PHILADELPHIA | Highrise Development Thread X

[Plokoon11]

^ Thank you very much for your information. I always found the high voltage powerlines above interesting in design, I think I figured that they carried power to substations and then to regular high tension lines. And yes agreed, they are very old. They are mostly rusted looking. Especially around Bristol or Bensalem parts. I wonder if they will eventually become replaced in the future. Same with some of the aging bridges.

[PhilliesPhan]

Originally Posted by mcgrath618

I am! I’m in EMC, specifically the track department (for now).

Welcome to EM&C! I'll keep an eye out for you.

Also, totally agree on the views! I prefer to come into offices as it is, but the views only sweeten the deal!

[cardeza]

Originally Posted by PhilliesPhan

Welcome to EM&C! I'll keep an eye out for you.

Also, totally agree on the views! I prefer to come into offices as it is, but the views only sweeten the deal!

Wow, so many SEPTA people on here. Small world.

[JACKinBeantown]

Wait for it...

Originally Posted by EastSideHBG

Came across these and really enjoyed them

• Video Link

[summersm343]

Pretty good sign that Philly is at least holding up better than some other major cities when it comes to increases in office vacancy rates:

Signs of stress deepen in the office real estate market

Change in U.S. office vacancy rate

San Francisco +7.5
Seattle +3.9
New York +3.5
Los Angeles +3.3
San Jose +3.0
Houston +2.8
Boston +2.7
Chicago +2.6
U.S. +2.5
Washington, D.C. +2.3
Miami +2.0
Philadelphia +1.6

https://www.axios.com/signs-of-stres...59b524d33.html

[DeltaNerd]

Originally Posted by summersm343

Pretty good sign that Philly is at least holding up better than some other major cities when it comes to increases in office vacancy rates:

Signs of stress deepen in the office real estate market

Change in U.S. office vacancy rate

San Francisco +7.5
Seattle +3.9
New York +3.5
Los Angeles +3.3
San Jose +3.0
Houston +2.8
Boston +2.7
Chicago +2.6
U.S. +2.5
Washington, D.C. +2.3
Miami +2.0
Philadelphia +1.6

https://www.axios.com/signs-of-stres...59b524d33.html

Big brain move, can't lose that much office jobs if you didn't have any in the first place.

Joking aside, I'm not truly sure how much office space we had in Philly in the first place. Granted I know WFH is a must for most people. A trend I can see is more and more people would want a hybrid approach and want to go into the office some days. Hopefully we can continue to grow our office market here.

[skyhigh07]

Originally Posted by DeltaNerd

Big brain move, can't lose that much office jobs if you didn't have any in the first place.

Joking aside, I'm not truly sure how much office space we had in Philly in the first place. Granted I know WFH is a must for most people. A trend I can see is more and more people would want a hybrid approach and want to go into the office some days. Hopefully we can continue to grow our office market here.

I think it mostly has to do with a lot of office buildings being converted to residential over the last decade, which in the long run maybe turned out to be neither good nor bad. On the upside, it meant more residents and a cushion against Covid. On the downside, an indicator of a mediocre job/office market.

[TempleGuy1000]

Originally Posted by DeltaNerd

Big brain move, can't lose that much office jobs if you didn't have any in the first place.

Joking aside, I'm not truly sure how much office space we had in Philly in the first place. Granted I know WFH is a must for most people. A trend I can see is more and more people would want a hybrid approach and want to go into the office some days. Hopefully we can continue to grow our office market here.

This was a measure of metro areas. Philadelphia's metro area GDP is similar or greater than many European countries. We have plenty of offices even if a greater % are tucked in and around the suburbs and not in the CBD. What we never really did was build a lot of 'spec' buildings. Usually things were built with a purpose. There's nothing wrong with that at all.

I saw people on twitter talking about this yesterday, and I thought this graph was interesting and related.



