Archinect - News

Can the Chrysler Building still endure against imposing contemporary neighbors?

2024-07-18T20:05:00-04:00

Is the Chrysler Building’s reputation enough for it to endure as an icon, or is it at risk of fading away from the skyline, as newer, taller and glitzier glass buildings surround it?

William Van Alen’s iconic masterpiece of the Art Deco style (which topped out just six days before the stock market crash of 1929) is now facing financial uncertainties after its pre-pandemic sale for just $150 million to an Austrian developer and New York-based CRE firm. The recent bankruptcy of the former company, Signa, has prompted questions about its future.

The Times reports more than half (650,000 square feet) of its rentable spaces are now vacant. The building's plight resembles slightly that of the Flatiron Building, which was finally sold to a local residential developer late last year.

The corner office's long era of dominance is over. Make way for the new 'Workplace Power Symbols' says The Atlantic

2024-05-21T17:43:00-04:00

Many modern companies “have as many conference rooms as there are executives,” [Kay] Sargent said, and it’s become a “dirty little secret” that conference rooms are the new corner offices. [...] When a high-ranking executive parks themselves in a big conference room or spreads their stuff across the long table in the office coffee shop, no one is going to tell them to leave.

The influence that Google exerted over office design in the 2000s has been credited with starting the movement toward a post-COVID reality in which the private spaces within offices now occupy only 45% of the total footprint. (H/t CoStar.com from January)

Still, The Atlantic’s Michael Waters writes: “We may one day return to an older layout of explicit hierarchy: [Lenny] Beaudoin, the CBRE designer, told me that he recently worked with a bank that decided to reinstall corner offices for a group of senior leaders, hoping it would bring them back to the office. But even if recent changes prove lasting, with space designed to be up for grabs, there won’t be any illusions about who has the power to grab it.”

Oceanwide Plaza, LA's unfinished high-rise graffiti mecca, faces impending sale

2024-05-10T12:00:00-04:00

The Chinese owners of the stalled residential, hotel and retail complex towering over Crypto.com Arena have hired real estate brokers to sell the property to buyers who could restart the project after work stopped in 2019. Taggers recently covered its outer walls with graffiti visible from far away.

The LA Times also reports the brokerage firm Colliers to have submitted an application estimating the property’s current value at $485 million and stating it is still just 60% completed. Another $865 million would be required to finish the block-scale development designed by CallisonRTKL. Some had speculated it could be demolished. Costs for the cleanup of possibly the greatest graffiti takeover of recent memory have been reported at $3.8 million.

This is what Hudson Yards West will look like, according to developers

2024-03-15T13:25:00-04:00

Details of the planned Wynn New York City resort scheme from Related Companies and the Oxford Properties Group have been released, along with new renderings and further details about the final Phase 2 building segment at Hudson Yards.

The three-tower scheme chosen from the set of alternative proposals that was released in February calls for a 1,189-foot hotel with 1,750 rooms to be placed at the northernmost edge of the site opposite a 1,366-foot office building and across a plaza area from the x-shape third residential tower, which stands at 1,172-feet will include 1,507 units. A 5.6-acre park will complete the master plan, along with a 750-seat public school and 12,250 square feet of ground-level retail.

Rendering courtesy of Related Companies and Wynn Resorts

Included in this proposal are plans for a gaming component that could potentially earn one of three coveted casino licenses up-for-grabs in the Downstate region (which includes New York City) for $500 million apiece in 2025...

Plans revealed for Hudson Yards Phase Two with several towers and a potential casino

2024-02-26T12:03:00-05:00

The next chapter in New York’s Hudson Yards has been revealed, with developers filing a bid for a potential mixed-use casino complex. Related Companies and Wynn Resorts submitted plans as part of an environmental impact process last week with the New York City Department of City Planning, which includes two scenarios for the plot directly west of The Vessel.

The proposed site is currently occupied by the West Side Yard and would see the Hudson Yards development expand west, separated from the Hudson River only by 12th Avenue. The plot would also be wrapped on three sides by the High Line, which already borders the south side of the existing Hudson Yards development.

In 2020, Related Companies offered an indicative insight into the architectural intent for the site when it published renderings to assuage concerns that a 700-foot wall would separate the development from The High Line.

Hudson Yards Phase Two proposed plan. Massing and plan credit: Related/NYC Planning

Both scenarios sub...

Adam Neumann is attempting to buy his way back into WeWork

2024-02-06T20:00:00-05:00

Five years after driving WeWork into the ground, co-founder and ousted CEO Adam Neumann has now hatched a plan to buy it out of bankruptcy. In a letter to WeWork’s advisers obtained by The New York Times, Neumann and his new real estate business, Flow Global, express interest in buying the co-working space solution — but claim WeWork has been ignoring attempts to get more information so they can come up with a bid.

