flyingember wrote:part of the reason we're shedding jobs is our old office towers.
Incorrect. There is a lot more functional downtown Class B/C space and is higher occupied than Class A. Downtown Class A has lower rent than some suburban Class B.
We all post the same message over and over again - mine is grow the residential base and everything else will follow. Downtown has an actual demand for residential space, not office space at the moment. KC's urban core (downtown to plaza) has far more office space than most other comparable city cores and not too bad vacancy overall (<15%), so is not in any dire situation right now. Class A in the Loop could improve but overall city core is pretty healthy.
flyingember wrote:part of the reason we're shedding jobs is our old office towers. there's a number of historic towers sitting completely empty right now. they're all going residential over time. companies are showing they want more modern.
everything from LEED to floor plans just aren't working for the kind of companies we want.
the occupied buildings are mostly newer ones. State Street, DST and such are in much newer buildings than the Commerce Tower
One of the biggest reasons downtown KCMO continues to suffer so much despite billions in improvements is Kansas.
So long as companies can get FREE brand new class A office buildings in affluent kansas suburbs, Downtown KC doesn't have a chance and that's why they need to keep the class B structures that can work for office (like commerce) and go after the start ups etc that don't get the big 50 million dollar deals from kansas.
P&L tower, 909 Walnut etc are fine for residential conversion, but once you start getting into the Commerce towers and City Center Squares, then you dilute the ability for downtown to develop local companies that may not take the Kansas cash and actually stick around downtown and be a true part of the community and city.
KC has already converted many relatively modern office structures to residential like Park Place and Wallstreet Tower. Hopefully new residential high rise construction will stop that trend and downtown can fill what's left of its office towers with office workers.
GRID wrote:
KC has already converted many relatively modern office structures to residential like Park Place and Wallstreet Tower. Hopefully new residential high rise construction will stop that trend and downtown can fill what's left of its office towers with office workers.
no, no it hasn't.
the majority of the top 40 buildings fit into these categories. of the ones I recognized.
24 for are offices
2+ are empty.
8 are residential and one started as residential.
so it's far more likely that the major towers are not converted but sitting empty or partially empty. the problem is what's empty is 40-70 years old.
and the residential towers tend to be the shortest in the list.
Also, Wallstreet is 1974. One Park Place is 1963 Adding in JoCo I bet those are way down the list as far as tall buildings go
GRID wrote:
So long as companies can get FREE brand new class A office buildings in affluent kansas suburbs, Downtown KC doesn't have a chance and that's why they need to keep the class B structures that can work for office (like commerce) and go after the start ups etc that don't get the big 50 million dollar deals from kansas.
Seems like that's a losing equation for downtown. Why would a company choose a 70 year old downtown office over a free new building in Lenexa? The only reasons they would are for prestige and because their employees live downtown. Adding residents to downtown is how you accomplish that isn't it?
And let's say we do get to the point where we have not enough office space downtown (which from what I understand is not an issue right now, there are plenty of empty office buildings, correct?) Isn't building new office space much more profitable for developers than building new residential? If the demand is there, the supply will come.
I'm willing to concede my assertions are wrong, but I'm just trying to think this through. We've been hearing "there's not enough housing downtown!" for years, and it doesn't exactly seem like there is a shortage of office space, so this Commerce Tower equation makes perfect sense to me.
GRID wrote:
KC has already converted many relatively modern office structures to residential like Park Place and Wallstreet Tower. Hopefully new residential high rise construction will stop that trend and downtown can fill what's left of its office towers with office workers.
no, no it hasn't.
the majority of the top 40 buildings fit into these categories. of the ones I recognized.
24 for are offices
2+ are empty.
8 are residential and one started as residential.
so it's far more likely that the major towers are not converted but sitting empty or partially empty. the problem is what's empty is 40-70 years old.
and the residential towers tend to be the shortest in the list.
Also, Wallstreet is 1974. One Park Place is 1963 Adding in JoCo I bet those are way down the list as far as tall buildings go
I'm not sure what your point is here. There are not that many highrise office (not hotel, government etc) towers in KC and most of the ones that could and should be converted to residential have already been converted (P&L tower one of only ones left).
A building built in the 70's or 80's is a modern office tower by KC standards.
I just think buildings like Commerce, City Center Square, 12 Wyandotte, 10 Main? (old AMC HQ) etc should be left office space or KC will be left with 3 large multi tennant office buildings soon.
KCMax wrote:I'm willing to concede my assertions are wrong, but I'm just trying to think this through. We've been hearing "there's not enough housing downtown!" for years, and it doesn't exactly seem like there is a shortage of office space, so this Commerce Tower equation makes perfect sense to me.
