Canvas (BB&T building/lot redevelopment)

[PuppiesandKittens]

7 hours ago, vicupstate said:

Why would you demo a perfectly useable building?  The cost to replace the concrete and steel in that building alone is millions. They got the building and the VERY significant acreage  for a mere $5 million.  They probably got at least half that back when they sold the TH acreage to Toll Brothers.  Plus they built the apartment building on what they kept.  With only the existing garage in place the building has insufficient parking, which explains why is has stayed vacant.  Once that ugly garage is gone and replaced with a much bigger one it will be a legitimate option for someone that would need that kind of space.  Plus the new residential tower with retail will make the building look much better and provide on-site amenities.  For the moment though, the fact that it will be a construction site is NOT conducive to filling it.

I wish they would have filled the retail space in the apartment building first before they sold off the TH acreage. I think with more dedication surface parking the retail would be filled now, perhaps with a specialty grocer.   

I think that you answer your own question: based on the facts in your post, the building is worthless, worth less than the concrete and steel in it, and worth significantly less than the concrete + the steel + the land on which it sits.

Thus the question is, "since the land on which the building sits is perhaps worth more than the land with the building on it, why in the world has the building not been demolished and the land used for new construction that would add value, not subtract value as the building does?"

What matters are future profits, and the future profits from that building are probably $0.

If tearing down nice new Greenville Mall was economically the right decision, tearing down the BB&T building certainly is.

 

Edited September 3, 2023 by PuppiesandKittens

[GvilleSC]

You look at things through a rather unique perspective. 

[vicupstate]

19 hours ago, GVLer said:

Because painting a beautiful mural on an ugly building is putting lipstick on a pig. The Townhouses sold but that high rise and the retail has zero occupancy. The proposed building looks nice, but amplifies how the canvas building does not. 

I already explained why both the office space and retail are vacant and it has nothing to do with the appearance of the building itself.  The only thing that building would potentially need  once the new building is in place, is replacement of the black aluminum. To tear down an entire building for a solitary  cosmetic that can be easily rectified would be lunacy.  The existing retail will fill too once the new construction is in place, albeit not the  high draw tenants it could have had.     

[PuppiesandKittens]

4 hours ago, vicupstate said:

I already explained why both the office space and retail are vacant and it has nothing to do with the appearance of the building itself.  The only thing that building would potentially need  once the new building is in place, is replacement of the black aluminum. To tear down an entire building for a solitary  cosmetic that can be easily rectified would be lunacy.  The existing retail will fill too once the new construction is in place, albeit not the  high draw tenants it could have had.     

What matters is future leasing activity and future profits.  

The Class A vacancy rate downtown is really low (5% or less, I think).

The Class B and C vacancy rate is significantly higher (above 10%, I think).

Without major changes, the BB&T building is competing with other Class B and C buildings.  That's a tough position to be in: lots of competition, lots of vacancy and low rents.

To maximize future profits from the building, it needs to be demolished or totally gut-renovated and transformed into Class A space.  Cosmetic updates don't suffice.

And if the building is to be for other uses, it would need major renovations as well.

County Square could easily be transformed back into a mall, or kept as office space with just cosmetic updates, but doing so wouldn't maximize future profits for it, either.

Edited September 4, 2023 by PuppiesandKittens

[vicupstate]

1 hour ago, PuppiesandKittens said:

What matters is future leasing activity and future profits.  

The Class A vacancy rate downtown is really low (5% or less, I think).

The Class B and C vacancy rate is significantly higher (above 10%, I think).

Without major changes, the BB&T building is competing with other Class B and C buildings.  That's a tough position to be in: lots of competition, lots of vacancy and low rents.

To maximize future profits from the building, it needs to be demolished or totally gut-renovated and transformed into Class A space.  Cosmetic updates don't suffice.

And if the building is to be for other uses, it would need major renovations as well.

County Square could easily be transformed back into a mall, or kept as office space with just cosmetic updates, but doing so wouldn't maximize future profits for it, either.

