The glut of available office space downtown

[Exile]

14 hours ago, PuppiesandKittens said:

How many of these companies have stated, "We want to be in suburbia. Period."

NONE.

They probably analyze the price of the land/building, commute times, etc. when deciding where to locate, and the competitive position of downtown (and areas near downtown) can be improved with respect to all of these factors so that the center city doesn't keep losing developments to suburbia.  For example, parking, transportation generally, land prices (perhaps by zoning land near downtown to be used for large office developments), etc. can all be improved, making the overall position of downtown more attractive.

Further, the Mauldins of the world could perhaps stop incentivizing relocations to Mauldin (for the tax dollar grab), in consideration of a more equitable sharing of property taxes among local governments. 

None? You don't know that, which you demonstrate by immediately shifting to probabilities. All it takes is one counter-example to blow your theory. Apple, for example, which has publicly expressed its preference for suburban locations for its next campus, wherever it lands. And I know first-hand of companies who don't want to be downtown (in Greenville). Period. This can be for a whole host of reasons, some of which you've more or less accurately summarized.

And if Greenville gets out-competed by Mauldin, then bravo for Mauldin. What's good for Mauldin is good for Greenville, and vice versa. We're all in this together. Greenville's Goliath might learn something and not fall to Mauldin's David next time.

 

Edited July 11, 2018 by Exile

[vicupstate]

There is NOTHING good about poaching companies from one part of the Metro to another part of it. It is a net negative.  It increases the infrastructure burden and sprawl issues, does not result in additional jobs, and give an undeserved break to companies that were already in the economy to begin with.   It creates a bidding war that benefits no one except the company involved, not the general community.  

[Exile]

9 minutes ago, vicupstate said:

I seriously doubt there is any real incentive to move to the suburbs except lower cost.  I wonder if they even consult  their employees on these moves. After all they probably bought/rented where they did based on the existing location of their job.  On the other hand, a lot of mid-level employees can't afford to live anywhere other than the suburbs. 

I realize cost always is the biggest factor, but their is something to be said for supporting the city from which you generate an income.  Abandoning space DT for the suburbs and putting costly infrastructure on the taxpayers back does not do that. 

The BB&T move makes even less sense since they already owned the DT building.  Is it really worth paying rent at a brand new building as opposed to staying put at a long paid for building? 

Now that DT has multiple spots of big space available, we will see just how well we do at bring in new business HQs.  They certainly don't have the 'no available space' excuse any more. 

 Can someone in the industry explain why TD Bank would not have sub-leased the space they had already vacated years ago?

A few observations:

1) Lower cost is huge.

2) As for consulting employees, some do, some don't. I'm aware of examples of both. It is true, though, that the larger a company gets, the less employee input there is in this kind of decision, if for no other reason than the cacophany that it would create by giving everybody a voice in the process.

3) These decisions are made with boards and stockholders looming in the background. It may be a bad decision, but that doesn't mean it's not a rational one.

4) It's not the company putting the cost of the infrastructure (such as there is) on the backs of taxpayers, it's the municipal government. Go after them.

5) As for why TD paid for empty space for so long, I'm as flummoxed about that as you are.

[Exile]

2 minutes ago, vicupstate said:

There is NOTHING good about poaching companies from one part of the Metro to another part of it. It is a net negative.  It increases the infrastructure burden and sprawl issues, does not result in additional jobs, and give an undeserved break to companies that were already in the economy to begin with.   It creates a bidding war that benefits no one except the company involved, not the general community.  

I don't disagree with you in principle. To be more transparent, pretty much all my statements have an unwritten, "Given that we're unfortunately locked into this crummy (if not corrupt) system of government incentives..." prefixed to them.

[vicupstate]

The municipalities have the play the game and the hand they are dealt. The companies ask for the incentives and create the bidding war.  