WeWork, meanwhile, is beginning to walk away from even more properties under the direction of new CEO David Tolley after announcing an initial list of 40 that would be relinquished in November.

Neumann had cited outside scrutiny as his main reason for leaving the company in September 2019. His attempts since December to purchase the company through his new housing startup Flow Global constitutes the second such push since Bay Area financier Dan Loeb funded the project in August 2022. The return-to-office downturn is being cited as their principal motivation. In a letter to WeWork advisers, Neumann's attorney said it would be a "value-maximizing transaction for all stakeholders."

WeWork currently owes about $18.6 billion in debts, according to their Chapter 11 bankruptcy filing from November.

Manhattan’s office building spree is now ‘over,’ according to the New York Times

2023-12-29T11:49:00-05:00

Just three large office towers — of more than 500,000 square feet — are being built across New York City, with two expected to open in 2024 or 2025 and nothing else projected to go up for years. Normally, a handful of sites that size would be in various stages of construction, with at least one opening every year since 2018, according to JLL, a real estate services firm.

Due to an obvious confluence of interest rates, office vacancy records, and construction costs, the Times says Manhattan is “entering its most significant office construction drought since after the savings and loan crisis in the late 1980s and early ’90s.” Recent superlatives like BIG’s 66-story The Spiral and the Foster + Partners-led 270 Park Avenue replacement may stand as the last major realized office designs before the early 2030s. Another three proposals totaling over 3 million square feet are stuck in the approvals pipeline as of right now.

The stasis has notably led to the cancellation of the much-maligned ten-block Penn Station revitalization plan, among other significant stall-outs. A “flight” to high-quality modernized office spaces of the kind featured in 425 Park Avenue and One Vanderbilt could spark a turnaround if not for their asking price. As the report stated, some industry experts believe $200 or $300 per square foot rents might be a reality for similar buildin...

WeWork seeks to vacate 40 New York properties following bankruptcy filing

2023-11-15T14:32:00-05:00

After officially filing for Chapter 11 bankruptcy protection last week, WeWork has released a subsequent list of 40 “underperforming locations” across New York City that the company hopes to walk away from over the coming months pending court approvals.

The news was first made public via the Commercial Observer, which also reported WeWork as identifying another 29 properties in the U.S. and Canada it plans to relinquish. The news adds to concerns over the performance of the commercial real estate market in New York and other cities. WeWork had been, until very recently, one of the biggest tenants in Manhattan.

The company has retained Hilco Real Estate to re-negotiate terms on its more than 400 outstanding leases and will allow some members to re-negotiate with landlords directly in certain cases. Current members will be transferred to better-performing locations still operated by WeWork. (The company has a total of 779 properties worldwide.)

Related on Archinect: WeWork is cutting ...

Google scraps $15 billion Silicon Valley development deal with Lendlease

2023-11-06T12:28:00-05:00

Google has scrapped a $15 billion development deal that would have benefitted California’s Silicon Valley with new modern office parks, affordable housing, and mixed-use districts, according to reports published by CNN and Reuters late Friday.

The deals struck with Australian multinational Lendlease cover planned developments in and around Santa Clara County, California, including Sunnyvale and three others in San Jose and Mountain View. Google had previously announced its plans to reduce its company size by about 6% at the beginning of the year.

Both Lendlease and Google had released statements expressing their continued pursuit of the projects in April when the San Jose Downtown West development’s start of construction was put on hold indefinitely. Lendlease now says the four-year-old deal is no longer “mutually beneficial given current market conditions.”

The news strikes a major blow to the faltering...

U.S. colleges eye unused office buildings for academic adaptive reuse

2023-10-06T14:09:00-04:00

U.S. colleges are taking advantage of a post-pandemic increase in affordable, unused offices by purchasing such properties for educational use, according to reporting by The New York Times. Since 2018, numerous higher education institutions in the U.S. have been acquiring office buildings, with 49 private and 16 public institutions making such purchases, as per data from real estate services company JLL.

“For schools seeking to expand, or just beef up their real estate portfolios, the purchases can be a bonanza,” The Times explains. “With the office market in a slump, they have bought buildings at bargain prices. Renovations are usually needed, but a makeover is typically not as expensive or as time-consuming as building from scratch."

Related on Archinect: AIA announces $20 billion in grant funding made available for adaptive reuse and decarbonization projects. Image credit: Brian Ferry

Examples cited by The Times include the 1928 Title and Trust Building in Los Angeles purchased b...