Even a total gut (which is probably what the owner expects to do anyway), is not a demolition.  Not by a long shot.  Nothing needs to be done to the exterior except possibly updating the aluminum.  It could easily become Class A space with an interior renovation. Regardless, without the required parking, nothing is viable. So obviously you complete the new construction and see what the market looks like at that time.   

[NewlyUpstate]

I thought they already were moving forward with renovation and upclassing this office space.  They've also fenced it off, so nothing will be leased during construction of the larger tower.

Here's a video that they released a few years ago: https://www.youtube.com/watch?v=HJb6z2DN-mY

[PuppiesandKittens]

1 hour ago, vicupstate said:

Even a total gut (which is probably what the owner expects to do anyway), is not a demolition.  Not by a long shot.  Nothing needs to be done to the exterior except possibly updating the aluminum.  It could easily become Class A space with an interior renovation. Regardless, without the required parking, nothing is viable. So obviously you complete the new construction and see what the market looks like at that time.   

The exterior is ugly.  It’s a 45+ year old, dated building.  A first-rate tenant (prominent law firm, bank, etc.) won’t want to have that as its office.  It’s pretty common to take older office buildings, just leave the frame and totally redo the interior and exterior, or at least to redo the exterior to make it modern.

Also, the building has an odd floor layout.  A tenant may want a larger floor space with a different layout.

Either way, a developer will want to maximize future profits and this building would need to be changed significantly to do that.

[Exile]

1 hour ago, PuppiesandKittens said:

The exterior is ugly.  It’s a 45+ year old, dated building.  A first-rate tenant (prominent law firm, bank, etc.) won’t want to have that as its office.  It’s pretty common to take older office buildings, just leave the frame and totally redo the interior and exterior, or at least to redo the exterior to make it modern.

Also, the building has an odd floor layout.  A tenant may want a larger floor space with a different layout.

Either way, a developer will want to maximize future profits and this building would need to be changed significantly to do that.

It was gimmicky from the beginning, because all (as far as I know) First Federal branches were built in the same shape. As if there were no other way to know you were at a 1st Federal branch. I worked in that building for a time, and it was a bit toward the claustrophobic, especially compared to American Federal-now-Prisma, which was (still is?) open and spacious.

Idle speculation, but I wonder if they did go for a gutting, if you could cost-effectively build the "missing" superstructure to make it rectangular? Truist across from Haywood Mall is one of those buildings, whose shape has been corrected (note the mismatched brick). But that's just one floor, of course.

[gman430]

Tear it down or at least make the structure all glass. Looks worse than the former Greenville News building ever did. I also don’t understand why the Beach Company didn’t do apartments in the building instead. That was the original plan. Makes no sense. 

Edited September 4, 2023 by gman430

[vicupstate]

19 hours ago, PuppiesandKittens said:

The exterior is ugly.  It’s a 45+ year old, dated building.  A first-rate tenant (prominent law firm, bank, etc.) won’t want to have that as its office.  It’s pretty common to take older office buildings, just leave the frame and totally redo the interior and exterior, or at least to redo the exterior to make it modern.

Also, the building has an odd floor layout.  A tenant may want a larger floor space with a different layout.

Either way, a developer will want to maximize future profits and this building would need to be changed significantly to do that.

 The lack of imagination on here is crazy.  This is worse than the NIMBY attitude in this town. 

First of all there are only three things that make the building look dated. 1) the  garage, which is going away regardless, so no problem there 2) the tiered layout on the Academy street side, which the new building will completely mask  3) the aluminum and glass siding which can be replaced and for a fraction of the cost of even the building demo.  The building could be enhanced with caps,  cornices and other elements that also wouldn't cost that much.  The brick could even be painted a different color.  If you have lived here long enough (or can find the thread on UP) you could easily compare this to what is now the Brio condominium building.  Consider what it looked like in 1995 compared to today.   

Considering most office floors layout are just cubicles, I have a hard time believing the floor plate is a problem, as the floor plate SIZE is typically the most important factor and is not atypically small in this case. 