[PuppiesandKittens]

1 hour ago, Exile said:

None? You don't know that, which you demonstrate by immediately shifting to probabilities. All it takes is one counter-example to blow your theory. Apple, for example, which has publicly expressed its preference for suburban locations for its next campus, wherever it lands. And I know first-hand of companies who don't want to be downtown (in Greenville). Period. This can be for a whole host of reasons, some of which you've more or less accurately summarized.

And if Greenville gets out-competed by Mauldin, then bravo for Mauldin. What's good for Mauldin is good for Greenville, and vice versa. We're all in this together. Greenville's Goliath might learn something and not fall to Mauldin's David next time.

 

Yes, I do.

Your statement about Apple is contradicted by its own media release, which states that it is building at least one downtown location: https://www.apple.com/newsroom/2018/01/apple-accelerates-us-investment-and-job-creation/

Not one article that I have ever read, in the Greenville News or any business-related publication, or in any other local media, has ever stated that any company that has leased a large block of suburban office space in Greenville requires being in suburbia, period, regardless of any other criteria.

Please point me to an article that contradicts this.

It wouldn't make much business sense to completely eliminate any part of town for a new office location--at least without considering the price and other criteria. 

Plenty of companies probably locate in suburbia because they can build a new campus for cheap, or because there is even more of a glut of cheap Class B and Class C space in suburbia, and because they like being near I-85 or another suburban location.  So they make their decisions based on attributes of suburban office space that are more appealing to them than downtown space is. 

My point is that downtown's competitive position relating to transportation, land costs, rental rates, etc. can be improved; no company that I have ever heard of or read about has ever stated something to the effect of, "rental rates, commute times, etc. will not be considered--we simply have to be in suburbia and refuse to even consider a non-suburban location".

Edited July 11, 2018 by PuppiesandKittens

[Exile]

1 minute ago, PuppiesandKittens said:

Not one article that I have ever read, in the Greenville News or any business-related publication, or in any other local media, has ever stated that any company that has leased a large block of suburban office space in Greenville requires being in suburbia, period.

Please point me to an article that contradicts this.

You'll have to take my word for it. I know this professionally first-hand, and I also know it via friends who are decision-makers for their own companies. I'm not operating from newspaper reports, so I'm not inclined to do the research to satisfy that--fairly arbitrary--demand. But then, in another thread, someone just (today) noted that the "Greenville Snooze" isn't particularly reliable with details, so what you're asking for wouldn't be particularly authoritative, anyway, even if I found something to support what I'm saying.

But I'll grant you this: they don't generally say "we want to be in suburbia." They'll say something like, "we want to be along 385 not far from Southchase." Or "the closer to Spartanburg the better, without leaving Greenville," (meaning really Greenville County, less likely the city) or the like. Six of one, half dozen of another.

[PuppiesandKittens]

24 minutes ago, Exile said:

You'll have to take my word for it. I know this professionally first-hand, and I also know it via friends who are decision-makers for their own companies. I'm not operating from newspaper reports, so I'm not inclined to do the research to satisfy that--fairly arbitrary--demand. But then, in another thread, someone just (today) noted that the "Greenville Snooze" isn't particularly reliable with details, so what you're asking for wouldn't be particularly authoritative, anyway, even if I found something to support what I'm saying.

But I'll grant you this: they don't generally say "we want to be in suburbia." They'll say something like, "we want to be along 385 not far from Southchase." Or "the closer to Spartanburg the better, without leaving Greenville," (meaning really Greenville County, less likely the city) or the like. Six of one, half dozen of another.

Sorry, but if there is no documented support for a fact, I can't simply take someone's word, when the documentation that I have states otherwise.

Companies may certainly state that they want to be near a particular location.  But they want to be near a location for various reasons, likely short commutes or short trips by suppliers; there is nothing inherently valuable about a specific site.  If downtown is losing out to suburbia because companies want short trip times to specific areas in town (likely executives' homes, or suppliers), then downtown needs to improve its transportation and access to those specific areas, and that will help downtown win more companies.

