Is this a new trend?

Yackemflaber69 · #1 Posted **Jul 12, 2024, 8:52 PM**

After the news about the Ren Cen in Detroit and the BNY Mellon tower in Pittsburgh I have been thinking about if were starting to see a new trend developing in which certain skyscrapers are going to be demolished if they can't be converted to new uses for whatever reason.

https://www.post-gazette.com/busines...s/202406270056

https://gmauthority.com/blog/2024/07...be-demolished/

Austin55 · #2 Posted **Jul 19, 2024, 3:15 AM**

The tallest building in Lake Charles, LA will be demolished in September. In addition to economic challenges, the building has also been torn apart by hurricanes.

https://www.kplctv.com/2024/07/16/ci...outputType=amp

photoLith · #3 Posted **Jul 19, 2024, 7:24 PM**

If they blow up the BNY Mellon Building, that will be awful for optics for Pittsburgh and will also fuck up our skyline and holy crap, I can't believe they are considering blowing up the GM building in Detroit. Thats just insane.

giallo · #4 Posted **Jul 19, 2024, 8:17 PM**

In a world where they torn down the Singer Building in NYC, anything is possible - as depressing as that may be.

HomeInMyShoes · #5 Posted **Jul 19, 2024, 8:51 PM**

Quote:

Originally Posted by Austin55

The tallest building in Lake Charles, LA will be demolished in September. In addition to economic challenges, the building has also been torn apart by hurricanes.

https://www.kplctv.com/2024/07/16/ci...outputType=amp

Wow. Only forty years old and it is absolutely huge.

I would guess this is probably expected when there is no renovation/reuse plan for a structure. But still crazy on some levels.

Duffstuff129 · #6 Posted **Jul 19, 2024, 11:06 PM**

Economically this is pretty interesting. The cost to demolish a tall building in the middle of a city must be enormous, which implies that the value of the building is at least as far in the negative as the total cost of the demolition. That is - if it costs $50 million to demolish, it implies that the building is so difficult to sell that they couldn't *pay* someone $49 million to take it off their hands.

This calculation is complicated sightly by the fact that, perhaps, the owner of the building also owns the land underneath it and would be left with that potentially valuable re-developable real estate, but even then buildings and the land underneath them are frequently sold and held separately (at least in New York).

Either way, in my example it implies that owning *the building* is worth -$50 million dollars or worse once the cost of maintenance, property taxes, etc are calculated and discounted against whatever potential revenue can be made off it.

Naively, this all seems hard to truly believe, but if multiple companies are making this same decision, then that must be the economic reality of it.

llamaorama · #7 Posted **Yesterday, 1:44 AM**

That tower in Lake Charles was kind of a white elephant even before the problems with commercial real estate. Lake Charles was an oil town, similar places like Midland had buildings sitting empty for a long time too. It's not surprising this happened.

Lake Charles actually has some casino high rises so that wasn't necessary the only tall building in the city.

JManc · #8 Posted **Yesterday, 5:17 AM**

Companies should have never let the WFH genie out of the bottle and compelled employees to return to the office as Covid eased. I worked at Meta during Covid and they dragged their feet in enforcing RTO rules and wound up eating a lot of costs in ditching office space.

MayDay · #9 Posted **Yesterday, 2:41 PM**

Cleveland has had some notable success converting older high rises into residential or mixed-use but most of those don't have the huge floor plates of something like the Mellon building in Pittsburgh (1.6 million if I understand correctly). Off the top of my head, I think most conversions in Cleveland have square footage topping out around 500K. Even so, there have been substantial public funds to help subsidize a lot of these projects.

I don't think there will be wholesale demolition of skyscrapers but we're likely going to see some of that, particularly in areas where there's just "not enough there there."

llamaorama · #10 Posted **Yesterday, 6:54 PM**

Dallas too. And some of the buildings converted to residential in Dallas had comparatively large floor plates and were the kind of building that the critics are saying can't be renovated. Yet they are.

Of course DFW is the 4th largest metro area in the country and so there's a lot more demand for new apartments and condos in downtown Dallas than their is in Pittsburgh let alone Lake Charles. That said, this is happening in smaller cities, too. Some of the taller buildings in Oklahoma City are also being converted to residential as well.