’re looking to downsize.
Stepping through the front door—imported from Colorado—reveals this grand foyer. On the right is the dining area, sectioned off by rounded, taupe-stained pine walls.
The partial wall and cut-out windows allow natural light into the space, and the room was built specifically to accommodate that large circular dining table.
Here’s a view from above. The outer ring of the table can be removed to seat smaller groups.
Just beyond the dining area is this lodge-inspired great room, with cedar log beams, pine ceilings and hemlock floors. The 20-foot-tall transom windows overlook land that backs onto the Greenbelt.
That reading nook beside the limestone fireplace is the ideal spot for a morning coffee.
Opposite the great room is the kitchen, which features matte granite countertops, a butler’s pantry and an island with seating for three. The tin ceiling was made by an artisan in Waterloo.
The kitchen also has a wet bar.
And, yes, this home comes with a turret. This is its main level, which houses a breakfast room. There’s porch access through the doors on the left and a three-season sitting room on the right.
Here’s that sitting room—the owners wanted a space to enjoy the outdoors in the summertime without having to worry about flies and mosquitoes.
Back inside on the main floor is this office, which can be seen from the second floor.
Here’s the main-floor powder room, with an antique metal wash basin.
This laundry room down the hall has a built-in gift-wrapping station, and its large porcelain sink is great for prepping flower arrangements.
The primary bedroom sits on the main floor and features a faux-stone wall that conceals the ensuite bathroom.
The ensuite has plenty of storage.
It also comes with a glass shower and jet tub that overlook the sprawling woods.
A quick detour outside shows off the main bedroom’s porch, which has more of those cedar logs, this time as pillars.
The catwalk on the second floor is almost always bathed in natural light.
Above the garage is the guest suite. Whitewashed ceilings and soft pine floors add a bit of freshness.
Here’s a reverse view of the suite to show its cozy window bench.
Guests also have their own ensuite.
This sewing room could easily be converted into another bedroom.
And so could this exercise room with vaulted ceilings.
The estate’s painting studio sits at the end of the second-floor hall. That railing on the right overlooks an escape ladder.
Here’s the ceiling, which is itself a work of art.
If a daring escape isn’t your thing, you can reach the basement via the winding staircase.
There are are four more bedrooms in the basement. This one has an ensuite.
Here’s that ensuite, with a double vanity and a raised shower.
Beyond these stained-glass doors is a walk-up bar, a media room, a games room, a wine cellar and a tasting area.
And here’s a look at that bar. The doors on the right lead to a 700-square-foot patio with a hot tub.
The games room is fashioned for the outdoorsy types.
The sunken media room showcases another fireplace (this one’s granite) and a movie screen that can be hidden away via the folding doors on either side.
Here’s the tasting area, with hemlock flooring. It lives directly under the turret.
Beside it is the wine cellar.
This huge workshop sits underneath the three-car garage. It’s completely separate from the main home, so it could be renovated into a rental unit.
Outside is this firepit with log benches. Since the owners have tapped many of the property’s maple trees, you could use the cauldron to boil sap.
Here’s the back of the house, with its 15-foot-tall waterfall currently covered in snow.
The property also comes with a 12-foot lined pond, home to about 100 trout.
Have a house that’s about to hit the market? Send your listing to firstname.lastname@example.org.
There is going to be a ‘real mess’ in commercial real estate, but maybe not a financial disaster, economists says
The commercial real-estate sector is headed for a “real mess” but not necessarily a financial disaster, a leading economist said Monday.
“I expect a major correction in commercial real estate is already under way,” said Adam Posen, president of the Peterson Institute for International Economics.
The cause is not complicated. Office occupancy is “lastingly” down 30%-40% since the pandemic, he said.
Even thought the problem is relatively simple, the whole industry still seems like it is frozen in place.
“We haven’t seen smooth repricing or terribly transparent repricing of the mortgages and commercial real estate lending that is held in nonbank financial intermediaries,” Posen said.
A disproportionately large share of the lending in commercial real estate went through so-called “shadow banks.”
This may be less bad for the entire economy because these private equity lenders aren’t banks.
But at the same time everything is opaque. The sector isn’t regulated.
City municipal tax revenues may be hit hard because they are based on rental rates.
“Is it a financial disaster? I hope not. I don’t expect so,” he said. But it could have a negative effect on wealth and city budgets to the real economy, Posen said.
Commercial real estate is in trouble. Why you should be paying attention
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.
Economists are growing concerned about the $20 trillion commercial real estate (CRE) industry.