Pretty much what I've been saying too. Commerce Tower ideally would stay office space but when there is a clear demand for housing and not downtown office space, converting half to residential and upgrading the rest is a good compromise. And it gives foot traffic both night and day to the same spot. Let office buildings convert to residential. When you get enough residential base downtown, demand for office may follow and may then spur more office towers. However...
With the growth of work from home you'd think there'd be shrinking demand for office space even though many home workers still have an office desk. It's not quite happening as a major trend yet but a company I worked for recently moved over 1000 people permanently to work from home and dropped entire floors, it could become a trend. Or if some 2-3 day home workers still have an office desk, it may be smaller or shared cube, so ultimately less office space needed. Depends on type of company/dept of course.
Everybody needs a place to live, not everyone needs office space. Downtown should focus on housing as higher priority as there is clearly many who want urban living - some of them may be working from home. Some residential buildings offer a business services room for work from home'rs. Commerce Tower residents could maybe use the receiving services and meeting rooms for the office building.
Well to some extent the issue is with suitable commercial office space inside the Loop.
There are a couple of problems actually. One is that what space there is downtown is in older buildings, or buildings that don't have the floor plates desired. There is nothing actually that wrong with the former P&L Building as an office building per se--if it were renovated, other than it's not a Class A building and the floor plates on the upper floors are very small. So as an office building, it would really only be suitable for a bunch of small businesses or companies, or offices of independent consultants, attorneys, etc. One's that don't mind bare bones office buildings. You could probably fill it up over time if there were enough big companies downtown in Class A buildings, that would require services of companies that would lease Class B, C spaces.
However, you aren't going to get financing to renovate the P&L Building as a lesser class office building, because there are other lesser class buildings downtown that aren't filled up now that would be competing with it.
The second problem is with our lack of continuous blocks of space in the existing Class A buildings like One Kansas City Place, 1201 Walnut, and Town Pavilion. Companies that might consider moving downtown can't find a big enough block of space on adjoining floors in those buildings.
Say a company requires 300,000 sq. foot of space. They might not be able to find that in one Class A office building in all of downtown.
So it's sort of a chicken and egg situation. The new spec Class A buildings won't get built without large tenants signed up so the lender can see that a good majority of the space is pre-leased. That might happen if say Copaken signs two large tenants in advance of constructing a new tower.
The other possibility is a company willing to build its' own headquarters tower who can afford to build it themselves, or finance it, and build it large enough to accommodate their needs and perhaps lease half the building to others. This happens less often nowadays because a lot of companies prefer leasing, or don't want to commit to permanent office buildings in one location.
Tax lawyers might chime in on this, but I think I recall part of the reason is also that there are less tax advantages for companies to own their building than in the past.
Because Kansas City is a medium-sized city, I think there can be an argument made that it's harder to raise capital here to build a speculative Class A office building than in other, larger cities. There aren't developers here than can take a risk that large parts of the building might sit empty for awhile.
One other thing might be aesthetics. I don't think downtown has gotten to the point yet that it's considered upscale enough for some investors to take a risk putting up a spec Class A building, and attracting big tenants. This might seem silly to some, but I think it matters. If downtown were more like the Plaza in ambiance, where the streets and sidewalks were kept up well, kept very clean, and there was lots of art, fountains, and landscaping everywhere, people would see it as a Class A environment. We have pockets of quality now, but all of the Loop is not there yet, and the Crossroads certainly has a way to go.
The most likely parcel for office to get developed next is the Copaken parcel at 12th and Grand. However, until the Argyle Building is renovated, and something happens with the Board of Education Building, I still think some would be cautious about investing or locating there--even though it's next to the P&L District.
The same goes for the parcel west of the Federal Courthouse. Until the Pickwick Hotel building is addressed, I don't see anything happening there.
But right now, if you have a building that is emptied out, the demand is for housing.
FangKC wrote:
The second problem is with our lack of continuous blocks of space in the existing Class A buildings like.... Companies that might consider moving downtown can't find a big enough block of space on adjoining floors in those buildings.
Agree, and so downtown is better off pursuing many startup/smaller companies than large ones. The logistics are easier for smaller companies. And startup companies tend to hire college grads or young leaning single people - many want to live downtown. And, downtown Class A space is now going for less than some suburban Class B.
KC is becoming a solid entrepreneurial/startup metro - downtown needs to capitalize on that and not waste time on large companies that aren't interested anyway (unless giving them the bank). The Biz Journal paid edition tracks all new startups/incorporated biz licenses - it's jumped massively in the last several months compared to last few years. Every week lately a couple hundred of new biz are listed. This is just in the last week, my browser counts 268 new biz (and nearly same the week before, some weeks near 300), so about a thousand new biz every month lately...
