If You Build It, Will They Really Come?

Today's top tenants want new, high-quality space. But is that reason enough for developers to build without leases lined up? One research guru tells us long-term fundamentals in most areas are good enough to give the green light. Cassidy Turley chief economist Kevin Thorpe tells us 63% of buildings 15k SF or greater in the US are 20 years or older, leaving many big markets with outdated, obsolete product. So there are big opportunities to tear down older buildings and construct newer, more efficient product, since "most tenants are just not interested in old fixer-upper space," Kevin says. And while going spec often comes down to timing and luck, he adds long-term job growth numbers actually leave markets such as Austin, San Francisco, Boston, Seattle, and New York undersupplied going forward.

Of course, some developers have to wait it out longer than others when it comes to spec building. In Rosslyn, Monday Properties is looking for tenants at 1812 N Moore (pictured), the 580k SF skyscraper that delivered late last year, currently the region's tallest building. (Has everyone just been watching Vertigo on Netflix?) The government's fiscal drag isn't helping builders of spec product in DC, Kevin says. Look for more of Kevin's comments in today's Bisnow National Real Estate newsletter.

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