Quote:
Originally Posted by IluvATX
I’ll give one example just because I haven’t seen it posted here hundreds of times. Lot size. An office building usually has and desires to have larger floor plates, often taking up full blocks. This isn’t possible with residential towers as you can’t have a unit that’s entirely interior it needs windows. So 1/4 block residential towers seem to be the norm. You need some serious capital to purchase a whole block in the CBD so from the start an office building is much more expensive with architecture that follows and businesses occupying it will look for flashy buildings with large floor plates to enhance their brand and pay a lot for those qualities.
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It's a lot more nuanced than that. It's about numbers, returns for investors, and the market. For a long time Austin led the state by having the highest CBD commercial rental rates so there was a (regrettable) flood of office product that will now be hard to fill. Office buildings are much simpler in almost every way than high rise residential. They can have clean forms and shiny exteriors because in general do not require the elements that generally "clutter up" exteriors of residential buildings - like balconies, louvers, vents, etc. which are all things that make high rise residential both super complicated and difficult to make look sexy.
Ultimately it's like comparing apples to chickens to talk about commercial and residential in the same sentence. The return metrics, exterior supply/demand, and complications of the buildings themselves do not lend themselves to any sort of comparison.