After decades of thriving growth bolstered by low interest rates and easy credit, commercial real estate has hit a wall.
Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop. The Fed’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry.
Recent banking stress will likely add to those woes. Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists.
“I do think you will see banks pull back on commercial real estate commitments more rapidly in a world [where] they’re more focused on liquidity,” wrote Goldman Sachs Research’s Richard Ramsden in a note on Friday. “And I do think that is going to be something that will be important to watch over the coming months and quarters.”
Recently, short-sellers have stepped up their bets against commercial landlords, indicating that they think the market will continue to fall as regional banks limit access to credit. Real estate is the most shorted industry globally and the third most in the United States, according to S&P Global.
So just how big of a deal is this threat to the economy? Before the Bell spoke with Xander Snyder, senior commercial real estate economist at First American, to find out.
This interview has been edited for clarity and length.
Before the Bell: Why should retail investors pay attention to what’s going on in commercial real estate right now?
Xander Snyder: Banks have a lot of exposure to commercial real estate. That impacts banking stability. So the health of the market has an impact on the larger economy, even if you’re not interested in commercial real estate for commercial real estate’s sake.
How bad are things right now?
Price growth is slowing and for some asset classes it’s starting to decline. Office properties have been more challenged than others for obvious reasons.
Now private lending to the industry is starting to slow as well — bank lending was beginning to dry up over a month before the Silicon Valley Bank failure even happened. Credit was getting scarce for all commercial real estate and a fresh bank failure on top of that only exacerbates that trend.
How do you expect banking turmoil to make things worse?
I think more regulatory scrutiny is coming for smaller banks, which tend to have a larger concentration of commercial real estate loans. That means small and medium-sized banks are going to tighten lending standards even more, making it more difficult to get loans.
Does the possibility of a looming recession play into this?
As credit becomes scarcer and more expensive, it’s hard to know exactly what buildings are worth. You get this gap opening up between sellers and buyers: Sellers want to get late 2021 prices and buyers are saying ‘we don’t know what things are worth so we’ll give you this lowball offer.’ That was already happening and the result of that price differential was bringing deal activity down.
There’s no broad agreement on asset valuations. Economic uncertainty will exacerbate that trend. And if you’re a bank, it’s a lot more difficult to lend against the value of a building if you don’t know what the value of the building really is.
So how worried should we be?
A lot of people hear commercial real estate and they think it’s all the same thing and the trends are they’re all the same but they’re not. The underlying fundamentals of multifamily and industrial assets remain relatively stable on a national level.
It’s different for office and retail properties. There’s been a fundamental shift in how we use office space and that has changed demand. That’s something you should have your eye on, especially as low-interest office loans come due. We’re running into a situation where office-owners have to refinance at a higher rate and only 50% of the building is being used. That doesn’t translate to good cash flow metrics for the lender.
I think retail also faces challenges. A lot of people are still sitting on excess pandemic savings that are beginning to be spent down and the Fed is certainly trying to nudge unemployment up a little bit. So I imagine that both of those things will impact retail spending and therefore impact retail as an asset class.
Economists forecast recession and elevated inflation
Stagflation, the combination of high inflation and a weakening economy, could make a comeback. The majority of economists expect a recession sometime this year and forecast that inflation will remain above 4%, according to The National Association for Business Economics’ latest survey, released Monday.
It appears as though the fog has lifted since last month’s survey, which showed a significant divergence among respondents about where they think the US economy is heading in 2023.
“Panelists generally agree on the outlook for inflation and the consequences of rate hikes from the Federal Reserve,” said NABE Policy Survey Chair Mervin Jebaraj. “More than seven in ten panelists believe that growth in the consumer price index (CPI) will remain above 4% through the end of 2023, and more than two-thirds are not confident that the Fed will be able to bring inflation down to its 2% goal within the next two years without inducing a recession.”
Still, more than half of NABE Policy Survey panelists expect a recession at some point in 2023. But only 5% believe the United States is currently in one. That’s nearly four times lower than the 19% who believed the US was in a recession in August.
Banking turmoil brings us ‘closer right now’ to recession: Fed President Kashkari
The recent meltdown in the banking industry could tip the US into recession said Federal Reserve Bank of Minneapolis President Neel Kashkari.
“It definitely brings us closer right now,” he said during a CBS Face the Nation interview this weekend.
“What’s unclear for us is how much of these banking stresses are leading to a widespread credit crunch. And then that credit crunch, just as you said, would then slow down the economy,” he added.
While Kashkari said that the financial system is “resilient” and “strong” he said that there are still “fundamental issues, regulatory issues facing our banking system.”
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