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Image courtesy of Pelli Clarke Pelli
The Turkey Awards made their debut a decade or so ago, though how many years I can’t truly say, though it’s certainly been several.
But the founding concept remains the same: The “winners,” truly an elite group of sorts, are refined, using the most rigorous of scientific methods, from the dross of the biggest losers in town.
And while 2020 has been downright disastrous in so many ways, it has truly excelled at delivering a bumper crop of big, fat juicy gobblers to skewer, from doomed projects to idiotic proposals.
The pandemic has not only turned the world upside down, it also exposed a whole lot of foolishness as well in the real estate market and beyond.
Incredibly, a whole bunch of office tower developers are about to figure out that’s it’s no longer 1985 and that remote work is a real thing – something they should have seen coming years ago.
But you can’t completely blame them, for developers have been abetted in their delusions by corporate America, which has given far too much credence to the remote work skeptics, who, while less prominent than they once were, are still out there, grumbling in their empty offices.
COVID-19 has also exposing the shallowness of the idea that everyone wants to live downtown, and will pay any price for some cramped, cookie-cutter box in a high-rise.
Suddenly, all those sparkling luxury apartment towers don’t look so smart now, especially as they scramble to entice renters with free rent and other perks.
Still, dumber right now than another luxury apartment tower is a new downtown hotel, yet that’s exactly what one developer is proposing, nor is it a small one at that.
Go figure.
Without further ado, here are the winners of the 2020 Turkey Awards.
Developers of New Office Towers
Yes, I know that is a pretty broad category, but how does even building a single new office tower in downtown Boston make sense right now?
More than 4 million square feet of new office space is slated to come online before the end of the year, with millions scheduled for arrival over the next few years with the construction of two major new office towers, Winthrop Center in the Financial District and the skyscraper Texas developer Hines is building over South Station?
Both towers will have to fetch sky-high rents in order to turn any sort of profit, but who’s going to ante up here?
While the pandemic may finally be brought to heel by next fall, a sizeable proportion of the workforce, as much as 25 percent, is likely to remain at home for a good chunk if not all the work week even after the emergency passes. The technology has been with us for years and the numbers have been growing fast as well – it’s not like we couldn’t have seen this coming.
The developers of ultra-high-end residential buildings in Boston were left holding the bag this summer as many rich residents sold out in favor of vacation destinations like Cape Cod.
Luxury Multifamily Developers
OK, you’ve had your glory and your day. For years, it was: “Built it and they will come.” Cities were king and the suburbs a vestige of a boring, by-gone America.
None of that, as it turns out, was true.
Taking advantage of rock-bottom interest rates and looking for homes with a yard and a bit of space to raise children in, Millennials are fleeing to the suburbs and snapping up homes. Some are even moving even further out, freed by the ability to remote remotely to truly go remote, setting up camp the exurbs leaving for new regions and states across the country.
And as they bail on the exorbitantly expensive downtown market, these homebuyers are leaving behind a bevy of cookie cutter residential towers and buildings that are truly hard to distinguish from each other.
After a while, a box, is a box, is a box, and, if it comes with any sort of view, only a precious few can even think of buying it.
What propels such lemming-like behavior on part of developers? Now that’s a subject for someone at MIT or UMass Amherst to study.
Marissa Mayer & Co.
Remember Marissa Mayer?
The one-time Yahoo CEO grabbed her 15 minutes of fame – or more accurately, infamy – when it 2013 she ordered all of the once-proud tech company’s employees back into the office on her way to driving the company into the ground.
For a tech company, she was oddly suspicious of modern communication systems, believing, apparently, that the only way to preserve “speed and quality” was to have everyone working “side-by-side.”
“We need to be one Yahoo!, and that starts with physically being together,” Mayer wrote in a memo to employees at the time.
Today Mayer is out there pitching some irrelevant app related to adding contacts to your phone – definitely need help with that arduous process – and her views on work-from-home definitely did not age well.
Still, I suspect there are more like her out there in corporate suites who, despite reams of evidence about rising productivity on part of remote workers freed from insane commutes, just can’t let go of the idea that workers, like wayward children, need constant supervision. (Here’s a hint, if they do, you’ve hired the wrong people.)
Unfortunately, here’s an ominous sign. A recent Harvard Business Review piece found “a large number of managers are struggling with the effective management of people working from home, with this translating into many workers feeling untrusted and micromanaged by their bosses.”
Many executives and mid-level managers long rejected the idea of letting employees out of their sight. Now, the experience of the COVID-19 pandemic could mean working from home becomes the norm.
Deutsche Bank
All the diehard corporate office defenders out there, you can forget about stampeding companies and their workers back to their desks with a tax on remote work.
A turkey of an idea if there ever was one was cooked up as if by special order, for this year’s Turkey Awards by the geniuses over at Deutsche Bank, Donald Trump’s favorite financial institution.
The lender’s “Konzept” research report recently floated the idea of a 5 percent tax on remote workers, starting first on the corporate level, for the “privilege” of working from home.
However, to dodge the penalty, all a company has to do is claim it has a desk available at its office, leaving you know stuck with the bill. But no worries, for the 5 percent tax amounts to “just over $10 per working day” based on average $55,000 salary for those whose primary office is at home, not in a downtown tower or suburban building.
“That is roughly the amount an office worker might spend on commuting, lunch, and laundry etc.,” Deutsche Bank’s “thematic strategist” wrote. “A tax at this rate, then, will leave them no worse off than if they had chosen to go into the office.”
Great advice from someone who likely makes ten times that amount in a gilded executive suite.
SKW Partners
I understand that SKW says it spent six years drawing up plans for a new, 22-story hotel on Boston’s waterfront, on the James Hook Hook & Co. Lobster site as well.
That sure sounds like a lot of planning.
But with a little over a third of all hotels in Boston industry actually occupied each night, is this the best time to move forward with a 300-foot hotel tower?
Well yes, the developers do think the timing is perfect to start permitting their proposed, 400-room tower, and have notified the Boston Planning & Development Agency of their intent to file plans for the new structure. But methinks businesses aren’t going to be rushing to blow money on travel like they did before the pandemic, even after the virus has been contained, especially with Zoom having made virtual meetings seem normal.
Scott Van Voorhis
Short of building a new mall, I wasn’t sure whether anyone could come up with a dumber idea than building new office tower or luxury condo high-rise. But with their new hotel tower plan, SKW has done just that.
After all, everyone still needs a place to live, and some percentage of the workforce will be spending at least two or three days a week in the office. But, sorry, you don’t need to travel.
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