Edit: Just checked... about 25-40 new biz licenses in downtown area zipcodes every week too last several months, so around 10-15% of metro already. Downtown office leasing agents should go after more.
Given this discussion about office space and residential I wonder about the following.
Let's pick a point in time, say 1960, and what was the amount of office square footage inside the downtown loop. And that sq ft should include occupied by owner and by government. Then add how much of new office sq ft has been constructed since then and subtract out sq ft demolished and sq ft converted to residential. I think what would remain would be the amount of current sq ft. In other words has the amount of office sq ft increased or decreased over that time? I guess also what would be interesting would be the number of office workers in 1960 and now and how those numbers compare.
Not sure about other cities but I am pretty confident that there is very little office space built in the KC metro area that is pure speculative. So in order to have any new office space built it will have to be pre-leased for the most part. So if Commerce does go residential I would not expect any new downtown office construction unless tenants are ready to move into it.
Yeah, the days of office spec building are over. That's a known. Since downtowns in the past used to be the shopping and city center for entire city, they had that high foot traffic in past in addition to office workers. That's of course not the case today and won't be as suburbia has its own shopping centers and movie theaters etc, so downtowns now depend on local residential and unique venues to fill the gap.
Downtown KC doesn't really need to be an office center as much as other downtowns need to be. KCMO as a whole needs to be concerned about income from jobs but downtown doesn't have to have the majority. Downtown just needs to be functional and balancing residential/office/play is the way to go, not drive (well at City expense) to have the most of any one category - residential is what downtown KC has demand for and is short of. Strong metros have strong downtowns and KC's needs to be stronger - with more residents than office workers.
The downside to sprawled KCMO is obvious but the upside is KCMO can offer urban/semi-urban, inner/outer-suburb, exurb and even rural product to any business/retailer. Many city cores can't do that. The result is that KCMO overall still has over half the office space and around half the jobs in the metro - not the case with many (most?) core cities of any US metro. And that's why it makes sense for KCMO to do the 1% income tax.
GRID wrote:Bad idea. Really hope downtown KC can hang on to existing office towers, especially ones like the Commerce tower which has parking and relatively large floor plates and build some new residential towers (maybe the cordish tower will spark new demand and higher rents).
Downtown KC is already shedding jobs to the suburbs at a much faster rate than most comparable cities and has almost no chance of new office tower construction. With all the other development occurring, there will eventually be demand for that class B type space which could lead to class A new construction (which downtown KC desperately needs)
I just hope that KC doesn't fix one piece of the urban fabric puzzle that was missing for a long time (residents), but in the process creates a new missing piece (lack of jobs/office space).
Like I said, hopefully the cordish tower will start a wave of "new" high-rise residential construction, which is a very different market than crossroads and river market lofts or historic conversions.
Commerce Tower has no parking. I agree though this seems like a poor use for this building.
the comment about the downtown environment makes sense.
there's plenty of notable lots open in parts of the city ripe for development. we don't like lots but there's huge opportunities that don't take months of deconstruction to build on. but who wants to be the new building next to the parking garage, the parking lot and the empty building? That needs to become one garage and two occupied buildings.
downtown also has a food problem. I'm certain companies look at employee amenities nearby as a big deal with where they locate. many of the places like Corporate Woods also is near restaurants. One thing that striked me about Chicago is just how many convenience stores there are. Turn a corner, walk two blocks and there's another. In KC right now there's a single CSV and you're basically done.
If you were to build today at 8th and Wyandotte, there's very little nearby for food. And what there is is not fast food for the front-line worker. I stopped going to the nearby options because what we do have is hindered by long lines. The 30 minute lunch break shouldn't involve a 20 minute line.
And these residential conversions are causing noticeable improvements in this area, but we still have a ways to go.
Another interesting thing is cars will remain important for some time even with transit involved. There's three gas stations inside downtown. Can you imagine adding 10,000 residents and 20,000 office workers and not adding places to fuel one's car? There's also something like 2-3 car repair places? Similar issue.
Fast foot places have a 15-20 min line anywhere at lunch, even in the burbs. There are plenty of food options downtown for lunch, that's not really the issue IMO. You certainly have way more options downtown than say at the Cerner northlands office.
Downtown KC has the CVS, the In N Out in the Commerce Tower and the Cosentino's. That's not a ton, but its more than you're suggesting.