The former Bank of America building (now Canal) is proof that even a plain looking 50 year old building can attract great tenants if the interior is updated and the surroundings are upgraded and desirable.  With the new construction and the city's plans for that corridor, the same could happen here, but no one is going to sign a lease  until those things are in place.    

Given what construction prices are today, it would be business malpractice to demolish perfect good concrete and steel when the same product could result for a fraction of the cost.  Spend $10mm and have a Class A building that rents for $30-35 a foot or spend $100 mm to have a building that rents for $40 a foot.  The $10 mm solution can be ready to lease in less than a year and the $100mm will take 3 years or more. Do the math, and see that it makes no sense.

Unless it is a build to suit, you are never going to know the desired floor plate size of the eventual tenant, so that is just throwing a dart and hoping it lands on a bullseye.  

There is NO evidence whatsoever that the land is worth more than the building. Comparing a suburban retail mall that never should have been rebuilt in the first place, to a DT office building is apples to doughnuts frankly. 

[PuppiesandKittens]

30 minutes ago, vicupstate said:

 The lack of imagination on here is crazy.  This is worse than the NIMBY attitude in this town. 

First of all there are only three things that make the building look dated. 1) the  garage, which is going away regardless, so no problem there 2) the tiered layout on the Academy street side, which the new building will completely mask  3) the aluminum and glass siding which can be replaced and for a fraction of the cost of even the building demo.  The building could be enhanced with caps,  cornices and other elements that also wouldn't cost that much.  The brick could even be painted a different color.  If you have lived here long enough (or can find the thread on UP) you could easily compare this to what is now the Brio condominium building.  Consider what it looked like in 1995 compared to today.   

Considering most office floors layout are just cubicles, I have a hard time believing the floor plate is a problem, as the floor plate SIZE is typically the most important factor and is not atypically small in this case. 

The former Bank of America building (now Canal) is proof that even a plain looking 50 year old building can attract great tenants if the interior is updated and the surroundings are upgraded and desirable.  With the new construction and the city's plans for that corridor, the same could happen here, but no one is going to sign a lease  until those things are in place.    

Given what construction prices are today, it would be business malpractice to demolish perfect good concrete and steel when the same product could result for a fraction of the cost.  Spend $10mm and have a Class A building that rents for $30-35 a foot or spend $100 mm to have a building that rents for $40 a foot.  The $10 mm solution can be ready to lease in less than a year and the $100mm will take 3 years or more. Do the math, and see that it makes no sense.

Unless it is a build to suit, you are never going to know the desired floor plate size of the eventual tenant, so that is just throwing a dart and hoping it lands on a bullseye.  

There is NO evidence whatsoever that the land is worth more than the building. Comparing a suburban retail mall that never should have been rebuilt in the first place, to a DT office building is apples to doughnuts frankly. 

I’ve worked for years in the field of commercial real estate finance, including large loans on office buildings.

There is no such thing as “business malpractice”.  If it’s more profitable to totally redo or demolish a building than to use it with cosmetic updates, a developer with access to capital will do the former.  If simply doing cosmetic updates on an old building was how developers operated, then the Greenville Summit would be a hotel again, the old Greenville News building would have been left and County Square would be a mall again.

Clearly we’re going to disagree.  Let’s just let the developers do what they want and see how it turns out.

Edited September 5, 2023 by PuppiesandKittens

[distortedlogic]

2 hours ago, vicupstate said:

 The lack of imagination on here is crazy.  This is worse than the NIMBY attitude in this town. 

First of all there are only three things that make the building look dated. 1) the  garage, which is going away regardless, so no problem there 2) the tiered layout on the Academy street side, which the new building will completely mask  3) the aluminum and glass siding which can be replaced and for a fraction of the cost of even the building demo.  The building could be enhanced with caps,  cornices and other elements that also wouldn't cost that much.  The brick could even be painted a different color.  If you have lived here long enough (or can find the thread on UP) you could easily compare this to what is now the Brio condominium building.  Consider what it looked like in 1995 compared to today.   

