[BTinSF]

Originally Posted by nequidnimis

You forget the three rules of real estate: Location, location, and location. Nowhere does it say design. Therefore, to maximizie his profit, the smart developer needs to find the best location he can, and build the least expensive building he can. That the existing neighbors will face an eyesore after he's done is a problem for them, but not for him.

That is absolutly not true. There are buildings all over Chicago and New York that prove it as do, I think, both ORH and The Infinity here in SF. Personally, I'm not thrilled with the locations of those buildings, especially ORH. Built at the top of a hill, it virtually eliminates walking as an option for the disabled and out-of-shape seniors--I've huffed/puffed up that hill to check the site too many times not to know it would make me drive almost anywhere if I lived there--plus it's fairly isolated and there's little in the area to walk to. But people are willing to pay premium prices to live there because it's a dramatic building with great views.

Here's more proof:

Friday, May 30, 2008
S.F. tenants hunting for treasured LEED space
San Francisco Business Times - by J.K. Dineen

Tenants like killer views. They want to be near BART. They appreciate value. And, increasingly, they are looking for a green workspace.

While market reports regularly track view space and pricing, NAI BT Commercial's David Klein has now compiled a list of LEED-certified office space (and buildings) in San Francisco and Oakland. At a time when nearly every office building under construction has applied for Leadership in Energy and Environmental Design certification, the RealGreen Index demonstrates how few spaces and structures have achieved the designation thus far.

For entire buildings, you have PG&E's building at 245 Market St., Swinerton's headquarters at 260 Townsend St., Method cleaning products' home at 637 Commercial St., and a couple of others. In terms of built-out space, the biggest LEED spaces in San Francisco are Nixon Peabody's 80,000 square feet at One Embarcadero Center, Stantec Architecture's (formerly Chong Partners) 43,000-square-foot space at 405 Howard St., and HOK's 17,000-square-foot digs at One Bush St. Over in Oakland, the University of California Office of the President's HQ at 1111 Franklin St., a whopping 226,000 square feet, is LEED silver.

As of now, the fully LEED-blessed buildings have no vacancies, so tenants looking for such green homes have two choices. They can build out LEED spaces themselves or wait until some of buildings under construction, like Tishman Speyer's 555 Mission St., obtain certification. The RealGreen Index will help eliminate what Klein calls "greenwashing": the use of "green" references in marketing when the LEED certification has not been obtained.

"As of today if someone was determined to rent a LEED-certified office or retail space in San Francisco or Oakland, no such space is immediately available at any price," said Klein.

Source: http://www.bizjournals.com/sanfranci...ml?t=printable

So, once again, top architecture (in this case, green architecture), has a premium value, even if the location isn't ideal, and can recoup its cost in higher prices or rents.