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Yeah, one thing they don't usually do here is over build, i.e. we have a huge population and relatively small number of towers. Most are hotels in which we are sorely lacking. Last time our occupancy rate was as high as 2014, Harry Truman was president. Others are corp. HQs for local companies, office buildings in University city, condo/apartment towers because people want to live downtown, and some are completely random like this Mormon meeting house /apartment tower.
I just feel like a lot of cities are just experiencing post-recession mini building booms for the lack of development during the recession and quite a few cities will slow down over the next 2 or 3 years, especially ones that simply don't have the job growth to accompany it.
DC is most likely one of best if not the best city in country at having 30 buildings under construction. Hands down.
No, NYC dwarfs DC, but we are probably number two in concentrated dense urban development. Houston has 600 miles so they may have more in city proper. DC is only 61 sq. miles.
Atlanta's definitely ~2 years behind, as was LA. Houston might see a slow down given where oil is today, and frankly, when it comes to tall construction, their boom is quite weak, and when it comes to downtown/CBD construction, also not as strong as on paper indicated above (maybe 5 of those 47 buildings are downtown, and maybe 5 of those 47 buildings in total are > 400 ft, the vast bulk under 250 ft). Seattle and Austin are so strong right now, there is just no stopping either. SF has a super robust pipeline and people aren't forecasting a slow down for another few years. Boston just received approvals for a couple of tall ones yet to break ground, so that city is just getting interesting, as well.
Philly's boom is explained as follows:
Comcast Center - a departure from almost all other significant office tower construction going up in the US in that it will be 100% owned and occupied by Comcast (which I think is a bit of a shame - would have loved to see more firms in there). Different from SF Tower and Wilshire Grand in that SF Tower is BXP/Hines developed and owned and is a real estate investment rather than a corporate space need and Wilshire is foreign money, which just hasn't reached Philadelphia, and is also a spec real estate investment. Even the Amazon developments in Seattle are being developed by a 3rd party (such as Vulcan, which is co-founded and partially owned by Paul Allen of Microsoft).
FMC - *this* is emblematic of where Philly is, development/economy wise. 44% pre-leased to FMC (chemical co) and 17% pre-leased to U Penn. 39% to go (575K sf total office).
The top floors will contain 260 high-end apartments. I think it's telling that they aren't going condo, considering the tower, however, the main partner (or maybe sole partner) in the deal is an office REIT, not a condo developer. Apartments/cash flow easier to fit into an office REIT structure (one would think).
FMC was lured partly by the ability to tap into state incentives for locating its HQ in this building, which I suppose falls under various redevelopment zones targeted by PA and by Philly, too. $10M in incentives for a 253K sf lease in a ~$350M building, for perspective.
Then there's a series of 5-6 apartment and student housing high-rises in the 25-33 story range scattered between CC and UC. 3-4 of these are wrapping up and and ~2 just got started. I could be off by +/- 1. This is similar in scale to development happening in Atlanta, more than in Dallas, and less than in Houston, Seattle, or LA.
Then there are some hospital buildings going up, which are never indicative of the times as they relate to the economy or real estate, necessarily, but do have a lot to do with available financing, needs, and construction costs (though I'm guessing now is not a good time for the latter variable for hospitals).
The rest are basically proposals, still. There are 3 towers I can think of that have a 60+% chance of happening, which is high in my book. SLS, W, and the apartments being sponsored by the Mormon Church. I personally don't see both the SLS and W happening, but I can all but guarantee that the Mormon apartments will happen. They're essentially monetizing an account and there is no reason, financially, even with a potential for a downturn, that the Mormons wouldn't consider building a 32 story apartment high rise and holding onto it for a bit. The only thing I can foresee changing is the amount of money they choose to put into the design, materials, amenities, and interiors. It's not exactly in the most happening spot in Philly, in my opinion, and rents in Philly are only sporadically high enough to justify high end high-rise construction.
Now condos (SLS and W), if one or especially both happen, that tells us one of potentially two things: the developers are off their rockers (always a distinct possibility when you get local guys who are in d**k measuring contests with each other, even if that means they lose their house), or that Philly is truly a "there" market right now. Based on previous condo activity and velocity of sellout at other projects, I just think it's a huge gamble. Millennium Partners (also in NYC, Boston, DC, SF, and Miami) came in with their Ritz Carlton Residences many years and I don't believe that was a home run, at all, for them (they're still not even sold out, really not even close...though I believe MP offloaded the unsold units in bulk for some discount to some other group late last year).