The Delaware Valley has the lowest vacancy rates overall. It's wrong to try to spin this negatively
.

[Philly Fan]

Originally Posted by TempleGuy1000

I saw people on twitter talking about this yesterday, and I thought this graph was interesting and related.



The Delaware Valley has the lowest vacancy rates overall. It's wrong to try to spin this negatively

Including, significantly, the lowest downtown vacancy rate.

[summersm343]

Originally Posted by Philly Fan

Including, significantly, the lowest downtown vacancy rate.

Boom! Look at Houston and Dallas

[TempleGuy1000]

Originally Posted by summersm343

Boom! Look at Houston and Dallas

I read an incredible story one time about how something like over half of the skyscrapers in downtown dallas have defaulted and/or been sold off for way less than they were built for. A lot of them were built during the early 1980s banking boom. I tried to find it again not that long ago, but couldn't find it. It had something to do with tax changes and big banks shifting their portfolios more heavily into commercial real estate.

[EastSideHBG]

Originally Posted by TempleGuy1000

I read an incredible story one time about how something like over half of the skyscrapers in downtown dallas have defaulted and/or been sold off for way less than they were built for. A lot of them were built during the early 1980s banking boom. I tried to find it again not that long ago, but couldn't find it. It had something to do with tax changes and big banks shifting their portfolios more heavily into commercial real estate.

This fairly recent article touches on the amount of space available for those interested:

https://www.dmagazine.com/commercial...ally-obsolete/

I can confirm Dallas' situation, as the company I worked with for many years was considering an office in DT Dallas but went with another spot in the metro for a few reasons. But after spending time in Dallas I found that DT is similar to Atlanta's, as in it's important but not really the heart and Uptown and Deep Ellum had more of the traditional DT feeling to me.

I like Dallas and was considering a move to there but it wasn't the right time for me so I declined. I can see why some folks around here would dislike it but it had some interesting pockets and I am sure it will keep morphing into its identity with its growth. It's nowhere near as cheap as you may hear, though (even then), and don't believe the hype in that category.

[UrbanRevival]

Originally Posted by EastSideHBG

I like Dallas and was considering a move to there but it wasn't the right time for me so I declined. I can see why some folks around here would dislike it but it had some interesting pockets and I am sure it will keep morphing into its identity with its growth. It's nowhere near as cheap as you may hear, though (even then), and don't believe the hype in that category.

That makes a lot of sense. Texas is really a unique juggernaut of development that's not comparable to essentially anywhere else in the US.

And speaking of increasing costs, as much as folks tend to complain fiercely about infrastructure woes in cities like Philadelphia, I can only begin to imagine what Texas will face in the coming years as its massive highway systems in the big metros like Dallas, Houston and Austin begin to require significant replacement and maintenance.

It's not going to be pretty for municipal and state budgets.

[iheartphilly]

^
I spent a month in Houston working and did a lot of driving, and the highways there are huge and as far as the eye can see and all concrete. Longer life span with concrete. They look brand new and are all elevated but in great condition; no trash on highways, but the biggest drawback is tolls on the tollway almost no matter where you went.

And, Houston is unique in that it has a core downtown with tall blgds. But along the highways around Houston are clusters of highrises and midrises, so it's not concentrated like most big cities.

[TempleGuy1000]

Originally Posted by EastSideHBG

This fairly recent article touches on the amount of space available for those interested:

https://www.dmagazine.com/commercial...ally-obsolete/

Thanks for sharing. I don't think any of us 'dislike' Dallas (Cowboys, sure), and we are just pointing out some standouts from the data.

I will say, it's strange that article blames the lack of parking for some of the leasing problems. Brandywine Realty, our local juggernaut, who also has long been the largest land owner in Austin Texas, has become rich beyond their dreams developing parking lots in Austin into more useful things like highrise living and more offices. I guess, it just comes down to different places wanting different things.

