By Eliot Brown
In Midtown Manhattan, the extra-slim condo tower at 432 Park
Ave. reached its peak 1,396-foot height on Tuesday and become the
tallest residential building in the Western Hemisphere, 146 feet
taller than the roof of the Empire State Building.
But the crowning of the 104-unit tower--which hosts a $95
million penthouse--marks more than just the latest of the
super-tall condos for the ultra-rich.
It is a sign of an inversion going on in the real-estate world:
The wealthy are clamoring to buy glassy apartments that soar high
in the skyline, while the fastest-growing companies are demanding
spacious low-slung buildings and eschewing tall towers.
For most of their history, skyscrapers in major cities like New
York were first and foremost office buildings. From the Woolworth
Building to the Sears Tower, they held top corporations wishing to
express their success and ambitions to clients and investors in the
form of sweeping views on high floors of iconic edifices.
But times are changing for the office sector.
Facebook Inc., for example, is building a 430,000-square-foot
headquarters in Silicon Valley. While an office tower of that size
could rise higher than 20 floors, Facebook's building is merely a
single floor, stretched out over one-third of a mile, the size of
seven football fields.
Built on stilts over parking, it could be likened to a giant
Home Depot, but one with a roof garden pockmarked with skylights
that allow light to stream to workers below. The theory is that
workers collaborate better when in proximity, and not separated by
stairs or elevators that inhabit interaction--a focus on the
employee, rather than impressing outsiders with grandeur.
Tech companies around the world are building or occupying
similar style buildings.
Twitter's headquarters is in a sprawling former wholesale
furniture mart on San Francisco's Market Street. Google last year
unveiled plans for a so-called ground-scraper in London, a
1-million-square-foot building that is longer than London's Shard
tower is tall. In New York, the search giant occupies one of the
largest buildings in the city that is just 18 floors high.
Meanwhile, the high-end residential market has flipped. The
toniest addresses in New York were long brick co-ops and townhouses
on the Upper East Side like the 17-story 740 Park Ave. Now, the
trend is for taller structures.
A strange phenomenon has played out in Manhattan--and to some
extent London and San Francisco and Miami--since the economic
downturn. Prices for the highest-end new condominiums have
skyrocketed, particularly for those that rise above anything else
in the sky. While $10 million was once a big number for a
residential sale, now pricey apartments within skyscrapers go for
$40 million, while the upper crust nears $100 million. Even
wire-mesh storage bins in such towers list for $200,000.
Whatever is driving this geyser of demand--be it a bubble
created by a flood of international investor speculation or a
hunger for real estate by the growing super-affluent class--it is
spurring many a developer to start building slim and tall
towers.
Write to Eliot Brown at eliot.brown@wsj.com
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