Quote:
Originally Posted by laniroj
Several well heeled developers have built and are building in Denver, just at smaller scales than other places despite Denver outperforming coastal cities (from a RE return standpoint for nearly a decade). Why Denver always gets smaller, I don't have a good explanation other than the remaining perceived fear that we have a boom and bust economy.
As for giants building supertalls, the entire City of Charlotte comes to mind with all the banks that built vanity towers in their lifeless downtown, Chicago is getting quite a few new ones in this cycle (BofA Tower is a gem!), Los Angeles' Wilshire Grand anchored by a giant, pretty much everything in NYC has a giant behind it...even Atlanta has a 53 story tower proposed (mainly residential) with several hundred thousand sf of office in it - that's how Denver needs to be getting supertalls - mixed-use towers. Giants also build campuses or occupy suburbia. Charles Schwab, Ball, Newmont, Western Union - these are all companies who could have been leveraged to build supertalls in Downtown Denver, but instead chose mediocre suburban office space not because the lease rates are drastically cheaper but because that's where their employees want to work (RE occupancy cost for companies of those sizes is minuscule and $10/sf or more isn't going to influence a decision such as corporate headquarters relocation. I am of firm belief that Denver doesn't get supertalls because DTC and SE can still attract those companies to locations 2 miles from their executives Cherry Hills homes and all their employees making $85k+/year. DTC is getting close to full so that's positive, but now with Lone Tree v2.0....
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Of all that, only Wilshire Grand is arguably a supertall, and it's due to a spire.
I don't know the reasons why those companies chose the suburbs, but generally companies choose their locations more for employee recruitment, being among similar companies, etc. A private company might locate near the boss pretty often, but a public one will generally make a supportable decision.
You're not considering the downsides of an office leasing in a supertall...starting with three years of lead time typically, including a lot of risk about whether the building will go forward or not until it's actually happening. Plus the added cost, which can be quite a bit more than $10/mo.
Mixed-use is certainly easier. Denver's code favors mixed-use. But that brings another set of challenges...a larger percentage of the building devoted to multiple elevator banks, more stairs, more lobbies, potentially separate parking, and so on. It's worth it only when the code favors it, and generally when the uses are symbiotic, like condos over a hotel having access to hotel services.
It does really come down to economics. Large, well-located sites are relatively cheap in Denver. Most corporate office tenants will go with something stubby in that scenario. Same with residential and hotel uses outside the peak locations in a handful of cities...the list gets very narrow when you're talking 1,000' tall buildings.
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