COMMENT OF THE DAY: THE BEAUTY OF THE FAMILY SEDAN 
“The perceived blandness of modern office buildings has nothing to do with the lack of vision or enthusiasm of developers, it has to do with where the money comes from today. Decades ago there were eccentric millionaires and corporations with money to burn on monuments of their own egos, but these days money only comes from carefully calculated, vetted, reexamined, audited, and risk assessed finance packages. Throw in a healthy dose of anti-wealth and anti-corporate profit sentiment in the US and you have the real estate equivalent of a Toyota Camry — simple, functional, non-offensive, and very forgettable.” [commonsense, commenting on New Spec Office Building on Montrose Blvd. Will Sit Atop Southwest Fwy. Wall Vines] Illustration: Lulu
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On most levels you’re right man, but then you look at Hines and all the money they allocate to Pickard Chilton to design beautiful, highly unique, stylish skyscrapers. Your comment is over symbolistic and has the noxious aroma of Supply Side Economics, where the only thing that trickles down is middle class wages.
You’re both wrong.
Unlike with residential or multifamily finance, office and industrial (and to a significant extent retail) finance boils down to lease terms and tenant creditworthiness. It is entirely possible for two identical office buildings to sell at vastly different prices depending on the particulars of the tenants that occupy them.
In extreme cases, a long-term singe-tenant net lease to a company perceived as highly creditworthy at the time of the sale can result in the building getting priced as almost a function of that company’s corporate bonds. The circumstances of the sales of the Hess Tower and also the CITGO headquarters building out in the Energy Corridor both come to mind as historical examples that are relevant, and each occurred within buildings that were originally constructed on a spec basis in both core and non-core submarkets. On the other extreme, you have Boxer Property’s portfolio; nobody aspires to construct a building that Boxer targets for opportunistic acquisition (not that theirs isn’t a good business model).
Judging from what is typical of office buildings within the Montrose submarket, it is extremely unlikely that this property will get filled by a single corporate user. Nevertheless, this particular location will be considered prestigious to a certain kind of tenant and smaller tenants aren’t necessarily uncreditworthy. The design should reflect that and benchmark to Campanile, Campanile South, or Hines’ River Oaks tower (which btw, Shannon, was designed by Ziegler Cooper/HKS, not Pickard Chilton); all of these are likely to be going after the same sorts of tenants and although none is likely to win any architectural awards, all have better designs. Design should be especially important for this site compared with the others because it has such high visibility from the highway and from Montrose. It is an advantage that can be levered with money.
Remember, if it were all about bottom dollar, then all tenants would just go lease space in windowless tiltwall service centers in the suburbs. And some office tenants do that. The market is segmented. This site will appeal to a certain segment of the market and not others, and what is built there needs to match with where the demand will come from from the segment that can be counted on to pay the highest rents. It doesn’t need to be a temple wherein employees go to worship the ego of their CEO, but it needs to be more than a box. It needs to have windows for one thing, and it needs to have a tasteful architectural treatment that — right now — it is entirely lacking.
I think he’s correct. How many people that criticize all the new architecture in the Energy Corridor drive Ford pickups or Toyota sedans. Why don’t they spend their money so I don’t have to look at their boring ugly cars everyday. If everyone would just pony up for a Ferrari the world would be a much more beautiful place. Instead they think about things like the family budget, how selfish of them.
Pickard Chilton does nicer high-rise work than Kirksey, HKS, and Gensler , but they are not the contemporary equivalent of the architects Hines used in the ’70s and 80’s like Philip Johnson and I.M. Pei.
Don’t dis Boxer properties. They do everyone a service when they buy a building from a fly-by-night LLC with no name and no website, and use their resources to bring it up to standard. I may not agree with what they did to the Sharpstown Mall (I wish it were more upscale and more like San Antonio’s Market Square) but I do like what they do with office buildings.
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That said, of course I understand the difference between a signature building – designed for a specific tenant and usually well done architecturally – and your garden variety spec office building. But shouldn’t there be room for a boutique spec office builder here in Houston? Someone who builds interesting spec buildings. Maybe ey cost a little more but you get what you pay for in terms of design prestige? There are people up in New York who’ll spend more to have an office in the Chrysler Building….
I am not dissing Boxer Property.
So what industries would be sufficiently prestige-obsessed to warrant building more beautiful buildings for them? If it is a function of corporate bond price that would preclude tech startups for example, right?
@ anon22: Those single-tenant long-term net leased buildings that can be priced in relation to the tenants’ corporate bonds…those are few and far in between and those aren’t all necessarily beautiful buildings for the prestige-obsessed. Some of them are, others aren’t.
For the most part, there are two categories of spectacularly beautiful buildings. There are trophy buildings that are mostly located within the CBD and usually built on a spec or mostly-spec basis. They tend to be made to appeal to legal, financial, or other professional services. And then there are single-tenant built-to-suit facilities; those are more geographically dispersed and run the gamut from very small to very large facilities, and they may include more than just office space.
The general argument for an office building with a tastefully upgraded architectural treatment is that the market two years from now might not be as hot as it is just right at the moment. If tenants suddenly find that they can suddenly choose between numerous empty office spaces, they’ll tend to bunch up in the best buildings. When it happens, this is called a “flight to quality’.
Point taken, Notch. I disagree that Pickard Chilton isn’t to the standard of Johnson or Pei. For the record the Chase is probably Pei’s worst building. In actuality his partner Cobb was a much better architect. As for Johnson, he was a great mimic, and understood his clients but hardly an all time great Architect.