Considering most office floors layout are just cubicles, I have a hard time believing the floor plate is a problem, as the floor plate SIZE is typically the most important factor and is not atypically small in this case. 

The former Bank of America building (now Canal) is proof that even a plain looking 50 year old building can attract great tenants if the interior is updated and the surroundings are upgraded and desirable.  With the new construction and the city's plans for that corridor, the same could happen here, but no one is going to sign a lease  until those things are in place.    

Given what construction prices are today, it would be business malpractice to demolish perfect good concrete and steel when the same product could result for a fraction of the cost.  Spend $10mm and have a Class A building that rents for $30-35 a foot or spend $100 mm to have a building that rents for $40 a foot.  The $10 mm solution can be ready to lease in less than a year and the $100mm will take 3 years or more. Do the math, and see that it makes no sense.

Unless it is a build to suit, you are never going to know the desired floor plate size of the eventual tenant, so that is just throwing a dart and hoping it lands on a bullseye.  

There is NO evidence whatsoever that the land is worth more than the building. Comparing a suburban retail mall that never should have been rebuilt in the first place, to a DT office building is apples to doughnuts frankly. 

Great post. There are lots of ways this building could be spruced up yet still keep it's character. The exterior may not be the prettiest but I think it looks way better than a number of other buildings DT and many that are "new and modern."  I always liked that this building isn't just a rectangle or a box; one of the very few that applies to. If this building were to be torn down we would likely just have another modern 6-10 story box with no character; ie 98 E Mcbee. 

[vicupstate]

2 hours ago, PuppiesandKittens said:

I’ve worked for years in the field of commercial real estate finance, including large loans on office buildings.

There is no such thing as “business malpractice”.  If it’s more profitable to totally redo or demolish a building than to use it with cosmetic updates, a developer with access to capital will do the former.  If simply doing cosmetic updates on an old building was how developers operated, then the Greenville Summit would be a hotel again, the old Greenville News building would have been left and County Square would be a mall again.

Clearly we’re going to disagree.  Let’s just let the developers do what they want and see how it turns out.

Business malpractice is making a decision that wastes millions of dollars needlessly. It's what leads to bankruptcy of a previously profitable company.  Obviously it IS more profitable to do cosmetic updates to THIS building because that is exactly what The Beach Company is pursuing. They have a long and successful track record here and elsewhere. 

None of your examples are comparable either. The Greenville News was a single purpose (and not very convertible to other purposes)  low density building that consumed an entire block of what had become very valuable land SINCE its original construction.  Same thing with County Square.  A sprawling single purpose, largely single  story complex on 38 valuable acres doesn't make sense.  The Greenville Summit is in government hands, so it is not subject to market pressures to give it a higher use.  

The Canvas building is essentially the same number of stories as a new office building would be built in this market given its location.  To destroy a perfectly good building for simple cosmetics that can be easily remedied just doesn't make sense in this instance.  There is already an entire city block for sale across the street from this building.  If there was a case to be made for a major 10-20 story office building, you would just build it there.   

[PuppiesandKittens]

34 minutes ago, vicupstate said:

Business malpractice is making a decision that wastes millions of dollars needlessly. It's what leads to bankruptcy of a previously profitable company.  Obviously it IS more profitable to do cosmetic updates to THIS building because that is exactly what The Beach Company is pursuing. They have a long and successful track record here and elsewhere. 

None of your examples are comparable either. The Greenville News was a single purpose (and not very convertible to other purposes)  low density building that consumed an entire block of what had become very valuable land SINCE its original construction.  Same thing with County Square.  A sprawling single purpose, largely single  story complex on 38 valuable acres doesn't make sense.  The Greenville Summit is in government hands, so it is not subject to market pressures to give it a higher use.  

The Canvas building is essentially the same number of stories as a new office building would be built in this market given its location.  To destroy a perfectly good building for simple cosmetics that can be easily remedied just doesn't make sense in this instance.  There is already an entire city block for sale across the street from this building.  If there was a case to be made for a major 10-20 story office building, you would just build it there.   