[EastSideHBG]

Originally Posted by UrbanRevival

That makes a lot of sense. Texas is really a unique juggernaut of development that's not comparable to essentially anywhere else in the US.

And speaking of increasing costs, as much as folks tend to complain fiercely about infrastructure woes in cities like Philadelphia, I can only begin to imagine what Texas will face in the coming years as its massive highway systems in the big metros like Dallas, Houston and Austin begin to require significant replacement/maintenance.

It's not going to be pretty for municipal and state budgets.

I wonder if they will, though? Of course they will need upkeep but they are built better and they don't have the extreme freeze/thaw cycles that we do.

I saw this after I posted, same feelings:

Originally Posted by iheartphilly

^
I spent a month in Houston working and did a lot of driving, and the highways there are huge and as far as the eye can see and all concrete. Longer life span with concrete. They look brand new and are all elevated but in great condition; no trash on highways, but the biggest drawback is tolls on the tollway almost no matter where you went.

And, Houston is unique in that it has a core downtown with tall blgds. But along the highways around Houston are clusters of highrises and midrises, so it's not concentrated like most big cities.

[Urbanthusiat]

I'm glad our vacancy is low but vacancy can be a little misleading on its own. What's absorption and new construction like? Is vacancy high in Texas because developers are outpacing absorption? Is it because of a lack of absorption or is absorption still high, but construction activity is even higher? If it's the latter scenario than I'd probably rather have higher vacancy but more job growth and construction than lower vacancy and less job growth and construction. Unfortunately I'm not entirely convinced that's not exactly what's happening here. But Philly is of course still doing quite well (for Philly, at least) based on all the data I've looked at.

[Mayormccheese]

Originally Posted by UrbanRevival

That makes a lot of sense. Texas is really a unique juggernaut of development that's not comparable to essentially anywhere else in the US.

And speaking of increasing costs, as much as folks tend to complain fiercely about infrastructure woes in cities like Philadelphia, I can only begin to imagine what Texas will face in the coming years as its massive highway systems in the big metros like Dallas, Houston and Austin begin to require significant replacement and maintenance.

It's not going to be pretty for municipal and state budgets.

I’m sure they’ll get federal funds. The southern states are a lot better at securing federal money than we are.

[EastSideHBG]

Originally Posted by TempleGuy1000

Thanks for sharing. I don't think any of us 'dislike' Dallas (Cowboys, sure), and we are just pointing out some standouts from the data.

I should have been clearer and "around here" meant this forum as a whole and because it's not super urban in many areas.

I will say, it's strange that article blames the lack of parking for some of the leasing problems. Brandywine Realty, our local juggernaut, who also has long been the largest land owner in Austin Texas, has become rich beyond their dreams developing parking lots in Austin into more useful things like highrise living and more offices. I guess, it just comes down to different places wanting different things.

Austin is a bit more urban-minded than Dallas [by TX standards] and Dallas is similar to Houston with its car culture.

[thoughtcriminal]

Originally Posted by Urbanthusiat

I'm glad our vacancy is low but vacancy can be a little misleading on its own. What's absorption and new construction like? Is vacancy high in Texas because developers are outpacing absorption? Is it because of a lack of absorption or is absorption still high, but construction activity is even higher? If it's the latter scenario than I'd probably rather have higher vacancy but more job growth and construction than lower vacancy and less job growth and construction. Unfortunately I'm not entirely convinced that's not exactly what's happening here. But Philly is of course still doing quite well (for Philly, at least) based on all the data I've looked at.

it's also not a static thing. this 10% number doesn't mean that that's what it is now and ever shall it be so. to say that vacancy rates are about 10% in Q1, and trending down from previous quarters, means that the economy is rebounding and it might be almost time to start building again. that means that rents will drop a bit, and make the city more attractive to prospective tenants.
I don't know how you could even have higher vacancy rates with more job growth and construction. job growth = demand for more space = lower vacancy rates = more construction.
always look at the trend.