Quote:
Originally Posted by Eventually...Chicago
Hines would not have introduced this project if leasing levels were not good at 300 North Lasalle. They wouldn't want two of their towers competing against each other.
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Possibly true, but it depends on how much equity Hines has in each project. If it's not a material amount, think of the two buildings as movies with Hines as the director. It wouldn't be end of the world to a director if two of his movies were released at the same time. There could be a small degree of cannibalizing the same market (and being associated with a lesser performing project), but really that's for the investors to worry about. Sometimes a developer has their own money in a project, and sometimes investors just believe in a certain developer and think they can pull off a great project. I'm not sure what the situation is/will be for these buildings. Even if there was a competing building nearby, a developer certainly wouldn't talk the investor out of an idea to build. Basically, you make a good point, but your logic makes some assumptions that you should be aware of. Just because this is being proposed it doesn't necessarily follow that leasing is great at 300.
Also, the buildings would attract from different tenant pools so the market overlap is less than you'd think. 300 looking for smaller A tenants looking for views, and 200 is looking for a corporate HQ, a North American HQ of a foreign company, or the latest large long-term tenant to decide they need to modernize to compete. Plus, the cycles are worlds apart. Delivery in 2011 vs. 2008. Obama's economic reforms should have us cranking along in high gear by then. ; )