[Exile]

30 minutes ago, PuppiesandKittens said:

Yes, I do.

...

My point is that downtown's competitive position relating to transportation, land costs, rental rates, etc. can be improved; no company that I have ever heard of or read about has ever stated something to the effect of, "rental rates, commute times, etc. will not be considered--we simply have to be in suburbia and refuse to even consider a non-suburban location". 

All I'm doing is accounting for location decisions based on the knowledge that I have. I haven't made any absolutist statements. I am perfectly willing to acknowledge that a city might be able to come up with some sort of incentive to lure to the CBD even those companies who have good reasons not to locate downtown (though you don't seem to think that such good reasons exist, as far as I can tell). But the fact remains that some companies prefer (even strongly prefer) *a* (particular) suburban location (not "suburbia" in general).

I get that this is Urban Planet, and believe me, on one level I'm with you. But not everybody loves urbanity. That's just the reality, and we live "next door" to those people.

As for Apple, I'm speaking of their 4th campus, which, e.g., Raleigh is still in the running for. Of course Apple has a presence in some CBD's. I never stated or implied anything different. What  I said was that, for their 4th campus, they *prefer* a suburban location. I did not say (or imply) that, come hell or high water, they're going to locate in the 'burbs. Who knows, they  may put up a supertall in mid-town Manhattan. But if they do, it will be against their initially expressed preference.

[Exile]

15 minutes ago, PuppiesandKittens said:

Sorry, but if there is no documented support for a fact, I can't simply take someone's word, when the documentation that I have states otherwise.

Not a problem. We agree to disagree.

I will say, however, that the level of certainty that you're expressing is beyond the knowledge of even the most well-connected, successful agent, developer, or city/county representative. You're essentially saying that you have sufficiently detailed knowledge of every single instance both currently and historically to speak absolutely. Sorry, but your burden of proof is way bigger than mine.

[PuppiesandKittens]

2 minutes ago, Exile said:

I will say, however, that the level of certainty that you're expressing is beyond the knowledge of even the most well-connected, successful agent, developer, or city/county representative. You're essentially saying that you have sufficiently detailed knowledge of every single instance both currently and historically to speak absolutely. Sorry, but your burden of proof is way bigger than mine.

I'm stating that, based on everything I've ever read, I have never seen a company state that it HAS to be in suburbia, period, and HAS to be outside of downtown, period, regardless of any other criteria.  If anyone can share an article that states the contrary, I'm all ears; Google should be a good resource for this.

I also acknowledge- and have expressly stated- that companies have reasons to be in suburbs.  That's fine; to each his own.  But my point--again--is that companies locate at a particular site based on a range of factors (typically price, commute times, availability of desirable space, etc.).  They may pick the suburbs, or they may pick downtown, based on whichever best satisfies those factors.  Downtown can work to improve its desirability based on typical factors considered by companies, and if it does so, it will win more corporate locations.  I've never heard of a company ever stating, "We don't care about any factors whatsoever--we simply have to be in suburbia."  That would be a very poor decisionmaking process to pick a site that way.

[GMoxley]

7 minutes ago, PuppiesandKittens said:

I'm stating that, based on everything I've ever read, I have never seen a company state that it HAS to be in suburbia, period, and HAS to be outside of downtown, period, regardless of any other criteria.  If anyone can share an article that states the contrary, I'm all ears; Google should be a good resource for this.

I also acknowledge- and have expressly stated- that companies have reasons to be in suburbs.  That's fine; to each his own.  But my point--again--is that companies locate at a particular site based on a range of factors (typically price, commute times, availability of desirable space, etc.).  They may pick the suburbs, or they may pick downtown, based on whichever best satisfies those factors.  Downtown can work to improve its desirability based on typical factors considered by companies, and if it does so, it will win more corporate locations.  I've never heard of a company ever stating, "We don't care about any factors whatsoever--we simply have to be in suburbia."  That would be a very poor decisionmaking process to pick a site that way.