HKS bid for Texas’ tallest skyscraper gets cut down

2023-04-28T12:12:00-04:00

Amid challenging conditions in the real estate and lending markets, a proposed 80-story residential tower that had been planned to be the tallest high-rise in Texas has now been scaled back to 45 stories. [...] Taylor Wilson, president of Wilson Capital, said the revised design comes in response both to feedback from Austin's Design Commission and to significant changes in the real estate and financial markets, which are grappling with rising interest rates and tightened lending standards.

The revised Wilson Tower proposal would have surpassed I.M. Pei’s JPMorgan Chase Tower in Houston as the state’s record-holder. KPF’s Waterline development is still on track to break it by 20 feet. The episode highlights the economic stasis affecting developers in the city’s insanely high-stakes CRE market as the impacts of the tech recession compound.

"We are making some changes to the ground floor in response to both the Design Commission’s feedback and changes to the vertical nature of the building in response to current market conditions," Wilson said via email to the Austin American-Statesman. "Construction costs and interest rates are both higher now than they were when we originally designed the project. We believe this new design is more appropriate to provide an activated ground floor while remaining feasible in today’s environment."

...

Google pauses work on 'Downtown West' San Jose development

2023-04-25T11:48:00-04:00

As part of Google’s downsizing that went into effect early this year, the company has gutted its development team for the San Jose campus. The construction project, which was supposed to break ground before the end of 2023, has been put on pause, and no plan to restart construction has been communicated to contractors, according to people familiar with the matter who asked not to be named due to non-disclosure agreements.

The news broke on Friday amid a sector-wide fallout caused in part by the tech recession. CNBC reported that some sources now speculate as to whether or not the 80-acre development will be completed at the same scale though both LendLease and Google have reaffirmed their commitment to it in written statements. Google has now incurred $500 million in losses for the first quarter of the year alone on office lease exit fees.

Previously on Archinect: Google wins approval for 'Downtown West' mega campus in San Jose

Kohn Pedersen Fox, Heatherwick Studio, Grimshaw Architects, SHoP Architects, Solomon Cordwell Buenz, SITELAB urban studio, and West 8 were among the design firms attached to the construction, which was to be the single largest in San Jose history. The project was approved in 2021 after years of planning and an exchange with local opposition groups that ended in the decision to commit to adding $450 million worth of affordable housing and other community initiatives.

Moody’s declares pre-1980s office buildings ‘obsolete’ due to conversion costs

2023-04-07T15:18:00-04:00

A new report from Moody’s Analytics is further dampening CRE prospects for the near future after declaring all office structures built before 1980 to be “obsolete” in terms of their abilities to lure back tenants in the face of an ongoing national downtown decline.

Speaking to MarketWatch recently, the ratings agency’s Nick Villa said buildings built before that date are obsolete because “generally speaking, if there were no significant renovations to the building, the amount of capital required to bring it 'current' and compete in today's market would be costlier.”

Cities like New York and Oklahoma City that maintain a higher share of these buildings may therefore face further economic difficulties as interest rates continue to climb and lending standards tighten.

Previously on Archinect: Zoom Town to Boom Town: North American business districts are going to evolve instead of dying off completely

The end of the pandemic has ushered in a new era of office design, with many new const...

The Flatiron Building is still up for grabs after auction winner fails to make deposit

2023-03-28T17:20:00-04:00

Ownership of Manhattan’s iconic Flatiron Building is still up in the air after the surprise winning bidder at last week’s auction failed to follow through on a $19 million deposit that would have guaranteed his sole ownership of the building, which has been vacant for years.

Last week, the private equity firm known as Abraham Trust came out on top of a whirlwind auction that was initiated as part of a lawsuit brought against the building’s minority owner, Nathan Silverstein, by his partners to determine who takes over the sole controlling stake and can therefore decide its future.

As reported by the Commercial Observer, the firm subsequently missed the deadline to make its required 10% deposit on the property it bought for $190 million by Friday. This will set off a ripple effect, as the partnership that originally brought the suit and placed second in the auction is apparently declining its option to make the purchase at their final bid of $189.5 million. The result of their decisi...

Will Austin’s tall-buildings boom survive the skyscraper effect and looming tech recession?

2023-01-19T17:52:00-05:00

But joining the fraternity of cities with supertalls can also be a dubious distinction: Real estate is a lagging indicator, and skyscrapers often arrive after the boom is over, looming half-empty as monuments to a bust. Others, however, are convinced that Austin’s high-rise stampede is just getting started. Given the city’s emerging significance as a next-gen manufacturing hub this building boom could defy the skyscraper effect.