I agree though, the more residential you bring in, the more demand there will be for these amenities. Its always been a chicken and egg thing, but we're at a point where you can at least have some amenities downtown, its just a matter of bringing in more to fulfill the needs of more downtown residents.
KCMax wrote:Fast foot places have a 15-20 min line anywhere at lunch, even in the burbs. There are plenty of food options downtown for lunch, that's not really the issue IMO. You certainly have way more options downtown than say at the Cerner northlands office.
Downtown KC has the CVS, the In N Out in the Commerce Tower and the Cosentino's. That's not a ton, but its more than you're suggesting.
I agree though, the more residential you bring in, the more demand there will be for these amenities. Its always been a chicken and egg thing, but we're at a point where you can at least have some amenities downtown, its just a matter of bringing in more to fulfill the needs of more downtown residents.
you backed up my argument
you mentioned three convenience stores just on a 4 block section of Main. What about Broadway? The City Market? The Crossroads? Government District? There's a grouping of occupied towers near city hall and it's basically a dead spot for amenities
once you have to walk 8 blocks to get lunch a 20 minute line just isn't doable.
KCMax wrote:Fast foot places have a 15-20 min line anywhere at lunch, even in the burbs. There are plenty of food options downtown for lunch, that's not really the issue IMO. You certainly have way more options downtown than say at the Cerner northlands office.
Downtown KC has the CVS, the In N Out in the Commerce Tower and the Cosentino's. That's not a ton, but its more than you're suggesting.
I agree though, the more residential you bring in, the more demand there will be for these amenities. Its always been a chicken and egg thing, but we're at a point where you can at least have some amenities downtown, its just a matter of bringing in more to fulfill the needs of more downtown residents.
you backed up my argument
you mentioned three convenience stores just on a 4 block section of Main. What about Broadway? The City Market? The Crossroads? Government District? There's a grouping of occupied towers near city hall and it's basically a dead spot for amenities
once you have to walk 8 blocks to get lunch a 20 minute line just isn't doable.
KCMax wrote:Fast foot places have a 15-20 min line anywhere at lunch, even in the burbs. There are plenty of food options downtown for lunch, that's not really the issue IMO. You certainly have way more options downtown than say at the Cerner northlands office.
Downtown KC has the CVS, the In N Out in the Commerce Tower and the Cosentino's. That's not a ton, but its more than you're suggesting.
I agree though, the more residential you bring in, the more demand there will be for these amenities. Its always been a chicken and egg thing, but we're at a point where you can at least have some amenities downtown, its just a matter of bringing in more to fulfill the needs of more downtown residents.
you backed up my argument
you mentioned three convenience stores just on a 4 block section of Main. What about Broadway? The City Market? The Crossroads? Government District? There's a grouping of occupied towers near city hall and it's basically a dead spot for amenities
once you have to walk 8 blocks to get lunch a 20 minute line just isn't doable.
Eight blocks?? Exaggerate much?
had you looked at a map you'd realize that wasn't exaggeration
most of the Paseo Industrial District has a long distance to restaurants of any kind
the area north of the east village is a dead spot
the section of the river market west of 169
the west bottoms are in downtown (downtown ends at the state line) and are a notorious dead spot
the northern parts of hospital hill aside from the on campus food
Kansas City Sustainable Partners LLC has requested a 10-year, 100 percent abatement of property taxes on the value to be added to the half-vacant building. The request is scheduled to be considered Sept. 25 by the Land Clearance Redevelopment Authority.
it's worth noting that there will be a streetcar stop literally at the front door of this address, and:
Spurred by strong demand for downtown housing and plans for the new streetcar route adjacent to the building, the redevelopers decided to buy the building out of receivership last month and convert 17 to 19 of its top floors into apartments.
and...
Berkebile said the apartments will offer office employees in the building an opportunity for a live-work experience and that the streetcar would offer convenient transportation Downtown and eventually, as routes are added, beyond.
"That north part of the downtown core has been lagging behind," Berkebile said. "But it's a great location, and the streetcar and need for more housing make this the perfect time for this project."
DaveKCMO wrote:it's worth noting that there will be a streetcar stop literally at the front door of this address, and:
Spurred by strong demand for downtown housing and plans for the new streetcar route adjacent to the building, the redevelopers decided to buy the building out of receivership last month and convert 17 to 19 of its top floors into apartments.
and...
Berkebile said the apartments will offer office employees in the building an opportunity for a live-work experience and that the streetcar would offer convenient transportation Downtown and eventually, as routes are added, beyond.
"That north part of the downtown core has been lagging behind," Berkebile said. "But it's a great location, and the streetcar and need for more housing make this the perfect time for this project."
I hope you at least get a Christmas card from all these developers.
