There’s a building going up in a commercial section of town. Right now there’s naught but a foundation and a few piles of pipes & whatnot strewn about the site.
In front of this building are several signs. These signs tell me:
[ul]
[li]The construction company doing the construction.[/li][li]The union representing the construction workers.[/li][li]The electrical company doing the sub-contracted electrical work.[/li][li]The union representing the electricians.[/li][li]The plumbing company doing the sub-contracted plumbing work.[/li][li]The union representing the plumbers.[/li][li]The bank financing the construction.[/li][/ul]
What I don’t see is what the building is going to be or when it’s going to open.
Is there some economic reason for building under secrecy like this? I would think that a big sign that says FUTURE SITE OF CECIL’S WIDGET SHOP! OPENING AUGUST 2005! would get people talking and generate some pre-opening buzz for Cecil’s shop and get some warm bodies thru the door when they open.
I note that not all commercial construction projects in Springfield operate in secrecy. In one place in town there’s a big sign that says “D’arcy’s Pint: New Location Coming Soon” in front of a cleared field.
So, yeah, what’s the reason for building a commercial enterprise but not telling potential customers what is is?
Another possible scenario: some local cartel of millionaires is having the building built “on spec” with the hopes that by the time it’s done, they’ll have signed up tenants, and one of them will be the “key” tenant that wins the right to pay more to have their name put up at the top of the building.
Until that happens, they can’t easily give the place a name and they probably don’t want their name on it either.
It is virtually unknown in No. America to build a significant commercial bldg on spec. Often, banks don’t even give out money unless a live tenant is involved. I think there are other reasons. Walmart built a large store near my warehouse and never put a sign up at all until they were ready to open - and I also watched that construction board that listed everybody but the sole tenant.
I don’t know where in N. America you are, but it’s quite common for retail and small commercial spaces, and even large office buildings to be built (or at least designed and construction started) on spec in my neck of the woods. Not so much back in the late '80s/ early '90s when the commercial RE market was soft here, but now it’s quite common.
The fastest track design-build projects I’ve ever worked on had a 15 month lead time from start of actual design (after the preliminary schematic design phase) to move-in. Most projects take much longer. How many tenants are going to sign a lease for a move-in more than two years out (other than anchor tenants in malls, and similar 800-lb. gorillas)?
I’ll venture a guess. Perhaps tenant X is one which is controversial, and the GC is seeking to minimize the amount of work that has to be redone owing to vandalism should the tenancy be known ahead of time.
I’m a CCIM and I sell and lease commercial/industrial real estate for a living. In a hot market like the current one it’s quite common for light industrial and retail buildings to be put up on spec without any pre-leases. In a softer market it would be much less likely.
Having said this, I’m talking about 10,000 to 30,000 sq ft office, office-warehouse and retail strip center properties in this context. If it’s a big city office building costing hundreds of millions of dollars the risk issues may be much different, and major tenant pre-leases might be much more critical in obtaining financing.
I don’t know the answer, but this is pretty common where I live and I’ve wondered about it a lot too.
In the shopping centre where I used to work, they were putting up two new buildings. The first was almost finished before they put the sign up to say what it was; I had known what it would be for at least a couple months before that though. They knew what was going there, they just won’t advertise it for some reason. They’re still building the other building, and I know what it’s going to be, but again, no public signage is available besides the construction companie(s). Both stores are nationwide retail chains.
I understand the issue with building large office complexes, but the places I see this happen the most aren’t retail strip malls or office buildings. It’s standalone retail outlets, fast food joints, etc. Down at one of my other previous jobs, they put in a HUGE shopping centre across the street from where I worked. It used to be an empty field. We didn’t know what it was until it was near finished. I think they know they’re building a WalMart or Lowe’s or Home Depot or Best Buy before they even break ground; so why the secret?
I’m going to speculate that it’s a deliberate marketing ploy, at least for retail buildings.
People like NEW and they have the attention span of a 5 year-old. If they put up a sign in front of the new Burger World or Wonder Mart saying “Coming soon!!!” 12 months before it opens, people will have gotten excited, then jaded, then forget about it entirely before it’s even open. When it does finally open, the owners will have to overcome the inertia of the bored locals to et them to come in.
Contrast that with making a big splash with signage & advertising about a week before opening. Everybody gets like a kid before XMas, eagerly waiting for the doors to finally open so they can rush in and waste their money.
I had always assumed these signs were for the benefit of prospective workers who wanted to get a job working on the project.
As to why a project would not identify who its tenant is going to be or when they will be open, I can’t day. Ther has been a lot of commercial buildign in my small town. Wal-Mart and Home Depot were well underway before there was any visible sign acknowledging what they were. Dunkin Donuts and Tim Horton’s, by contrast, had signs up before construction started.
Astro, I clicked on your link, and although I didn’t go to every possible page on the site, you would think that a web site for the CCIM Institute would tell you somewhere what the hell CCIM stands for.
Those signs are just advertising for the firms involved. Whether they’re used or not depends on local zoning/sign regulations. In cities whre such signs are allowed, they usually have to be removed when a “certificate of occupancy” – a C.O. – is issued; at that time, the project is considered to be complete.
What to know exactly what’s being built there? Go to city hall, and ask to see the building permit. It’s public information.
Its in the about us section, not too far hidden but then I guess most people accessing the site already know what it is.
“A Certified Commercial Investment Member (CCIM) is a recognized expert in the disciplines of commercial and investment real estate. A CCIM is an invaluable resource to the commercial real estate owner, investor, and user, and is among an elite corps of 7,500 professionals across North America who hold the CCIM designation.”
I believe that’s pretty common with Wal-Mart stores, because so many people protest or sue when one is being built. They don’t want to draw attention to themselves until they’re ready to go.
According to the book, How Wal-Mart Is Destroying America and the World: And What You Can Do about It by Bill Quinn, Wal-Mart has had over 10,000 lawsuits filed against them.