PHILADELPHIA | Highrise Development Thread IX

[jsbrook]

Originally Posted by iheartphilly

^
I don't know if getting a Class A new building built just rest on the cost of labor, but it is a major, if not deterring factor that hinders the tallest of the tall being built here in the US. I don't have the breakdown, but Hudson Yard as a complex of buildings costs an astounding $27 billion.

Here's a fairly recent article in USA today that discusses the issue of cost and financing of new construction, among other things related to high-rise construction:

https://www.usatoday.com/in-depth/news/2...y-america-isnt-building-them/3160931002/

Right. But Jayfar's point was that working those hours 6 days a week does not necessarily mean overtime. It could just mean another shift of workers paid at their standard rates.

[Radio5]

Originally Posted by Skintreesnail

I can't believe it. They finally added them.

Wait, what! This is crazy. I submitted a request last week. Could it have been that simple or am I being self aggrandizing here

[iheartphilly]

Originally Posted by jsbrook

Right. But Jayfar's point was that working those hours 6 days a week does not necessarily mean overtime. It could just mean another shift of workers paid at their standard rates.

I agree. It may not mean overtime. It could be a number of things, like trades rotating shifts on a 6 day basis or make up days for when there is bad weather, sick day, emergency day. I'm sure the union gives some flexibility to its members on scheduling. Most jobs try to stay on budget to get the job done. If any time is overtime, it is worked into the contract because it is not coming out of the unions' pocket. There's some wiggle room but probably not a lot.

My point is that union construction labor is expensive relative to the amount of money that can be recovered from the project when it is lease out for Class A, especially for Philly.

[Late1]

Originally Posted by Skintreesnail

I can't believe it. They finally added them.

Finally!!! Thanks for the heads up!

And they included regional rail & trolleys, which is nice. Although the Broad Street Line's orange stops at Oregon rather than Pattison -- but we won't quibble lol.

[City Wide]

Originally Posted by iheartphilly

^
I don't know if getting a Class A new building built just rest on the cost of labor, but it is a major, if not deterring factor that hinders the tallest of the tall being built here in the US. I don't have the breakdown, but Hudson Yard as a complex of buildings costs an astounding $27 billion.

Here's a fairly recent article in USA today that discusses the issue of cost and financing of new construction, among other things related to high-rise construction:

https://www.usatoday.com/in-depth/news/2...y-america-isnt-building-them/3160931002/

The article you linked to doesn't mention labor costs once, although its clear that labor costs in the USA are higher then most of the places mentioned where super tall buildings are going up. I'd like to see a cost break down, like the cost of a steel beam, fabricated ready to go, with the cost of picking it up off the truck and putting it in place, for high rise construction.
In Philly the standard apartment building seems to be 25 to 35 stories, and I'm pretty sure that labor costs don't get greater as the building gets taller. But other costs do go up---everything in the structure gets bigger and more expensive, and at some point the taller you build the more square footage is given over to non income producing space, like additional elevator shafts. Building taller takes more time so the carrying costs increase.
I just think that's its a cheap catch all, overly simple excuse, to somehow 'blame' the cost of labor for the general lack of construction. Union jobs pay well, and good for them. But how many of you would like to not know where you might be working next week or if you'll be working at all?

[iheartphilly]

^
Under the heading, "cost and financing." Average cost per square foot. While Philly was not mentioned with any stats in the article, I still think labor cost is a big factor for Philly because we cannot command the higher rent on Class A office to recoup the investment. I believe union wages in the Northeast is very similar. It is possible that Boston might be a better comparison on average cost per square foot. In any case, I don't think construction material costs vary all that much. A steel manufacturer is going to sell its I-beams for pretty much the same cost throughout the US.

I don't have time to try to uncover all the numbers, but try googling it. Maybe you'll have luck and come up with some hard numbers for us to discuss.

Look at CTC, $1.5 billion to build. I recalled somewhere in an article that 1000+ people where working on the construction of that building. Lots of money spent to build it. And, I'm all for good paying jobs and job stability, but as you know, the trade business coincides with the boom or bust business cycles. Luckily, it is booming for Philly, say the last 10 years or so.

[Redddog]

Originally Posted by iheartphilly

^
Under the heading, "cost and financing." Average cost per square foot. While Philly was not mentioned with any stats in the article, I still think labor cost is a big factor for Philly because we cannot command the higher rent on Class A office to recoup the investment. I believe union wages in the Northeast is very similar. It is possible that Boston might be a better comparison on average cost per square foot. In any case, I don't think construction material costs vary all that much. A steel manufacturer is going to sell its I-beams for pretty much the same cost throughout the US.

I don't have time to try to uncover all the numbers, but try googling it. Maybe you'll have luck and come up with some hard numbers for us to discuss.

Look at CTC, $1.5 billion to build. I recalled somewhere in an article that 1000+ people where working on the construction of that building. Lots of money spent to build it. And, I'm all for good paying jobs and job stability, but as you know, the trade business coincides with the boom or bust business cycles. Luckily, it is booming for Philly, say the last 10 years or so.

Will it continue (and for how long) is the question.

[jsbrook]

As a former attorney there, I am surprised that MLB would be a tenant in a new construction trophy building in Chicago. https://www.rejournals.com/international...est-tenant-at-110-n-wacker-20190409.aspx But, while we are not Chicago and our office market is different, I think it's pretty good news for us. I think it makes it more likely that they'd take a sizable chunk of some the new construction proposals being discussed on West or East Market. Perhaps this is the new direction. They have become increasingly focused on playing on the world stage and with the big boys over the last 5-6 years. Maybe that's part of it.