Since you want to argue, let’s do that.   But please make accurate and more thoughtful statements.

Again, there is no such thing as business malpractice.  Businesses make stupid decisions all the time.  Directors and officers have various duties, but that’s separate.

The Greenville News building was around the same age as the BB&T building and is similar: an ugly, aging building that needed a total re-do to maximize profits.

The Greenville Summit is owned by a private developer that is doing significant work, beyond cosmetic changes, to increase its value, and is planning major upgrades once its current tax-favorable situation changes.

Again, I’ve spent years in the field of commercial real estate finance.  Letting the BB&T building languish with just cosmetic changes is not the way to maximize profits. As per the facts that you’ve listed, the building is worthless, and a total re-do is the best use of the site.

I hope that you are consistent with your statements and still drive a 1974 car, have a 1974 home with original 1974 furniture and appliances, etc. and even wear 1974 clothes, since you are so convinced that cosmetic updates to aged items (instead of total re-dos) is the only use.

[GvilleSC]

16 minutes ago, PuppiesandKittens said:

Since you want to argue, let’s do that.   But please make accurate and more thoughtful statements.

Again, there is no such thing as business malpractice.  Businesses make stupid decisions all the time.  Directors and officers have various duties, but that’s separate.

The Greenville News building was around the same age as the BB&T building and is similar: an ugly, aging building that needed a total re-do to maximize profits.

The Greenville Summit is owned by a private developer that is doing significant work, beyond cosmetic changes, to increase its value, and is planning major upgrades once its current tax-favorable situation changes.

Again, I’ve spent years in the field of commercial real estate finance.  Letting the BB&T building languish with just cosmetic changes is not the way to maximize profits. As per the facts that you’ve listed, the building is worthless, and a total re-do is the best use of the site.

I hope that you are consistent with your statements and still drive a 1974 car, have a 1974 home with original 1974 furniture and appliances, etc. and even wear 1974 clothes, since you are so convinced that cosmetic updates to aged items (instead of total re-dos) is the only use.

What an aesthetic queen. I can only imagine how much plastic surgery you've had.  

[PuppiesandKittens]

27 minutes ago, GvilleSC said:

What an aesthetic queen. I can only imagine how much plastic surgery you've had.  

You’re welcome to disagree with my views on aesthetics (some people like 1970s architecture).  But my point is simply that a building that looks like that won’t command top-dollar rents, in part due to its appearance.

[GvilleSC]

And what you’re ignoring is that we need a diverse array of pricing for office space. The Beach Company knows this and sees market potential for the building. Not everyone can afford to put their business in top dollar space, and to do so would indeed be malpractice and mismanagement. 

[westsider28]

I'll add to @vicupstate's point that the propensity to tear down and rebuild constantly is extremely wasteful when it comes to environmental and climate impacts.  Unfortunately, that cost is borne externally, so it doesn't really factor into developer economics (but perhaps it should).  @PuppiesandKittensexample of keeping old clothes kind of goes along with my point, in that current "fast fashion" trends are similarly detrimental to the environment.  See also the "right to repair" movement.  Thinking of everything as disposable rather than fixable and reusable is a big societal problem with significant negative impacts on our environment/climate.

Edit: Also, aesthetics are almost entirely subjective, and tend to be cyclical. We're coming back around to modernist styles being "in".  And how many Victorian and Beaux Arts buildings were demolished because people at the time thought they were "ugly"?

Edited September 5, 2023 by westsider28

[GVLer]

I don't think anyone is being a "queen". The building is simply ugly and devoid of ANY architectural appeal. Being clad in the ugliest possible brick (aka baby poop brown) does not help either. Only an architect and contractor could define whether meaningful exterior retrofit could be achieved for a feasible sum. And someone else made the point that the older existing high-rise buildings share a common trait in ugly architecture. While true, that does not mean we should not aspire to beautiful  architecture; hence the proposal to revamp the current City Hall exterior. 