It sounds like y'all are saying the same things... 

[vicupstate]

Quote

"Greenville Snooze" isn't particularly reliable with details, so what you're asking for wouldn't be particularly authoritative, anyway, even if I found something to support what I'm saying.

Actually it was the poster that misstated or misunderstood the wording. The newspaper said there was 10 floors of apartments, which is correct. However, the poster said the building was 11 stories, which is also correct.  

[PuppiesandKittens]

Why doesn't the city take some of the large swathes of land in and around downtown and zone them and maybe even set up some type of beneficial tax arrangement to promote (1) new leases downtown and (2) new construction downtown?

There's even a huge block of land forming an arc between McBee Station and Main Street, for some reason used as a semi-landscaped parking lot.  That's prime real estate-what's the owner thinking?

[vicupstate]

Why would you build additional office space when there is a substantial amount of vacancy already?  The city should be trying to fill the existing space so that demand will warrant new construction.  

[PuppiesandKittens]

6 minutes ago, vicupstate said:

Why would you build additional office space when there is a substantial amount of vacancy already?  The city should be trying to fill the existing space so that demand will warrant new construction.  

Build downtown instead of build in the suburbs.

There is also a few hundred thousand square feet of net absorption of office space per year in Greenville County, so despite the current vacancies, new space will be needed at some point.

Plus some companies look for large blocks of space having certain characteristics (such as minimum square feet per floor), and that might not be available in existing space.

[gman430]

1 hour ago, vicupstate said:

Why would you build additional office space when there is a substantial amount of vacancy already?  The city should be trying to fill the existing space so that demand will warrant new construction.  

Ask the Camperdown developers. They’re about to add 150,000 square feet of it.

[vicupstate]

6 minutes ago, gman430 said:

Ask the Camperdown developers. They’re about to add 150,000 square feet of it.

Exactly my point. That was announced before this most recent vacancy. We have significant vacancy now, and will likely to continue that for years to come as there is still more in the pipeline already.  We should not seek to incentivize more buildings, but to incentivize more tenants.   

[PuppiesandKittens]

2 hours ago, vicupstate said:

Exactly my point. That was announced before this most recent vacancy. We have significant vacancy now, and will likely to continue that for years to come as there is still more in the pipeline already.  We should not seek to incentivize more buildings, but to incentivize more tenants.   

Makes sense to me.  The "all growth is always good all the time" crowd needs to quit going "woo-hoo, we're gonna be a big city, world-class, woo-hoo" over every single office box plopped down in Mauldin, and Greenville as a whole ought to celebrate longer-term trends that bring jobs, such as increasing educational levels, Greenville's new (apparent) reputation as a start-up-focused city, etc. 

Edited July 11, 2018 by PuppiesandKittens

[gman430]

I wish some of these companies located at NEXT (95 companies) along with Endeavor (37 companies) would start to grow and take up lots of office space downtown like Chartspan has done. Or maybe Synnex and possibly Scansource will decide to move downtown someday. Probably too much to ask for though. 

Edited July 11, 2018 by gman430

[motonenterprises]

I'm just glad we aren't in decline.

[gvegascple]

Anyone heard anything about potential vacancies in the Daniel building?  There are rumblings about one of their major tenants having financial trouble.  Would add to the excess office space (and suck for employees).

[gman430]

33 minutes ago, gvegascple said:

Anyone heard anything about potential vacancies in the Daniel building?  There are rumblings about one of their major tenants having financial trouble.  Would add to the excess office space (and suck for employees).

Windstream no doubt.

[gman430]

Building permits worth $750,000 issued for 75 Beattie Place and $50,000 for 300 North Main Street. 

[motonenterprises]

4 hours ago, gman430 said:

Building permits worth $750,000 issued for 75 Beattie Place and $50,000 for 300 North Main Street. 

Hmm. I wonder what's up. I'll have to ask around.