That was 270 condos. Which would be a drop in the bucket for an SF, a relative drop in the bucket for a Boston (Millennium Tower alone, by same group, going up in Boston, is 442 units from $1.5-$37M and already 70% pre-sold while the building isn't even halfway up yet), and an absolute drop in the bucket for a Miami (obviously).
W + SLS will be 90 + 125 (215 total condos) at price points never before seen in Philly. There are also other proposals on the table. Not to mention, while I think the W has way more of a place in Philly, the SLS is a hotel at a whole other price point with a whole other target clientele. Hotel with rates not achieved ever in Philly + condos at price points never achieved in Philly, all in Philly, = huge risk.
All in all you have a domestic corporate owned tower going up that happens to be a supertall, a Cesar Pelli mixed-use tower that is benefiting from tax benefits and incentives and will include apartments rather than condos on top (a departure from most similar developments in other cities), about 2,000+ high-rise apartments and student housing units (including Evo, recently completed), a couple of hospital expansions, and potential for more.
When you break down Philly's boom, it's impressive relative to its recent history. But when you really look at the numbers, the players, and compare to other markets, you can see that the economies elsewhere are producing numbers at many levels above those talked about in Philly and are attracting foreign interest and a different breed of American development firms that can take down $100M land parcels before they even get entitlements.
I think the growth factor in Philadelphia is the investments being made by Philly's Universities . Almost 6 Billion $ were invested in new facilities in the past five years just in university city alone and another 5 billion $ projects are to start soon . Mostly to train a high caliber talent pool and to retain them in the city .There are 100,000 students in or close by center city and retaining a highly educated talented pool of grads is essential for the city to thrive . I think Philly's future is looking very bright .
Why is there so much Philly construction anyway? It's not like it's a booming economy or has high job growth like Boston, SF, Seattle, D.C., Austin, or Houston.
I feel like there are some cities that are going to overbuild and then the bubble will burst.
Your first mistake is looking at the entire city of Philadelphia as a whole instead of just the core of the city. There are still swaths in North, Northeast and Southwest Philadelphia that are losing population and jobs while the Core, South Philly and Northwest are gaining jobs and population. The is real demand driving the construction in Center City for office space, apartments, medical/research, academic, condos, and hotel rooms.
Comcast new tower is not only office space but twenty floors of development labs . Just imagine working in your lab 50 stories up over looking the city . The labs will have 3 floor atriums with trees and water falls at 50 floors up , not like any lab I worked in .
Your first mistake is looking at the entire city of Philadelphia as a whole instead of just the core of the city. There are still swaths in North, Northeast and Southwest Philadelphia that are losing population and jobs while the Core, South Philly and Northwest are gaining jobs and population. The is real demand driving the construction in Center City for office space, apartments, medical/research, academic, condos, and hotel rooms.
But CC's (or any downtown's) office space isn't just driven by demand by people deciding they want to move into an urban environment instead of the burbs. That's part of the equation. However, of the hundreds of thousands of workers in CC, most certainly commute in, likely from fairly suburban areas. Or else there wouldn't be the need for a fairly extensive heavy rail system and a large commuter rail system out to the various parts of Greater Philly drawing people into CC.
Office expansion will occur based on general economic expansion, and particularly service-oriented job expansion. Look at Miami for an example of a city that can build tens of thousands of high rise downtown units and see little to no demand for new downtown office space (granted it's a different story with those residential units, but it's a story nonetheless). Houston is building a single office building downtown that can fit more employees within it than there are currently residential units downtown or under construction.
Quote:
Originally Posted by kingtutaaa
Comcast new tower is not only office space but twenty floors of development labs . Just imagine working in your lab 50 stories up over looking the city . The labs will have 3 floor atriums with trees and water falls at 50 floors up , not like any lab I worked in .
I am pretty intrigued by this. Comcast absolutely sucks as a company. And I'm baffled as to why they would need lab space. What is it that Comcast will be developing that requires actual lab space?!? Is this what our Comcast bill goes toward - essentially glorified office space for workers at this horrible company? Really, I want to know
Oddly enough Comcast already has a few of these labs set up in philly, Silicon Valley, seattle, Denver, and in Israel. I think they are coming up with mind control techniques. Nah I'm just kidding. Don't be such a sheep, they deliever freakin Internet, it's not like they are killing people as much as Disney and Google want you to believe.
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