[PuppiesandKittens]

38 minutes ago, GvilleSC said:

And what you’re ignoring is that we need a diverse array of pricing for office space. The Beach Company knows this and sees market potential for the building. Not everyone can afford to put their business in top dollar space, and to do so would indeed be malpractice and mismanagement. 

You are right.  We definitely need a range of office space.  There is already a glut of B and C class space, including downtown, though.  Greenville has plenty of dinky, outdated buildings.  That’s my point: a first-rate developer often would want to avoid that crowded marketplace.

westsider28, your points about waste are also valid.

Edited September 5, 2023 by PuppiesandKittens

[vicupstate]

3 hours ago, PuppiesandKittens said:

You’re welcome to disagree with my views on aesthetics (some people like 1970s architecture).  But my point is simply that a building that looks like that won’t command top-dollar rents, in part due to its appearance.

Yeah, that's why NO ONE said to keep its current appearance!  Given your background, you know that building is not going to lease up WITHOUT PARKING!  What did I say that indicates the building is worthless?  Nothing, I said just the opposite.  Demotion is throwing the baby out with  the bath water. It makes no economic sense.  

If the word 'malpractice' offends you then mismanagement will do. You know what I meant. 

[vicupstate]

2 hours ago, GVLer said:

I don't think anyone is being a "queen". The building is simply ugly and devoid of ANY architectural appeal. Being clad in the ugliest possible brick (aka baby poop brown) does not help either. Only an architect and contractor could define whether meaningful exterior retrofit could be achieved for a feasible sum. And someone else made the point that the older existing high-rise buildings share a common trait in ugly architecture. While true, that does not mean we should not aspire to beautiful  architecture; hence the proposal to revamp the current City Hall exterior. 

You are making my point for me. City Hall isn't being TORN DOWN!!

If you want another very comparable example, consider the old BB&T building in Asheville!  They didn't tear it down either. It looks completely different now though. 

Arras Building

BTW, how much can a coat of paint cost?  Not even a faction of what the landfill cost would be on a demotion. 

[PuppiesandKittens]

29 minutes ago, vicupstate said:

Yeah, that's why NO ONE said to keep its current appearance!  Given your background, you know that building is not going to lease up WITHOUT PARKING!  What did I say that indicates the building is worthless?  Nothing, I said just the opposite.  Demotion is throwing the baby out with  the bath water. It makes no economic sense.  

If the word 'malpractice' offends you then mismanagement will do. You know what I meant. 

Calm…calm…calm.   Take a deep breath.

Incorrect references to “business malpractice” don’t offend me.  There is simply no such thing as business malpractice.

You’ve said that the concrete and steel are worth millions, and the price paid for the site, after receipt of proceeds from selling part of it, is only about $2.5 million.  Thus the building is worthless, as the land alone may be worth that.

Edited September 5, 2023 by PuppiesandKittens

[gman430]

3 hours ago, westsider28 said:

I'll add to @vicupstate's point that the propensity to tear down and rebuild constantly is extremely wasteful when it comes to environmental and climate impacts.  Unfortunately, that cost is borne externally, so it doesn't really factor into developer economics (but perhaps it should).  @PuppiesandKittensexample of keeping old clothes kind of goes along with my point, in that current "fast fashion" trends are similarly detrimental to the environment.  See also the "right to repair" movement.  Thinking of everything as disposable rather than fixable and reusable is a big societal problem with significant negative impacts on our environment/climate.

I disagree. All of the demolished material from the current building would be recycled and a new building would no doubt be LEED certified. Much more environmentally friendly especially in terms of energy usage than what is currently on site. 

Edited September 5, 2023 by gman430

[vicupstate]

18 hours ago, gman430 said:

I disagree. All of the demolished material from the current building would be recycled and a new building would no doubt be LEED certified. Much more environmentally friendly especially in terms of energy usage than what is currently on site. 

Nonsense. The greenest building is the one that is already built.  The renovation of the building would also raise its energy efficiency.