With a slate of high-rises and supertalls, including KPF’s Waterline design and the record-setting Wilson Tower from HKS in the works, Bloomberg asks if the pace of development can be sustained amidst tech’s downturn and the annals of urban economic history. The salvation apparently lies in the influx of manufacturing dollars into the city, along with a downtown area that offers what some consider to be the nation’s highest overall quality of living.

A planned cap-and-stitch project could add even more commercial parcels along a stretch of I-35 downtown beginning in 2025. The risks of repeating the same tax incentive-driven boom-bust cycle that led to so many of Dubai’s architectural headaches a decade ago are not lost on developers. For now, Austin’s only real crisis is the affordability of homes and a dearth of convenient worker housing.

Related Companies expands into Austin with a pair of new office projects from Gensler and KPF

2022-09-19T12:39:00-04:00

The ever-changing skyline of Texas’ eccentric state capital is getting another pair of new additions after Hudson Yards developer Related Companies announced plans this month for two new separate Austin office buildings designed by Gensler and KPF.

Related says both projects will be located in South Austin and are slated to be completed in 2024 and 2025 respectively. The larger 15-story One Ladybird Lake tower is designed by KPF for a 3.3-acre plot located along the waterfront at the city’s Lady Bird Lake reservoir. Its total 475,000-square-foot construction will include a mixed program of ground-level retail spaces topped by office amenities with four wraparound terraces, a bar, green spaces, and an activated rooftop area created by the local landscaping concern TBG.

One Ladybird Lake by KPF. Image courtesy Related Companies

This is to be joined by a shorter 5-story development located half a mile to the south on 901 South Co...

Office buildings are deploying the power of scents to lure workers back

2022-09-15T14:29:00-04:00

There’s been a surge of demand from real estate owners for pleasant fragrances to make the air a little fresher and the workplace a little more comforting and energizing [...] “Here in New York City, for example, real estate companies are interested in scenting the building itself, as opposed to just the individual tenant spaces [...] There are lots of vacant office spaces these days. So what can the real estate companies do to attract tenants?”

So-called "scent profiles" have been documented to improve productivity, avoid a phenomenon known as olfactory fatigue, and achieve a psychological familiarity helpful to marketers when developing brand recognition. This is one of many approaches companies are attempting to use in order to lure workers back into the city's emptying central business districts.

Marriott, the nation’s second-largest hotel chain, has for two decades incorporated scents into all 30 of its Bonvoy properties, and (despite the HR headaches caused by allergy risks) there is now a growing interest among heavyweight commercial clients like SHVO and CBRE looking to improve indoor air quality in the wake of the pandemic.

Allison Lobay, global account manager of Air Aroma, shared with the Commercial Observer: "Some scents are associated with improved productivity. In the office, citrus fragrances are used to energize...

Spec buildings have increasingly become the answer to commercial clients' pandemic growing pains

2022-07-29T18:09:00-04:00

“Historically, spec buildings have been risky, but in a market environment like we are in now, where there is a race to get goods to people faster and to manufacture more things, the flexibility of the spec space becomes an asset, not a liability.”

Biomedical clients are among the most popular movers of the building trend, propelled by demand imbalances for lab space. E-commerce is another common tenant, followed by light manufacturing operations from companies like IBM that leverage high-paying jobs in smaller communities like West Chester, Ohio already targeted by developers for their easier-to-navigate zoning laws.

The rise of inflation, labor shortages, materials costs, and ongoing supply chain lags are seen as both threats and contributors to the trend continuing unabatedly. Marquette University's Andrew Hunt estimated that the average warehouse construction costs 40% more when compared to last year but still thinks the economy is in developers' favor. As he told the Times, "It doesn’t feel like that party will end any time soon."

Architects earn more from renovations than new builds for first time, fueled by workplace revolution

2022-05-10T09:00:00-04:00

Architecture firms are billing more from reconstruction and renovation projects than they are from new builds for the first time; a milestone driven by soaring demand for office renovations. In the 20 years that the AIA has been collecting data on billings for renovations versus new build projects, the share of billings received from renovations has been consistently rising for over a decade, suggesting the new milestone is not entirely attributable to the COVID-19 pandemic.

Throughout 2021, works to existing facilities reached 52% of architecture firm billings. According to AIA Chief Economist Kermit Baker, one quarter of works to existing facilities comprise adaptive reuse, with another quarter owing to conversion and basic interior modernization. 18% comprises tenant fit-outs while adding usable space and upgrading building facades or systems each comprise 10%.

