Does anyone know of any instances where a developer has built a high-rise office tower which they then intended to sell, not lease, to a buyer? Does that ever happen? It seems unlikely to me, I mean we’re not talking about track homes and just obtaining the financing alone without a buyer already signed on seems far fetched. Do developers plan to build office towers then shop around for a buyer (not a lessee)? Is that common and can anyone cite examples?
I’m not in the business, but I’d suppose it would be unlikely for the reasons you mentioned. It would simply be too much of a risk to build an office tower at enormous costs without knowing how to use it afterwards. Generally, even the lease contracts are made in advance - you wouldn’t incur the risk of investing bunches of money and having the premises stay vacant for months.
The only constellations I can dream up where this would probably happen are when a contractor disguises as a seller. If, for whatever reason, a contract of sale is preferable as compared to a construction contract, then one could think of the construction company building the tower for itself, then selling it to the principal (instead of builing it for the principal’s account in the first place). Or maybe it happens in sale and lease back deals: The finished building is sold to an independent entity and immediately leased back by the seller. This can have tax or accounting advantages. But this is probably not what you were thinking of, because in all of these constellations, it’s perfectly clear from the beginning who will be using the premises after completion.
There are many skyscrapers that have changed ownership during construction.
It takes years just to get the permits. In that amount of time, even a major airline or car manufacturer can go from black to red and start shedding underperforming assets. And when you think of all the Trumps and Turners in the world . . . well, you get the picture.