Quote:
Originally Posted by StoOgE
I think people on here are a little unrealistic. Size of buildings are driven by market factors and profit margins as well as the capacity of the developer.
Yes, building a 1,000 foot tall buildings with 2x the space would have higher theoretical profit, but at lower margins and higher risk. Developers rely on financing and financiers want to minimize risk and maximize profit margins, not just profit. You are also looking at a much longer construction and approval process for a taller building, higher cost of material and all kinds of other factors that play a part in determining when and why people build what they do.
Austin has lots of underdeveloped space in the CBD (not to mention South Shore). It is much cheaper to build 2 500' buildings than a single 1000' building.
The super-talls in New York are driven by a handful of things we do not have:
1) The most expensive real estate in the United States.
2) A workforce of 30MM+ humans
3) Untold numbers of company headquarters that are looking for signature towers to impress clients, attract and retain workers and house their staff all in one place.
4) Billionaire's the world over looking to buy multi-floor 100 million dollar condos that overlook the entire city (and a nice way to offshore assets from China and Russia).
5) Stupid amounts of demand for both housing and new office space.
Austin is just now getting rid of most of our surface lots. Once that happens and the surrounding area becomes denser we wills tart to see older buildings come down and be replaced with taller ones.
In 30 years I imagine lots of these filler hotels and 400' tall office buildings that we all hate that were value engineering nightmares will likely come down and be replaced with taller towers.
I think we also need to understand that the number of cities in the US that can support current construction of 900 foot tall buildings is basically 5 or 6. And cities that can support the regular construction of supertalls is 1.
We're an MSA of 2MM with several 700 footers and an 800 footer proposed. We are outpunching our weight class and will continue to do so in the short and long-term while we grow to a 3MM-4MM person city, and hopefully get our infrastructure up to snuff before that happens.
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Thank you for putting this out here, I was far too lazy and not well-versed enough to type out these thoughts.
I will add onto what you said with specifics; with the Parsley lot there was concerns on leasing as they weren't prepared to lay in debt if they build extra office space that could potentially sit vacant for an extended amount of time. Rumor had it too that there some small shot that they were going to scrap what they had altogether and build outside of the CBD on a different piece of land - but I can't confirm.
The main takeaway is we're seeing a bigger surge in preleasing space pre-construction which is great for developers and their financing though it does seem to dictate some minor design considerations. Developers for office space have to rely largely on smaller, local businesses to fill the area which is a fickle and potentially limited market; they can't always catch the big whales needed to justify an investment for 600'+ structures. This isn't everything as market supply/demand is still the prevailing driver of development which echos exactly what StoOgE said.
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