“This is a l...

Lloyd's has dropped plans to reimagine its Richard Rogers-designed office in a potential portent to its future

2022-01-31T17:20:00-05:00

As a follow up to the recent surprising news that insurance giant Lloyd’s of London may be considering a potential exit from the award-winning Lime Street headquarters designed for them by late architect Richard Rogers in the late 1970s (opened in 1986), The Architect’s Journal UK is now reporting that the company has also paused previously announced plans to overhaul a major portion of the building in what could be a sign about the future status of its lifelong tenant.

The all-important Underwriting Room within Lloyd’s was supposed to be the subject of the planned fixes, although now plans are being revisited, according to a spokesperson for the company. Lloyd’s is saying it has made the decision to step back from the project its CEO said would be a “once-in-a-lifetime opportunity” for architects in order to “ensure our vision for the future of this space is in line with the market’s needs and fit for purpose.”

Rogers’ original design of the Lloyd’s building included the multistor...

Lloyd's of London is mulling an exit from Richard Rogers' award-winning headquarters building

2022-01-24T20:31:00-05:00

Lloyd's of London (SOLYD.UL) is considering whether to remain in its flagship City of London headquarters and may make a decision this year, the commercial insurance market said on Tuesday.

The news comes just over a month after the death of its Pritzker-winning architect in London at the age of 88. A Lloyd’s spokesperson pointed to the shifts in workplace culture brought on by the Coronavirus as significant factors behind the potential change.

The insurance giant's headquarters is one of several listed buildings in the Lime Street vicinity and was bought in 2013 by a Chinese insurance company, which holds the current lease until 2031 with a clause that can be broken in 2026, according to a real estate publication called React.

Interior view of the Lloyd's building. Image courtesy of Wikimedia Commons user Lloyd's of London (CC BY 2.5)

"As we adapt to new structures and flexible ways of working, we are continuing to carefully think about the future requirements for the spaces and services our marketplace needs," the company said in an email to Reuters. "Like many other organisations, we are considering a range of options around our workspace strategy and the future l...

According to EIA survey results, U.S. commercial buildings are increasing and getting larger

2021-09-22T18:14:00-04:00

The U.S. Energy Information Administration’s (EIA) 2018 Commercial Buildings Energy Consumption Survey (CBECS) data is now available.

The CBECS is a national sample survey that collects information on the stock of U.S. commercial buildings, including their energy-related building characteristics and energy usage data. It defines commercial buildings as those in which at least half of the floorspace is used for a purpose that is not residential, industrial, or agricultural.

The survey provides building characteristics information for the estimated 5.9 million commercial buildings in the United States in 2018. The data includes the number of buildings and amounts of floorspace by characteristics including geographic region, building activity, size and age, employment and occupancy, energy sources used, and energy-related equipment.

According to the survey, the number of U.S. commercial buildings grew 6% from 2012 to 2018, and the total floorspace of commercial buildings increased ...

Condé Nast settles back rent dispute with One World Trade Center developers following a yearlong standoff

2021-08-10T18:43:00-04:00

A protracted standoff between the landlords at One World Trade Center and the parent company of Condé Nast appears to have finally reached a conclusion … for now. Advance Publications executives Steven and Donald Newhouse have agreed to pay almost $10 million in back rent owed to co-developers the Durst Organization and the Port Authority, the New York Post reported.

Condé Nast had apparently been looking to break its lease with the Durst Organization that was set to run through 2039. The 112-year-old media company was originally a headline tenant of the building, which has had trouble filling its more than 3.5 million square feet of office space since opening in 2014.

Vacancy rates in Manhattan's Financial District have risen to 20% as a result of the pandemic. The New York Post has more on the settlement here.

Have empty New York hotels and offices turned into 'perfect targets' for commercial real estate developers?

2021-04-23T13:30:00-04:00

Commercial real estate may have been hit hard this past year due to spikes in remote working and the emergence of "post-COVID ghost towns." However, has the opportunity for converting empty offices and hotels turned into a feeding ground for developers? Must the solution always result in some form of housing option? In a recent New York Times article C.J. Hughes reports on the possible future for offices and hotels that have been empty for a year due to the COVID-19 pandemic. While he opens with the notion of plans for transforming these "eerily empty commercial structures and converting them to housing of some kind and perhaps other uses," who actually benefits from these conversions?

Beyond renovation costs and safety requirements, Hughes provides more details on the growing opportunities within New York commercial real estate. He connected with the managing principal of Metroloft Management, Nathan Berman, who shared, "Covid has expedited the ultimate repurposings," and these em...