[Jawnadelphia]

Originally Posted by jsbrook

As a former attorney there, I am surprised that MLB would be a tenant in a new construction trophy building in Chicago. https://www.rejournals.com/international...est-tenant-at-110-n-wacker-20190409.aspx But, while we are not Chicago and our office market is different, I think it's pretty good news for us. I think it makes it more likely that they'd take a sizable chunk of some the new construction proposals being discussed on West or East Market. Perhaps this is the new direction. They have become increasingly focused on playing on the world stage and with the big boys over the last 5-6 years. Maybe that's part of it.

They are jammed currently, no room in 1701/1801, and taking over additional space in 1801 Market. I think they are looking to finally consolidate all ops into one space.
Also, I agree -- they view themselves as a big boy, top 10 firm now. New offices in Asia and beyond, I think up to 32 offices (2 in UAE and 2 in Kazahstan even). They are growing a lot.

[3rd&Brown]

Originally Posted by jsbrook

I'm certainly not saying the lower cost and ease of doing business is the only reason why companies choose to locate in the suburbs. Or vice versa. There are obviously companies that choose to incur tax and other costs because it makes business sense or they want to in the city that badly. Or are forced to for staffing or other reasons, making it a poor business decision to be in the suburbs. There are many factors that go into location decisions. But I think it ignores the evidence to say that taxes and regulation do little to depress business in the City or to suggest that we shouldn't be working on dropping taxes and simplifying operations while still ensuring adequate revenue generation.

Anyway, off my soapbox. Back to work...but not before saying the Blumenfeld proposal looks great!

Not to bring this back up, but after this discussion (in part because I'm one that is super negative on this topic vis a vis Philadelphia), I did some digging. It turns out the city has been cutting the NPT 5 basis points (0.05) per year for the past few years and has them scheduled for the next 3 already. At it's high point (very recently), the NPT was 6.5% on income generated in Philadelphia. With these cuts, the tax will be 6.0% in 2022.

While it needs to drop much further, I was happy to find the cuts are certainly happening at a faster rate than the wage tax was ever cut. Although I think the city could be cutting it faster (say 10 basis points per year) while city coffers were flush, I'm glad to see that they're decisive cuts.

I suppose it's not being talked about more because taxes in Philadelphia are a touchy issue. Any time it is perceived that a business is getting a tax cut, some camps lash out. Given that, I can't say I'm unhappy it's not talked about much.

[PurpleWhiteOut]

I'm not sure if the renders are public yet, but CHOP is planning on breaking ground on a 17 story building for employee offices behind the Buerger center by the end of the year. They also expect to need a new research building in ~6 years.
The renders I saw during the presentation looked great, but I wasn't able to get any pictures. They said they're planning to secure a contractor in the next month or so, so I'm sure they will be public soon from the CDR.

[summersm343]

Originally Posted by PurpleWhiteOut

I'm not sure if the renders are public yet, but CHOP is planning on breaking ground on a 17 story building for employee offices behind the Buerger center by the end of the year. They also expect to need a new research building in ~6 years.

Nice!

[Philly Fan]

Originally Posted by PurpleWhiteOut

I'm not sure if the renders are public yet, but CHOP is planning on breaking ground on a 17 story building for employee offices behind the Buerger center by the end of the year.

Yeah, that's just what we need in that area--more construction-related traffic congestion.

But seriously, though, that's actually great news (unless you happen to have an appointment at the Perelman Center ).

[City Wide]

Originally Posted by PurpleWhiteOut

I'm not sure if the renders are public yet, but CHOP is planning on breaking ground on a 17 story building for employee offices behind the Buerger center by the end of the year. They also expect to need a new research building in ~6 years.
The renders I saw during the presentation looked great, but I wasn't able to get any pictures. They said they're planning to secure a contractor in the next month or so, so I'm sure they will be public soon from the CDR.

Re a future research building----wouldn't it make sense for CHOP to add floors to the translational research building, since it was designed for that?


BTW-----what does NPT stand for in terms of City taxes?

[Urbanthusiat]

Originally Posted by PurpleWhiteOut

I'm not sure if the renders are public yet, but CHOP is planning on breaking ground on a 17 story building for employee offices behind the Buerger center by the end of the year.

Can you elaborate more specifically where this would be? I'm looking around maps for land "behind" the Buerger center that could accommodate a 17 story medical-office tower and I'm not sure I see anything obvious.

[hammersklavier]

IIRC the Buerger site is supposed to support a Phase II *somewhere* on it, though I don't remember the specifics. This probably uses that infrastructure.

I'm also pretty sure that CHoP's research buildings will all be on the Roberts site (which, remember, is planned to support four such towers).

[iheartphilly]

Isn’t there a semi-cylinderical glass building attached to the Beurger Center? Are you guys saying they will eventually be building on top of that to make it even taller?

[hammersklavier]

Originally Posted by iheartphilly

Isn’t there a semi-cylinderical glass building attached to the Beurger Center? Are you guys saying they will eventually be building on top of that to make it even taller?

I doubt it's there. Look at the parts of the site that only have greensward on them.

[GtownFriend]

The first story or two is already there. The semi-circular platform between Roberts and South St (parking?) is the foundation for Phase II. Page 1 of the oldRoberts thread has a copy of the rendering of all four towers there.

[PurpleWhiteOut]

Originally Posted by Urbanthusiat

Can you elaborate more specifically where this would be? I'm looking around maps for land "behind" the Buerger center that could accommodate a 17 story medical-office tower and I'm not sure I see anything obvious.

Honestly, I wish I had gotten a better look at the renders. They also didn't show it in context of the 'before,' so the perspective wasn't super clear. It looked like it will be wider than it would be deep, so it probably would go over the secondary parking curb cut (or eliminate it) along with length of the block.